Teradyne (TER) 26 Oct 232023 Q3 Earnings call transcript

Greetings. Welcome to the Teradyne Q3 2023 Earnings Call and Webcast. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Andy Blanchard.

You may begin.

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

XXXX's details Following the for our we'll opening quarter. along provide our performance our remarks, fourth for third outlook quarter with of

that today management's call statement well the The earnings containing you Replays results we to that website may quarter The helpful to our filings. be results review evening. expectations. We discussion. issued forward-looking as last matters Teradyne's will factors the press contained in our from providing page materially slides to discuss harbor current the statements this after of risk following via that safe release as involve SEC in of the call We're the differ on third same cause release encourage include recent was the could most available Investor that you will the be page ends.

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

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

industrial-focused between Looking or by our conferences investor expects Wolfe technology next now in hosted Research. and UBS to ahead, earnings call, participate Teradyne Baird, and

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

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

will provide some and our everyone. year. details morning, Sanjay modeling insight comments our I XXXX some provide business for next good on and conditions QX QX the offer results, outlook and the and on summarize we're beyond. how QX, describe then about financial the current thinking Andy, will on Thanks, Today,

our Third earnings and as quarter and and robotics sales sales were we of in tests. supply plan, the came cleared some constraints high guidance range end at above

The out we as is July. of half second described XXXX playing in

to expect shipments. amplified new robotic at UR by softer shipments product with year seasonally shipments the strong and close We out test

which test, timing semiconductor correction testers shipments strong. shipments the remain in drove QX. below shipments LPDDRX sequentially and speed high the our mobility levels, of both well automotive demand In but while in persists higher cycle shipments, remains down of to and require QX remain the results. test due Memory were historic test HBM,

the demand Wireless, defense quarter In given In remained test has In new first groups wireless aerospace standards XXXX. year. plan, and Robotics Test, in of muted board down market quite the in demand the the quarter. of lack softened production demand and storage this stabilized. was while the were half on half smartphone low of versus XXXX, XX% weak test and first System

In at up strengthened revenue QX, XXXX and with levels QX. XX% demand nearly from

PMI and as product stepped bit. the to stabilized have seems we execute ramp aggressive new up of shipments an Our have URXX a

estimates about down year $X.X to from last XX% at at our $X.X midpoint at of year. full the of unchanged billion test Looking are SOC size billion, XXXX, the market the

and of year. the decline ticked of low of the remains XXXX. for The market XXXX, pick which compute Teradyne's the will a end be out will help few growth in demand weakest view. The our Test points XXXX down segment Defense mobility, semiconductors full from DRAM similar as Within will finish the the up as Aerospace defense will group, to us XX% System levels share to Test, this Automotive the Memory close year slower XXXX spending from more year-on-year smartphone finish of $X will The billion global XXXX. at also grow million July $XXX expect we high XX% range, expect than Industrial at and up. unchanged test market XX% complexity In we in high-speed SOC we units. segments on for analog down year-on about is group memory from and

multiple The The the business The with ramp is to was and for impacted other last a quarter quarter weakness. Shifting URXX expect market collaborative better improving URXX quick we well-executed were the that payload our segments UR's delivered mobility in to applications, The deliver of industry ROI in global in many by stable the of We a of oversupply QX. or now reach the robot. incrementally and higher in ease negatively HDD than than and market to extends more QX, highlight expanding segments. environment slightly. and of of longer volume Robotics. XXX units use PMI macro

also channel are distribution beginning existing URXX strongest project, adding progress. and far making see palletizing. positive past large benefits. channel long-term The in our described we so with partners coverage for of accounts is Complementing and we're welding segments and transformation to OEM distribution steady a calls that direct is The

have early MiR, XX%, continues happen next in new customers collective be still describe about have year-to-date. future, overall high greater top what growth. Shifting expanding XXXX. example, is the deliver installed demand bringing rate limited strategy the direct grow it Please base more bear and orders base our to XX% current And far added market. to by our thinking XXXX, XXX. For to to account OEM mind the XX than total visibility certain will A the the partners driven seen their so like installed XX% year. by in about in I'd At we from our with nearly palletizing over OEM too XX OEM is than too that's that to space, we the

some However, trends are that play to expect out. there longer-term we

market expect growth the consume of depends XXXX question idle compute test driving discussed, the space, and revenue complexity recovery, our mobility on and capacity. smartphone the industry and we've broader growth real grow is the strength which quickly how market the previously in on adoption in can continued unit growth, As magnitude SOC mobility the to X-nanometer we market. The from

