The corporate’s Q3 earnings present AI increase pushing up demand for semiconductor take a look at tools
In sum — what to know:
Sturdy Q3 displaying: Advantest posts report quarterly gross sales amid hovering AI chip demand
AI drives progress: The corporate says robust market demand for AI chips and reminiscence is pushing up orders for chip and reminiscence testers.
Capability enlargement forward: The corporate plans to ramp manufacturing from 3,000 to five,000 take a look at items in 2026 to maintain tempo with peaking demand.
Cash pouring into AI infrastructure continues to spice up the fortunes of take a look at suppliers. Japanese semiconductor take a look at large, Advantest, is likely one of the latest beneficiaries. This week, the Tokyo-based firm reported strong monetary outcomes for Q3 2025 (U.Ok. fiscal 12 months, to not be confused with U.S. fiscal 12 months)
The Nvidia provider clocked a revenue of 78.7 billion yen ($515 million) in three months to Dec, 31.
“We’re happy to report that our Q3 outcomes exceeded our inner projections set in October, delivering a brand new report for quarterly gross sales,” Douglas Lefever, chief government officer, mentioned on the earnings name.
Between October and December, the corporate booked gross sales of 273.8 billion yen ($1.86 billion) — up virtually 11% — outperforming each Q1 outcomes and inner estimates.
Unsurprisingly, the Check System enterprise section noticed the strongest progress up to now 9 months. From 478.7 billion yen ($3.26 billion) in 2024, web gross sales hit 723.1 billion yen ($4.92 billion) in 2025, reflecting a 51.1% surge.
Working revenue too rose by a powerful 64% 12 months on 12 months reaching 113.6 billion yen ($741.8 million).
The corporate credit rising demand for system-on-chip (SoC) testers for HPC and AI functions — a aspect impact of the fast AI infrastructure buildout — for the efficiency. It additionally cited continued demand for high-performance DRAM testers as one other key driver.
“Whereas uncertainty lingers as a result of ongoing geopolitical dangers and the attainable danger of sharp alternate fee fluctuations, AI functions proceed to be the primary progress driver of the semiconductor market amid a quickly and dynamically evolving AI market,” Lefever famous.
The corporate mentioned a requirement downside it anticipated in 2025 didn’t come to cross.
“Due to demand pull-in for SoC and reminiscence take a look at techniques serving AI-related functions, the momentary digestion we had anticipated didn’t happen, leading to stronger than anticipated top-line efficiency.”
Banking on the previous 9 months’ run and a sustained demand within the AI sector, the corporate revised its steerage upward for fiscal 12 months to March 31, 2027. Gross sales is now forecasted at 1.07 trillion yen ($7.28 billion) and web revenue at 328.5 billion yen ($2.23 billion) — each increased than prior projections. Full-year working revenue is hiked up as nicely to 454 billion yen ($3.09 billion), a 21.4% rise.
“Trying forward, with AI-related demand remaining robust, we anticipate sustained progress within the tester market in calendar 12 months 2026,” Lefever mentioned, including that enterprise in China stays “fairly wholesome round 20%-25% of the general income”.
Capability Enlargement
Advantest is betting massive on its AI-fuelled {dollars}. The chip testing tools maker additionally mentioned that it’s aiming to lift capability from 3,000 take a look at items in July, 2025, to five,000 in 2026.
“A number of the purchasers have, as you recognize, talked about being bought out all through this 12 months and into subsequent 12 months. In order that bodes nicely for the take a look at capability that they’ll want. Coupling that with growing complexity, you recognize, 12 months after 12 months, that additionally bodes nicely for twenty-seven,” Lefever famous.
The ramp-up is predicted to proceed by means of the following few years. In its midterm plan, Advantest had revealed that it’s going to velocity up capability to 7,500 techniques inside a few years, and to 10,000 within the following part.
“We’re positively on observe for [the 5,000 unit capacity] and really now are increasing that even additional due to a few of the demand that we confirmed within the TAM [Total Addressable Market]. So we could also be within the place to must speed up that construct out sooner than we had initially deliberate,” he mentioned. “Now we have the scalability to transcend that definitely,” he added.
Analysts stay cautiously optimistic. Semiconductor is a cyclical market sector the place demand rises and falls, making it a high-risk market. And with all of the talks of the AI bubble and round economic system, variability is the secret.
Shares jumped 14% on Thursday after the corporate posted its outcomes. The upward swing comes amid a gentle observe of excessive inventory valuation. In latest occasions, each Advantest and rival firm, Teradyne with which it holds a duopoly within the semi testing tools sector, have traded at extraordinarily excessive valuations. The success has been linked to explosive market demand pushed by the AI and HPC increase. Semiconductors and high-bandwidth reminiscence (HBM) stay crucial elements for supporting AI workloads. As their architectures shrink and develop extra complicated, there’s a rising demand for superior take a look at options to check and validate them.
Advantest’s rising inventory worth and market share (58% in 2024) is reflective of its dominant market place in a distinct segment that’s rising at an astounding clip.
