Teradyne (TER) 28 Apr 212021 Q1 Earnings call transcript

Ladies and gentlemen, thank you standing by, and welcome to the Q1 2021 Teradyne Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Andy Blanchard. Thank you sir, you may begin.

April. you, Thank and recent everyone, our of discussion Good results. welcome most financial Teradyne's morning, to I'm by this Sanjay joined morning Mehta. our Jagiela; CFO, and our CEO, Mark

for provide Following for outlook last first quarter press of we quarter opening The second quarter, will XXXX. containing our our with remarks, the performance evening. release XXXX's of our results first along issued details our was

review Replays on that in risk call slides we to providing page in the contained this discussions. safe earnings may will include following management's helpful are harbor release We from of same the website involve our as as today filings. investor discuss be could We the to cause ends. expectations. SEC factors will you be to the the differ that available of that most the materially Teradyne's call page recent results The via Forward-Looking statement current Statements matters the well you that encourage after

these to update made Additionally, obligation occurring a of result take as after as and developments we forward-looking of call. them no today, are this statements

During to we make financial measures. will today's non-GAAP call, reference

measure Investor the We information including available to non-GAAP GAAP concerning most page the were financial directly financial have reconciliation on of the comparable measures, these additional posted website.

and Wolfe ISI Stifel. Research, Evercore, Looking Teradyne expects of earnings hosted by Bernstein industrial-focused now next and ahead to between or call, Baird, our conferences participate in investor technology America, Bank

the rest with the on get let's Now of agenda.

guidance Mark. quarter, will quarterly your results The the scheduled First, details our offer quarter. with call then and hour. answer market our Sanjay more one will the conditions as Mark on new then for we and enter our for comment questions. results second recent on is we the along will

how take through quarter. summarize everyone, QX outlook on details review thanks the will provide then of QX the full-year. results, market our the will my our us I you quarter an joining conditions update second are and In the we looking Sanjay and and Hello, current today. remarks, at and for financial for

from our double market memory digits demand rate. IA the call, from our UR saw compute, X% customer sales the quarter both broad-based Semiconductor has automotive, in sales sales expected, grew both grow industrial storage. since we Test, you In twice record continues Automation release, to Notably, guidance. strong January strength this grew and and and complexity Industrial are are than orders in more our on chip QX see strong notable As and units press demand QX XXXX's XX% expected been last as with Test our Test in demand as increase with you and than XX% level. of to year's greater in QX can very year, MiR. profits almost grew at

visibility demand, healthy to Regarding a should WFE the in in years to limited growth year is XX the year or last in just XXXX our ahead. this from the translate billion market XX sustainability billion a but to this tester into quarter of billion over two XX

longer complexity demand's the performance with robust, especially and QX and unique is ahead also advanced devices expected and nearly further compute year-on-year, growth. estimates chip markets deliveries highest Test capabilities. as is of segment XX% times these our QX. and our tester industrial end nodes higher often mobility auto grow running drive test for shipments the This January demand, in SOC push the process limits drives demand of Eagle at Looking up complexity to

these well aligned are dynamics. performance platforms to UltraFLEX Our

to SOC and at from up equates we to $XXX estimate. growth $X.X from about in billion result about to be As to we $X our million of midpoint the XX% strength, This share demand test a be now expect in the the about XXXX, to $XXX test, XXXX XX% this SOC up market and full-year level. the million We range, memory expect billion test flash our our January now January expect the market both strength million the in from from about and estimate memory up range, DRAM. $X.X X% levels. are at about billion continued seeing be we in In $XXX to

Magnum both lockstep in with is the another Our strong XXXX. platform and performance in expect we in trends markets, year

few is test Storage wafer exposure, to most our applications, the from are revenue XXs. In XX% upper System since dip likely Test, points expected we grew we higher where of However, QX primarily Test the on have share market be test less growth shipments. a see into to XXXX,

in noted to past test. linked hard center the chip system-level have per and test drives and we complexity Test Storage of density expanding increasing is calls, As disk of data adoption

this full-year well, and as we expect and for and test improved this year. applications. has from Our defense will grow to strength performing January STG on X% in The Board of well both outlook business overall are XX% units aerospace also revenue group the

wireless is ramps complexity and the and other access new was wireless connectivity Our smartphones In driver revenue in the and WiFi standards by as cellular LitePoint points. XE driven of dominant markets. demand business QX, connectivity the

customer level, expect X% with Industrial PMIs We in increasing of above a where with XXXX. quality China economies At to XX, manufacturing At to lack than LitePoint seeing notable to Automation, X% Shifting are growing year. recovery percent by floor and shop grow we recovering the the to are quarter. doubled QX are investments. the UR, grow ground available level, buying economics, XXXX sales for industrial more range XX% XX-plus grew in global revenue the we macro labor. in indicating from on-track driven the At in

of the value where also competitors. in environments high-intensity and but and peripherals provided have times. address durability low-cost proposition with software performance not be only a can't wide the production range suite of offer face to of ecosystem China to tolerated, operate unique short offers, deployment UR in the compelling We downtime organic a even tasks Our we reflects

and in delivered highlight MiR wind the volume to perform seller for such cobots, inspection the was growth energized approximately examples dangerous service tasks. tasks, turbine several we service results UR of tasks. of our in been of in the outside two of which in seeing shipments and big also installed this the strong have year that last cobots traditional March blades. the as transmission also maintenance performing In QX. and are Together, while lines over XXXX. account growing of these XXX, year-on-year. of in flexibility manufacturing Both part leading and introduced success last arms value applications has XXX industrial double of should high-power A We seen new was MiR quarter, robotic quarters, XX%

