Teradyne (TER) 27 Jul 232023 Q2 Earnings call transcript

Greetings and welcome to the Teradyne Second Quarter 2023 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Andy Blanchard, Vice President of Investor Relations. Andy. you, Thank

begin. You may

our operator. our And I’m and you, Smith; morning, this good of Teradyne’s to and Greg discussion CEO, results. by welcome Sanjay most Mehta. morning Thank our everyone, CFO, recent joined financial

provide opening for performance outlook for of our results evening. quarter. third Press quarter, Following our details with was second last second quarter along our we’ll remarks, our the XXXX’s release containing issued

in may on via slides of Investor the be this helpful of the you after the the available that providing We’re call the call to ends. page following page be Replays discussion. website will same

encourage The risk to Harbor Safe contained today factors matters to recent review will in involve cause statement release, as filings. the could most statements We Teradyne’s our results that management’s discuss well you that that SEC from as differ the include we materially earnings forward-looking expectations. current

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

During financial page information measures. on the measure Investor today’s available directly measures, website. financial the comparable We’ve to reconciliation most including were non-GAAP reference these non-GAAP additional GAAP concerning the posted financial we’ll of make call, to

to and earnings our ISI. Looking conferences ahead, between now technology call, participate Teradyne or by Jefferies, next Citi Deutsche Evercore Sachs, and expects KeyBanc, in hosted investor industrial-focused Bank, Goldman

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

Greg? then we conditions with answer more We'll Greg call the recent details will market along the quarterly and quarter. as one our scheduled results for This for questions. our third enter First, Sanjay comment our hour. is then on on third your the guidance will quarter. offer results

results. year. will and guide and the Today, our the of QX QX the Comment the business Sanjay financial posts and half. on of the offer morning, I’ll Thanks conditions outlook provide some Andy, our for for first good view rest everyone. our on details QX, and second current summarize half financial

at At top Robotics guide strong as performance as mobility supply the memory were the a margins. remains inventory, incrementally test, past demand eased. above remained the demand our worsening part the sales system and Automotive three growth stronger are devices In of the UR unfolded Earnings halfway into has PMIs businesses, driven semiconductor and our year, company of tester the retooling. with has range but the tests the muted the of applications constraints Second distribution quarter of gross in and of by our were has point correction quarters from tester, April higher guidance on level, robotics has In are cycle demand view. segment we channel. softened hit our data four for months the excess wireless hardest. the market over expected and weaker. HBM which was at center DDRX driving unchanged in short-term overall impacts transformation

the Looking XXXX. forward to to in strength and segment. AI the computing networking. build of test sustained by accelerating $X.X in from April. $X.X But of automotive driving out offset be estimate will compute been XX% SOC cloud for up since our market The has mobility is in test we demand down Also weakness billion, the continued rest to XX% XXXX April, the billion outlook from enabled XXXX,

In of test incrementally for impact of where billion end in market stronger a April. of this memory low XXXX. the market, AI range In is especially evident, second see the HBM be the described expect million products we test, through the demand the Magnum we we at DRAM half $X $XXX in will segment, to

HBM under phase, market market is to last is in driven share to overall overall of memory the And than technology rapid a of is a represents This from strength the moving higher XX% year XX% offset HBM our by memory share. test Although of X% the for it growth small driver our test buys, the cloud portion in is complexity. be market, demand applications. for capacity can semiconductor an spatial edge Flash insatiable mobile ADAS and we growth consumer privacy of about in especially increasing applications Despite focused downturn, current applications. remain confident device Primary future systems, like market. seen computing This and weaker the in AI the XXXX.

tireless sophisticated more rates, These require higher and enormous compute management. power, data power wireless

through to We The segment this grow growth a design. lighting vehicles and EVs or fundamental intensity and broader by centers proliferate high trend faster required of cloud achieve the accelerate. vertically rate computing of are adoption by that the rest years now the infotainment, the this few and chip SOC disruption at expect provide is to AI beginning will beneficial a than automotive ago that of a automotive and Companies Teradyne. and differentiate midterm, data and ADAS, such Efforts tam to and the computing, edge hybrids, the of test integrated to cabin driven features solutions is taking of levels. as are market trend in quality cloud to seeking AI will control began their producers VIPs

