Teradyne Reports Weak Outlook Amid Softening Chip Testing Demand

Teradyne (TER) projected lower-than-expected revenue for the first quarter, signaling a decline in demand for its semiconductor testing equipment.

Slowdown in Semiconductor Industry

Surging borrowing costs and economic uncertainties have prompted businesses to cut investments, affecting demand for Teradyne's products. Certain markets, such as automotive, are also facing pressure due to surplus inventory accumulated during the pandemic.

Strategic Realignment

To enhance its growth and profitability, Teradyne plans to restructure its robotics business.

Long-Term Prospects

CEO Greg Smith expressed optimism for long-term growth, citing opportunities in AI computing and memory. The company will continue investing in these areas.

Financial Performance

For the fourth quarter, Teradyne reported a 12% revenue increase to $752.9 million, surpassing estimates. Adjusted earnings per share reached 95 cents, exceeding expectations.

First-Quarter Forecast

Teradyne predicted first-quarter revenue between $660 million and $700 million, below analysts' consensus estimate. Adjusted earnings are expected in the range of 58 cents to 68 cents, lower than the forecasted 63 cents.