Aehr Test Systems (NASDAQ: AEHR) has traditionally been recognized for its contributions to the electric vehicle (EV) sector, particularly in testing silicon carbide (SiC) devices. However, recent strategic initiatives have positioned the company as a significant, yet underappreciated, player in the artificial intelligence (AI) semiconductor market.

Transition to AI GPUs

In September 2024, Aehr secured its first multisystem orders for the Sonoma ultra-high-power system, designed specifically for the volume production test and burn-in of AI processors. This system addresses the unique requirements of AI applications, marking Aehr’s strategic entry into the AI semiconductor testing market.

Technological Differentiation: GaN vs. SiC

Aehr’s technology focuses on wafer-level test and burn-in solutions for wide bandgap semiconductors, including gallium nitride (GaN) and silicon carbide (SiC). In December 2023, the company received an initial order for a FOX-NP™ wafer-level test and burn-in system for GaN power devices, highlighting its capability to support both GaN and SiC technologies.

Business Segmentation: EVs vs. AI and Other Markets

Historically, Aehr’s revenue has been significantly driven by the EV sector, particularly through the testing of SiC devices used in EVs and charging infrastructure. For instance, in July 2024, the company reported receiving $12.7 million in orders for FOX WaferPak™ full wafer contactors to support production of SiC power devices for EVs.

While specific revenue percentages from AI-related activities have not yet been disclosed, the recent orders for AI processor testing systems suggest a growing diversification of Aehr’s revenue streams beyond the EV market.

Relationship with Tesla

Aehr Test Systems does not supply equipment directly to Tesla. Instead, it provides test and burn-in solutions to semiconductor manufacturers that supply components to Tesla. This indirect relationship means that while Aehr’s equipment plays a role in the production of semiconductors used in Tesla vehicles, Tesla is not a direct customer.

Other Market Segments

Beyond EVs and AI, Aehr serves several other markets:

Silicon Photonics: Aehr provides testing solutions for silicon photonics devices, which are crucial in data centers and telecommunications.

Memory ICs: The company offers burn-in and test equipment for memory integrated circuits, ensuring reliability in various electronic applications.

Gallium Nitride (GaN) Devices: Aehr’s systems are used for testing GaN power devices, which are increasingly important in power electronics due to their efficiency and performance.

Expectations for January 2025 Earnings

Several factors support the potential for increased revenues in Aehr’s upcoming financial filings:

Diversification into AI Testing: The introduction of the Sonoma system for AI processors opens new revenue avenues. As AI applications expand, the demand for specialized testing equipment is expected to rise, benefiting Aehr.

Acquisition of Incal Technology: In August 2024, Aehr completed the acquisition of Incal Technology, a manufacturer of packaged part reliability/burn-in test solutions. This acquisition is anticipated to enhance Aehr’s product offerings and market reach, potentially boosting revenues.

Ongoing Demand in EV Sector: Despite diversification, the EV market remains robust. Continued orders for SiC device testing equipment are expected to sustain and possibly increase revenue from this segment.

In summary, Aehr Test Systems’ strategic expansion into AI processor testing, combined with its established presence in the EV market and recent acquisitions, positions it for potential revenue growth in the forthcoming financial periods.

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by Steve Macalbry

Senior Editor,

BestGrowthStocks.Com

 

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