gate higher expect portion up Over customers. and Three group The the retooling solid pipeline puts for growth or advanced Fi and drives equipment. has In times dye is semiconductor and a compute stack roadmap nanometer memory very upgraded similar aerospace defense than test nanometer two industry in that a growth. roadmap that of drive of processors. new market our around interface system we for high for and the overall compute a the standards. technology test, segment segment, the devices. Wi system wireless and see test technologies will standards all device and share the these complexity than our faster will Wireless all These adoption complexity adoption like is test soon. new XX, semiconductor broadening system traditional we In unchanged. supports remains ramping packaging, new Rolling new test and A of for chiplets test VIP longer will now, midterm bandwidth foundation grow coming and hypothesis and increased process are require our Test, broader new and be X our to complex businesses. In the SLT solid compute on test more

portfolio, business. and to And to Shifting where ran Robotics that which UR to we end have Ujjawal moment is him of month, I solutions delighted take from His MiR. the for markets as President the us our deep new and background a Teradyne combined businesses the building Honeywell, this software he joins great want joined includes earlier addition our growth are join team. Teradyne. industrial to Kumar Robotics Group, across and experience inorganic highlight multiple the organic process with through leadership automation in Ujjawal a

In softened The particularly Europe low that have PMIs US the resulted the conditions, highest significantly. in in demand robotics second noted have April lower trends economic our challenging demand we and continued regions. in in intensified, quarter, and revenue

We work high transformation OEM but to having in for quickly With weeks the pipeline times softness current in end have is and exposure on five are lead has previously UR felt to impact small sized with channel not our well, quarter. conversion. progressing medium cover enough market in change the the businesses especially demand market development build continued under channel trend at quickly. the noted out QX. This an and accounts of was the Large

short scale our place lead interest trade customers clear saw major the orders We in no generation to However, two there's term. reluctance a quarter, there in shows is in from products. shortage automation human the automation in but from record

XX% result, the group position that impact of are will to the emerge down we XXXX As full a difficult robotics now robotics. revenue year Despite we for we from projecting last our in changes, and macro short environment from our year. be distribution the stronger in flat to believe term

serving payload digit On the quarter industrial URXX. front. triple demand a across product fabrication URXX welding unit for of have reach palletizing of higher and backlog. our in a shipments and the number We metal the verticals driven and longer new Customers began

our first revenue We URXX and half. through shipments in will QX the see second ramped

and near based across large sites effectively. customers MiR to to monitor and introduced also cloud workflows insights, more We fleets a enable optimize tool multiple

We at term, of short direct existing UR is channel Recall, that level a potential. this are slowing adding partners growth customers support. sales OEM with channel UR shift potential. distribution we were dependent appears sales high the term it are on from change transforming the coverage long-term revenue and however, with distributors XXXX. focus the Longer that on highest In our customers distribution puts in high the touch large have complementing our

large At our robotics labor MiR, to this with is and Although, view these the of so the right on focus costs market customers time. results. we're with and has grown large rising at yield, We as our over on We've partners partners opportunity. the populations, changes aging long-term new to good installed cycle base. distribution quarters confident year, to XX that will engage and are customers. are working The yielding OEM clear, of a large path. wages, XXX we're directly reshoring year, far added This overall reduce accounts shortage Xx several our production rate drivers installed base our take

market the dollars of leading year. products innovative grow per potential to a market has that serving billions XXs We of have to

Teradyne of robots brings value Our the ecosystem human partnering customers performance MiR providers tasks they're product needed operations become And and our with to of of and the us extend have the foundational planning operations. expand expertise demonstrated to engineering customer UR their they're enable in to our automation. range automate. scale support and already to premier and to

by of signs But the seeing place in the sales is the are are this yielding. work of We term putting support structure long end in early midterm. the we $X billion profitable This to project. a

through second test are products our year. performance inventory enable months. to of the market new up, through strongest to markets Automotive reductions six mobility and than continue this expect And performing half. a that Wrapping the should in better test year. next it combination our the planned all first And and recover we businesses memory

expect below of to And for the the second was business plan plan the in half our and the growth expect robotics we year. group, we first the financial stronger Our half. full below while be

our and Our distribution expand are plans to track. product our line on transform

are these our in business spending execute this carefully managing We while changes. we

With turn financial Sanjay details. to that, the over Sanjay? I'll for things

also I'll assumptions. chain you Good our Today summary everyone. the will outlook update and Greg. year on our full supply QX and planning resiliency I QX, cover you, financial provide morning, Thank progress. of

Now to QX.

