Aehr Test Systems’ Q4 2025 Earnings Call Highlights Growth and Strategic Expansion
Aehr Test Systems (NASDAQ: AEHR) delivered a strong performance in its fourth quarter of fiscal 2025, with reported earnings per share (EPS) of $-0.01, meeting expectations of $-0.015. The company’s financial results reflect continued progress in expanding into new markets and enhancing its product offerings to meet the evolving needs of the semiconductor industry.
Market Diversification and Expansion
One of the key highlights from the call was the significant diversification of Aehr Test Systems’ revenue streams. The company has made substantial progress in entering new markets beyond its traditional focus on silicon carbide devices used in electric vehicles. This year, the burn-in of artificial intelligence (AI) processors accounted for over 35% of revenue, compared to zero in the previous fiscal year. Additionally, the company secured three major customers, two of which represent new markets and customers.
The growth areas include production wafer level burn-in of AI processors, package part burn-in for qualification and ongoing process monitoring, and screening of AI processors. The company also expanded into gallium nitride power semiconductors and silicon photonics integrated circuits, further broadening its market reach.
Technological Milestones and Innovation
Aehr Test Systems achieved a major milestone by completing the development, validation, and customer acceptance of the first-ever wafer level burn-in system for AI processors. This innovation marks a significant technological and commercial achievement, as it expands the market potential for the company’s FOX wafer level test and burn-in systems.
The high power FOX XP wafer level burn-in system can test up to nine 300-millimeter AI processor wafers simultaneously. This capability is the result of extensive development efforts in delivering massive amounts of power and current to a wafer during testing, along with advanced wafer contacting technology and thermal control.
By shifting the burn-in process to the wafer level, Aehr Test Systems helps reduce manufacturing costs, increase revenues, and minimize field-related failures and warranty costs. The company believes that even a small increase in yield through wafer level burn-in can have a significant impact, given the high value of AI processors.
Addressing Industry Challenges
The call also highlighted the challenges faced by the semiconductor industry, including the limitations imposed by reticle size in chip manufacturing. As AI processors require increasingly large and complex designs, manufacturers are turning to chiplet architectures and advanced packaging technologies to overcome these constraints. These developments underscore the importance of reliable and efficient burn-in solutions, which Aehr Test Systems is well-positioned to provide.
The company has also expanded its product portfolio through the acquisition of InCal Technology, which enhances its capabilities in packaged part burn-in and test solutions. This acquisition has enabled Aehr Test Systems to offer a more comprehensive range of products, including the Sonoma line of systems, which provides cost-effective solutions for packaged part burn-in of AI processors.
Financial Performance and Outlook
In terms of financial results, Aehr Test Systems reported revenue of $59 million for the full fiscal year 2025, representing a 11% decrease compared to the prior year. However, the company saw a 24% increase in annual bookings, driven primarily by sales of AI processor burn-in systems, wafer packs, and burn-in module boards.
The company’s backlog at the end of the fiscal year stood at $15.2 million, with an additional $1.1 million in bookings received in the first five weeks of fiscal 2026. Aehr Test Systems remains optimistic about its growth opportunities across various segments, including AI processors, gallium nitride power semiconductors, data storage devices, silicon photonics integrated circuits, and flash memory.
Despite the uncertainties surrounding tariffs and supply chain disruptions, the company remains focused on long-term growth and continues to invest in research and development to enhance its product offerings and expand its market presence.
Future Plans and Strategic Initiatives
Looking ahead, Aehr Test Systems plans to increase its research and development investments to support further product enhancements and expand its R&D resources. The company also aims to hire additional talent in the U.S. and the Philippines to support its growing AI customer base and improve automation for scalability.
The company will continue to focus on securing and executing orders, with nearly all the opportunities discussed during the call expected to experience order growth in fiscal 2026. The only exception may be the silicon carbide market, where growth is expected to be back-half loaded with stronger momentum anticipated in fiscal 2027.
Conclusion
Aehr Test Systems is well-positioned to capitalize on the growing demand for reliable and efficient semiconductor testing and burn-in solutions. With a diversified product portfolio, strategic market expansion, and a strong focus on innovation, the company is poised for continued growth and success in the years to come.