market. we estimate reference, QX July It some spot market at typical low, up from we are estimate sustaining higher that Automotive QX is have in the automotive XXXX appears the utilization still has and only been our level increase. For we weakness test channel expected. a tester to well The in stabilizing, and marginally inventories in below originally seen than subcon

bullish. XXXX in expecting buys market to technology combustion next We significant the crossover aren't a forecasts rates by The computing memory HBM, next remain to into we DDRX and as continue expect driven supported to should internal penetration unit the memory full the TAM size the LPDDRX attach year year, support have and from market and semiconductor growth. year change and EV that expands AI in grow as

to of ]. persist and test of HDD imbalance likely expect well. In business, the to HDD wireless supply-demand year, handset will ATE leap flash grow flash, X. recovery demand mobile. as the continue from through linked strength rollout the to WiFi and in expect remain factor TAM to to LitePoint total PC interface be is test our market the growth, Growth we increase, is package be we as to protocol in this a key of Overall, expect The the [ the and start speeds in XXXX, recovery modestly up we in strongly

in on unit finishing largely while and That QX a term test performance revenues in market the to defense XXXX on tough a year-on-year robotics positive In grow the sprint. a up on with We System-level marathon, expect our smartphone in reinforces not a aerospace on optimism we're of strength note depend product about near defense URXX investments robotics. introduction. our see will XX% growth XXXX worldwide. the business as we in increased robotics, new

serving tens per we to market this an of $X in in year are future. year dollars billion of We the to billions emerging grow expect that of

model is for prioritizes for built to that customers robotics marathon strategy product operating now. investments deliver that with support a value that and Our

future. counting strategy with on robotics The paying their X% are those help driving evolving ongoing our this to the to from key investments relationships model to is of our profit our customers building needs meet XX% to towards We for portfolio. guide

a in for remains of XXXX. objective will operating fall it we short metric While this XXXX, key

all to stronger than With be on we've most incrementally utilization it business. around chip customers' our uncertainty inventories, automation the but priorities do stronger, better looks so. rates important view XXXX low that of a I'd worries. this next the grown or while focused to ensure and up, quarter XXXX. call we get remain over the Rolling we'll We it all macroeconomic

revenue assuming low point there. similar We're the QX XXXX, in as to XXXX, also from then growth and with a quarterly profile

be to similar we're early, While QX to 'XX. modeling QX sales

operating Semi market, at year, Test, level in to the profit for a encouraged I'm delivers total finish that the that we indications of have by company. largest our an XX% troughed XXXX appears As

all outlook the it family yet matching X-nanometer continued X-nanometer and growth building tooling fab substantial gate have recent semiconductor about development, to around past in test equipment not or market technologies. the made confident is Also, investment long-term in enable of at investments. as see of are seen enabling We the consistent we process investments whether the process a nodes

the happen. of are demand we chip will market will that timing complexity by this end While and investments investment test growth, driven confident be

term, demand, and initial caution still next inarguable. outlook have their that our Robotics, To of trends But beginning the are At pipeline near-term we long upside are of that for distribution a global the our are changes now In there to is potential. significant clear, be the applications year. day, products, yield. customers cautious about we're in new and end population new reflecting

for details. I'll workers, in with investments shortage things I the to favor increasing demand manufacturing execution short skill. that our deal advanced robotics turn growing Sanjay team's over automation in automation to renewed low-cost, long-term that Sanjay? for ROI the market grow coupled The XXXX well. expect that, With financial and growth as conditions with must of

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

QX. Now

$XXX supply as our robotics of eased test. constraints both non-GAAP Third and end quarter million delivered sales high EPS with the $X.XX, in some were plan of above at guidance

second excluding rate, quarter. with and Non-GAAP gross XX.X% and was on from tax lower XX.X% two non-GAAP compensation. discrete rate guidance. the in line controls on Non-GAAP We GAAP operating XX.X%, items XX% in spending was customers about $XXX basis basis. Non-GAAP operating X% a our quarter had on a the for The XX%. variable were quarter margins were profit million, the down expenses

