Teradyne, Inc. CEO Discusses Market Uncertainty, Tariff Impacts, and Strategic Growth at JPMorgan Global Technology Conference

Key Takeaways

TL;DR: Teradyne (NYSE: TER) highlighted balanced H2 '25 upside/downside risks driven by macro uncertainty, tariff impacts (~$0.02 EPS in Q2), and sector-specific dynamics. AI/Compute demand (high-quality/test intensity) and HBM memory transition (HBM3E → HBM4) are key LT growth drivers. Robotics (13% of rev) sees LT reshoring tailwinds. FY guidance withheld due to segment volatility; mgmt emphasized resilient biz model (variable cost structure, conservative balance sheet).

1. Macro & Biz Model Resilience

• H2 '25 Uncertainty: Mgmt flagged a "unusually wide range" of possible outcomes for H2, balancing potential upside (AI/Compute demand acceleration, HBM4 transition) vs. downside (recession, automotive slowdown).
• Operational Model: ~60% variabilized OpEx via employee variable comp (tied to growth/profitability) + outsourced manufacturing. Conservative balance sheet (low debt, $2.3B cash) supports LT R&D investment.

2. Tariff Impacts

• Minimal Direct Exposure: 10-15% of rev exposed to U.S. imports (Test: 10-15%; Robotics: ~33%). EPS impact: $0.02 in Q2 (COGS/OpEx).
• Supply Chain Shifts: Exploring U.S. Robotics production (reshoring automation demand), but no immediate plans.

3. AI/Compute & System Test

• Key Growth Catalyst: AI accelerators require 2x test intensity (vs. traditional chips) due to high-quality standards and scrap cost avoidance ($1K+/unit).
• Market Share: Won 50% of AI accelerator sockets (vs. competitor) due to tester scalability (2x parallelism) and reliability. Quantifi Photonics acquisition targets silicon photonics/co-packaged optics (data center power efficiency), TAM expansion in merchant (AMD/NVIDIA) + VIPs.
• Lumpy Revenue: Hyperscaler orders may shift between '25–'26 (~15% CAGR Semiconductor Test LT).

4. Memory (HBM/DRAM Focus)

• HBM Transition: HBM3E → HBM4 shift (likely '25 vs. '26) could drive ~$150M incremental demand.
• Wafer-Level Test Wins: Gained share in HBM stacking/performance test (vs. historical DRAM final-test leadership).

5. Automotive & Industrial

• LT Tailwinds: EV semiconductor content 2x ICE vehicles + data center power semis (ex: SiC/GaN).