Release Date: October 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aehr Test Systems (AEHR, Financial) reported revenue and non-GAAP net income ahead of consensus estimates for the first quarter of fiscal 2025.
- The company is seeing increasing traction in new markets such as artificial intelligence processors, gallium nitride power semiconductors, and flash memory devices.
- Aehr Test Systems (AEHR) completed the acquisition of Incal Technology, expanding its product portfolio and market opportunities, particularly in the AI semiconductor market.
- The company is making steady progress with new silicon carbide device and module suppliers, expecting to add several new customers this year.
- Aehr Test Systems (AEHR) is optimistic about its silicon carbide business, with customers forecasting capacity expansion needs in calendar 2025.
Negative Points
- First quarter revenue was down 36% from the same period last year, indicating a challenging market environment.
- The company faces risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
- Aehr Test Systems (AEHR) has a significant portion of its revenue dependent on WaferPak sales, which may pose a risk if demand fluctuates.
- The integration of Incal Technology is still in progress, which could present challenges in terms of personnel and manufacturing consolidation.
- The company has not provided specific details on the contribution of mix in its $16 million backlog, leading to potential uncertainty for investors.
Q & A Highlights
Q: Can you provide more details about the potential new silicon carbide customers and how their ramp might compare to your current largest customer?
A: Gayn Erickson, President and CEO, explained that some potential new customers are ones they have been working with for a while, but their timelines have shifted. There are also new customers who have come online recently. These customers are expected to start with one or two systems and ramp up based on demand from sectors like EV and data centers. Erickson noted that these customers have the potential to become as significant as their largest current customer.
Q: Regarding the AI processor opportunity, can you provide more color on the potential size of this opportunity?
A: Erickson stated that the AI processor opportunity is significant, with test times being quite long and requiring 100% burn-in. While they have not disclosed the specific customer, it is a revenue-generating AI processor company. The opportunity could potentially be more than a 10% customer for Aehr this fiscal year.
Q: Can you provide more details on the backlog and its composition, especially since there haven't been many press releases about new orders?
A: Erickson mentioned that a reasonable portion of the backlog is from the Incal acquisition. While they have been press releasing material orders, the increasing number of WaferPak orders has not been individually announced. The backlog includes both Aehr and Incal orders, with Incal having longer lead times.
Q: What is the expected mix between 150mm and 200mm silicon carbide wafers in your visibility?
A: Erickson noted that while they are currently testing 200mm wafers, 150mm wafers remain dominant. The transition to 200mm is expected to become more significant in 2025. Aehr's systems can handle various wafer sizes, so the transition does not significantly impact their operations.
Q: Historically, new customers have purchased FOX-NP systems for evaluation before moving to FOX-XP. What are your expectations for new customer ramps in silicon carbide and other applications?
A: Erickson indicated that four of the next five customers are expected to start directly with FOX-XP systems, skipping the FOX-NP evaluation phase. This shift is attributed to increased customer comfort and Aehr's in-house testing capabilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