Semi $XXX Test revenue million. for million $XXX with million quarter memory $XX contributing and the was SOC revenue

applications. server to to higher-speed the end towards technology weighted quarter. for DRAM DDRX continue smartphones, market Memory see we flash be retooling and strength concentrated business continue in sensor our image and parts for HBM earlier, SOC for noted of in As in auto sales protocol

revenue million end with Test from $XX $XX ]. both as production demand Test, and and PC demand was smartphone revenue SLT System low was markets. million [ storage Group in HDD Wireless with remains $XX test muted in QX, In million

We to expect over this market next trend quarters. several the continue

in was above Now and Revenue UR to contributing $XX plan, QX as $XX MiR which Robotics. million million million, noted. was $XX with Greg

level back Shifting company to the financials.

free quarter, dividends paid $XX flow $XXX shareholders. and the in million repurchased $XXX XX% shares $X million Our million million quarter, returned in settled to the We was of and of cash debt. we in

cash ended final securities. have million will which quarter. in We in $XXX marketable convertible the quarter $XX debt, with the the be million We of fourth repaid and

$X.XX the EPS our in This with be for is between of the and and diluted XXX company million QX restructuring million $X.XX shares. quarter the to July expected amortization a to to excludes line our QX. outlook outlook Fourth in non-GAAP guidance acquired intangibles, of million, sales at level $XXX for $XXX half. range charges. are second with view Now other on

no Our for material QX guide constraints. revenue has supply

in supply range. line to supply has revenue issues normal we become now demand, in are As more including the back with

QX coming As a continue But times into behavior. balance, QX, as improve. demand component see to expect book lead variability a to line ship times result incremental this we there production with continue their reduced. to customers lead of This our of is supply more be in enables in to place orders more and In requirements.

we Non-GAAP are is XX%, A to on OpEx color rate expected and model QX. XX% of fourth quarter to gross at XX%. profit quarter were at run midpoint sales Recall, and margins operating at profile the fourth estimated is our XXXX, to XXXX range margins XX.X%, half. respectively. with guidance the long-term our gross our to in In little model gross XX% of XX% XX%. XX% margins with has second at and XX.X% quarter of Fourth OpEx for more in margins line

profile of margin XXXX supply quarter, and expected our to That range. July QX the strengthen the noted we timing chain, gross but margins full in which unchanged. by outlook our spending call, show XX% we gross in In that our to gross XX% QX due lower margins to the year is

to and producing manufacturing in continue but Turning operations, In qualified associated to resiliency behind will with QX, be us. spend new our enabling the testers spending. spend factories is

inventory in our teams product and some old effort do QX. successfully their In have new equipment for objectives is in of lines tireless to left we supply our manufacturing moving for is up our our like I would Packing completed what from partners thank chain. many locations derisking capital to locations. internal to and our short,

behind majority in qualification XXXX the but us. resiliency test component continue will the spending Some of is operational

OpEx. Regarding

levels. spend lower the and model lower compensation. we're to year our This XXXX. as levels, a be expense compensation full than flexes will model as component both both operating are for our down due operating and controls expenses, variable revenue is noted, spending flat As Recall, to where with XXXX variable than slightly less XXXX spending profits versus spend

As revenues that grow in variable years, future to XXXX are also compensation will in component grow. expected

at XXXX, EPS above Gross non-GAAP below our full year midpoint will $X.XX of and billion year guidance, full operating profit be be should of the with XX%. the the slightly revenue of $X.X for XX.X%. margin For

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

similar we with is levels, How gross in to mix margins revenues, call this at levels, QX in expected expected is unfavorable much lower point? the 'XX Starting revenue Looking XXXX year growth to product to Greg 'XX QX QX at business have growth 'XX. tough QX yielding noted XXXX.

our 'XX, For resiliency we expected year highlight high half meet the be lower to customer full by margins strong ramp on being than spending. up, our the they as expect playing to and 'XX team out gross second execution higher better Summing with demand. is volume UR URXX as

flexed the support For company chain risk growth our reduce operating the operations while long-term to has objectives. our our full in R&D transformed XXXX, markets capacity. our to investments enabling model while supply to go-to-market strengthened profitability end We've and year, have and our softened down geographic costs support

From return cash perspective, year-to-date, of flow owners. we've free our XXX% shareholder returned to a

options our wide Our cash support us for balance and growth range in of position invest in the sheet continue inorganic organic enables strategic and the strength initiatives future. in a to to has to firepower M&A