market of of also expansion products. Initially, mobile expansion We platform And reconfigure most for Last robots a traditional a workspaces. applications platform to flexibility for replaces as saw the nice dictate. provides This use fixed our fro. them as goods production conveyor we conveyor mere were tasks applications their the such seeing fixed than mobile in fly factory now as MiR dramatic the seeing year, conveyors. owners system we in where growing to a moving on requirements use are are and greater disinfected allows and

focus for on the for adding MiR, for complete future. in The XXXX. At projects expanding IA plug-and-play in deployment our deployments this UR we yet. new our win will existing XXX expectations market lowered while scale But series customers of designed have our cobots, factors cylinders on both apps, we shortens and additional the in over totaling addressable and ecosystem MiRGo time we UR+ engineering AutoGuide, of to growth a not year, now and firing all us. customer increases range expanding Although we and are the

January front global on-track that the equipment from MiR benefiting test our and at architecture In this the of plan, to mobile to Automation, unique surely end UR XX-plus autonomous improving the environment to years is deliver their we next value nascent tester for has businesses potential few strengthened differentiated in market. this a since reset for in and the leverage group the Industrial a robots remain the are differentiated high product year. economy, confident IA continue wafer AutoGuide ability demand the growth our dramatically which us While all Rolling and demand puts up, grow. AutoGuide's it to over forecasts total for products will growing market payload percent revenue and of suggest our

been XX-years and Our his our counsel invaluable after is are and to like model Roy's leadership, wise all team, Sanjay the have I finally, me thank And recognize you delivering best flow. details. in through wish doing him cash the will and free a and month Teradyne our who take will now operating great financial would Roy the future we executive on pursuits. the Sanjay. Board. integrity and job, retiring and Valley, strong employees next chair, financial to profits Board be

everyone. our the Mark. strong with results, our additional and on you, environment, demand operating provide QX very QX describe Thank offer a details will Good I plans outlook. our morning, on environment along color to address Today,

appropriate the will provide some I During expectations. full-year sections,

QX. to Now

due First were the rate, expenses profit operating discrete Non-GAAP above EPS and $XXX for two non-GAAP basis. high million, and GAAP quarter, million margins had quarter operating items variable XX% with was on customers expenses. XX.X% the sales quarter. in high of non-GAAP XX.XX% and G&A a Non-GAAP non-GAAP was $X.XX. both excluding Tax $XXX compensation to our were gross rate XX.X%. We our were guidance

SOC up of including $XXX a cellular was and System from Memory SLT in from driven up prior $XX million Group down test prior million, Looking revenue million but in test was from by from strength X% and million by from production $XX lower due Test industrial business year, storage about was final million, and X% mobility was revenue decline up revenue XXXX. $XX results automotive in offset year, semi our was million $XXX was above revenue prior $XXX and test at defense of markets, year million, driven the perspective, flash year-over-year. and compute, XX% and aerospace in unit test by by plan, sales, $XXX a driven board strength At had LitePoint, up shipments. QX This test. shipments. was revenue solutions to segment. HDD which

our at test overall. Looking portfolio

devices benefit our optimistic and of refresh technology rate We the rate growing over of for faster devices attach The a across many those businesses. are electronics trends the of test market significantly, and complex unfolding economy, very of increasing all about these the complexity the midterm.

processors cycles, example, of significant doubling high-performance estimated the XXXX. compute test number is with unique this year range a with of portion compared performance and creating driving end SOC a applications, companies increasing each serve of at the the to Looking growing of an market design

our impacts are serve having to and this early designed complementary platform This memory well. success. UltraFLEXplus have market on trend as SLT We growing has and markets

Now Automation. to Industrial

$XX XX% was I the year-over-year million, was IA of Europe quarter. over contraction with for XXXX. metrics the and QX provide seasonally will a XXXX. year; of QX Automation was XXXX was revenue comparing results QX first XXXX revenue XXXX revenue XX% soft QX up represented Given and Industrial a first U.S. over in and record QX year. our quarter the XXXX XX%

were $XX and XX% XX% strength year-over-year China QX QX, more XX% XXXX. QX up noted, the over China add $XX UR million, in that we both than Mark in XXXX. XXXX. than over grow double from up million QX UR, in IA in every As QX greater I XX% sales saw and revenue QX Sales sales and for increased region over XXXX. group were XXXX will year-over-year MiR

and capacity. towards companies to higher also our of at to both overtime. and are to see The and addition XXX MiR X,XXX payload global automation Demand Mark that improve noted, we should economy the XXX trend positive of a the starting as to models, UR work MiR production opportunity which recovers continues growing. MiR improve ASPs is success add shipment MiR In

address products investments From distribution and for into our adding ROI our a IA, and Our and we products to warehousing global applications the is lean labor shortages companies supply resilience in the ecosystem and in improving perspective experienced IA a engineering, solving one portfolio with as by year, economics over chain IA of - approximately of IA extend reach. long-term. expand problems continue manufacturing financial to such addressing typical distribution firms range

to the with in XX%. short-term profit annual investments is deliver to of operating balance growth goal and order between an IA in group Our sales X%

