Atsushi Yoshioka

Asked about changes in the China outlook for 2025 compared to three months ago, the impact of recent US export control regulations, and if there are current pull-forward requests from China.

Answer

The company is affected by US regulations to some extent but the growth plan has not been significantly impacted over the past three months. They have received some requests for pulled-forward deliveries but do not expect more under the current regulations. They are closely monitoring the situation.

Asked for an outlook on new equipment sales by application, focusing on the reasons for the expected recovery in sales to NAND customers in the second half of the fiscal year, and whether new NAND-related applications are driving this trend.

Answer

The executive clarified that while full-fledged NAND investment is expected next year, the current fiscal year's sales outlook is based on long-term investment plans already shared by NAND customers. The increase in the second half is based on these customer plans. However, investment in next-generation, leading-edge NAND technology is not expected in the current fiscal year.

Sought clarification on the high gross profit margin, asking about the impact of the high proportion of sales to China and whether the high margin level of ~48% is sustainable for the next fiscal year.

Answer

The company emphasized that high GPM is driven by high-value-added products and services, and this trend is expected to continue. Regarding China, it was mentioned that the profit margin is 'not so bad' and some business there requires less R&D investment. They believe it's possible to aim for a high level of gross profit margin going forward.

Atsushi Yoshioka from Nomura Securities inquired about the impact of Edge AI devices. He asked about the extent of their contribution in 2024, their effect on test times, and how much is factored into the 2025 SoC TAM outlook.

Answer

Executive Douglas Lefever responded that business is still predominantly driven by data center AI, though there is some upside from Edge AI in handsets. He expects the data center to remain the 'lion's share' in 2025. He noted the definition of Edge AI is evolving to include industrial applications, which is a positive long-term driver. Test times for Edge AI will increase but will not be equivalent to data center AI test times.

Atsushi Yoshioka asked about the contribution of Edge AI to Q3 SoC tester sales, how Edge AI impacts test times, and to what extent Edge AI is factored into the 2025 SoC TAM outlook.

Answer

Executive Douglas Lefever stated that the business is still predominantly driven by data center AI, although AI-equipped handsets are providing some upside. He expects data center AI to remain the lion's share in FY25. Lefever noted that test times for Edge AI devices will be longer than historical application processors but not as long as data center AI chips, reflecting a balance of complexity and economics. He also mentioned the definition of Edge AI is evolving to include industrial applications like robotics.

Pointed out that the full-year forecast implies that SoC tester sales might be flat or decline slightly in the second half of the year. Asked if this outlook was due to conservatism stemming from short lead times and uncertainty, and if there was potential for upside.

Answer

The company acknowledged that the current forecast for the second half is somewhat conservative due to uncertainty and limited visibility over the full period. They confirmed, however, that they do not see any specific negative factors that would drive sales down in the second half.

Atsushi Yoshioka of Nomura Securities asked about the sales trajectory for SoC testers throughout the fiscal year. He noted the forecast implies a potential slight decline in the second half and questioned if this was due to management conservatism given short lead times, or if there was upside potential.

Answer

An unnamed executive confirmed the forecast implies a relatively flat to slightly declining trend for SoC sales in the second half. He acknowledged this reflects a degree of conservatism due to the uncertain environment and shorter lead times, and clarified that there are no specific negative factors anticipated that would drive sales down.

Asked about the potential business impact from a partnership between a major competitor and a large probe card manufacturer, and what the company's strategic response would be.

Answer

The company is confident there will be no negative impact due to the industry's open ecosystem model for testers and probe cards. They view the competitor's move as an affirmation of the 'total solution' strategy and will continue to monitor the situation and adapt their own business approach accordingly.

Atsushi Yoshioka from Nomura Securities inquired about the contribution of Edge AI to Q3 SoC tester sales, whether it is extending test times, and how much it is factored into the 2025 SoC TAM outlook.

Answer

Executive Douglas Lefever responded that business is still predominantly driven by data center AI, though Edge AI in consumer handsets is providing some upside. He expects Edge AI business to grow in FY'25 but believes data center AI will remain the largest driver. Lefever noted that test times for Edge AI will be longer than for historical edge devices but not as long as for data center AI, due to differences in device complexity and economics.