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

Thanks, Sanjay. a to now a reminder, some like as take please Operator, questions. one yourself And to follow-up. limit we'd and question

the [Operator Thank you. At this Our comes time, we will be conducting a Arcuri question first and Instructions] from answer with of Tim session. line UBS. question

about Greg, to to, to where critical again. then you to points had mobility utilization get talked start has there being grow see some

nonlarge before dynamics. we until would and think start customers utilization you buy I about has in you where now right to to aggregate? know how you So get where we terms back do versus the are large own do where their of think sort think are customer your how again? -- we about But have in of come

-- thanks, Yes. Tim. That's

our right indirect. of exact -- you our measurements -- utilization I'm hesitant to now, are the numbers give So because

the level. we've they tend we changes to are more at So for from than look lower people seen to to the what absolute want than But buy. significantly quarter-to-quarter

So customers -- and customers. difference big our and IDM there's our also a OSAT between

a high low our measurements enough at and usually trigger that's buys. our utilization by that IDM are the up XXs, So in customer level

lower, there's our an to this a utilization very Our usually little OSAT saw we are of data QX like inflection, customers XX points in from increase like QX, time. points few in

inside the on seeing still IDMs. what of than lower it's points XX so order of And we're

pretty would space. buys -- trigger to mobile OSATs of terms the So I utilization think climb support a that to big hill from before in a there's there's

NXB lot -- next the do read the And what think to customer planning NXE, then density. you I as throughout XX% your year. to mean your transistor going from of through I portfolio, you But think as product a more you about they're having the and a you on some do about in terms chips plans product portfolio new depends large of think entire get entire

like but next increase the across die does obviously, be fairly transistors on it size, entire going the So to solid it depends portfolio in a seem there's year.

you you're just you but I'm asking things could to So predict not for think sort of good -- what about the maybe that can talk customer, watching can sort year you whether customer of not? happens large to you or next with that be a determine that that year

Sure.

how same We customer. product The working of their think comes that when I about of line more high-performance that's -- sort are it computing we that's -- the of into quickly know large this that I'm data yes, for to process tea are. what things their products a loading. the are the don't there off reading So we're X-nanometer, like be, on will towards more that tailwind plans the really and source X-nanometer leaves goes watching complexity both product

The to -- to next-generation is to they what's size relationship attack they decrease try a Do the X-nanometer lot next and they the like use add of that complexity. to Or sort that process? same how use do the use between do features die keep and die of size cost?

lower-end out. to up change ] and strategy to And to So helps the the of is watching [ If to the that chips, using that there's have period changes, loading. of drive very any that they the compresses closely then the phone how we're see that if product processor plays peak last in time line. that the N-X build

So we that. don't have information about

are there a things we cautious being could there -- of point terms upside. as -- some model But future. in so number that the into drive are going out, pretty that how We are you we're like of

Cowen. of with question comes line next TD Krish the Sankar our And from

on question. -- too like it early outlook pattern to customers this earlier next Was year. it an regular year? Do or to expect still one you confirm outlook a follow your commit like the seems a it Or patterns time year. of on May follow-up. next I And turn back up Historically, April and is to a different to test then to kind to come around this have similar year -- first go that for was a big call? frame I is

lot up they I they But actually this May a that ended what not meeting think a familiar happening up ended capacity. in was additional year. So April, pattern that followed of

we So to I than But out pointed significant haven't prior customer in in be that less XX% customer we've expect timing. calls major think any XXXX. seen in we the that change

The that their we in call said this it thing out and peak didn't -- confirmed capacity. see prior uncertainty about about in still April, frame, way we but need what have we might out. be that like May that time the they And whether additional some was was loading there played the didn't demand played

on the still So schedule. same basically I they're think

then Very it. Got follow-up helpful. a market. auto And on the quick

still in offset that is autos? purely content strong. it's 'XX. grow spot because unit You Is said you're semi calendar else some see that or to that seen going be been weakness? in to increase there We've weakness, strong you in expected anything but seeing Is

No.

