Aehr Test Systems Symmetrical Triangle Breakout On William Blair Outperform Rating

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Aehr Test Systems $AEHR stock rose 13.7% on October 17, 2022, after William Blair began coverage of the stock with an Outperform rating.

Aehr Test Systems initiated with an Outperform at William Blair

On October 17, 2022, William Blair analyst Jed Dorsheimer initiated coverage of Aehr Test Systems with an Outperform rating. The analyst noted that $21B of the $78B power analog segment is likely to be disrupted by silicon carbide. Dorsheimer said that Aehr Test Systems $AEHR will enjoy an outsized benefit relative to peers as the S-curve adoption of SiC semiconductors begins. Aehr Test Systems only has one product line, FOX-XP, selling to silicon carbide device manufacturers, but it is likely to keep benefiting from large purchase orders, especially as ON Semiconductor (ON) attempts to achieve its $1B revenue target in 2023.

Aehr Receives Order from New Customer for FOX™ Wafer Level Burn-in System for Silicon Carbide Semiconductors for Electric Vehicles

On October 13, 2022, Aehr Test Systems (NASDAQ: AEHR), a worldwide supplier of semiconductor production test and reliability qualification equipment, announced it has received purchase orders from a new customer for a FOX-NPTM multi-wafer test and burn-in system, multiple WaferPakTM Contactors and a FOX WaferPak Aligner to be used for qualification of their silicon carbide devices for electric vehicles. The order for WaferPaks from this customer was announced during Aehr’s earnings conference call last week. This company is a multibillion-dollar annual revenue global manufacturer of semiconductors that is currently supplying silicon based MOSFETs for the automotive industry.

This FOX system is configured for High Temperature Gate Bias (HTGB) and High Temperature Reverse Bias (HTRB) stress testing and burning in of silicon carbide devices on 150mm and 200mm wafers using Aehr’s proprietary WaferPak full wafer Contactors. The FOX system, WaferPaks, and WaferPak Aligner are scheduled to ship within the next six months.

Gayn Erickson, President and CEO of Aehr Test Systems, commented, “Our momentum in silicon carbide wafer level burn-in continues to increase, and we are very excited that this new customer has chosen Aehr’s FOX full wafer test and burn-in solution in a very short period of time. The company already has experience in power semiconductors and quickly understood the value proposition of being able to test and burn-in 100% of their devices at wafer level.

“Multiple forecasts are projecting tremendous growth in the silicon carbide market, and we are excited to also be attracting semiconductor companies who are relatively new to the silicon carbide market and see them recognize how our unique and cost-effective solutions can accelerate their time to market as they compete for market share.

“The FOX-NP system is a dual-wafer system that is fully compatible with the volume production FOX-XP, which can be configured with up to nine or eighteen wafers depending on the customer’s specific test requirements and power configuration. This allows our customers to bring up initial production for customer qualifications as well as maintain 100% compatibility of systems, WaferPaks, test programs, and results between both new product introduction systems and volume production systems at facilities located around the world.

“Aehr is ramping our production capacity for both systems and full wafer WaferPak Contactors to meet the anticipated demand we see for several market applications, and particularly for the enormous growth projected in silicon carbide power MOSFETs to meet the needs of the traction power inverter that drives electric vehicle engines as well as the on-board and off-board chargers for electric vehicles. These applications require an extremely high level of quality and reliability and, due to the higher than acceptable extrinsic or early failure rates of silicon carbide devices used in power conversion, the industry widely acknowledges the need for 100% burn-in of these devices before they are used in electric vehicles. Customers use Aehr’s FOX multi-wafer systems to test and burn-in their devices at elevated temperatures and voltage biases for up to 24 hours or more per wafer to remove weak devices that otherwise would fail in the end use application. Failure of the power inverters in an electric vehicle can create what we call a ‘walk home event,’ which is where upon certain device failures, the passengers and driver of the electric vehicle may be forced to get out of the vehicle and walk home.

“The FOX family of compatible systems including the FOX-NP and FOX-XP multi-wafer test and burn in systems and Aehr’s proprietary WaferPak full wafer Contactors provide a uniquely cost-effective solution for burning in multiple wafers of devices at a single time to remove early life failures of silicon carbide devices, which is critical to meeting the initial quality and long-term reliability the automotive, industrial, and electrification infrastructure industry needs.”

Aehr Test Systems Reports 89% Revenue Growth Year over Year in First Quarter of Fiscal 2023 on Strength of Wafer Level Test and Burn-in of Silicon Carbide Devices used in Electric Vehicles

On October 6, 2022, Aehr Test Systems (NASDAQ: AEHR), a worldwide supplier of semiconductor test and reliability qualification equipment, announced financial results for its first quarter of fiscal 2023 ended August 31, 2022.

Fiscal First Quarter Financial Results:

  • Net sales were $10.7 million, up 89% from $5.6 million in the first quarter of fiscal 2022.
  • GAAP net income was $589,000, or $0.02 per diluted share, compared to GAAP net income of $696,000, or $0.03 per diluted share, in the first quarter of fiscal 2022, which includes the impact of forgiveness of $1.7 million in loans from the Paycheck Protection Program (“PPP”).
  • Non-GAAP net income was $1.3 million, or $0.05 per diluted share, which excludes the impact of stock-based compensation, compared to a non-GAAP net loss of $414,000, or $0.02 per diluted share, in the first quarter of fiscal 2022, which excludes the impact of stock-based compensation and forgiveness of the PPP loan.
  • Bookings were $19.1 million for the quarter ended August 31, 2022.
  • Backlog as of August 31, 2022 was $19.5 million.
  • Total cash and cash equivalents as of August 31, 2022 were $36.1 million, up from $6.5 million at the end of the first quarter of fiscal 2022.
  • An explanation of the use of non-GAAP financial measures and a reconciliation of Aehr’s non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying tables.

