Mark Schutter

Mark Schutter (Blake Schutter Theil Wealth Advisors) asked for insights into the engagement and qualification cycle for Aehr Test Systems' AI customers, specifically whether new product cycles are necessary and if customer demand is overriding risk aversion towards new equipment. He also questioned the gating factors for customers initially choosing Sonoma (packaged part burn-in) over Fox (wafer-level burn-in) and the expected transition process between these solutions.

Answer

CEO Gayn Erickson explained that new product cycles are not strictly necessary, as Aehr can adapt wafer packs for existing devices, and customer engagement involves collaborative problem-solving. He noted that the high visibility of Aehr's systems at OSATs is driving increased inquiries. Erickson emphasized that the growing complexity of semiconductors due to AI and data center expansion necessitates enhanced reliability testing, making wafer-level burn-in overwhelmingly cost-effective due to yield advantages. He clarified that Aehr is neutral on packaged versus wafer-level burn-in, positioning Sonoma for qualification and reliability of complex packages, while FoxXP, a newer solution for AI processors, requires proving its capabilities to customers.

Mark Schutter (Blake Schutter Theil Wealth Advisors) asked for insights into the engagement and qualification cycle for Aehr Test Systems' AI customers, specifically whether new product cycles are necessary and if customer demand is overriding risk aversion towards new equipment. He also questioned the gating factors for customers initially choosing Sonoma (packaged part burn-in) over Fox (wafer-level burn-in) and the expected transition process between these solutions.

Answer

CEO Gayn Erickson explained that new product cycles are not strictly necessary, as Aehr can adapt wafer packs for existing devices, and customer engagement involves collaborative problem-solving. He noted that the high visibility of Aehr's systems at OSATs is driving increased inquiries. Erickson emphasized that the growing complexity of semiconductors due to AI and data center expansion necessitates enhanced reliability testing, making wafer-level burn-in overwhelmingly cost-effective due to yield advantages. He clarified that Aehr is neutral on packaged versus wafer-level burn-in, positioning Sonoma for qualification and reliability of complex packages, while FoxXP, a newer solution for AI processors, requires proving its capabilities to customers.

Mark Schutter asked if the second smartphone OEM agreement should be viewed as more concrete or if this customer is more eager than the first. He also questioned if there was an opportunity to create a competitive race for qualification between the two customers.

Answer

CEO Raj Talluri responded that every customer relationship is unique and at a different stage, and the company's goal is to become a major supplier to the entire market. CFO Farhan Ahmad added that securing the first customer is the most critical step, as it shifts the dynamic from a 'push' to a 'pull' for subsequent customers, making adoption easier across the industry.