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Soitec announced consolidated revenue of 226 million Euros for the third quarter of FY’25 (ended December 29th, 2024), down 6% on a reported basis compared to the third quarter of FY’24. This reflects a 10% decline at constant exchange rates and perimeter, a positive currency impact of 5% and a negative scope effect of 1%.
Pierre Barnabé, Soitec’s CEO, commented: “After a very strong sequential rebound in the second quarter, we maintained the third-quarter revenue at a fairly similar level. The good performance of the Mobile Communications division was driven by sustained momentum in POI, and a seasonal tailwind in RF-SOI sales. Despite seasonal restocking in the second half of the fiscal year, the customers continue to optimize RF-SOI inventory levels based on seasonality and market conditions, which will keep driving fluctuations over the next few quarters. At the same time, we are strengthening our position as a leader, notably with the introduction of new innovative 300mm products. The Automotive and Industrial division continues to be impacted by a weak automotive market. In Edge & Cloud AI, the momentum remains strong, supported by significant investments in cloud infrastructure across the industry to accelerate AI computing power, as well as increasing demand at the edge for lower energy consumption and processing costs.
Due to worsening conditions in the Automotive and Consumer markets, a couple of customers have requested to put some delivery requests on hold. As a consequence, we are adjusting our guidance for fiscal year 2025, with annual revenue expected to decrease by high single digit year-on-year. We are managing our EBITDA margin to be between 32% and 34%.
With the lack of visibility on our end markets for now, it is also too early to provide specific guidance for fiscal year 2026. Given current market conditions, we expect at this stage quite limited growth for fiscal year 2026.
Our fundamentals remain solid and will allow us to accelerate as end markets recover. We continue to enhance our technology leadership, to strengthen our SOI positioning with both existing and new customers, and to deploy our expansion into compound semiconductors with the acceleration of POI volumes and a fifth customer in qualification on SmartSiCTM.”
Original – Soitec
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Siltronic AG has achieved its annual guidance for 2024 at the upper end of expectations based on preliminary, unaudited figures. The company reported preliminary sales of EUR 1,413 million, a decline of about 7 percent compared to the previous year (2023: EUR 1,514 million). The target for the reporting year was a high single-digit percentage decrease in sales.
The main reason for the year-over-year decline was weaker demand from the semiconductor industry due to continued high inventory levels, particularly at chip manufacturers. Despite the ongoing demand weakness for the second consecutive financial year, Siltronic recorded only a slight decrease in sales prices. As a result, a preliminary EBITDA of EUR 364 million (2023: EUR 434 million) and thus a continued solid EBITDA margin of 26 percent (2023: 29 percent) was achieved. This margin was also at the upper end of the guided range of 24 to 26 percent.
“Despite a challenging market environment, we achieved our guidance and demonstrated our resilience with an EBITDA margin of 26 percent, thanks to targeted cost reduction measures. For the year 2025, we anticipate that the growth in the end-markets, primarily driven by AI, will not yet be reflected in our wafer demand due to the persistently elevated inventory levels in the value chain. Therefore, we expect H1 2025 to be significantly weaker than H2 2024,” commented Dr. Michael Heckmeier, CEO of Siltronic AG.
Compared to the previous year, cost of sales decreased at an underproportional level to sales due to lower fixed cost dilution and higher depreciation. As expected, earnings before interest and taxes (EBIT) were significantly lower year-over-year at EUR 125 million (2023: EUR 231 million). The preliminary EBIT margin was 9 percent compared to 15 percent in 2023.
Net cash flow improved due to lower capex
In the year under review, capex including intangible assets was significantly reduced to EUR 523 million (2023: EUR 1,316 million). The majority of investments continued to relate to the new 300 mm wafer fab in Singapore, which was commissioned at the beginning of 2024 and will now be ramped over several years.
Due to the ongoing demand weakness and the still elevated project-related investments, the preliminary net cash flow for 2024 remained negative at EUR -297 million, but improved significantly compared to the previous year (2023: EUR -664 million). As a result, net financial debt increased to EUR 733 million as of December 31, 2024 (2023: EUR 356 million). This includes the dividend payment of EUR 36 million for 2023.