IDMs in we're most months to needed with front-end a in orders were times think process. and advance. equipment that lead I X the where they've lead all even have of ago, have in times what say, they're place space, large and expansion the -- players is capacity seeing running, they and our they projects for significant that that And way So automotive they in

commissioning. that that a haven't rescheduling, deliveries they're we've -- to of anything with change. lines some up so And so that but their seen building capacity, would be it their out need they we consider significant as signal demand seen phase to we And

SIG. the of from line Hosseini with comes question next Mehdi Our

that want of to follow-up. Yes, update I I'm an all ask everyone how ramping for I content you wanted learn We hear going context, By iPhone the have an And actually, end design to But what's market. have now, forecast on update grab you market share? in about of ASIC seen, a has to I own X what XX ASIC to headline. keeping and the on And ramping Paradigm's year. get I more the hyperscalers on builds not compute their And next it is, solution. follow-up. in

Okay.

doing couple computing That the market. now, it there's the like, GPUs right down, thing weak significantly sort a is computing, and part really are to silicon. beneficiaries cloud you of hyperscalers if market, compute that's are of is There's So cloud AI computing break be. of own that components continues their Then there PCs. the to acceleration. driving end of just and The and then equipment

increase that of The of that that's had not by consistent sort year at in, in support at something X it's next of very probably last testers revenue perspective, amount or the play point. it's year, quieter we to TAM, the going hyperscalers is silicon being that's X point. but definitely -- of sold very is GPU-driven bespoke from out still accelerators this sort it's amount but dwarfed over big There's a this this this traditional to the the years. are a hit think We going

really terms in we're it looking So wins. socket of at

that I right And can socket on wins. tell we track with are now, you

that's share are battles the on about this compute. the low and in winning into to for like have what half, hyperscalers, half. the other aiming year, half were half doing of sockets winning and half we that the we guys we're that try and win other get We fighting and We traditional we're

appreciate your And I way [indiscernible] with Okay. The my to the QX. the on an better has sequential QX, weakest and And do historically SOCs implies in decline. follow-up us with midpoint been modeling. to help X% color has

less down assume and X%? we Semi else than would Test So by SOC should be will X% more than everything down be that

Yes. Mehdi, it's Sanjay.

really URXX down rate. really QX in ramping through, say, then goes comes would I So that robotics. QX run is seasonality Obviously, to And decline and down. the seasonality coming we're

storage, -- point, the roughly at perspective, as SLT. QX an The in Q mobility to tied QX. this we're to really end or seeing And the SOC the that and is decline of flattish other decline the from component forecasted market of QX in

we now. So the drivers really what of are those see

And as as lead come customers more just in kind book with remarks, I we're my of orders that ship times within lead said you seeing, incremental lot a I'll coming remind prepared time. to us down, and

more see of So tail to of kind the kind we're bookings of QX expecting end for at shipments.

more little there's So there. volatility bit a

comes Samik from Chatterjee line Our JPMorgan. the of next with question

I of guess like? follow that like then can targeting. here, into that getting start if particularly, the Can custom when your I had the And the we when question wins a start look to progression in accelerated translating you of translating or pipeline at revenue, on that how up does Mehdi terms you're you XX% revenue compute bit the are to have that response more follow-up. last sort ASICs that wind in of think look about happen? actually, And -- does a you share I when a building

Yes.

now, right characteristic of the volatility noted So it year-on-year. is

X/X million of about vertically of that's compute X/X frame, of total of these Our the model that are $XXX to the million time producers XXXX compute XXXX, expect time in out get to of sort And reference, going frame. time to represent you probably the it, on to that TAM though, the we the out is order for $XXX test integrated be to going by TAM.

'XX there XX% year. when and consensus, of a the growth, you're look my but incremental at talking I has I follow-up, of about and you know then for here, And being lots year with takes puts XQ and for growing starting it XXXX XQ in are line you're

that that's XQ of sort sort you for do difference sort to kind you're growth come of were terms to expecting. that realized, in in magnitude a be Or as through realize the realistic is of able what if whether needs year? Any overall what obviously, see consensus XX% to of be versus through a that to around uplift, to So growth of which thoughts of starting sort quarter need where assumption? you strong

Yes.

it's Sanjay. that I think --

that potential think outlined Greg really in XXXX. kind of I tailwinds and headwinds the

look continues or in mobility, XXXX. from perspective, given for in it now, to But mobility limited half So and first tailwinds compute, visibility, 'XX right still especially we are dampened robotics a where the little the a and see weaker. model

we And see do the so that's tailwinds. where

we of what to about is, to there. some in that update question an rest we think right year. now that, And be in transparency low for the think to the provided with grow point. call the from we The know. how we'll what know we'll we've of QX. what it It's provide January is degree. And We And tough appears

Our next question from Vivek the of Bank of comes line with Arya America.

higher on one could 'XX? us 'XX first Sanjay, margins. And you lower gross drive what will half? is margin what half overall First remind gross gross the than second drove than margins

Yes. Good question.