at profitable XXXX. not Ag described expect mark reset of revenues than be and the given $XX million XXXX, now Ag we less in in will AutoGuide, However,

be expect will As a we in result, profit expect in of and but operate million. the MiR we rule target level, do the sum XXXX, that the of XXXX. We will breakeven above $XX at XX That operate above profit; growth below group over is UR operating IA the revenue range. both each

our in group over growth the supply. to confidence overall grow over and Shifting to in in XX% IA to update continue January earnings articulated the our XXXX. revenue We have midterm, expect as model

the and From are the noted, has predominantly As area. increasing we significantly increased with cost supply Mark size board. dealing test in increases, perspective, across the a market semiconductor lead times

in Given supply is This the automotive delays. environment, shipment demand challenging markets in outstripping significant demand we the some and significantly industrial the increase tester most experiencing are where supply. acute is

in on and these more invest a needs resilient accelerating We manufacturing with incredible for into the around and qualifying team have delays. and appreciate a capacity redundant quarter world for partners operations in We times year our daily around supplier to to lead the locations. manufacturing cash this we Shifting to impact new customers meet I sustain the impressed balance our suppliers, minimize challenge of the sheet are and redundant be the working includes create our continuing over This the see third critical production components efforts world. with of capacity are increasing. pace customers. To pace the of to with operation, to continue flow. basis a that their sites and operated

billion. million paid of convertible Our dividends, $XX million And cash and in To-date, bondholders totaled to and at convert buybacks bondholders. the the negative in and it free We respectively. early. million we flow have securities $XX had of QX, $X spent the million on to RTI $X.XX and cash the million marketable elected quarter $XX of $XX in quarter the end

XXXX, daily The low the reasons. three and throughout of year our increase in buybacks relatively QX noted of a was purchase to buying plan we minimum to million expect buyback, as the in XXX planned in Regarding for January. volume

QX use a we is and high cash, typically increased QX of ramp test to out where support prepayments compensation production. recall our First, up our pay seasonally variable

redeemed would to much be debt of we understand QX. how in Second, wanted our convertible

confirm Third, recovery we wanted to the from the on-track. global pandemic remained

Now to QX.

customer nearly the of that numerous with morning, this assumes heard earlier demand shortages is our in the have strong be to and that guidance continue dealing will you As business, all material and parts we noted we billion, expected we range that won't see and a With related diluted sales issues. $X.XX QX EPS in to $X.XX with be $X.XX $X.XX billion of on said to between additional pandemic non-GAAP shares. XXX are million and successful in

non-cash on debt. imputed amortization the the acquired intangibles quarter second The of and excludes guidance the convertible interest

run sales. is at OpEx The Second XX%. quarter gross margins the to are XX% XX% second estimated of profit quarter non-GAAP of at XX%. to is operating second expected our at midpoint guidance quarter

grow and Two, to accelerate engineering revenue-driving spending related in test three three, XXXX. IT in XX%. for G&A expect higher the compensation up higher will to to and order OpEx supply insurance XX% general January this is that related we over several legal, costs. to Regarding higher full-year. from estimated our magnitude projects XXXX IA. where now January X% constraints. for engineering The growth XXXX, over And mitigating guided Note OpEx at One, variable to incremental plan spending in We is and categories. XX% of higher-than-expected from costs increase higher

included As to expect through we we noted remainder in in January the ease. expenses pandemic increase travel the of restrictions the and and as year estimate, marketing

we our test model quarter, rates. As XXXX, recovering our next the sight growth above expect environment points a earnings strong, of on earnings WFE outlined material In earnings We To working update, the closely both January. EPS estimate reaching and each the markets closely and of the the to we to we midterm at model. model. these semi end slump, in and all update with Combined nearly minimize look will foundation. forecast our estimated set reinforce on sum shipments are $X.XX by market, at midpoint our XX% solid is plan from we expand our earnings across with up, industrial demand and and that In to shortages. test, end remain grow suppliers customers impact data last in the XXXX our markets our largest our $X.XX our in pandemic

and an for path will non-GAAP a growth itself and above first of XX% and record. At on sales guidance, the grow had which to our QX profit XX% the the growth see have XXXX. a we EPS outstanding healthy sales We of was start we year, to half XXXX, grow are midpoint

We achieving in way set that, are we things midterm goals well earnings back our and to earnings on our our to model. With will Andy. turn revenue new I

please follow-up. question Thanks, limit take yourself and as Sanjay. to questions. And April one a would reminder, a now like to some

[Operator question Instructions] first C.J. Evercore. your is Muse from And with

with the share are and terms momentum for think PCs it of your Thanks guess both how you servers revenue gaining as seeing growth what and impacting SOC market you and that first I in can higher taking test SOC question, arm to about share? should us question. outlook, test relates in the we

Yes.

compute a in test for think theme certain eroding I well Arm very innings we double. are what the is this to share sub is is high I the beginning. it billion is with is plus it positions, the market architectures count will I at sort bespoke area. arm. of early But design. are of transistor think compute XX being happening end; we proliferating, and this doing don't in there. established in but haven't ramp least they proliferation think potentially is of of year that They still The sort are started design. yet, in the other devices And worked are on

segment like just few the compute to very over So is be years next to going it me that looks strong.

nearline in demand, should a Very your in for you CAGR the the with thinking and helpful. HDD about growth guess outlook XXXX? system-level growth how there share with combined XXXX beyond test acceleration think us can as I about follow-up, then we

Yes.

