Good for Teradyne, great for Nextest, a challenge for Verigy.

Implications: Teradyne gets a capable entry into flash memory test to allow the company to compete more effectively against Verigy.  Nextest executives get over being swallowed for a second time by Teradyne by negotiating a good price for the company.  Keeping Nextest key employees will be the challenge.

Analysis: Teradyne's acquisition of Nextest is a good strategic fit for the company.  Teradyne's gets a well-architected flash memory tester and an established customer base that they can drive to greater success with their field organization.  In addition, it's likely there will be development synergies with FLEX in future generations beyond Magnum., together with the Mosaid assets Teradyne acquired earlier.

Teradyne will now be able to take the fight to Verigy's turf in flash memory test instead of just playing defense in the SOC space.  The Magnum is a worthy competitor to Verigy's Versatest series, and will automatically be considered by more customers now it's backed by a company like Teradyne.

Keeping Nextest's key employees will be Teradyne's main challenge.  The company's executives are from the Q2 memory group of Megatest, and left when Teradyne bungled the acquisition of that company in the early '90s.