were Non-GAAP product for to million, with operating sales flat our our GAAP items above quarter. in expenses revenue We the discrete in and gross quarter which resiliency on contributing was operating high first deferred costs Above basis end guidance which of the our Non- $X.XX. the $X.XX, guide quarter. for non-GAAP with a was due memory improved customer and million was high million XX.X%. Semi $XXX Non-GAAP XX.X% $XXX profit quarter EPS mix. the The $XXX GAAP on $XXX later XX% million revenue year quarter XX%. $XXX XX.X% was with the of until and guide were non-GAAP rate the were tax SOC at a basis. Second margins million. one test had was excluding

As all ramps QX like Test, new, higher $XX demand In low the million and to in markets. towards smartphone end Greg Memory PC $XX was group in and server noted, has smartphones, test which DRAM end HBM continue on Wireless weighted with SLT strength both storage as been for System SOC technology driven QX speed concentrated continued were applications. with revenue million devices demand. auto Flash from low in industry down was million see sales protocol production buys revenue ongoing test, DDRX HDD $XX year we and for market. the

$XX a robotics. impact our million Revenue was which contributing million, top $XX bottom as in results. line $XX FX million material and was QX on Greg Now not with have noted. below to plan or did MiR UR

flow of level in million financials, cash was We $XXX debt. of million in Shifting back the dividends quarter. the paid settled million the company quarter, $X repurchased to free $XXX shares million $XX in and our

remaining. We marketable ended quarter million We and debt in $XXX have cash securities. of million with convertible the $XX

sales QX range a $X.XX in $XXX are $XXX diluted non-GAAP Now to EPS million be to between million, shares. with our $X.XXon XXX expected QX. for outlook and million to of

other and view third excludes covers is is under incrementally and This our and the above quarter April The test the level. of outlook softer. robotics the But stronger, restructuring guidance amortization acquired intangibles, at company charges.

on profile third GAAP of are gross Non- OpEx is slightly guidance run XX%. estimated XX% Third operating rate quarter XX% midpoint quarter margins to is to margin from color XX% quarter for profit half. of gross and our expected at A more down our revenue third at XX%. the at sales to little the QX. second

to $XX tied QX, revenue excludes we supply which expect of in demand constraints Our in million QX. guidance approximately resolve test to

earlier. similar QX QX level. to some result, the we clear of If to be expect we As revenue a constraints supply the

That Some QX half of roughly resulting shift second profits the will and XX% at revenue year. will full revenue into QX. put

Shifting margins. gross to

QX of we design new through In sub-assemblies noted Our developing of XX% some risks. work. XXXX long-term In improved model year be margins to Geographically that know margins our of to products. line past that XX% test we supply sourcing to sites model and year. transitory and manufacturing capability XXXX part adding to were We're for margins XX.X% at has and of expected lowest our be in the XXXX, reduce in multi XX%. April, our also due In to components we and calls, gross multi margins gross services XX.X% country respectively. at range we full expected to costs in XX% with

of However, outperformance in timing later and year. reflect in Net-net, and resiliency to will continue in second which to in expect half, XX% these QX. the margins will margins driver gross the QX shifted QX the gross to our spending we on to a drop for costs. the these full was margin costs now happen XX% QX Since year, that of

transitory However, half costs until the been of these the second resiliency year. of some deferred have

the guide roughly no expect as from year be Regarding full to for OpEx compared our OpEx XXXX with year, XXXX. full we flat prior change

the profitability to full Now for robotics year. for

at revenue operating the reduced we the Robotics while overall now expected profitable, Even to levels. robotic sales expect the above are And Greg be loss year. mentioned, an group for the lower corporate margins gross these average. expect for we As UR year. to is have robotics

and in non-GAAP and respectively, XXXX. GAAP Our to are rates XX.X% tax XX% forecasted be

than high leading guidance. resiliency and range XX% of end supply last in balanced with our full high margins We're more sales robotic at executing margin outlook of are to year services. in with plan our our with profits shipments, on to in Summing line hold improve stronger guidance improvements to engineering yielding up, gross QX our the test year year. businesses track to the gross weaker our XX% OpEx chain modeling flat We're April the our and above full

returning share We excess and we dividends. support cash strong to sheet have a and organic to shareholders while through balance inorganic growth, repurchases continue

over I'll Andy. turn With that to back the call Andy?

