The Zhitong Finance App learned that Japanese semiconductor testing giant Edwin raised its outlook above expectations due to strong demand from AI data centers for testing equipment needed to manufacture increasingly complex chips. The equipment supplier that detected defects in Nvidia chips said that operating profit is currently expected to increase by 70% in the fiscal year ending March next year, higher than the 26% increase previously predicted. Analysts, on average, expect a growth rate of 42%.
In the quarter ending June, the Tokyo-based company said its operating profit increased 53% to 190 billion yen (about $1.2 billion), while analysts expected a 28% increase. Revenue, on the other hand, increased by 39%, above expectations.
Saito Kazuyoshi, senior analyst at Iwai Space Securities, said, “The adjustment of performance expectations far exceeded expectations, leaving a very positive impression on the market. Although AI-related stocks haven't been sought after recently, I think this could be a catalyst to reverse the situation and help remove some of the pessimism that has loomed over the industry.”
Market demand for Edwin test equipment is surging as semiconductor manufacturers seek to reduce the defect rate of advanced logic and memory chips needed in AI data centers. The company's executives previously predicted that the investment boom will continue for at least a few more years.
Since reaching a record high in June of this year, Edwin Test's stock price has dropped by about 30%. Since this year, its stock price has increased cumulatively by about 28%.