Business performance in Q4 2024
Preliminary Q4 2024 sales of EUR 361 million were slightly higher than Q3 (EUR 357 million), supported by a stronger US dollar. Preliminary EBITDA for Q4 2024 of EUR 93 million exceeded the previous quarter’s level (Q3 2024: EUR 89 million), mainly due to the improved FX result. The preliminary EBITDA margin was 26 percent (Q3 2024: 25 percent). With a planned slight increase in depreciation, the preliminary EBIT in Q4 2024 amounted to EUR 27 million (Q3 2024: EUR 29 million). Preliminary net cash flow for Q4 improved significantly to EUR 21 million (Q3 2024: EUR -65 million). This improvement is mainly due to better operating cash flow and timing differences between payment dates and the accounting of capex. Preliminary capex for Q4 amounted to EUR 116 million (Q3 2024: EUR 94 million).
Guidance for the financial year 2025
Despite the forecast for continued end market growth in the current financial year, inventory levels at chip manufacturers and their customers are only slowly decreasing. This continues to delay the expected wafer demand recovery. The Executive Board therefore expects demand to remain subdued and no sales growth in 2025. Assuming unchanged exchange rates, sales are expected to be in the region of the previous year. According to current estimates, the first six months of 2025 will be the most affected, as customer volume shifts from long-term contracts will also partly occur from the first to the second half of 2025.
The sales guidance takes into account the announced closure of wafer production for diameters up to 150 mm in Burghausen, which is now scheduled for July 31, 2025. This will have a slightly negative impact on sales and a negligible impact on earnings compared to the previous year.
The EBITDA margin is expected to be in the range of 22 to 27 percent. The cost of ramping the new fab will be partially offset by savings in energy and other areas.
At this point, Siltronic’s visibility remains very limited. A more detailed guidance is expected to be provided with the publication of the Annual Report on March 6, 2025.
Mid-term ambition delayed due to postponed demand recovery
The demand recovery assumed in the mid-term ambition (published at the Capital Markets Day in 2023) did not materialize in 2024, and the current financial year also continues to be characterized by subdued growth prospects. As a result, the mid-term ambition of generating sales of more than EUR 2.2 billion and an EBITDA margin in the high 30’s by 2028 will likely not be realized until a later point in time.
Despite these developments, Siltronic is convinced of its medium-term growth potential. Key drivers of this growth are megatrends such as Artificial Intelligence, Digitalization, and Electromobility which will lead to a strong increase in demand for semiconductors and thus also for wafers.
Dividend proposal of EUR 0.20 per share
Due to the continued demand recovery delay, the Executive Board proposes to the Annual General Meeting on May 12, 2025, a reduction of the dividend to EUR 0.20 per share for the financial year 2024. Based on the preliminary figures, this corresponds to a payout ratio of approximately 10 percent of the consolidated net income attributable to Siltronic shareholders.
“The freed-up funds will flow into our future investments to increase the long-term value of Siltronic. Despite the ongoing demand weakness, it is important to us that our shareholders continue to participate in the company’s success,” said Claudia Schmitt, CFO of Siltronic AG.
Original – Siltronic
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Infineon Technologies AG reported results for the first quarter of the 2025 fiscal year (period ended 31 December 2024).
“Infineon has held up well in a weak market environment, closing its first quarter slightly ahead of expectations,” says Jochen Hanebeck, CEO of Infineon. “Against a continued uncertain economic backdrop, our business trajectory in this fiscal year is following the pattern we expected: Following the expected inventory reduction, we continue to anticipate that the recovery in demand will be gradual for the current fiscal year. The positive stand-out is the move towards increased use of artificial intelligence, which is driving demand for our leading power supply solutions for AI data centers. This is a prime example of our long-term growth drivers, digitalization and decarbonization.”