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

[Operator Instructions]

Tim question Our first is from Arcuri with UBS.

question Thanks a SOC the on of lot. revision Tam. I TAM, had a the

on year? to about where up nine your it I million. still that kind six in Can from that also took said you, And this then all in talk expectation this think share would from? previously XX% of year? you you be you the XX% range Is in had that higher autos? go So autos So coming $XXX even that's Tam? about that to the Is this

we time, midpoint at the to X.X. about last the the at midpoint, Roughly got Tam, Sure. SOC

X.X. it's obviously, noted to Greg X.X Now,

And $XXX to that's million driver. of market And key increase. really compute as rounding hundreds millions. tied roughly the to we're a So there's a

say, it's, on I that bit. compute. So but roughly flat in perspective, And were our from a the full view mainly it's years may share tick a would

I year? Okay. evolving you for into and Got a part in of be to year kind QX. how think you the going rebounded to is still then see that you year? of the going first expectation soft of think of next sense can full it's give get sort to that's And that storage it, do just very next then the

to at I sort expect So might that there think of along ship rate, And running would we're continue first storage to But recovery rate. minimal this a XXXX. at that is thing. be be we a in Greg. Yes, is a going think it don't half

fair a still in amount oversupply. of for there's a that the think HDD, fair end I amount of softness market

of and hammer out drive purchases. demand So inflection additional further we're and that's comes drive than next it's when capacity in probably year. will higher time online, test first ultimately But the going when really to see capacity half significant times increases, that only

Hosseini Our from with is next question SIG. Mehdi

Thanks taking Yes. my question. for

how pause. hit you XXXX. to Just of I SOC And an test understanding evolving going density to an growth to And update ago, handsomely. get And benefiting I how want I'm then growth the see a the remind we SOC trying the have you rate follow is next into a back year. just the couple of up. into was Tam, transistor get years evolving

Greg. is this Mehdi, morning, Good

So But to saw the would maybe seems slowly a The back much volumes, transitions we bit more have that those significantly recent semiconductor what events, bit especially it's key to little compared end mobile of ramping with where a be before, down. roadmap in than in in unit occurring complexity thing are in track. in nanometer of pretty process three little on perhaps market terms pretty XXXX. are much a expected line we is

there So complexity at of unit being seeing even of capacity we fair happening, changes sort the in and idle increases expected filled new is though of that's driving a test the time, are declines are amount versus purchases. tester the because

So kind we the process I But your that going we pace hope new that expected. think answered adoption basically, as is of questions. of

Does or would rate the same? in that growth accelerate that would imply remain ‘XX the

devices up more chips XXXX number think we of the party sort that up And there'll is nanometers. see it's that our of high but three going is market three so I view is third end to of around on that increase, nanometer So the dramatically. reports not definitely volume be

terms numbers smartphone X% volume and in X% between I've unit So increases. seen of

And be to more be we more to are they're parts nanometer going on be think there's that three from to nanometers. going going three definitely volumes fabs, So up. coming

stronger XXXX that be to incrementally going So than XXXX. is we think

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

for growth. growth do almost last Because Teradyne think And where start the you generational kinds in of generational look are the lows? do next still those Greg, taking year, these at they said expectations at Where utilization XX% I in justify utilization kinds orders of for you QX, consensus kind to see was understand I for of a it expectations now? my when you Thanks think test I'm call, trying when low. are to if is question. to remains

Vivek. morning, for question. Good Thanks the

hasn't news So good gotten that is utilization any the worse.

in increase Teradyne to tam in of up of so the it's So bit a utilization X% X% terms equipment.

our So that will own a there disparity is IDM thing fleet, you and of really utilization is subcons. view significant is the I tell that our in between

inside IDM that's lower, utilization And of range strength where points into our So, heading that's really adding nearly that actively is the utilization is automotive. well right In it XXs. And the in in we in see upper the is direction. XX capacity. subcons, the customers the are but

think of I idle really So of much capacity a in question size will XXXX. business impact good it's terms in the that how

So much of have think stronger, we factored be. are. stronger it be that's XXXX how into but plans, we will a we idea would sort great about our don't really

more two kind IA Is right? the the I that or structural And favorable ever competitive proposition next has last it of in just profitable. four declined business? disconnect? you And will business less value sense. sort and for has curious, of and the What actually future? think it's do potential, makes the that related change what's to years? it of in years? the really pricing been I'm then be So It's been a the environment that think one few maybe it's very the disconnect? will Because growth innovative, But follow-up been And on underperformed don't what business, consistently its

question. So it's a good

group The the hasn't consistently underperformed point first has lost thing it profit I'll is that our that consistently money. targets, out

to where we up, end of a delivering the for think really growth you're misunderstood what we're there's robotics to first f we I projecting business. is, that they very is moving buying much sum it year right, is, years the the sort just didn't sophisticated And how potential started market this were this early large and not were robots into focused expect we that is it that But group. we adopters, enthusiasts and what that driven those is have these how And on are I'm in we skills robot from people solution, discovering needed business from like, to this as growth, more a, a early market, of by for that and they really going early that this that So loss where we're we're people the found was satisfied enthusiast. put the into larger a operation. those