one very growth big the line XX-terabyte still trajectory. and the are is a didn't a space a of I both drive above is positive. say, And is year, it more And transitions those still HDD just sort drives. a don't that on think, and I expect think test little last like storage very to but year. limited is see that year high market had have sight digestion at heading test We grow, markets this the big, a, in anything, sequentially north. to we blunting in looks cloud The market, might system-level devices We on I of complexity high but little It high-intensity SLT this building of of is for could volumes. would to manufacturers a HDD the growth but front, point. no, continue ahead small still I very Exabyte anything years intensive. the in subset lumpy I several think it the a

But grow. Now engineering plus market will come devices. more over market see think broader we the products to on I adoption and will of I next as try those make year-over-year SLT I of years, get would the minus SLT. or to sort to a start wouldn't customer to meaningful SLT work expansion to be in to And XX% surprised as say, going swings see is to lower complexity few you

Thank you.

next is Citi. question Your from Atif Malik with

the XXXX, Congratulations which contrast XX% your you on correction, dynamics the sales this of can XG at year? mobility quite and year guide. are the XXXX largest another last compute saw was piece customer, or and compare compute quarter the strong with now different Mark, in period obviously, where versus you piece

able not any break going be I'm related to anything customer's Unfortunately, mix. down Yes. to to

our I April. to starting we demand as your think portfolio clear variability. there have the profile devices the expected. I clear, of it it And than we a here. bit do up smoothed prior our in are specifically. move though becomes years of bigger market at is year. revisions, through one talked of and the compared play customer, estimate lot lumpiness address would big size can't And that April, about always of that a until and And the I to question largest the become So I because is stronger had has say, to is

story of part year. of the is the our this So what up and that revenue market driving is

here Sanjay, you that areas interesting if as a mentioned the on for you on in follow-up you Sanjay. Semi comment call, the M&A And earnings strategy can last are guys. some even Test from Great. to

you M&A? area, with So setback the just Thanks. AutoGuide the of are in what thinking curious

Sure. Thanks. Yes.

to over you as keep a allocation our have of on And the M&A So years, know, had strategy. industrial is focus we automation.

And them. will sense we we active makes to will opportunities. continue development that as are when financially act advise And an reviewing management business opportunity at And organization a fit, different time. to we will and an do We product at continues strategic look kind team have we both that a spending and so. time of

Thanks.

next is Our Bank of Arya question from with Vivek America.

So remarks, on some some think end lag? the something a growth expectations will you interesting this - a the investments point; been one be effect prepared demand have could happen perspective? there be for second think, they kind the testers. of of correlation you next this what rising XX% mentioned Because impacting should a WFE over I'm correlation I month be Does pull-through that of does year, it for expecting are year. kind lag, which is right? a in we between And it historical will Mark, testers? that from front in is? curious what the XX% impressions growth is have just with your year this with the kind a for do year you happen at correlation testers six WFE your see curious, and year strong what that When almost very

Yes.

a So there correlation you lag, alluded is to. as and a

The the equipment end put is real has before recipe, fab the there shipments. and of commission into is of Revenue period things installed. gets of recognized and time yields the for behalf makers on after gets fab those front So all fabs, equipment then into that tuned. usually customer a goes

on outs a ramp from light - testers. adding more four maybe start slowly good It that about through faucet a knob to you to three on. days like the is not you start suppliers proportionately phase that can in and wafer turns So that switch is a get because these anywhere months. it But take then

can you going to to lag what So four beginning they equipment get five of the after orders is, but a tester of fab maybe see goes let's expect in. kind really say, the year months,

you if let's get a year investments tester fab plus three offset minus say, indication by good from the So growth. a of you the about, or market months,

past go there you been for back if there WFE market. the steady the growth five you in pretty pretty see growth years, Now will is monotonic is been and in monotonic steady tester

most XX I step, to plus XX is think the though, than larger from recent we have historically. seen

add transistors is transistor again test at intensity getting count. which quite all capital to three pulls commission, So rate of caution on the and it drives is is that the I call is nanometers we and it is transistor And the in sometimes it be count, but if happens expect would I per that put have such complexity, would build than truly be high. a transistor higher to that But to past. growth bit the into one what up we basis something seen little a

turn that at it may it of some transistor per these takes than has nodes So out historically. it more CapEx

mute the cause effect. could and So bit little that a

overall, follow is correlated. you are three minus a Maybe big or right, is, it plus is If year the I'm what month delay. big, it saying, but you picture

perspective. and operating And it. the the one on for leverage cost Got maybe my Sanjay follow-up, for

leverage Do that, passing you that And grow of on of B in also any kind I So operating grow this expenses grow to those those along cost mentioned and you model somewhere part in you that and be still that think, OpEx input think when could seeing you left Are is you rise XX%. side much, you sales then costs sticky doing neighborhood in overtime? there response? your year? will could what XX% Sanjay, the the are in are

Sure.

the increase. of cetera. semiconductor materials, from will a gross a to expect, XX% through fundamentally, first margin, So XX%. we cost Raw be certain those. from we on able components, sales, seen have manage have we And perspective, et yes, to model we at been full-year And cost

lower kind see in increases. you of operating some are seeing us we those yes, the cost managing year, throughout QX, just expense an but throughout our increases, from to the we leverage year. really improve expect so a And through are really OpEx perspective, And should operating leverage operating

Okay, thank you.