- Q1 FY 2025: Revenue €3.424 billion, Segment Result €573 million, Segment Result Margin 16.7 percent
- Outlook for Q2 FY 2025: Based on an assumed exchange rate of US$1.05 to the euro, revenue of around €3.6 billion expected. On this basis, Segment Result Margin forecast to be in the mid-teens percentage range
- Outlook for FY 2025: Based on an assumed exchange rate of US$1.05 to the euro (previously US$1.10), revenue is now expected to be flat to slightly up (previously: to decline slightly) compared with the prior year. The adjusted gross margin should be around 40 percent and the Segment Result Margin in the mid-to-high-teens percentage range. Investments of approximately €2.5 billion planned. Free Cash Flow adjusted for investments in frontend buildings should be around €1.7 billion and reported Free Cash Flow around €900 million
Original – Infineon Technologies
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NXP Semiconductors N.V. reported financial results for the fourth quarter and full-year, which ended December 31, 2024.
“NXP delivered full-year 2024 revenue of $12.61 billion, a decrease of 5 percent year-on-year. In the fourth quarter, revenue was $3.11 billion, a decrease of 9 percent year-on-year, modestly above the mid-point of our guidance range. In review, NXP delivered resilient results throughout 2024, reflecting solid execution, consistent gross margin, and healthy free cash flow generation despite a challenging market environment. We rigorously focus on managing what is in our control, to navigate a soft landing while executing our growth strategy,” said Kurt Sievers, NXP President and Chief Executive Officer.
Key Highlights for the Fourth Quarter and Full-year 2024:
- Fourth quarter revenue was $3.11 billion, down 9 percent year-on-year. Full-year revenue was 12.61 billion, down 5 percent year-on-year;
- Fourth quarter GAAP gross margin was 53.9 percent, GAAP operating margin was 21.7 percent and GAAP diluted Net Income per Share was $1.93. Full year GAAP gross margin was 56.4 percent, GAAP operating margin was 27.1 percent and GAAP diluted Net Income per Share was $9.73;
- Fourth quarter Non-GAAP gross margin was 57.5 percent, non-GAAP operating margin was 34.2 percent, and non-GAAP diluted Net Income per Share was $3.18. Full-year Non-GAAP gross margin was 58.1 percent, non-GAAP operating margin was 34.6 percent, and non-GAAP diluted Net Income per Share was $13.09;
- Fourth quarter cash flow from operations was $391 million, with net capex investments of $99 million, resulting in non-GAAP free cash flow of $292 million. Full-year cash flow from operations was $2,782 million, with net capex investments of $693 million, resulting in non-GAAP free cash flow of $2,089 million;
- During the fourth quarter of 2024, NXP continued to execute its capital return policy with the payment of $258 million in cash dividends, and the repurchase of $455 million of its common shares. The total capital return of $713 million in the quarter represented 244 percent of fourth quarter non-GAAP free cash flow. On a trailing twelve month basis, capital return to shareholders represented $2.4 billion or 115 percent of non-GAAP free cash flow. The interim dividend for the fourth quarter 2024 was paid in cash on January 8, 2025 to shareholders of record as of December 5, 2024. Subsequent to the end of the fourth quarter, between January 1, 2025 and January 31, 2025, NXP executed via a 10b5-1 program additional share repurchases totaling $101 million;
- On October 15, 2024, NXP introduced the S32J family of high-performance automotive Ethernet switches and network controllers to enable the next generation of software-defined vehicle development (SDV). The S32J family shares a common switch core with the NXP S32 portfolio of automotive processing devices to maximize software re-use and simplify network configuration and integration;
- On October 23, 2024, NXP announced Audi has adopted the Trimension® NCJ29Dx Ultra Wide Band (UWB) product family in its advanced UWB platform delivering precise and secure real-time localization to enable hands-free secure car access via smart mobile device and other UWB-based features. Cars featuring NXP’s Trimension UWB devices, including the Audi Q6 e-tron, will hit the road in 2024;
- On November 12, 2024, NXP announced the i.MX 94 family, the newest addition to its i.MX 9 series of applications processors, designed for industrial control, telematics, gateways, and building and energy control. The i.MX94 family includes Ethernet Time Sensitive Networking (TSN) switching capabilities;
- On November 12, 2024, NXP announced industry-first wireless battery management system (BMS) based on Ultra-Wideband (UWB) connectivity, expanding its “FlexCom” family of wired and wireless BMS solutions. The new UWB-based BMS solutions enable increased battery energy density, decoupling the mechanical and electrical development for faster time to market;
- On December 17, 2024, NXP announced it had entered into an definitive agreement to acquire Aviva Links, a provider of Automotive SerDes Alliance (ASA) compliant in-vehicle connectivity solutions in an all-cash transaction valued at $242.5 million. The acquisition of Aviva Links expands NXP’s market leading in-vehicle networking (IVN) portfolio with the industry’s most advanced ASA compliant portfolio, supporting SerDes point-to-point (ASA-ML) and Ethernet-based connectivity (ASA-MLE) with data rates up to 16 Gbps;
- On January 7, 2025, NXP announced it had entered into an definitive agreement to acquire TT Tech Auto, a leader in safety-critical systems and middleware for software-defined vehicles (SDVs). The all-cash transaction is valued at $625 million, and accelerates the NXP CoreRide platform, enabling automakers to reduce complexity, maximize system performance and shorten time to market. TT Tech Auto’s MotionWise middleware platform has a proven industry track record and is designed to manage the interconnected systems in SDVs, prioritizing safety-critical functions while ensuring seamless integration.