Those that's behind the like by OEMs, our in be solution we're the maintain customers. to that the their the And able providers and of that capability to towards UR transformation larger more are implement customers. directly at emphasis by that our heft So have to level at connecting going organizations. the shifting of able customers to robots to within channel solutions are provide the logic be

that a that think robotics evidence our value, them isn't a of out is a the way easily do are a technology thing them. we just is going products we're And best around to the lot to I the get our they're in adopt be So working that into in way have challenge. deliver market we able as customers much to hands that it discovering as fit challenge of product go-to-market that's that the and

environment. Competitive

Oh, yes.

the cue, for thanks Andy. So

in a mid-XXs. more competitor. it our than Xx our its UR leader And the is of So clear nearest terms competitive of the share space, in in the has market the environment, shares

industrial We see that makers robot Cobots. are into two we competitors, of pivoting kinds are,

China. points the share And But almost pure in And share that play entrance. have share sort the have all have of cobot entered Chinese market not industrial to from the past specifically to of years. lost play of in pure significant the lost a players of cobot robot China, mostly we losses we few companies, couple any that

much frank, profitable that coming struggling lower China. China, to XX% that share with share So profitability. exclude over us. China best that market worldwide, growth like of really gain worldwide because it's expense much- the if of prices at share our in we're with is for be lot a in mid-XXs. aren't you we being served And the I really in said is up was not or And around are our to at And XX%. interested solution overall

about in is range and no to AMRs, probably companies the And about there the large market relationships have about a In The that bunch are the West, and fragmented, $X a have that AMR we per we of of it's leader in on that billion to it's X% the total year, we're customers, adopt X% thing that clear X%. share range. Wild-Wild crowd really is our of whole ones other is working are very strategic they're with there's fleets. the trying global because to ability establish in

we see we think fragmented be able to it's will and that I outperform. So competition, but believe

Muse Evercore Our ISI. C.J. is next from with question

question, those in guess morning. would you And to in guess the million I could auto? shortage? taking to specific question. Thank you that I Good earlier around Is what was first Yes. the in QX? enable for revenues speak hoping I more detail come $XX

enable Sure. product Hi, the the the shortages for test semi comes logic, those are past, noted, but really analog across of that. tied to that a the supply to in thanks online I've entire as it’s other Sanjay, the our across supply say working we're with spread couple of lines. as ones chain And portfolio are, supply and many items, partners question. to the I'd linear

over years. into if of want year. last the range. to just half impact QX, of of out come just transparent, we're the from trying on QX, and second provided does And that And I it have now, be couple be we have to so clear right it's overall shouldn't an the is the that And as excluded

‘XX. sense. I mobility Makes for for guess

perhaps great growth, any some other gave You of we of complexity hoping should business kind three support drivers rank kind AI you unit about growth could nanometer edge next order was be year. and that demand but for to for thinking earlier, detail potential

specifically or It’s mobile in –

Yes.

I complexity bake AI in So would the factor. say that edge into mobile, we

counts is chipset, developers to market nanometer their causing the the go to AI three So the that is lot. processors the transistor edge and mobile pole increase to a

then and capability that's lumped for increasing the is handset. complexity key mobile probably driver I in AI in the the So think I for

complexity pace down, is up, the pretty it inflected at that, said see inflecting unit it's which not been of it's a it's volume. that XXXX linear, we Having The hasn't thing consistent is increases inflecting the not, kind factor. in

tend and to XX%, So this, quarters, in out in peak look for was And the peak shipment big the and shipment of. XXXX to peak higher quarters, when we a smartphones. we at hole XXXX peak than dig look quarter try that's at quarter shipment, pretty

year, has complexity the will next been inflect. And been is over to volume unit past, going So, the increasing have years. four over past

we expect driver being to the unit So volume see

JPMorgan. question is next with Our from Samik Chatterjee

if seeing on where demand the I Oh, questions. biggest related looking that you follow up. can that the year, see be perspective, memory I Thank XXXX from coming maybe business thoughts start memory you. hi. and your and share of Thanks on at you're you next can but other any will on demand pieces demand I impact through guess AI, the AI have side, topic a for about taking my if somewhat the on you mentioned benefit, the or sort

