Advantest hikes profit forecast as AI boosts testing demand

By Sam Nussey

TOKYO (Reuters) - Japan’s Advantest on Wednesday hiked its full year operating profit forecast by almost a fifth to 165 billion yen ($1.08 billion) as strong demand for high performance artificial intelligence-related chips boosted its testing tools business. 

Operating profit in the July-September quarter tripled year-on-year to a record 63.6 billion yen.

Advantest sees strong demand for AI-related chips, although it would take time for testing demand to recover in areas such as automotive and industrial. 

"Amidst the increasing complexity of semiconductors for high performance compute and AI, customer investment appetite remains very robust," CEO Douglas Lefever told an earnings briefing. 

Growth in Advantest’s memory testing business has been underpinned by demand for high bandwidth memory (HBM), which is used in processing data for AI. 

"Amid strong demand for HBM, we have been progressively working to improve our production capacity this fiscal year," Lefever said. 

"Our memory test supply capability is expected to improve even further in the second half," Lefever added. 

In the second quarter, Taiwan and China contributed 38% and 22% of sales respectively.  

Advantest, whose shares have risen almost 80% year-to-date, said it expects operating cash flow to increase and will buy back shares worth up to 50 billion yen. 

($1 = 153.2900 yen)

(Reporting by Sam Nussey; Editing by Nicholas Yong)