Original – NXP Semiconductors
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Mitsubishi Electric Corporation released its consolidated financial results for the third quarter and the first nine months of fiscal year 2025, ending December 31, 2024. The company reported a revenue of ¥4,000.4 billion, marking a 5.8% increase from the same period in the previous fiscal year. This growth is attributed to strong performances in the Infrastructure and Industry & Mobility segments.
The cost of sales was ¥2,771.0 billion, resulting in a gross profit of ¥1,229.3 billion. Selling, general, and administrative expenses totaled ¥951.4 billion. The company also reported other profits amounting to ¥25.7 billion, leading to an operating profit of ¥303.6 billion, a significant 36.5% increase year-over-year.
Financial income stood at ¥16.9 billion, while financial expenses were ¥5.4 billion. The share of profit from investments accounted for using the equity method was ¥29.6 billion. Consequently, profit before income taxes reached ¥344.6 billion. After accounting for income taxes of ¥76.8 billion, the net profit was ¥267.8 billion, a 36.4% increase from the previous year. Net profit attributable to Mitsubishi Electric Corporation stockholders was ¥248.1 billion, with ¥19.7 billion attributable to non-controlling interests.
In terms of comprehensive income, the company reported ¥340.8 billion, up from ¥315.6 billion in the previous year. This includes other comprehensive income of ¥73.0 billion, primarily due to exchange differences on translating foreign operations and changes in the fair value of financial assets.
As of December 31, 2024, total assets were ¥6,234.8 billion, an increase of ¥67.5 billion from March 31, 2024. Current assets were ¥3,636.7 billion, with cash and cash equivalents totaling ¥734.0 billion. Non-current assets amounted to ¥2,598.2 billion.
Total liabilities decreased by ¥93.2 billion to ¥1,745.9 billion. Current liabilities were ¥1,745.9 billion, including trade payables of ¥574.6 billion and contract liabilities of ¥325.8 billion. Non-current liabilities stood at ¥1,745.9 billion. Equity attributable to Mitsubishi Electric Corporation stockholders increased by ¥161.0 billion to ¥4,161.0 billion, while non-controlling interests rose by ¥0.3 billion to ¥327.9 billion.
These results reflect Mitsubishi Electric’s robust performance across its business segments and its strategic focus on growth and profitability.
The Energy and Electric Systems segment experienced a revenue increase due to strong demand for power generation and distribution systems, particularly in renewable energy sectors. The Industrial Automation Systems segment also saw growth, driven by increased capital investments in factory automation and robust sales in the automotive sector. Conversely, the Information and Communication Systems segment faced a decline in revenue, attributed to decreased demand for communication systems.
In its consolidated financial results Mitsubishi Electric reported notable performance in its Semiconductor & Device segment. This segment encompasses the company’s semiconductor operations, including power devices and other electronic components.
Third Quarter Semiconductor & Device Performance:
- Revenue: The Semiconductor & Device segment achieved a revenue of ¥67.8 billion in Q3 FY25, reflecting a slight decrease of ¥1.9 billion compared to the same period in the previous fiscal year.
- Operating Profit: The segment reported an operating profit of ¥8.4 billion, marking an increase of ¥0.5 billion year-over-year. The operating profit margin improved to 12.5%, up from 11.3% in Q3 FY24.