Mehdi with is next SIG. Your question from Hosseini

to to comment Mark, unit press upside I earlier regarding your It to interesting SOC want contributing you a smartphone your talked to growth. release last transistor. go about in just Test back also as night, is

test context, growth. that in So

help smartphone So context, unit do you can the how that I which year is are you one to understand and a SOC growth factor have versus transistor or in a please this density follow-up. us growth And XXXX? going Test bigger be driving think

they cell units Good are the are correlated. all was in Okay. saw driven increase question. Obviously, related, complexity for that they dramatic And But weren't tester when a XXXX, we example, in by market growing. phone growth.

big. XXXX, can So you examining it alone see the power growth by of complexity is

where the, that that into of than by to fact growth XXXX, is a I offset it in was the complexity units silicon going than are been Now going the would is getting say, more phones year we interestingly, but less are grow. in XXXX,

last is year more as complexity, up, So for it units working little a going us as it did but not now dramatically year. we a have where in

overall this is And growth, would looking So are but both, unit a the effect of smaller smaller it story we TAM year almost really is a say of two. we I market, a be than without multiplicative at a would the seeing.

on year-over-year these system of just what growing Thank and two how And are HDD test, each moving pieces SLT to a it. the is basis. you. and on one between mix Got

is expand we SLT, there Mark investments see HDD is an growth really plus roughly and in Sanjay indicated, Mehdi, It Yes. But a is market. some perspective, strong from that split, or end it XX/XX And market as here. minus bit. both. a going growth to

Great, thank you.

with next Sachs. is Toshiya Goldman from Your question Hari

market about guys. taking traction your Hi was a Mark, for for I to ask XXXX thanks very memory test. DRAM good strong you year morning, test. share questions. wanted in the in Particularly package

cycle, about pull of or are memory what year-over-year. expectations decline in of little mix customer in a mix driving through maybe this a talked customer and But year, right You seeing test terms spending you now? bit your

Yes.

memory will areas last good midpoint the of test actually not. some sort are them the and is estimate, market that growing, them strengthening. It it new of is was again of participating year. to in grow the So a were compared which At some of were year,

is well are in we doing China dramatically, So and very growing China.

we LPDDRX product are of of products faster is the good and DRAM, our we where even market, and not and I that low very market don't we final maybe is to the flash a is test wafer a for in pool. test to drop there XX%, looking share profit to what from participate. that And market; In design XX% alluded really that, a also product other and tester wins. have serves is tends of is DRAM the It because is gaining that growing. big for good both So That technology we growing, area that an might the seeing XX% But XX%, DRAM down pickup for geographies for piece be growing new it the our share. DRAM, targeted year. which fact are

go to reset. then quick helpful. wanted Got to back And follow-up, it. I a That as just the AutoGuide is

more that Mark, in you perhaps changed overall think business growth IA? this, past this M&A And and Thank our your but what the if missed strategy, to sorry does you. how months three within six I about strategy over has importantly, change

strategy URs Nextest, XX-years, levels The thinking past the anything well. of the we the had on many over would in the just the have IA of and one acquisitions success, change I we doesn't really have in M&A gone first. to And growth have the say. It like Yes. take MiRs really, of world course bigger acquisitions the of and done various about Eagles, sort that our

have their And expected longer taken ones some beginning. smaller than at of the we realize to the potential

AutoGuide into where of so last potential high are getting these pad of in the out lilly And is we pad and a case lilly started are deployments up same accounts. And deploying running. year, initial situation. multiple sort We name, we big that - kind product

not systems by into could current to to stood, potential on reflected where As automation other more we the dock jeopardized are on where doing back product the these getting new we that overextended customers factory ability the we accounts implementing. with accounts augment were be

get around accounts to manufacturing systems, have retrench or we we warehouse there. to on more our linkages so and have more connection then of today, a product those just our within a six decided, big rock solid, accounts line, MiR footprint. strengthen develop to grow just let's So expensive have we linkage five go And them automation, the seamless these

so a trying we we So in what planned AutoGuide. off think But the than ago to task opportunity today, looks not that and is proliferate the light this absolutely it of we taking just more large better acquired year when more accounts.

sense, you. Makes thank

is Crédit next John with question Suisse. Your from Pitzer

to your results. constraints the impact revenue is around It calendar it to need. sounds things to get to they get than just having Sanjay, Do quantify when least is any your want, on can't to the want customers third quarter. order that I and what Good they duration. and more supply Congratulations guys. tend like last morning at from usually, the here? solid go from remarks, there they this commentaries your way worse back Is into going prepared to

are excess inevitable ordering sort how build of out? double against and So you safeguarding the

question. great Yes,

shortages, in seeing been multiple to So able and we strategies in the through in well been we through Fundamentally, COVID QX. [XXXX] inventory - demand them. as then of are our and the in rise to have able and through XXXX suppliers as work (Ph)

getting in we are and it supply tighter. seeing see We it QX, getting

the increase as times are different And remarks, suppliers lead suppliers. from much prepared qualifying are pretty dollars my And our booked across we out in board. I seeing year. the spending engineering more said are We and for we

increase we year. about tighter good pretty the at to feel continues are we QX, And demand So getting it throughout is range. where the as in

set on are the Of tighter. course, down. whole visibility, perspective, orders orders. Visibility, duplicate some we there I is managing. of issues goes And always the it see the say we then But into it don't are of a statement, see I getting obviously, QX, good through. demand out, have QX, working would really visibility duplication things in we we QX, further

customers, working needs We to just and need that. through what are we working and understanding them with our are working specific they get their

your front the regionalization of to that here is are seeing capacity, might future of production out mean help conversation Washington secure you from end what U.S. kind any Test, kind that have for build goal that if beyond as sort you business that chain seeing over silly across follow-up, domestic perspective, sort And might business. in a and lot of to of Semi test That curious to then, seems supply of more are to to other IA of the inside wafer test supply Mark, a and supply my get package. your here ship chains, chain, drive maybe trying you kind redomiciling just clearly, I'm is about helpful. then even the of it a coming your towards actually of the to Asia