continue, is shipments. HBM driving still we AI and cloud of it's So DDRX expect the something a minority that DRAM to

application And vertically that there's sales driver be the the suppliers. for generation space, significant market. for traditional integrated to there's developing look when those so AI protocols. adoption room then And of DRAM than significant segment. also But producers business, flash for into in parts the their is oversupply in mobile you grow. to performance in tester the compute will in SOC of that And of And primary course, to drive there chips. next drive going it The is also of is less it general there's

of type those that scalar where for nontraditional compute and from both to terms in we're driver for expect but growth AI, those a AI looking in so capabilities of XXXX, we for business And especially stuff, hyper players. going VIPs cloud in vehicles, also that's be

up. the follow and Okay,

the you've what of question level I terms back to on profitability, Just scale of to what more around Thank targets in you that in look see few about on much of you. the million the annually sort can thoughts And $XXX we as out are based does think get what hiccups is million of well. macro? looks done And in relation $XXX of dependent distribution like terms before as of next going segment? you're how of Vivek’s need revenue Any profitability quarters, point How long in on breakeven way? to the in on mean, to robotics, the like? sort then internal longer that your segment, turnaround in that you Any more channel -- that, sort to views revenue.

Sure.

me backwards. let that take So

So going QX of have sales of XX of to we which long this with normal year, how expect we're in is account does accounts, coverage to both see on the given months of the will in URXX. cycle take, direct significant that improvement also, And of it some release large in is. terms par related us our what that kind

in to are where hoping QX we're results we some over So see now. improvement

heading of are best the that and In I scale about to. talk for now terms where of where profitability, we to we're it's probably think in terms

we to to the profit. going And to XX% achieving for semi that capitulated business. make the So in points profitability range. that is baseline ’XX in our the to exit That year because was target terms is against from of yield end are to growth planning sort in into And the there. this as That return at next is time that the of of midterm we by this not we've to on was the range going seeing we're from our as a XXXX group X% up growth. that of midterm. mature our we range eke that the we're profits ’XX that expect answer when But really the test depends timeframe, rate same to we robotics couple this our

be it XX% that the will So per as market, drive are larger at planning in to billion company. doing to try of is to see delighted XX% end rule that long going we by continue changing and XX% we're we of be growth be if thumb seeing we've would a to midterm, that reduce scale we we OpEx track, trying future want same of misunderstood on at to I we're we're a groups $XXX the and to into year, the then over if of and in of have gears to value to that profit is get group tremendous, range, dollars multiple business XX% rule that growing rest that, range profit we're a it, we'd to the for that because on that that unit potential those delivering XX. this The XX% then means And operate having because the term. are, track exiting XX% and that billions the our

Our next question Sachs. Hari Goldman is from Toshiya with

and Greg, ‘XX industrial? calendar the your you you you on businesses. was And thinking for this for ‘XX? tests Thank good hoping question and of guess I customers. sustainability set auto are you likely morning. could think the Hi, upturns most what industrial about come question. I for guys roughly the revenue the I taking has one from been well. test how in guess into And of as what share auto more extended semiconductor SOC I will level importantly, percentage

thinking I we are think you to into secular you script. some them But your the ‘XX? cycle drivers in and about the spoke appreciate of long-term how collectively,

this Sanjay of I'll year. of pass don't second why half so the splits Yes, your in sort I'll of the exact And I, for it off terms question. take to

the of we're increasing attach looking key cars. terms that thing of In the rate sustainability, in is semiconductors at

total of rate is in semiconductor the a EVs increasing CAGR. is of together, there's portion much a lot what we're as revenue the is growing of market, semiconductors twice percentage as internal each car. So portion whole value like car I a a of that the XX% shift about the is EV standard semiconductors as and that that's that When fleet total faster XX% a CAGR. of car you there's seeing is And as in the than roll about And dollar combustion the EVs, all there at a rate. in

underlying That's this amount of driver an it's pretty, variation attach in automotive a the there's larger demand. than terms So increasing fair in rate.

market But be future. of continue cycle is overbuying automotive certainly don't periods the going this and into could the there right that to in that Coming to kind it the are coming and the is the So of now, periods end as absorption sustain. is this was fundamentals as strong, high weren't of we it that to and see confident we as demand softness. fact year, utilization going

fundamental and industrial parts are strength. are do That Carbide. is same GaN booming discrete stuff like infrastructure clean manufacturing kind industrial devices is and I energy, and of semiconductors consuming doesn't around driving growth helped terms of for the industrial EVs it's the our automotive that high certainly market Silicon it in business and the separate power Now, There batteries testing, some significant and of and show from like out of that.