Original – Mitsubishi Electric
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STMicroelectronics announced its financial results for the fourth quarter and full year of 2024, highlighting both its revenue performance and future strategic initiatives. In Q4 2024, the company reported net revenues of $3.32 billion, a gross margin of 37.7%, and an operating margin of 11.1%. Net income for the quarter stood at $341 million, reflecting ST’s ability to maintain profitability despite a challenging macroeconomic environment.
For the full year, ST achieved net revenues of $13.27 billion, a gross margin of 39.3%, and an operating margin of 12.6%, with a total net income of $1.56 billion. While the semiconductor industry faced fluctuations in demand, ST maintained solid financials, supported by its diversified portfolio across automotive, industrial, and consumer electronics markets.
Looking ahead to Q1 2025, the company projects net revenues of approximately $2.51 billion and anticipates a gross margin of 33.8%. This outlook suggests a seasonal decline in revenue compared to Q4, but aligns with broader industry trends.
In response to shifting market conditions, ST has initiated a cost-resizing program to optimize its global operational efficiency. This includes measures to streamline expenses, enhance supply chain resilience, and align production capacities with evolving customer demand. The company is also expected to continue investing in next-generation semiconductor technologies, particularly in power electronics, automotive chips, and industrial applications.
CEO Jean-Marc Chery reaffirmed ST’s commitment to long-term growth and sustainability, emphasizing its focus on innovation and cost discipline.
With strategic investments and market adaptability, STMicroelectronics aims to navigate industry challenges while reinforcing its leadership in the semiconductor sector.
Original – STMicroelectronics
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Wolfspeed, Inc. reported its fiscal second-quarter 2025 results, highlighting strategic initiatives aimed at enhancing profitability and strengthening its financial position. The company achieved revenue of $181 million, a decrease from $208 million in the same quarter the previous year. Notably, the Mohawk Valley Fab contributed $52 million to this quarter’s revenue, a significant increase from $12 million in the prior year.
The GAAP gross margin was reported at negative 21%, down from 13% in the previous year, while the non-GAAP gross margin stood at 2%, compared to 16% previously. These figures reflect underutilization costs associated with the commencement of production at the Mohawk Valley Fab.
Executive Chair Thomas Werner emphasized the company’s focus on accelerating the path to operating free cash flow generation, strengthening the balance sheet, and securing cost-effective capital to support growth. He noted the completion of a $200 million at-the-market equity offering, bringing Wolfspeed closer to finalizing CHIPS funding.
Looking ahead, Wolfspeed projects third-quarter fiscal 2025 revenue between $170 million and $200 million. The company anticipates a GAAP net loss ranging from $270 million to $295 million, or $1.73 to $1.89 per diluted share. On a non-GAAP basis, the expected net loss is between $119 million and $138 million, or $0.76 to $0.88 per diluted share. These projections account for the issuance of approximately 27.8 million shares under the ATM program.
In the first quarter of fiscal 2025, Wolfspeed initiated a facility closure and consolidation plan to optimize its cost structure and expedite the transition from 150mm to 200mm silicon carbide devices. The company incurred $188.1 million in restructuring-related costs during the second quarter, with $31.4 million recognized in cost of revenue and $156.7 million as operating expenses. For the upcoming quarter, Wolfspeed expects additional restructuring costs of $72 million, divided between cost of revenue and operating expenses.
Wolfspeed continues to invest in its 200mm greenfield footprint, aiming to produce high-quality materials and devices to meet the growing demand for silicon carbide in high-voltage applications. The company remains committed to leveraging its assets and capabilities to capitalize on long-term opportunities in the industry.
Original – Wolfspeed
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Qorvo® announced financial results for the Company’s fiscal 2025 third quarter ended December 28, 2024. On a GAAP basis, revenue for Qorvo’s fiscal 2025 third quarter was $916.3 million, gross margin was 42.7%, operating income was $53.0 million, and diluted earnings per share was $0.43. On a non-GAAP basis, gross margin was 46.5%, operating income was $177.9 million, and diluted earnings per share was $1.61.
