Teradyne's Q4 2024 Earnings Call: Dissecting Contradictions in Memory TAM, Robotics Strategy, and Semi Test Outlook

These are the key contradictions discussed in Teradyne's latest 2024Q4 earnings call, specifically including: Memory TAM expectations, Robotics strategic outlook, Share Outlook in Semi Test, and Growth Strategy in Robotics:



Semiconductor Test and AI Growth:
- Teradyne's SOC and memory test revenue grew by 17% year-over-year in 2024, with a notable increase in AI Compute demand for VIPs and networking.
- This growth was driven by the dominance of AI in the semiconductor test business, particularly in AI accelerator ASICs and HBM, DRAM.

Industrial Automation and Robotics:
- Teradyne's Robotics business experienced muted seasonality in Q4 2024 compared to previous years, with a non-GAAP operating loss of 13% in both Q4 and the full year.
- The weak performance was attributed to ongoing low visibility in the industrial spending environment, despite highlights such as the UR channel growth and AI-enabled product launches.

Strategic Partnership in Power Semiconductors:
- Teradyne announced a strategic partnership with Infineon to acquire their internal tester development team to accelerate roadmaps in power semiconductor testing.
- This move is aimed at capitalizing on future demand growth in the automotive and renewables markets driven by automotive electrification and renewable energy adoption trends.

Memory Test Market Dynamics:
- Memory revenue reached over $500 million in 2024, up 30% year-over-year, with particular strength in AI Compute demand for HBM and DRAM.
- Growth was supported by competitive differentiation in HBM performance testing and anticipation of strong demand from AI-driven data centers.

Long-term Growth Outlook:
- Teradyne's updated midterm model projects revenues to grow from $2.8 billion in 2024 to $5 billion by 2028, with earnings per share increasing to $8.25 from $3.22.
- The growth is expected due to continued strength in AI Compute, demand for long-term growth in broader end markets, and system-level test insertions for AI Compute.