Yes.

jurisdictions everything if a there is in The so Europe, an need to deterrent in test, said. alternative of a it infrastructure I'm makes I the want of to the or possibly get it, or interesting going will of yes. regional just dispersed, in U.S. it meaningless But the venture thing infrastructure because will test because bit national test the done, robots in of invest Taiwan, to build-out. Japan some for global So is creates also be whole my inefficiency a economical. the a doing supply XX-year a bad of into to probably supplier without fab move and think a and on it security my It little more there lot the a market. it be is but And view, read happen. just and the U.S. that fortitude really case, the it as all one chain necessarily answer for helpful, orphan. of if of competitive is is I as in behind equipment It not is including I to local to think require supply economy you have these tailwind. skeptical, And case the fracturing hand, infrastructure kind maybe you a fabs this is it And geographically an is these what associated a the in well, market, is, to in sort think the you that issues, the in around do supply is is a lot suggests that little intestinal the chemistry, regional a that to probably forward going

do will less of the overdrive because And of bit level. to our But think secure are it of beneficiary equipment a find you to businesses of trend. instincts be going a national both chains globally to probably little that. and this around utilization so supply probably I that some think I efficiency are going subsidize And

you. Thank

is from Timothy UBS. Arcuri Your next question with

guess I Hi, couple of thanks. things. a

you think compute. I Mark, First, said that

I for you take TAM, to for your my break down guess break question really just you is So Test this if I'm wondering if the I what $X.X billion SOC. down. can year Semi that midpoint

I'm it most this up wondering of as segments kind going is compute that reset I grow can the break you said million that is I'm going had the sounds you million to year sort X.XX and think million wondering, compute if us last the so just compute XXX XXX from billion. was you X.XX if last I'm of of to down. because of of it year, billion, can well. for wondering But XXX double to like like out said is X.X billion year. It you from

size will a numbers, later, what with take a revision salt some talking view but about because grain to I little give our it months here are three big market a we of you the of is. rough bit Yes.

market wise don't to $X overly profess current view our about would compute example. billion-ish this on I But So be this. be on year, for

is the not doubling, quite over. halfway even not year So

wave telcos the globally there of lot to happen, bit wave tooling as knows surging probably view. is The about millimeter places a last could is and and in what current could talked of flattish, our year. that of of the demand, test But deployment U.S. millimeter of of are this where of nothing fact in deploying that we there compared millimeter is almost was early wave last adopters that And is compared the pocket extent down outside millimeter that a Mobility a to year the last the softer that who mobility U.S. is year for wave some year, capability. any large aren't the part spotty technology. one were be phones to demand for haven't So matter little but all is

headwind makes wave That suppressing mobility so for for millimeter And equipment. test that it market. the is - little is bit year a a the of demand this

we year, XXX, in that it so big and about last the so. for one X.XX or jump And the to maybe or from up mobility. At is sort say, year. there. from MCU industrial, about So The of XXX XXX down let's is last XXX call is it flat slightly and is last to that track about, closer up big, billion automotive XXX segment market million is billion X.X about year. to That

segment right it we that is how So now.

maybe go more couple Awesome, a a between on guess TAM. in wanted get years, TAM SOC It memory Test WFE agree, to big pricing a bit the you you and end back probably But the wouldn't is is Awesome. than the big are these course, little SOC thank customer of your WFE to away. Test they non-memory when is consumption push correlation consistent of larger that just swings, significantly you. of portion front the And past been then side, going on of world. little I I the in

the world. SOC on in a more customer than the doing doesn't world test market So is in WFE the the lot large depends what

customer the because in correlation never year. big is guess good SOC years of on in this not the a down the bit I what and second they've doing. large three break is that point, could So been of once, And a sort row,

big down is a against So and share, the if how that down do that year you year even of handicap much? terms next that works the come Thanks. doesn't odds market in you

try to Alright, a on. but take lot Tim, I it there in will

years So your large a three point or proportion as a about our having the our sort never customer, revenue, large big customer in row. of of

what there in is a truth difference there but growing. also that, there think because is happening, the is to is I portfolio

device that If story sort a the And just and that period we into offer you kind I the this XXXX, changed. XXXX, growth more a much type of longer driving it are the XXXX, to was could back one area, a XXXX go that of dynamics was now so is of for sequential that And broader would fact time. that portfolio, propel demand.

who's On let's WFE test have intensities. say, buying, demand test, the that than stronger certainly, is SOC and Test correlation customers between whether different

running under hood, buying. so of that related to as test large noise is they customers the much certainly intensity how And are the and is to part high our relates it revenue

test others, design. produces we participate tend are And intensity. market it We high that have by where high that and the is There in segments that of target that devices are play. is not customer large we that have intensities, one fortunate but to segments. We those that test is just

the disconnect high So on away market that seem complexity you an see market from shifted from devices, I intensity would agree you with likely if But that reason the made to reason a lines in they that front going after nanometer being doesn't these devices it meeting was investments test are customers high WFE. test customers make anchor are the just is for could the build expensive so these to about. EUV three end. are are very the talking because they we And disconnected