Bob Bruggeworth, president and chief executive officer of Qorvo, said, “Qorvo is executing on a broad set of strategic initiatives to expand margin, generate strong free cash flow, and increase shareholder value. During the December quarter, we continued to successfully support our largest customer, who represented approximately 50% of sales. Within our Android 5G product portfolio, we are narrowing our focus to the higher-value flagship and premium tiers, where customers value Qorvo’s differentiated products. In HPA, we had record Defense & Aerospace quarterly revenue and expect continued strength in the March quarter. As we continue to execute on our growth and diversification strategy, we expect HPA and CSG to deliver double-digit growth in fiscal 2025 and next fiscal year.”
Financial Commentary and Outlook
Grant Brown, chief financial officer of Qorvo, said, “Qorvo exceeded the midpoint of our December quarter non-GAAP guidance in revenue, gross margin, and EPS. During the quarter, we took proactive steps to change how we support our Android business. These actions will reduce operating expense and are expected to benefit gross margin in our fiscal 2026. Subsequent to the quarter, we divested our silicon carbide business. These actions, in aggregate, are expected to support a high-40%’s gross margin in seasonally strong quarters of fiscal 2026 and additional gross margin improvement in fiscal 2027.”
Qorvo’s current outlook for the March 2025 quarter is:
- Quarterly revenue of approximately $850 million, plus or minus $25 million
- Non-GAAP gross margin between 43% and 44%
- Non-GAAP diluted earnings per share between $0.90 and $1.10
Original – Qorvo
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Texas Instruments Incorporated (TI) reported fourth quarter revenue of $4.01 billion, net income of $1.21 billion and earnings per share of $1.30. Earnings per share included a 2-cent benefit that was not in the company’s original guidance.
Regarding the company’s performance and returns to shareholders, Haviv Ilan, TI’s president and CEO, made the following comments:
- “Revenue decreased 3% sequentially and 2% from the same quarter a year ago.
- “Our cash flow from operations of $6.3 billion for the trailing 12 months again underscored the strength of our business model, the quality of our product portfolio and the benefit of 300mm production. Free cash flow for the same period was $1.5 billion.
- “Over the past 12 months we invested $3.8 billion in R&D and SG&A, invested $4.8 billion in capital expenditures and returned $5.7 billion to owners.
- “TI’s first quarter outlook is for revenue in the range of $3.74 billion to $4.06 billion and earnings per share between $0.94 and $1.16. We now expect our 2025 effective tax rate to be about 12%.”
Original – Texas Instruments
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Aehr Test Systems announced financial results for its second quarter of fiscal 2025 ended November 29, 2024.
Fiscal Second Quarter Financial Results:
- Net revenue was $13.5 million, compared to $21.4 million in the second quarter of fiscal 2024.
- GAAP net loss was $(1.0) million, or $(0.03) per diluted share, compared to GAAP net income of $6.1 million, or $0.20 per diluted share, in the second quarter of fiscal 2024.
- Non-GAAP net income, which excludes the impact of stock-based compensation, amortization of intangible assets, the acquisition-related fair value adjustment to inventory, and acquisition-related costs, was $0.7 million, or $0.02 per diluted share, compared to non-GAAP net income of $6.7 million, or $0.23 per diluted share, in the second quarter of fiscal 2024.
- Bookings were $9.2 million for the quarter.
- Backlog as of November 29, 2024 was $12.4 million. Effective backlog, including bookings since November 29, 2024, is $26.6 million.
- Total cash, cash equivalents and restricted cash as of November 29, 2024 was $35.2 million, compared to $40.8 million as of August 30, 2024.
Fiscal First Six Months Financial Results:
- Net revenue was $26.6 million, compared to $42.1 million in the first six months of fiscal 2024.
- GAAP net loss was $(0.4) million, or $(0.01) per diluted share, compared to GAAP net income of $10.8 million, or $0.36 per diluted share, in the first six months of fiscal 2024.
- Non-GAAP net income was $2.8 million, or $0.10 per diluted share, which excludes the impact of stock-based compensation, amortization of intangible assets, the acquisition-related fair value adjustment to inventory, and acquisition-related costs, compared to non-GAAP net income of $11.9 million, or $0.40 per diluted share, in the first six months of fiscal 2024.
