Advantest expects chip testing equipment demand surge

Tokyo-based Advantest anticipates a surge in demand for its chip testing equipment, specifically for memory used in artificial intelligence applications. Despite facing headwinds from sluggish electronics sales, the company is optimistic about the growth potential in the AI-driven memory testing sector. Advantest projects sales of memory testers to reach 244 billion yen ($1.65 billion) for the fiscal year ending March, reflecting a 5 billion yen increase from its previous October forecast. However, this figure is a 25 per cent decline compared to the same period the previous year.

During an earnings briefing, Advantest CEO Yoshiaki Yoshida acknowledged the need for additional efforts to meet the rising market demand. The company envisions the overall memory tester market to range between $1.3 billion and $1.6 billion this year, a notable increase from approximately $1.1 billion in the previous year.

Despite the positive outlook for memory testing, Advantest faced challenges in its recent financial results. The operating profit for the October-December quarter declined by 35 per cent to 26.8 billion yen, primarily attributed to weakened consumer demand for smartphones and PCs.

Advantest's sales in the third quarter saw a shift, with around 34 per cent of revenue generated in China, a country rapidly expanding its chip manufacturing capacity amid tensions with the United States. This marked a decrease from the 45 per cent of sales in the same period a year earlier.

The company's shares closed down 0.5 per cent before the earnings announcement but have demonstrated resilience, gaining 20 per cent since the beginning of the year, outperforming industry peers like Tokyo Electron and Lasertec.