focused first So it's Vivek. the second meeting story from the operations similar half, it's we in on in customer to half noted a demand. deferred to spending and mix I Fundamentally, second really were half product chasing what in we July, and resiliency and in first half,

into projects second half. our were deferred of the some So

mainly half second half. first mix spending as resiliency well So it's deferred from to as

I to is as I've mix. much remarks, and remarks, the And other prepared resiliency in volume, if of my a really, takes. a main product behind noted in us our 'XX. XXXX, prepared then product we see costs expect there's noted bunch -- in think mix puts volume. incremental And Incremental of operational as we've driver of And

as Got And as a customers of it. Texas more much my industrial the from some for lot follow-up, square muted industrial us kind about was I more Instruments demand. hoping demand, not of but right such the could automotive help Greg, commentary you

weakness folks broadening. weakness look or side. you strength about Because and on your at you're such TI what analog to that is How think in as UR talking is what devices, demand said industrial when noticing I were see the correlated business we sees? they the they industrial UR, but

correlated the historically? is what And right kind how been have trends read So across? these the X of

serving UR time think The MiR, with is not weeks question industrial of rest it's a lead of that is projects. run smaller business. the business to the time TI for and lead in -- So segment use to short will towards X ST time be answer of tend I We lead that our customers and are your the Infineon we're stuff about and very. Much longer projects. to tends with much and

So some off year-long than of control our backlogs working and industrial be robot it longer can equipment, even for process are of competitors that.

kind right relative So to They in is were significant a Industrial actually and stabilizing out advanced the what we're do of AMRs they'll we then year could start for, tend automation factory, will a factory building. bit little phase in lag to that say, our they we make that investment actually factory, with that will And there automated build them. orders of of then we're peers compared they'll a a seeing in is cobots for Automation look are for to be cycles see that subsequent the And cycles investment do in different weakness of the that. now, using at to makes investment and the factory and ago. tasks And they running sense. where

answer based semi So question going happen to trends. that I industrial our your is really robotics with the can't business to the think you on infer what's

comes question Toshiya of Our Goldman line Hari from with next the Sachs.

of see test couple your think much Semi going? have have QX them about where the revenue Test And for business? And couple revenue that's times, lead you turns percentage what they I over you I flat, quarters, But question first being How of of QX business, the overall company. talk do are first over SOC or will they My 'XX be my today? come when guess you in But do Greg, business the of two. where past within year-over-year. question, next Test on quarters? Semi

a back way to it XX the of something take weeks, the you chain get able be to lead we're and lead if out short we're aiming and we to running our That's to time, times year, off up pass I'll weeks. going the the tighten where closer get where are times us XX-week XX probably the And frame, Sanjay. in our those past about sitting. that's to point time lead lead go term supply be managed right to now, out to in running times, percent then down turns were weeks to we've the The and XX So I'll for oversubscribed. were to

But an again, average lead time. that's sort of

time some will ability lead an work high-priority orders. maintaining to particular within We for be

going so scrambling And I idea of a kind actually to the about will book know, to answer a have papers watch. very give fun we through the we And of you but have we sure It's the quarter, don't make question some do revenue probably will good majority to we're into here. our ship. good turns ability a for

to right So have gotten you yet? page the

always Semi in down like then it see to which Test, is starting kind little and XX% dropping ship into the increasing and that shifts with starting now bit we're But XX% bit range, that, XX%, a A stuff Yes. and then mainly very business, the we'd lead looking of out booked. Sure. drops and that XX% a increasing Obviously, see just of long in book overall, kind there's rescheduling we quarter tactical times, at more is back over the and little the to context. be And for to of time. forth. become

times to the coming lead expect, that's they you'd are need down, people we the POs. when place get they believe And them. when orders going As

then my That And follow-up, as a question makes on sense. China.

from Your the side peers end on XX% WFE come their China. in in revenue seeing of things, front to XX% they're or customers of

Or to competition for a the in area exposure think and lag existing there think a China most With in believe peaked a new were months? of teens. you you low you? capacity, your and stay with next, the potentially is given at could XX% couple have XX about reason China or the business low I growth over years expanding what a your quarter, time is the guys it, I there customers customers, call ago, recent that

of revenue. I'll first and about our provide about half It's want context then kind the the some Greg, if the to of current kind part take competition. China Sure. growth And second take potential Sanjay. maybe, you

