Stephen

Stephen (on behalf of Krish Sankar) asked about the potential for expansion in Teradyne's VIP customer base, particularly among larger and Tier 2 CSPs, and whether relationships with these customers or merchant GPU players are direct or foundry-based. He also inquired about expected growth for hard disk drive (HDD) system test in Q4 2025.

Answer

CEO Greg Smith explained that the VIP customer base is highly concentrated, with two main customers driving demand, and expansion is slow. Hyperscalers are increasingly controlling their supply chains. Merchant GPU efforts are directed at the specifier, not the foundry. Regarding HDD, Mr. Smith stated that capacity additions take time, so order strength will primarily translate into 2026 revenue, with no significant growth expected for the Integrated Systems division (IST) in Q4 2025.

Stephen, on behalf of Krish Sankar, asked about the expansion of the VIP customer base (larger CSPs, Tier 2 CSPs) and whether Teradyne has direct relationships with them or if it's more foundry-driven. He posed a similar question for merchant GPUs. He also inquired about the strength in hard disk drives (HDD) from cloud demand, asking if strong double-digit growth is expected for the System Level Test (SLT) segment in Q4.

Answer

CEO Greg Smith explained that the VIP market is highly concentrated with hyperscalers exerting more control over the supply chain, and merchant GPU efforts are directed at the specifier, not the foundry. For HDD, Mr. Smith stated that capacity adds take time, expecting a greater effect in 2026 rather than significant growth in the Integrated Systems Division (IST) in Q4.