Gayn Erickson, President and CEO of Aehr Test Systems, commented:

“We are off to a good start this year, finishing the first quarter with revenue and net income ahead of consensus estimates, and with strong bookings of $19.1 million.

“We are currently engaged or in discussions with almost all the existing and future silicon carbide suppliers regarding our unique, low cost, multi-wafer level test and burn-in solution that provides test electronics and device contactor technology that enables contact to 100% of devices on a single wafer. This allows our customers to burn-in every device at a lower cost than they could in any other form due to our ability to contact thousands of devices on a single wafer and test 18 wafers in a single system at one time with our FOX-XPTM multi-wafer test and burn-in system and proprietary FOX full wafer contact WaferPaksTM. The major silicon carbide companies expect that most electric vehicle traction inverters will move to multi-chip modules, and they have told us that they must move to wafer-level stress and burn-in to remove the inherent failures before they put these devices into multi-die modules to meet their cost, yield, and reliability goals of these modules. Aehr’s technology provides a total turnkey single vendor solution to meet these customers’ critical test and stress requirements.

“Our lead customer for silicon carbide wafer level burn-in continues to ramp up use of our FOX-XP multi-wafer test and burn-in systems and WaferPaks, placing another significant order with us during this quarter. Similar to past orders, they purchased the systems without the necessary WaferPak full wafer contactors and as such, we expect significant orders from them for WaferPaks to match these systems. This need for additional capacity is being driven by increased demand for silicon carbide semiconductors for electric vehicles. This customer recently announced that they expect their growth rate to accelerate faster than previously forecasted, and they continue to forecast orders for a significant number of FOX systems and WaferPak Contactors over the next several years.

“Our previously announced benchmarks and evaluations with two additional major silicon carbide semiconductor suppliers continued to move forward with great progress during the quarter. Following the end of the quarter, we announced an initial purchase order from one of these suppliers for our FOX-NP multi-wafer test and burn-in system, multiple WaferPak Contactors, and a FOX WaferPak Aligner to be used for qualification of our wafer level burn-in solution for silicon carbide devices for electric vehicles and other markets. This new customer is one of the world’s largest suppliers of silicon carbide devices serving several significant markets including the electric vehicle industry. We have already shipped the system to them, and we believe we will achieve their specific performance and functionality evaluation criteria on their test floor during the next three to six months as well as expect that they will be purchasing our FOX-XP production systems for shipment before the end of this fiscal year ending May 31, 2023. The benchmark with the other potential customer has also progressed significantly since last quarter’s conference call. We completed a significant milestone with a large number of wafers being tested, and we believe that we will successfully complete their correlation over the next few months, allowing them to also move forward with our FOX solution. We expect both of these major silicon carbide suppliers to implement our FOX platform solution into their volume manufacturing production flow as they look to capitalize on the fast-growing demand for silicon carbide devices in electric vehicles.

“We see demand building for wafer level burn-in of silicon carbide devices and specifically for traction inverters and onboard and offboard chargers for electric vehicles. During the last few months, multiple additional silicon carbide suppliers have asked us to provide technical feasibility, quotations, and schedules for production test and burn-in of their wafers. While some of these companies want to do on-wafer validation of our solutions before they place orders for systems from us, others are planning to move directly to purchasing our FOX systems and WaferPaks to accelerate their time to market. The silicon carbide market for electric vehicles and its supporting infrastructure requirements are growing at a tremendous rate, with Canaccord Genuity estimating that wafer capacity will increase from 125,000 6-inch wafers in 2021 to over four million 6-inch equivalent wafers in 2030 to meet the electric vehicle market alone.

“In addition to our progress with silicon carbide applications, we are seeing an increase in our wafer level burn-in business for silicon photonics devices used in data communications. We shipped multiple FOX-NP systems this quarter to support the characterization and product qualification of new photonics-based devices. We have also received multiple orders for upgrades to existing systems that enable a higher number of devices and higher power per wafer, as well as for new designs for WaferPaks that we expect will first be ordered for engineering and new product introduction, and then turn to volume production with higher quantity orders.

“We are very encouraged by the continued positive momentum and expanding growth opportunities we are seeing with current and prospective customers and are reiterating our previously announced guidance for revenue this fiscal year as we expect revenue to grow over the next three quarters. We believe that we will receive production orders from several silicon carbide customers beyond our lead customer and begin shipping systems to meet their production capacity by the end of our current fiscal year that ends May 31, 2023. Beyond our engagements with some of the top major automotive suppliers, we are also seeing high levels of interest and discussion with other silicon carbide prospects across the spectrum of industrial, solar, wind, and charging infrastructure markets that is expanding our potential customer base and giving us increased confidence about our growth prospects for fiscal 2024 and beyond.”

Fiscal 2023 Financial Guidance:

For the fiscal year ending May 31, 2023, Aehr is reiterating its previously provided guidance for total revenue to be at least $60 million to $70 million, with strong profit margins similar to last fiscal year. Aehr also continues to expect bookings to grow faster than revenues in fiscal 2023 as the ramp in demand for silicon carbide in electric vehicles increases exponentially throughout the decade.

Aehr Test Systems $AEHR Stock Technical Analysis

Aehr Test Systems $AEHR stock is in a technical strong uptrend. Both short-term and long-term indicators point to a continuation of the uptrend. The stock is doing a Symmetrical Triangle breakout pattern.

Aehr Test Systems stock chart on October 17, 2022, with Symmetrical Triangle drawn in red lines, with positive MACD and positive money flow.
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