- Cash used in operating activities was $3.5 million for the first six months of fiscal 2025.
Recent Business Achievements:
- Secured the first artificial intelligence (AI) processor customer for wafer level burn-in, utilizing the new high-power FOX-XPTM solution for wafer level production test and burn-in of AI processors.
- Secured the first volume production orders from an AI processor customer for package part burn-in, utilizing recently acquired Sonoma ultra-high-power systems for high-volume production test and burn-in of AI processors.
- Secured the first gallium nitride (GaN) customer for high-volume production wafer level burn-in of GaN devices using Aehr FOX-XP platform.
Gayn Erickson, President and CEO of Aehr Test Systems, commented:
“We achieved significant progress on the key objectives we outlined at the start of the fiscal year, most notably expanding our product reach into additional large and fast-growing markets. Market diversification into artificial intelligence (AI) processors, gallium nitride power semiconductors, data storage devices, silicon photonics integrated circuits, and flash memory is driving new opportunities in terms of customers and revenue. This progress includes our wafer level burn-in solutions and also the success we’re achieving with the new semiconductor package part test and burn-in product line from the acquisition of Incal Technology we closed last August. The acquisition has led to the acceleration of our market diversification with particular success and leverage expanding our total available market (TAM) in AI processors.
“Last month, we reached a significant milestone by securing our first AI processor customer for wafer level burn-in. This includes initial volume production orders for multiple high-power FOX-XP systems and our proprietary WaferPakTM Contactors, which enable full wafer contact for testing and burn-in of AI processors in wafer form before system integration. This achievement represents a technological and commercial breakthrough for Aehr, significantly expanding the market potential for our FOX-XP wafer level test and burn-in systems.
“During the quarter, we secured our first production AI processor customer for package part burn-in, receiving initial volume production orders for multiple Sonoma ultra-high-power systems. This customer is a large-scale data center hyperscaler and provides computing power and storage capacity to millions of individuals and organizations worldwide. System shipments have already commenced to their contract manufacturer doing test and burn-in for them in Asia. We see a significant potential to expand our packaged part test and burn-in business with the product line acquired from Incal, and feel we are particularly well positioned to capitalize on opportunities in the rapidly growing AI semiconductor market with the ultra-high power Sonoma product line. We estimate that the combined wafer level and package part reliability test and production burn-in market for AI processors will exceed $100 million annually in the future, and with our comprehensive product portfolio we believe we can capture a meaningful share of this market.
“Last week we announced another exciting milestone with our first gallium nitride (GaN) semiconductor production order. This achievement expands our production wafer level burn-in market for power semiconductors beyond silicon carbide used in electric vehicles, data center power conversion, and solar to now include GaN, a high-performance compound semiconductor optimized for mid-power applications such as data centers, solar energy, automotive systems, and consumer computing. Over the past 12 months, we have collaborated with this lead customer using our FOX-NP system, leading to their purchase of multiple WaferPak reference designs for diverse GaN applications. GaN offers a broader application range than silicon carbide and is poised for significant growth in the coming decade. With an expected compound annual growth rate (CAGR) exceeding 40%, the GaN market is projected to surpass $2 billion in annual device sales by 2029, according to Yole Group’s Power SiC/GaN Compound Semiconductor Market Monitor. Additionally, Frost & Sullivan estimates GaN semiconductors will account for over 10% of the worldwide power semiconductor industry by 2028. This transformative technology represents a significant growth opportunity for Aehr’s wafer level test and burn-in solutions, positioning us to capitalize on the rapid expansion of the GaN market.
“In addition, we are excited about our opportunity for production burn-in and stabilization of devices used in hard disk drives using our FOX-CP systems and WaferPak Contactors. Our lead customer for this application is ramping this year and has told us that they will purchase multiple production systems from us over the next few quarters to support their planned new product rollout and ramp. This customer, first announced back in 2019 prior to the COVID-19 pandemic, initially purchased our FOX-CP single wafer test and burn-in solution to support the qualification and early test stages of this new product aimed at the enterprise and data center markets. We view the data storage market both for hard disk drives and flashed-based semiconductor solid-state disk drives as significant growth opportunities for our systems. These markets have applications with devices made up of multiple die in complex structures, or in multiple die stacked on top of each other before they are put into higher-level packages or systems. These devices require exceptionally high levels of quality and long-term reliability of the die before they are put into these packages or systems, which aligns perfectly with the capabilities of our wafer level test and burn-in systems.
