ATE Tailwind For 2018?

Will test equipment have another big year?


The automatic test equipment market enjoyed a record sales year during 2017, and there are indications that the good times will continue this year.

Forecasters are predicting another robust year for sales of DRAMs and NAND flash memory devices, especially 3D NAND. That will drive demand for memory test equipment to keep up.

Frost & Sullivan predicts semiconductor test equipment will have a compound annual growth rate of 4.2% from 2015 to 2022, with worldwide revenue hitting $5.4 billion by 2022. The Asia-Pacific region will continue to dominate ATE sales; more than three-quarters of ATE revenue will come from the Asia-Pacific installed base, the market research firm says.

Advantest is one of the largest ATE suppliers. For its fiscal third quarter ended December 31, the company reported its net sales rose 29.5% from the same period a year earlier. Net income was up slightly.

For the Semiconductor and Component Test System segment, orders in the nine months ending December 31 were up 43.2% from a year ago.

The ATE vendor sees business conditions improving in this quarter, and the “favorable business environment” will likely continue in the next fiscal year, the company said in a statement.

Teradyne reported fourth-quarter revenue of $479 million, with $317 million of that total coming from Semiconductor Test. Q4 orders were $560 million; Semi Test accounted for $410 million.

“The fourth quarter capped off a great 2017 at Teradyne. In Q4, Semi Test sales were up 17% compared to Q4 of 2016 and up 22% for the full year,” President and CEO Mark Jagiela said in a statement. He added, “Turning to 2018, at the mid-point of the Q1 revenue guidance, we see 4% growth over Q1 of 2017. Our view of the 2018 Semi Test market outlook has also strengthened slightly since our October estimate.”

Teradyne is expecting revenue in the current quarter to be $460 million to $490 million.

In general, it looks like another good year ahead for ATE. It may not reach the heights of 2017 due to a variety of factors, yet it should be 12 months of sales growth, and profitable growth, at that.

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