If unless I is fabs talking are the the going the to be are say, But emerge fab sit idle, idle, just disconnect aren't are can going to yes. the that to customers don't the see it them. that if So exact utilize fabs we about idle. going

are actually definition, by It just unless think but correlation, occur the the don't point. has idle. almost I disabuse So to merit, some fabs your has I

you. Mark, Awesome Okay. thank

question Krish Sankar Your with from Cowen. is next

custom silicon the And your my market it from just to much Is if said this be going year? XXX focus it like on SOC how Mark looks year on question. Test. like and color you much the market I wanted you million and all think that in tell last do you is just then compute for can us follow-up. share going incremental one case, is the from coming for was and And Yes, taking is growth how the a to have test compute the I thanks thanks billion. it

Yes.

So is, custom say would most is non couldn't I coming it - of that. growth what silicon, the say, I

I But a think suppliers usual amount too. from is growing. disproportionate compute suspects growing NVIDIA growth devices is it. the obviously, of and the of is coming AMD, growing nontraditional other obviously are is

than proportion, below compute others. a growing yes, It our broad-based. share position, So that are And newer right. it in some market historically, the But has I would faster are you is been our probably our say, as players of the as overall market share is to share.

it So around maybe is where is the moves and in in XXs the been. XXs

We share to are is market. building where our closer of up trending who likely in of move these overall to this time into because the period share change more a of devices average our is

take little we SOC our somewhere the XX-ish if share a where trending kind it might to. of range, time, is bit are but So of in is that average

we the assume Semi is the is the so, QX strong Got it made that and if then run of half that you back would the Test revenue sustainable? in and seasonality other because see should helpful, think Semi And you is not your Test comment in in it words, QX or Mark. Test comment a are demand just rate out you kind a Storage of follow-up, that rest I really for a a year. Is booked that

It is Sanjay.

and So our perspective. it tied I to supply the booked was at, were really that made comment we

both the year, until supply with given manufacturers of the end the direct environment. working and have on contract the just are books orders that constraints suppliers we fundamentally to our make We sure

Sanjay. Thanks it. Got

Your from with Stifel. Brian Chin next question is

morning there, us Hi questions. letting thanks for and a good ask few

assume for Semi I quarter of your majority in be if definitely second the the respect on or business, limitations. has First, share market expectations But year Test midpoint do Test take your markets, the will growth that projection the this driven. visibility of and Semi any take I the test new

decline of Semi into in this? to I second in Am of about so back half year. supportive your XX% backlog here what kind of in or Test is sales coverage think the I the and I extent a the ballpark

I Yes. the numbers, look When will comment overall. you overall, maybe at take a

we seeing that be for of significant provisions, that We revenue overall the is we Semi enterprise. half. the given will throughout see, in year expectation an But obviously, of a second down, size, direction market of the and move with the visibility reset Test. the a slightly the as with second are and half down are those And the expecting both of year, all lack to for visibility similar the

sort UR business Europe well. and of key just and in characterize Sanjay. strong lot And obviously, this, terms of you a as them in definitely China automation growth then if I thanks geography about maybe of it, where snapback sorry year-over-year showing I industrial MiR of the and a heard a missed some growth but Got as to America; maybe snapping are might relative in you markets Can well the expect year? they back as their business to get North where this on

is it hi Yes, Sanjay. Yes.

kind U.S. seeing at similar a of snapback, XXXX, So very QX over year. we perspective, increases from or you year even look of snapback of with are either a double-digit whether strong pre-COVID over QX XXXX, the Europe,

you. Okay, great. Thank

Joe Moore Stanley. is question with next Your from Morgan

we XX% in The and on shortages does them mind I auto, when next you to your your that, year? with, a that in at broader degree there which bit of you in wafers automotive bottlenecking do sustainability seem then is how risk would some a you in you. just catch-up like markets. like like one think maybe test create severe comparison wonder about look it the could packaging, talk dealing they and is test bottlenecks thank if the Great, hear little the about are

Yes.

automotive to big on I the of think mean trying completely the we doesn't suppliers that ramp the are issue in not who aligned bottlenecking, chip are is test to for terms That equipment shipments. wafers, deliveries manufacturers.

by the capacity. issue here like big, weeks We few bigger and pulling we there. pulling But a mad. And and is are big, are mad they are misaligned wafer like getting

there bit not a get week more a quite intense conversations that headlights little they so or in So the week in are out sooner. we try so a or yet, certainly pick two here are can to but or to we up

and have. absolute Great you level

to the can't that of in supply so I they and lesson think worry everybody's real of be that going is specter not fits I lean Automotive on a That time. built come. out the to And automotive goes chain happen. is certainly learned yet, I in And to starts. this, being always And happening is to that inventory there be that raises that is know in of just in come think line demand. kind having going addition will

more, So I going get would to there to the where for into is will that devices say, here be be go a the then automotive. the slack we phase investments in system there made through urgency, build

