The corporate’s Q3 earnings present AI growth pushing up demand for semiconductor check tools
In sum — what to know:
Sturdy Q3 exhibiting: Advantest posts report quarterly gross sales amid hovering AI chip demand
AI drives development: The corporate says sturdy market demand for AI chips and reminiscence is pushing up orders for chip and reminiscence testers.
Capability growth forward: The corporate plans to ramp manufacturing from 3,000 to five,000 check models in 2026 to maintain tempo with peaking demand.
Cash pouring into AI infrastructure continues to spice up the fortunes of check suppliers. Japanese semiconductor check big, Advantest, is likely one of the current 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 govt officer, mentioned on the earnings name.
Between October and December, the corporate booked gross sales of 273.8 billion yen ($1.86 billion) — up nearly 11% — outperforming each Q1 outcomes and inner estimates.
Unsurprisingly, the Take a look at System enterprise section noticed the strongest development previously 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 purposes — a aspect impact of the speedy AI infrastructure buildout — for the efficiency. It additionally cited continued demand for high-performance DRAM testers as one other key driver.
“Whereas uncertainty lingers on account of ongoing geopolitical dangers and the potential threat of sharp alternate fee fluctuations, AI purposes proceed to be the principle development driver of the semiconductor market amid a quickly and dynamically evolving AI market,” Lefever famous.
The corporate mentioned a requirement drawback it anticipated in 2025 didn’t come to cross.
“Due to demand pull-in for SoC and reminiscence check techniques serving AI-related purposes, the short-term 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 steering 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 larger than prior projections. Full-year working revenue is hiked up as properly to 454 billion yen ($3.09 billion), a 21.4% rise.
“Wanting forward, with AI-related demand remaining sturdy, we anticipate sustained development 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 huge on its AI-fuelled {dollars}. The chip testing tools maker additionally mentioned that it’s aiming to boost capability from 3,000 check models in July, 2025, to five,000 in 2026.
“Quite a lot of the shoppers have, as you realize, talked about being offered out all over this 12 months and into subsequent 12 months. In order that bodes properly for the check capability that they’ll want. Coupling that with growing complexity, you realize, 12 months after 12 months, that additionally bodes properly for twenty-seven,” Lefever famous.
The ramp-up is anticipated to proceed by way of the subsequent few years. In its midterm plan, Advantest had revealed that it’s going to pace up capability to 7,500 techniques inside a few years, and to 10,000 within the following section.
“We’re positively on monitor for [the 5,000 unit capacity] and really now are taking a look at 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 need to speed up that construct out sooner than we had initially deliberate,” he mentioned. “We have now 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 gradual monitor of excessive inventory valuation. In current 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 growth. Semiconductors and high-bandwidth reminiscence (HBM) stay vital parts for supporting AI workloads. As their architectures shrink and develop extra advanced, there’s a rising demand for superior check 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.
