Analogy 1: Applied Materials for semiconductor testing

Analogy 2: ASML for chip reliability

• FOX™ Wafer-Level Test and Burn-in Systems: These systems provide full wafer contact and parallel test and burn-in for an entire wafer of integrated circuits simultaneously.
• ABTS™ Packaged Part Test and Burn-in Systems: These systems offer parallel test and burn-in for individual packaged semiconductor devices across various configurations.
• WaferPak™ Contactors and DiePaks™ Carriers: These are specialized interfaces and carriers enabling the electrical contact and handling of wafers and individual die within the FOX systems.
• Test Fixtures and Burn-in Boards: Custom-designed boards and fixtures used to connect devices under test to the ABTS systems for proper electrical stimulus and measurement during testing.

Aehr Test Systems (AEHR) sells primarily to other companies, specifically within the semiconductor industry. Its customers are generally manufacturers of semiconductor devices and modules, including Integrated Device Manufacturers (IDMs), Outsourced Semiconductor Assembly and Test (OSAT) providers, and fabless semiconductor companies.

Based on their latest 10-K filing (for the fiscal year ended May 31, 2023), Aehr Test Systems noted that two customers each accounted for 10% or more of their total net revenues, collectively representing approximately 63% of their net revenues for fiscal year 2023. While Aehr Test Systems typically refers to its largest customers in general terms (e.g., "a leading silicon carbide semiconductor manufacturer") without explicitly naming them in their financial filings, industry analysts and investor communications widely understand their primary customer to be:

• ON Semiconductor (Symbol: ON)

This identification is based on Aehr's frequent references to a "lead silicon carbide customer" ramping high-volume production for electric vehicle and industrial applications, which aligns with ON Semiconductor's significant investments and market position in silicon carbide (SiC) power semiconductors.

The identity of the second major customer has not been publicly disclosed by Aehr Test Systems.

Gayn Erickson, President and Chief Executive Officer

Gayn Erickson joined Aehr Test Systems as President and CEO in January 2012. He co-founded Verigy, where he previously served as Corporate Officer and Senior Vice President & General Manager of its memory test business. Prior to Verigy, he was Vice President of Marketing and Sales for Agilent Technologies' Semiconductor Memory Test products. His career in semiconductor test began at Hewlett-Packard's Automated Test Group in the late 1980s. He possesses over 35 years of experience in the semiconductor capital equipment market.

Chris Siu, Chief Financial Officer, Executive Vice President of Finance, and Secretary

Chris Siu was appointed Chief Financial Officer, Executive Vice President of Finance, and Secretary of Aehr Test Systems in June 2023. Before joining Aehr, Mr. Siu spent four years in senior finance executive roles at Ultra Clean Technologies, including Senior Vice President of Finance, Corporate Treasurer, and Chief Accounting Officer. He also held senior management positions at PDF Solutions and GlobalFoundries, where he served as Corporate Controller for four years. Additionally, Mr. Siu was Chief Accounting Officer and Director of Finance at Trident Microsystems. He began his career in public accounting with EY and Deloitte.

Adil Engineer, Chief Operating Officer

Adil Engineer joined Aehr Test Systems as Chief Operating Officer in April 2022. Prior to Aehr, he was the Head of Operations at Tecan, a Swiss company specializing in medical test and diagnostic tools. He also spent 11 years at KLA-Tencor and held positions of increasing responsibility in manufacturing, manufacturing engineering, new product introduction, and supply chain at Coherent and Kateeva. He has over 20 years of experience in operations and supply chain within the semiconductor and medical equipment fields.

Vernon Rogers, Executive Vice President of Sales and Marketing

Vernon Rogers' career has focused on nanoscale inspection, manufacturing, and test technologies with industry leaders such as LitePoint (acquired by Teradyne), Credence Systems Corporation (acquired by Xcerra), NPTest (acquired by Credence Systems), and Schlumberger Automated Test Equipment. He also oversaw sales for FlexStar Technology, a company focused on hard disk drive and solid-state drive test and burn-in.

Dave Hendrickson, Chief Technology Officer, VP of Engineering

Dave Hendrickson joined Aehr Test Systems as Vice President of Engineering in October 2000. Before that, from 1999 to 2000, he was Platform General Manager, and from 1995 to 1999, Engineering Director and Software Director, at Siemens Medical (formerly Acuson Corporation). From 1990 to 1995, he served as Director of Engineering and Director of Software at Teradyne Inc.