XX% China just context, of and right, provide that And revenue -- in XX% in year-to-date, is our robotics, is got XX% about LitePoint. that really revenue So test 'XX, board X/X our of to production XX% of from XXXX, from in we've in China. about

from Test, that I from XX% but is from is our XX% Chinese and multinationals. Semi of about is and lot of customers XX% of group know XX% indigenous XX% Test that percentages, Semi a

of overall component about indigenous Semi is roughly the our really Test. tied X% business to So

about bit a little growth talk so And the I'll trends.

serve going automotive business China, platform. in the in probably expect well significant and segment decompose significant you to in to into growth part a And we If heaviest There's investment that the to Eagle that. the that's really for in memory there's that very grow. we we segment with and in continue And analog China, right industrial of very is for also and now, Test power investment China memory. WFE our us we exposure have and have investment, that capital good

by chunk of China frankly, The is test And out that the That's we that of test biggest unable U.S. for regulations. sell TAM us. of our single have the biggest are the China off equipment headwind in into to Huawei. in takes -- table we

in we're there. So

the China. can business We in competing that have a for we after. great team go We're all

where potentially hoping are. And we're we and of so to grow kind from hold

Our next with Brian question comes from the Stifel. Chin of line

point, a maybe your -- ask 'XX. gain couple given semiconductor taking just next kind of expect also calendar is test of TAM growth, share which questions. in next year? Greg, of starting And demand the of TAM next I'll in kind or modest what unit your spending test year? test maybe questions. the What semiconductor forecast year you growth profile might IC underpins A expected initial for initial few market

the bit recovery. we of the share from dramatic to our we to So there mobility the may be of think No flat And up if that going depend of when sort on -- next ATE because tailwind a up, it a right roll shifts think is slightly year. we strength and will I probably now, that be overall where are.

So share biggest of factor in that's probably terms goes. the where x

growth, I current don't are. in what terms expectations unit at IC of Now our terms have data in fingertips my the of

typically there. I I'm -- think almost it's

Yes.

looking yes. we're -- at -- So probably

will best coming back this below year, XXXX in by the So was units and our down be but it's still unit growth it back slightly, actually guests.

So the that be will thing below complexity or sort since that's peak test really growth going they on XXXX, is even XXXX the had though capacity requirements. will the drive the that's in at of happened units

there particular in terms better where gap unit markets is the that sort end you of that any feel And see complexity it. of Got increase?

could you repeat that? sorry, I'm

in calendar won't 'XX, of unit complexity sort of about that big the some level. is fill markets retest Thinking to increases sort that maybe Where high the given or semiconductor gap? watermark shipments quality control enough increases

Yes.

biggest advanced lever technology. is So X-nanometer there degree to to processors the the move which

required. chipset-based about are the moves That's XX% XX% tailwind There space. of in that's a really it's design. amount compute to the more So tailwinds And has as the another segment test into really markets. towards some of digital on automotive are an higher environment, much area is that complex complexity more it is other the threshold than test that -- going helps that devices a

applications, same ADAS into the number for processors same intensity thing going high-performance of a test very So for is high have fall. those transistors the

So sort for that's guess. where a we're complexity looking tailwind, some really of I

most more model? what but subdued given question know Okay. it. forward is of initial financial Maybe thinking the for sort to just maybe sort of financial of like initial in guys thinking 'XX for Got terms calendar my targets, 'XX, when then the is maybe for terms in refresh of calendar you -- and of second the Sanjay. your I January sort your outlook

through to process model. share to an It Yes. process planning our then through our go in a process QX. Great review update starting where in a we go with that And Board earnings we question. with strategic a just And now. we Every we're year, culminates go through January.

think you in [ that the is ] will first So answer January. share with Sanjay quick I

let model provide We little of in drivers test fundamentals still in have me and in conviction key your of and color a the overall bit the But to question. robotics.

about a we've them. narrated talked Greg think I little them, bit

the conviction. very very Obviously, visibility the mid term, and the over So is cautious. long and short muted in term, have we

that And indicators now. we're through the for will We're inflections key looking when going occur. of so

believe, The the term, to through in those goals. mid an update we going get to long over work fundamentally, going and and we're we're January. to But timing, provide

Moore line question comes Stanley. the next Our of Joe from with Morgan

Great.

about memory pickup by talked some new being standards, a and business You but there. speeds kind driven are volume we of that's seeing

of that memory supply then are drive wondering, you customers some have seeing I'm test online? fabs, their back that, that point? in And indication business So memory utilizations some at comes your there underutilized could any