in the that strength see part that in your strength Does industrial we automotive. as So of it's question? we answer pervasive see as not

yes, And super Sanjay, thank helpful. then, color That's how, any you. on

it context. bring take down to from a revenue me then for let From, it Sure. market and

our of we the how that XX% under we And have, to SOC of has our view SOC the year. revenue, this overall. we roughly XX% about we we view in our year market or our industrial revenue of the the of that it's and tam see So size, believe XX% just That's auto about relative revenue of that revenue, view unfold.

presence a and I out? that And how little $X thinking into test you're of hope a kind Is you market then if provide of the be But curious, mean, memory over importantly HBM, the you we what HBM recovery this very we $XXX given to you're possibility to Is But realistic? million years, as billion? guess, markets can how DRAM average Thank I your breaks guess, in tam be follow NAND. be billion in higher helpful. in think consistent your your about ‘XX, to what been DRAM. market up, should That's across about year I in the somewhere you. the Thank past a being in no kind exception. there share? helpful. than I about several And And seeing the range, it's you. closer spoke given thinking my more context, very is $X.X will Greg, ‘XX? that

Yes.

for remarkable memory that is So couple they've the TAMS year it's, as the up early past year. the been is the market volatile. forces stable that or year. forces against than there as of optimistic us the over are now, next dollar to have even tam there memory it been years. value famously in really a range that am I more is right down And -- for I, too peg next it's

in to to seen their makers, more mainstream And of analysis I've a the appears in continue, in from it what So going their is they're of we a think continue new a of that working you start to business. have memory they happen. the terms transitions be that that going to adoption to is sort going through of business, that inventory, and the consistent may of as we think HBM the we capacity that to think protocols adding technology portion position of pace memory are grow

that going out I'm the think it'll So -- agree not with you I'm but be I up think not put number it's, going to there. I to

with question is next Stifel. Chin from Our Brian

letting Hi, is Maybe ask a industrial something. clarify there. math re morning. us for this of automation. Thanks question. around should the And Good sort I just

strong might down growth of else? of if that include input is XXs to XQ, your And in what have that rev think rec on I achieve you XX% factoring something forecast, seasonal, put have so, a backlog the correct? I beyond flat revised low even like you that that to sequential pretty, end kind or in? does of are normal And your very

plus URXX. model think shipments the would additional it way is I I of so the Yes, QX normal seasonal

And QX for So or we've of this that a year our our serve expecting, quarter taking backlog we been strongest at before. represents layer unable serving support a additional year. -- we will nearly we're for new that the the a to of were always were have we have basically And point. orders that significant we URXX is sort SAM

point why up sort to Got XQ, it. end just that And is of backlog the that the release sort of year? the of

No.

quarter, the end in of robot is at week began the that shipments but QX. recognize the volume the increasing second we third of through continue as we will per shipments the go plus So we revenue quarter,

revenue bulk in the So the going QX. is be to of

native the of auto of to maybe understandably this though a you so, to performance demand, inventory the just high about think historically in complexity of side, Thanks, memory potentially kind the Yes, Testing, even midterm. curious. the compute Okay, on correction, in the parts on is And how a you about CAGR think a been big about test you of when of driver sort on SOC of mobile, Greg. lot are just demand Do relation CAGR other got do the talk native thinking it. correction, then you it's smartphones, unit for curious side bit other tam here? as relation of drag sort test, a of well. over the

a about going the has at time. over of cars in this, while is computing proceeding around conversation mobile and cloud a really pretty been interesting, So, investments especially But clip. this in complexity we pretty the it's this on, And AI at the cars, recovery had yesterday. amount cloud we robust expect a semiconductors computing, semiconductors accelerated and in And of are accelerating. good like

concentrated in are years of market whole So that kind for where went were portion and whole will SOC back, into so when X% it will our over of mobile have is What think forward grown but large is a come to That grow of to time market at was looking the sort rest space. of mobile XX% area. sales the see it's of XX% CAGR. in that was we you less back we the us SOC the look tam going that there

of we dead. forward. looking across But mobile's like greater not diversity level it's So that there's segments think a

Our next Sidney Ho question from is Bank. Deutsche with

just Brian's thanks. that up follow Great, with to question. want I

that may quite of out If the a terms you guidance being normal you flat, you call about at below revenue, QX, be to taking flat robotics seasonality? you are business segment the in in talk of but look quarter-over-quarter, any particular what would what gets are businesses down QX bit up