“Aehr also continues to expand its presence in the silicon carbide power semiconductor market, a critical sector for power conversion for electric vehicle traction inverters, charging infrastructure, and a range of industrial, data center, and infrastructure applications. Based on recent market forecasts, growth in silicon carbide sales outside of China should remain challenging before recovering in calendar 2026. We believe we are well positioned in this market as we have a large customer base and are currently engaged in benchmarking efforts with multiple potential new silicon carbide customers around the globe, including in China. While we remain cautiously optimistic about the opportunities in China, we also recognize the geopolitical, trade, and intellectual property risks associated with this market. Recently, we filed a lawsuit in China against a local supplier for intellectual property infringement. This action relates to features of products by that company targeted at wafer level burn-in of silicon carbide devices that we believe infringe on Aehr’s intellectual property and patents granted to Aehr by the Chinese patent office. Our current fiscal year forecast includes contemplated orders and revenue yet to be booked for silicon carbide wafer level burn-in systems and WaferPaks destined for silicon carbide manufacturers in China. It is important to bring this to our shareholders attention, as recent trade-related developments in the U.S. and the emergence of competitive offerings in China that we believe infringe on our intellectual property have heightened the risk associated with bookings and revenue from Chinese customers.
“As we look at the composition of our total revenue for this fiscal year, silicon carbide is expected to account for less than half our total revenue as we have seen our expansion into additional markets capture real market share gains. AI processors, including wafer level and package parts, could comprise as much as 40% of our total revenue this fiscal year, up from effectively zero revenue last year. GaN, hard disk drives, silicon photonics integrated circuits, and other semiconductor package part revenues will comprise about another 20% of total revenue. We are not pivoting away from silicon carbide but rather are generating growth in these other markets while not seeing the growth in silicon carbide this year like we saw last year. According to recent market research from companies such as Yole, the estimated revenue for silicon carbide semiconductors in 2024 was around $2.5 billion and is expected to reach $10 billion by the end of the decade. To put this into perspective, the semiconductor market is projected to grow from about $600 billion overall in 2024 to over $1 trillion by the end of this decade, so silicon carbide will be about 1% of the overall semiconductor market by 2030.
“Aehr’s innovative solutions are poised to capitalize on this growth in the overall semiconductor market by addressing the critical reliability needs of next-generation applications and leveraging key megatrends shaping the semiconductor industry. Reliability has become a critical priority across a wide range of industries, including combustion and electric vehicles, data centers, electrification of the worlds infrastructure, and a wide range of AI applications. Factors such as smaller semiconductor geometries, the increasing adoption of compound and optical semiconductors, and the complexities of ensuring semiconductor reliability ever increasing power and performance of semiconductors and advanced packaging are driving the demand for wafer level and packaged part test and burn-in systems. Aehr’s solutions are instrumental in reducing early operational failures and ensuring long-term device performance in these rapidly advancing markets.
“With strong customer engagements, expanding market opportunities, and innovative products designed to meet evolving demands, we are optimistic as we move into the second half of our fiscal year and maintain our previously stated financial guidance for the fiscal year.
“As we’ve stated before, given the nature of our business with our high ASPs, our quarterly revenue can experience significant variability if system orders anticipated by quarter-end are delayed by even a few days. This was the case in this last quarter, and why we do not provide quarterly guidance. In the case of both our new GaN and wafer level AI customers, both requested pre-built systems that we fully expected to ship to them within the quarter. However, the purchase orders were not finalized until after the quarter ended. Looking past quarterly variations to the full year and beyond, we are excited about the current and emerging market opportunities for our products, which not only position us for a successful fiscal year, but also lay a solid foundation for long-term, sustainable growth in the years ahead.”
Fiscal 2025 Financial Guidance:
For the fiscal year ending May 30, 2025, Aehr is reiterating its previously provided guidance for total revenue of at least $70 million and non-GAAP net profit before taxes of at least 10% of revenue.
Original – Aehr Test Systems