The key risks to Aehr Test Systems (AEHR) business are:

1. Customer Concentration and Reliance on the Silicon Carbide/Electric Vehicle Market: Aehr Test Systems has historically been highly dependent on a single major customer, with approximately 88% of its first-quarter fiscal year 2024 revenue coming from one customer, primarily within the Silicon Carbide (SiC) wafer-level burn-in (WLBI) segment. This segment is largely driven by the Electric Vehicle (EV) market. A slowdown in the EV market during calendar year 2025 directly impacted Aehr, contributing to a net revenue decline and a GAAP net loss in fiscal year 2025. There is also a risk that this key customer could develop an in-house or alternative burn-in solution.

2. Execution Risk in New, High-Growth Segments: To mitigate its reliance on the SiC market, Aehr Test Systems is strategically expanding into new areas, particularly Artificial Intelligence (AI) processors, which constituted over 35% of its business in fiscal year 2025. A significant risk is that the ongoing evaluations with leading AI processor suppliers may not translate into high-volume production orders, which could negatively impact the company's financial performance.

3. Cyclical and Highly Competitive Semiconductor Industry and Geopolitical Factors: The semiconductor equipment industry is inherently cyclical and intensely competitive. Aehr faces risks from larger competitors potentially introducing more advanced or cost-effective products, leading to increased price competition and potentially eroding operating margins. Furthermore, geopolitical tensions, such as new U.S. tariff announcements and their secondary effects on customer orders and the supply chain, can impact the timing of large orders, particularly given that a substantial portion of Aehr's net sales are from outside the United States.

Aehr Test Systems (NASDAQ: AEHR) primarily focuses on providing test systems for burning-in and testing memory and logic integrated circuits, with a significant presence in wafer-level burn-in solutions. The company's main products and services address several key markets, including wafer-level test and burn-in, silicon photonics testing, automotive semiconductor testing, and AI processor testing.

Addressable Markets:

• Wafer-Level Test and Burn-in (WLTBI):

  The global Wafer-level Test and Burn-in (WLTBI) market was valued at approximately USD 2.1 billion in 2024. It is forecasted to increase to USD 2.29 billion in 2025 and is projected to surpass USD 4.5 billion by 2033, expanding at a Compound Annual Growth Rate (CAGR) of about 9.2% during the period 2025-2033. Other estimates place the global WLTBI market at USD 2.45 billion in 2025, with projections to reach USD 5.48 billion by 2033, at a CAGR of 10.60% from 2025 to 2033. The Asia-Pacific region holds the largest share of the global WLTBI market, accounting for approximately 50% of the total market revenue.

• Silicon Photonics Testing Equipment:

  The global Silicon Photonics Testing Equipment market size is estimated to reach USD 2.5 billion by 2030, growing at a CAGR of 25% during the forecast period 2025-2031. Another report indicates the global silicon photonics test system market reached USD 1.52 billion in 2024 and is forecasted to attain a value of USD 5.67 billion by the end of 2033, registering a CAGR of 15.8% from 2025 to 2033. The broader global silicon photonics market, which includes testing, was valued at USD 2.69 billion in 2024 and is projected to grow to USD 15.83 billion by 2032, exhibiting a CAGR of 25.3% during the forecast period. North America held a significant market share of 35.27% in 2024.

• Automotive Semiconductor Test Equipment:

  The global Automotive Semiconductor Test Equipment market size was valued at USD 2.7 billion in 2024 and is projected to reach USD 6.4 billion by 2033, exhibiting a CAGR of 8.9% during the forecast period 2025-2033. North America contributes approximately 31% to the global demand for automotive semiconductor test equipment, with the United States accounting for nearly 85% of this regional demand. Europe represents approximately 29% of this market. The overall automotive semiconductor market is forecast to increase by USD 31.29 billion, at a CAGR of 9.45% between 2023 and 2028 globally.

• AI Processors Testing (Wafer-level and Packaged Part Burn-in):

  The combined wafer-level burn-in (WLBI) and packaged part burn-in (PPBI) market for AI processors could exceed USD 100 million annually globally. Aehr aims to capture a "meaningful share" of this annual AI testing market.

