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Slowdown in ATE industry may lead to downturn

Posted: 13 Aug 2007     Print Version  Bookmark and Share

Keywords:ATE industry  industry slowdown  ATE vendors 

A slowdown is evident in the ATE industry, pointing to the possibility of another downturn. ATE giants Advantest Corp. and Teradyne Inc. recently posted mixed results, while Credence Systems Corp. reported a loss.

LTX Corp. has lowered its forecast, saying it would post a loss. ATE vendor Verigy Ltd also narrowed its forecast, but it plans to remain profitable.

But high-flying ATE vendor Nextest Systems Corp. on August 9 said revenue for the quarter ended June 30, was Rs.55.74 crore ($13.78 million), down 35 percent from the March 2007 quarter revenue of Rs.85.75 crore ($21.2 million) and down 47 percent from the June 2006 quarter revenue of Rs.105,570.04 crore ($26.1 billion).

Net loss for the quarter was Rs.2.59 crore ($641,000,) or minus Rs.1.62 ($0.04) per diluted share, compared with net income of Rs.6.07 crore ($1.5 million), or Rs.3.24 ($0.08) per diluted share in the March 2007 quarter. Net income for the June 2006 quarter was Rs.18.61 crore ($4.6 million), or Rs.9.71 ($0.24) per diluted share.

For the fiscal year ended June 30, revenue was Rs.322.37 crore ($79.7 million), down 9 percent compared with Rs.354.73 crore ($87.7 million) in the preceding fiscal year. Net income available to common stockholders for the fiscal year 2007 was Rs.31.55 crore ($7.8 million), or Rs.16.99 ($0.42) per diluted share, compared with net income available to common stockholders of Rs.13.35 crore ($3.3 million), or Rs.10.92 ($0.27) per diluted share in the fiscal year 2006.

Robin Adler, chairman and CEO of Nextest, painted a mixed picture. "Adverse market conditions have challenged the profitability of our flash memory customers in the first half of 2007, leading to reduced or delayed investments in additional test capacity, and the loss we reported in the June quarter,'' he said in a statement.

''Looking forward to the second half, the outlook in flash memory and in other markets we serve is improving,'' he said. ''Flash pricing has firmed, bits are continuing to grow sharply, and customers are responding by adding capacity. All of this bodes well for the company and we expect to be profitable in the September quarter."

Net revenue in Q1 of fiscal 2008 is expected to be between Rs.72.81 crore ($18 million) and Rs.88.99 crore ($22 million), with earnings per diluted share between Rs.1.21 ($0.03) and Rs.3.64 ($0.09).

- Jonathan Hopfner
EE Times

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