ADVANTEST CORPORATION
6857・Prime Market・Electric Appliances
Business
Advantest Corporation traces its origins to a specialized electronic measuring instrument manufacturer founded in 1954, and its core business today is test equipment (testers) for semiconductors and electronic components. The company manufactures and sells SoC Test Systems, Memory Test Systems, Test Handlers, Device Interfaces, and related products, supporting the quality assurance process for advanced semiconductors used in AI and HPC applications. Its major customers are the world's leading semiconductor companies, including NVIDIA (20.2% of net sales) and TSMC (11.1% of net sales), with overseas sales accounting for 97.8% of the total. In FY2025, net sales reached ¥1,128,610 million, and the operating margin renewed its all-time high at 44.2%.
Business Model
The main revenue source is product sales of semiconductor testers in the Test System Business segment (90.3% of net sales). The increasing complexity and higher performance of advanced semiconductors for AI and HPC applications are driving greater sophistication and longer duration in the testing process, which structurally boosts demand for higher-priced products. In addition, the Services & Others segment (9.7% of net sales) generates recurring revenue from Support Service and consumables (such as test interface boards), supported by the expanding cumulative installed base. Improvement in the product mix has reduced the cost of sales ratio to 35.7%, achieving high operating leverage.
Company Strengths
Market share expanded from 58% in calendar year 2024 to 65% in calendar year 2025. In high-performance SoC semiconductor testers for AI/HPC applications, the company has captured robust capital expenditure from major customers (NVIDIA, TSMC, etc.), and continues to expand its market share on the back of technological capabilities and a customer base that competitors find difficult to replicate in a short period.
R&D expenses increased from ¥71,400 million in the previous consolidated fiscal year to ¥78,100 million in the current consolidated fiscal year. R&D personnel account for approximately 30% of total company headcount, with R&D facilities located in Japan, Europe, the United States, and China. Preparations for bringing next-generation solutions to market are progressing, including the silicon verification automation solution "SiConic™" and test systems for silicon photonics.
In FY2025, the company achieved an operating margin of 44.2% (up 14.9 percentage points year on year) and ROIC of 54.4% (up 22.9 percentage points year on year). The cost of sales ratio declined to 35.7% due to an improved product mix, demonstrating a highly operationally leveraged structure in which profit expands at an accelerating pace relative to revenue growth.
ENVALITH's Perspective
Performance Trend
Revenue bottomed out at ¥486,507 million in FY2024 (ended March 2024) and rebounded sharply, reaching ¥779,707 million in FY2025 (ended March 2025) (up 60.3% year on year) and ¥1,128,610 million in FY2026 (ending March 2026) (up 44.7% year on year), setting record highs for two consecutive periods. Operating profit reached ¥499,120 million in FY2026 (ending March 2026) (up 118.8% year on year), and net income reached ¥375,353 million (up 132.9% year on year). The main external factor was a surge in demand for testers used in HPC devices and high-performance DRAM, driven by expanding AI-related investment. In addition, an increase in the sales ratio of high-margin products led to a significant improvement in the operating margin, from 29.3% to 44.2%. The disappearance of the goodwill and intangible asset impairment loss (¥21,393 million) recorded in the previous period also contributed to the profit increase. The company has announced its forecast for FY2027 (ending March 2027) of revenue of ¥1,420,000 million and operating profit of ¥627,500 million.
Growth Strategy
Advancing MTP3 along three axes: maintaining core market share, expanding production capacity, and developing next-generation solutions
Of the funds raised through the 2031-maturity convertible bonds (approximately ¥100,000 million), approximately ¥50,000 million will be invested by March 2029 to expand SoC Test System annual production capacity to a scale of 7,500 units. By continuing timely product delivery in response to robust customer demand, the company aims to maintain and expand its market share.
Of the funds raised through the convertible bonds, approximately ¥20,000 million will be allocated to strategic inventory buildup by March 2027. This will establish a supply system capable of flexibly responding to fluctuations in semiconductor tester demand, enhancing responsiveness to the timing of customers' capital expenditures.
Of the funds raised through the convertible bonds, approximately ¥30,000 million will be invested in next-generation solution development by March 2028. The company will develop new products and services, such as System Level Test (SLT) solutions, to address the increasing complexity of semiconductors and advanced packaging, accelerating expansion into adjacent markets.
The company will capture the continued increase in Support Service and consumables sales driven by the expanding installed base of its group products. In FY2026 (ending March 2026), the Services & Others segment achieved a turnaround to profitability with segment profit of ¥8,758 million (compared with a loss of ¥16,125 million in the previous fiscal year). The company will continue optimizing its portfolio, including through partial business transfers (gain on transfer of ¥2,504 million).
From the first quarter of FY2026 (ending March 2026), the reportable segments were reorganized from the previous three categories into two categories: "Test System Business" and "Services & Others." This strengthens the company's framework as a test solutions provider offering comprehensive coverage from tester units to peripheral equipment and services, enabling unified responses to customers' diverse needs.
Last updated: July 19, 2026