Aehr Test Systems (NASDAQ: AEHR) is poised for future revenue growth over the next 2-3 years, driven by its specialized semiconductor test and burn-in solutions across several high-growth markets. Key drivers include the continued expansion of silicon carbide (SiC) devices, increasing demand for artificial intelligence (AI) processors, the growth of silicon photonics, and the adoption of gallium nitride (GaN) power semiconductors, complemented by recurring revenue from consumables and strategic customer engagements.

Here are 3-5 expected drivers of future revenue growth for Aehr Test Systems:

1. Growing Demand for Silicon Carbide (SiC) Semiconductors in Electric Vehicles and Industrial Applications: Aehr Test Systems holds a leadership position in wafer-level burn-in (WLBI) solutions for the silicon carbide market. While there has been some recent slowing in the electric vehicle (EV) market growth, Aehr remains confident in the long-term opportunity for SiC, particularly as EVs continue to grow globally and SiC devices gain traction in other markets such as power infrastructure, solar, and various industrial applications. The company's FOX platform offers distinct capabilities for these devices.
2. Expansion into Artificial Intelligence (AI) Processor Testing: Aehr has significantly expanded its addressable market by entering the AI processor testing segment. The company is experiencing strong momentum and customer engagements in both wafer-level and packaged part test and burn-in of AI processors. This strategic diversification is evident as AI processors, which represented 0% of Aehr's revenue in fiscal year 2024, accounted for over 35% of revenue in fiscal year 2025. Orders from leading AI processor suppliers and major hyperscalers are anticipated to be significant growth catalysts.
3. Increased Adoption of Silicon Photonics Devices: The growing market for silicon photonics integrated circuits presents another substantial revenue opportunity for Aehr Test Systems. Aehr's specialized test systems are well-suited for the reliability challenges of these devices, which are crucial for data centers and high-speed communication.
4. Growth in Gallium Nitride (GaN) Power Semiconductors: Aehr has also diversified its product offerings to include testing solutions for gallium nitride (GaN) power semiconductors. This expansion positions the company to capitalize on the increasing demand for GaN chips, which are used in various power applications and could benefit from growth in EV manufacturing volume.
5. Recurring Revenue from Consumables (WaferPak and DiePak): A consistent driver of revenue growth for Aehr is the recurring sale of its proprietary consumables, specifically WaferPak contactors and DiePak carriers. These consumables are specialized for specific chip designs and are required with each FOX-P series tester, providing an ongoing revenue stream as customers utilize their installed base of systems and purchase new consumables for new device designs.

Share Repurchases

• Aehr Test Systems has not engaged in significant open-market share repurchase programs as a capital allocation strategy in the last 3-5 years.
• The company repurchased shares primarily for tax withholdings on the vesting of restricted stock units, amounting to $0.784 million in fiscal 2025 and $1.596 million in fiscal 2024.

Share Issuance

• In February 2023, Aehr announced an At-The-Market (ATM) offering to sell up to $25 million of common stock.
• The proceeds from this offering were intended for general corporate purposes, including increasing working capital and inventory, funding research and development, commercial activities, and capital expenditures.
• The company also issued common stock under employee plans, generating proceeds of $1.409 million in fiscal 2025 and $1.807 million in fiscal 2024.

Inbound Investments

• Aehr Test Systems raised an undisclosed amount in a Post IPO funding round on February 6, 2022, with participation from investors including Herald Investment Management, Summit Partners, QVT Family Office, and Deutsche Bank.

Outbound Investments

• Aehr Test Systems completed the acquisition of Incal Technology, Inc. on August 1, 2024, for $21 million, comprising $14 million in cash and 552,355 shares of Aehr stock valued at $12.67 per share.
• This acquisition expanded Aehr's product portfolio to include high-power packaged part reliability/burn-in test solutions, specifically for AI accelerators, GPUs, and high-performance computing (HPC) processors.
• Incal Technology generated $12 million in the 12-month period ending June 30, 2024, prior to the acquisition.

Capital Expenditures

• Capital expenditures were $4.992 million in fiscal 2025 and $0.749 million in fiscal 2024.
• In the first quarter of fiscal 2026 (ended August 29, 2025), capital expenditures totaled $1.391 million, contributing to a total of $6.3 million spent on facility expansion.
• The primary focus of recent capital expenditures has been to support the consolidation and upgrade of its Fremont manufacturing facility and headquarters, and to expand capabilities for new product lines, particularly for AI processors.