Eagle finds a white knight.

Implications: Industry consolidation in this case will not lead to a reduction in available products in the short term, so is of little immediate benefit to the industry as a whole.  Verigy will be the strongest out of the remaining SOC test companies as they alone benefit from the economics of single platform, and will compete with a Teradyne that is financially weaker after the Eagle acquisition.  Eagle doesn't have any test technology that isn't already part of Teradyne's FLEX platform - indeed Teradyne has recently beaten Eagle in head-to-head competition.

Analysis: The formation by merger of LTX-Credence has driven Eagle Test to find a suitor to rescue it from being the sole tier 3 semiconductor test vendor - Teradyne obliged by providing a coup de grace for Len Foxman.  Continuing the products and support at Eagle's customers allows Teradyne's executives to claim that the acquisition will be accretive in 2009, even though they have no idea what business conditions will be like next year, and assuming that neither of the customers who currently buy Eagle products do so precisely because they aren't Teradyne.