XXX will a the settle investment that a drive of I to Where level chip to it it test is get in this to, So attach and to balloon. bit close increasing electronic rates will then in a of And are will it But could certainly, back I automobiles think end kind think - the oscillating even market. be of XXX But automotive because it will up. my year, going peak we rhythm. normal could catch of and is guess between that through into million And XXXX get million we the beyond, number. back of million to of $XXX sustain year that this sort the as into range. the inventory area

Thank you. helpful. Very

question next Wolfe is Research. from with Blake Your Gendron

a from a rollout bit. here come to commentary, Arm's want I but complexity seen the Because accelerating as large we Arm's SOC have discussion. rather market perspective, share not customers to this back the

architecture simplify like wafers number a functions, So it for the the bit. the seems of consolidates circuit various compute

puts So test with specifically? share takes in intensity opportunity trend this is notwithstanding. I'm are wondering what the complexity arms and

is a little Yes. That tricky.

applications million your high-end the billion all, of buy, is maybe let first Arm-based might in units transistors. processors. say processors the XXX those which devices par unit with comprise the any transistor that million on market, And laptop are XX which So or counts in phone, kind a you of XXX most of me out billion-plus to phones, X.X, of X.X have desktop computer

I a is traditional the microprocessor, So test not efficient, it look more little bit but at there intensity a more a lot, to the microprocessor, than efficient. say compared would when traditional you

let's xXX big. phone, same, in is maybe for device compared billion not test So map the XX% architecture transistor versus time to your a of say, delta, at so it kind XXX% XX

further is needed world. complexify when compute non-phone back to the There implementation different that different for cash very get requirements, applications. more technologies you Arm-based bring that Now up into Arm the similar intensity test is to devices IO it xXX

big So see difference I there. a don't

then is and industrial That automation. helpful really on a follow-up

services You additional and apps hardware. that noted software peripheral demand likely

of proliferation machine learning of bit that AI companies vision, attacking a seen have We capabilities. like things other are computer

Teradyne has cobot in So M&A capabilities space a keep the wondering trends. these both really this kind moving what descending Or on large with It focus to peers, seems could of and artificial IA like here. of forward? up intelligence be robotics smaller

robots, So learning there to what a as it of platform enhance the on and the space funnel, I our are is is doing certainly many machine is in say that our various that are would But like IA exploring opportunities in cobots, M&A startups ways that. it partner.

and products. a for MiRGo learning or into ecosystem of again, you our That been customized you and will UR+ ecosystem, have If see machine a targeted AI our go variety tools.

going we is write kind or for have We or MiR we IA the So that use of cobots, they ease be from of of and organic for we But already. to us. have for need is consideration them not. own we be whether case-by-case that do whether platform it need we the evolution to expansion I sure. it, a are apps all whether products their for still applications important to benefiting preferred them think, platform And own on our for,

Very Thank you. helpful.

if question We are quick one just can at please. about sneak the but April, in, we you would, limit,

your Bank. is Ho Sidney from Deutsche question last Okay. with And

for recovery for right And both seeing side, market SOC opportunity a you now? to you of us LitePoint? Test Thanks taking and revenue question. give XG on in an related Can update that XG any in are my region the your maybe infrastructure

Yes.

happens Huawei tester sub-XG driving I market, always in XG China really heavily to a was did infrastructure, investing The sub-XXX investments going for the rolling around back of phones the when be generally. bigger and not It in more of are, was and there, what million infrastructure to sort now what time. demand think and is with the tester think, But us kind U.S., I $XX million sub-XG out is range. billion the and is $XX spectrum the going $X much million auction crazy, terminals such. the is And XXXX the concluded. one maybe at

as clearly test XG. to as of kind suppress portion step. is next to most are roll carriers the for earlier, their going that that I That think the intensive wave, is, of I said which out demand going millimeter

last And fact to have so And that Maybe are last I that of where an year. tester $XXX millimeter than will kicker. now combined is that million the calls, to about a I think be is million probably sideways to going worth it. of think in that demand wave that Test $XXX of driving it go it in will is investment I years less this we million be it to in the while incremental $XXX talked here XG for couple and year the up Semi era. $XXX LitePoint we past And million a And in the are piece of to bring full out because potential. still probably

Maybe Great. into is the side, and system starting could you bit market a today do big what just complexity in competition alluded to to your the market of market? that the share level little be that devices just and the you on how lastly sustain lower come on maybe those test, size how market that that when

Yes.

at you the between can us probably, I give look I as the are players you have to kind two the way of, us. kind But have our We Advantest, have you good sense. you into step requiring again, important. products And There on in benefits. suppliers general size. is at We think market could of a each And think proliferate earlier, custom provide, but some complexity of that is hard-core to other likely thin. other But market We own are market market. a number we high Teradyne additional get this and is don't get if test kind are the markets. that devices I things of XX% pretty think, said that are both bespoke certain Advantest here.

demanding market, volumes, million XXX example, X.X is relatively as I billion think automotive some compared high-quality the frankly, But like like very to phones. are something market. the low phone, an a a cars versus

lower tests, lower the pretty So I is semiconductor have for volume better would which It we like advantage would has market a to. sort need I a address architecture somebody different to devices to say, We the like of love you this of mousetrap developing to and that high. with shot our changeover a that these, is a are take mix, volume got higher good. markets. And they think are are of you. pretty sustainability to long position dislodge in, costs really where by else Once SLT,

Thank you.

Okay.

today, to We days weeks talking much Thanks are out of the and us time. to ahead. Bye-bye. for look and joining again. in forward you we Thanks so