Tokyo, Japan – Advantest Corp (6857.T), a major player in the chip testing equipment industry, foresees a surge in demand for its chip testing machines, driven by the increasing adoption of high-end semiconductors in generative artificial intelligence (AI) applications.
The company, known for its dominance in chip testing equipment alongside its U.S. peer Teradyne Inc (TER.O), acknowledged the current market’s contraction due to customers retaining excess inventory. As a result, Advantest’s operating profit plummeted by 68% to 14.3 billion yen ($101.8 million) in the quarter from April to June.
While the smartphone market’s weakness and a slowdown in data center investments contributed to the decline, Advantest remains optimistic about the future. The company expects a gradual recovery next year.
During an earnings briefing, Advantest’s CEO, Yoshiaki Yoshida, expressed confidence in a forthcoming growth curve despite the challenges faced this year. The company remains positive about the long-term prospects as the utilization of high-end semiconductors in generative AI applications gains momentum.
In anticipation of a market rebound, Advantest has continued to invest in cutting-edge technology and product development, positioning itself to meet the evolving demands of the semiconductor industry.
Ahead of the earnings report, Advantest shares closed down 1.7%, reflecting some caution among investors. However, it’s worth noting that the company’s shares have more than doubled in value since the beginning of the year, indicating positive sentiment in the long-term prospects of the chip testing equipment market.
As of the latest exchange rate, $1 is equivalent to 140.4300 yen. Advantest’s ongoing commitment to innovation and its expectation of a revival in demand paint a hopeful outlook for the company’s growth and the broader semiconductor industry in the years to come.