Aehr Test Systems: Navigating Market Diversification in Q2 2025

Aehr Test Systems (AEHR) recently reported its Q2 2025 earnings, providing insights into the company's strategic direction and market diversification efforts. Despite a decline in net revenue and GAAP net income, Aehr Test Systems maintained its full-year financial guidance, demonstrating confidence in its growth prospects. This article explores the key highlights from the earnings call and the company's market diversification strategy.

Aehr Test Systems' market diversification strategy has been a driving force behind its long-term growth prospects. The company has expanded its reach into large and fast-growing markets, including artificial intelligence (AI) processors, gallium nitride power semiconductors, data storage devices, silicon photonics integrated circuits, and flash memory. This diversification has led to new opportunities in terms of customers and revenue, reducing market concentration risk and positioning Aehr Test Systems to capture growth in emerging semiconductor segments.

One of the key achievements for Aehr Test Systems in Q2 2025 was securing its first AI processor customer for wafer level burn-in. This includes initial volume production orders for multiple high-power FOX-XP systems and proprietary WaferPakTM Contactors, enabling full wafer contact for testing and burn-in of AI processors in wafer form before system integration. This technological and commercial breakthrough significantly expands the market potential for Aehr's FOX-XP wafer level test and burn-in systems.

Additionally, Aehr Test Systems secured its first production AI processor customer for package part burn-in, receiving initial volume production orders for multiple Sonoma ultra-high-power systems. This customer is a large-scale data center hyperscaler, providing computing power and storage capacity to millions of individuals and organizations worldwide. System shipments have already commenced to their contract manufacturer doing test and burn-in for them in Asia. Aehr Test Systems sees significant potential to expand its packaged part test and burn-in business with the product line acquired from Incal Technology, particularly in the rapidly growing AI semiconductor market.

Another notable achievement was securing the first gallium nitride (GaN) customer for high-volume production wafer level burn-in of GaN devices using the Aehr FOX-XP platform. The GaN market is projected to exceed $2 billion by 2029, with a CAGR of 40%. This entry into GaN testing further diversifies Aehr Test Systems' product offerings and positions the company to capture growth in this high-potential market.

Despite the decline in net revenue and GAAP net income in Q2 2025, Aehr Test Systems maintained its full-year financial guidance of at least $70 million in revenue with non-GAAP net profit before taxes of at least 10%. This demonstrates management's confidence in the company's ability to capitalize on new opportunities and execute on its growth strategy.

In conclusion, Aehr Test Systems' market diversification strategy has significantly enhanced its long-term growth prospects by expanding its reach into large and fast-growing markets. The company's expansion into AI processors and GaN testing presents both opportunities and risks, but Aehr Test Systems is well-positioned to capitalize on these new market segments and maintain its competitive edge. As the company continues to execute on its strategic plan, investors should monitor its progress and consider the potential impact of market diversification on its financial performance.