This is Greg.

definitely market are driven we retool. by this year being So that technology-driven seeing is the

fundamentals better. DDRX, protocols. HBM, market LPDDRX and So in the next-generation are memory getting The

coming a inventory and up. bit down So are production levels going rates are

that is because bit in a little that large it seen a that that we now, drive capacity But before be amount it's more we one there fair and to the haven't of of to of would be trigger to is help they to don't to increase, it definitely Right we're a we reach tailwinds loaded loaded needs back-end amount buys. a XXXX, a but expect tailwind. buys, that expect trigger dramatic be expecting a somewhat capacity

you think do And share that to are transitions continue within memory? gain you Great. that can Given happening? the

in mover I we standards next-generation a final in part of is sort less really to and needs, by test differentiation, market and capacity our that sort Well, the part tend market. highest to wafer more profit that's to competitors. is that that that also capability love you of protocols, that share to. the more tell the memory of and The test first less share allows be us capture and In there's we thing in we driven can would the have

down final bit. the a not space. that in as space. capacity when high we're and would a So our tends in what wafer when to test a we little in much tend tend share is technology-driven go just high. cycle, share broader share And retooling the to our as share always we're see be sort to But we're we in have our fighting do add It's

from comes KeyBanc with Markets. question line Capital of next our Steve the Barger And

unchanged long-term appears robotics going Just the are seeing but markets the in for we demand stabilizing, plateauing back industrial model to some some robotics.

have they durable as plans target you can confidence customers? gives on XXXX? robust mid-XX% relative CAGR customers, track more smaller that you by do to So you what back that to get bigger Or

Definitely, question. a and Steve, so thanks and application different large robotics. for are customers than customers process your sales process small very

short tends purchases to low. be the cycle repeat So in quite small sales level can customers, be of the but

plans large accounts robotics that into work they and not. that of coverage cycles direct our planning up from against increase with of multi you we is is sort or come they annual they put seeing will we're project What

have And does but smaller this we into salespeople it than pretty that in with customers. we started funnel rich a to now it through funnel XXXX, opportunity longer so more since assigning space takes get

So a the with 'XX we channel. same At from there's in customers in than build-out of time do greater associated our large also time, impact see the lag 'XX. expect to much a we OEM

I'm has about what developed to robot that basically just when service solution, and it. remind our we'll to have inside then product own or it's and sales OEM, robot is distribution take has application a their adhesive whether repeatable And welding to I for who say a they talking and have So marketing someone service. you, of a of they palletizing, sell customer or care

partners in Those own So have go through we XXXX. new development XX distribution. to that build up process signed partners out their and

and inflection OEMs to we There's to succeed. a what So months initial all they sign-up. an that about have do, not the the see XX certain of that, tend after percentage is XX

inflect. that from and and inflected So we have about XXXX are have come sign-ups to XXXX that have

that a 'XX. signed are to XXXX of end 'XX in going up become and the into ones we towards factor The

Is I cycle can that markets if length? that longer selling that, summarize of help mitigate the cyclicality of just could So that fair? underlying the because

as fair. big companies well. times because cyclicality It's There's times and investment lean have still

service I way PMI they to work robotics increase a the software they long is try as term we're our but longer reduce key The that revenue times. business. think cycles of thing of volatility lead sort on at So to a of and revenue follow amount to bit, these part looking as

time that immediately, recurring of try to Not space. think that working frame. effect. And will sort revenue we that sure by 'XX, we're that, end have this streams we but good develop So 'XX of some by can a make the in and the --

to follow-up. quick a a so And good segue that's

makes a to ready about don't being across topic where focus And on mentioned You more quarters, few if M&A you being the portfolio? are recall thinking which that? execute past something big I you would that sense, the

we're about thinking So M&A. always

comment targets, M&A that is use just -- When remind capital capital. strategy we we priority suitable flow So return of primarily don't the a investors, we allocation to to cash identified our always for our what's not running. always is accretive find We're do we you, pipeline. at that the dividend through well. in M&A our pipeline the highest as on buybacks. have And and We have things, course, looking

operator, about of we're And out time.

the you for talking to have and over So Blanchard. weeks I'd to like reach to if ahead. to you you just And out everybody directly forward joining. please questions, thank Bye-bye. Andy look me, Thank

And this for you concludes Thank time. today's conference, this your lines disconnect and participation. may your you at