Sanjay Well, here. Thanks the question. hi, for it's

the I QX. than lower have tests for nothing it's think seeing businesses of test and our It's QX, It's and of within the our that. just uncommon portfolio not to more you're a that ebbs some semi timing flows. kind

you And Okay, quarter is like mentioned? Tam, kind SOC, raise how overall number, producers sounds that that's market Within Tam. you the that ago. instead the fair. share it's look computer, you the group talked of can should billion But that about stronger, If the switch about maybe year? $X.X of within you over what talk it, we how expecting today? And that integrated a are that definitely I vertically billion compute about $X maybe now to VIP think next maybe like within

so particular we small the So capacity things and devices, that of complex, one a buys customer that are relatively be going pop. to and quite they're because the they are will of a producing be number will, it's that spotty highlighted about for have and VIP players, parts that and happen will then pop that will different there there is customer one

So, to we the VIP down going tam to XXXX be is from a think that XXXX, bit. year-on-year

more revenue $XXX of year, VIPs. between had $XXX million $XX than million in million. we This probably and year, it's last like share Our

probably don't SOC XXXX. going know TAM it's of to XXXX, I we midterm. time the is going the north Tam $XXX overall significant be of by in what be exactly be this a chunk that by million the somewhere time we get we But So it'll so to to out exit think

Krish Our TD next from with question Sankar Cowen. is

memory Hi. for either up. more share or tests market just what had bandwidth final those, have follow it curious I I and towards and Is question. then Thanks I'm Yes. in wafer of them. the your a tests? And on the high have is DDRX skewed Greg, taking two tests.

about thing a fun go the into it, HBM doesn't that it is So package.

tests. So are phases it's for test, that wafer essentially way there all of two

test level. an is there at which then And the memory a itself. So wafer the performance test, there's is done interface of

talking core And for so product. the incorporated the into has that shipped between performance testing. and chiplet about the that off we're all base about and gets place, HBM then built for it roughly testing design probably final split up, HBM and is The of once tam be half been test the to half takes a test

almost it. then Or to more one it's $XX to that Very VIP, last Or $XXX said be to year. it up customer? you customer Is on year, Got million million And to over is towards the going diversified? compared million this basically auto helpful. follow skewed one $XXX you? just for

much much, it's more diverse. No,

last year customer think the capacity. is what on did that last of customers year, like broad broad So pop last a for top this base, a of from you diversity year of single could increasing. probably to is about that actually year, But lot

answer guess I to that's, your the I question is and so think So no. yes

is next question with from Our Atif Citigroup. Malik

taking you for question. have Hi. robotics Thank my I business. Greg, question a on your

I'm on fast of then trying guys? it Teradyne how the you this is build for kind OEM Is channel? And XX% to of you much not these And on how able macro on You to understand a much that help thought spoke XX% on of building like macro, robots higher not weight is guys Also if can and channels split. two you it more macro? have about environment. challenges. enough. And just

automation to than industrial a lead to us a split So make. most if you compare it's industrial have tough significantly player. different in Because time we peers profile automation,

those automation, of out kind industrial lead So for we're standard quarters. working two kind and are with robots of times. five And weekly for times

at is their looking So doing to rates. our to business are we businesses doing what order compare tend what

if so at order we're rates look for you year-on-year. down XX%, say roughly are, And you

‘XX the to of of first first So ‘XX. half half

or our over at they're look comparison that of robot, greater down robotics period. some same peers, XX% industrial you If

definitely seeing. right main broad a coming we're there's have economic we're higher with this happy a as not would expect But now, to And the So into growth we're headwind growth space because we the significantly facing. than disruptor, we're that players. that

bad whether we these a have it's have, We these cycles, business immunity solving that problem to that we're good also business. or because manufacturers greater think should

more and we're distribution distribution cycles, vulnerable And results. towards, is that what think to macroeconomic so quite seeing suited consistent to our setup current I is moving be is deliver you're the the going to distribution,

it's, we going say bad, of us given and serve headwinds is that particularly that account out macroeconomic of something in it's customers and build give coverage I serve think are types better immunity honestly, I So The the headwinds. we that's that large mostly them. that to OEM would way macroeconomic the the future

out and time. operator, Okay, are we of

And in Bye-bye, this So forward the up everyone, joining shortly in for talking weeks queue we with and days look the to thank ahead. will and call. you follow you today those I after us

conference. This today's concludes

you You may lines for your at this participation. time. Thank your disconnect