Advantest 4Q26: Leading in Silicon Photonics Testing; Raising PT to JPY 39,200
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Advantest delivered exceptional fourth-quarter results for the period ending March 2026, with revenue reaching JPY 328.1 billion, representing a 20% sequential increase and beating market expectations by 14%. Gross margin improved to 67.4% and the operating margin reached 46.7%. Net profit surged to JPY 126.8 billion, exceeding forecasts by 38%.
System-on-a-chip (SoC) tester revenue was the primary growth driver, surging 44% sequentially to JPY 237.2 billion, while memory tester revenue declined 36%. Geographically, Taiwan saw exceptional 83% sequential growth, highlighting robust AI-related demand.
Management raised the long-term SoC tester annual capacity target significantly to 10,000 units, aiming for late 2028. Additionally, the company secured its first mass-production automated test equipment order for silicon photonics and expects revenue from this segment to double over the next two years. Management explicitly noted Advantest is already leading in this market and does not need to catch up to competitors.
The calendar year 2026 SoC tester total addressable market guidance was slightly increased to a range of $8.7 to $9.5 billion, with Advantest expecting its market share to rise to 66%.
Bernstein maintains an Outperform rating and raised the target price from JPY 34,300 to JPY 39,200, implying 24% upside. The valuation multiple was lifted from 40x to 45x to reflect enhanced earnings visibility.