Advantest Corp Ord

Thank you very much for joining Fundis Corporation's financial briefing for the third quarter of fiscal 2020 for Dispatch of Business Schedule. I'd like to introduce the attendees on our site today. Mr. Douglas Lefevre, Representative Director, Senior Executive Officer, and Group CEO. Mr. Tsukui, Representative Director, Senior Executive Officer, President, and Group CEO. Mr. Mihashi, Senior Executive Officer, CFO, CSO, Executive Vice President of Corporate Strategy Group, and Mr. Nakahara, Senior Executive Officer, CCRO, and Executive Vice President of Sales Group. Serving as a moderator for today's session, we gave our department the Corporate Strategy Group. In this financial briefing, Mr. Nafiba will first report the summary of today's presentations. After that, Mr. Mihashi will report financial results for the third quarter of fiscal 2024, and then Mr. Rafira will present fiscal 2024 outlook before entertaining questions from the audience. We will close this session at 5.30 Japan time. In today's financial briefing, we will use English-Japanese simultaneous interpretation. If you prefer to hear the original audio, of both Japanese and English, you do not need to change the setting. Please join us with the report setting. If you prefer the Japanese language channel, you are kindly requested to click the globe icon on the lower left of the web page screen and select Japanese in the menu of Interpretation Language. If you slide the bar of notes to the far right-hand interpreter, You will hear interpretation into Japanese when the original language is in English. Today's presentation materials are posted on TDNet and our website. The audience joining us through a telephone line is kindly requested to download the materials. During today's briefing, we will project Japanese version and future materials on the screen. The audience who prefer to see the English version is kindly requested to download English materials. Before we begin, I'd like to remind you that today's briefing contains forward-looking statements, all of which are subject to risks and uncertainties that make our actual result to be different from those in such forward-looking statements.

So far, Mr. Mahiva,

will present a brief summary, including outline of third quarter of fiscal 2024.

Hello to everyone. I'm happy to welcome you all to our call. Let me start by providing an overview of today's presentation. Our 2024 3rd quarter sales operating income and net income all posted record highs on a quarterly basis. As of late, we have seen further growth in tester demand for related high performance semiconductors, especially for. Given that we are able to meet this strong tester demand, we have revised our full year earnings forecast for FY24 upwards. I will give the details of this later in the presentation. As we look into calendar 2025, while the second half is unclear as usual, we expect tester demand to remain strong. Tester demand for markets other than AI-related semiconductors is still taking time to recover, but strong demand for the AI-related semiconductors is expected to continue against the backdrop of increasing semiconductor complexity and production volume. I will also give some further details of this later in the presentation. Now, Mahachi-san will explain our third quarter results. Yas, please.

Thank you, Doug-san.

So this is Ms. Massey. I'd like to talk about the results of the third quarter of fiscal 2024. So please refer to page five, please. This is the third quarter summary of results. I will not explain the results of the third quarter of fiscal 2024. In the third quarter, we achieved record-breaking sales and profit. As I said earlier, operating margin exceeded 30% for two consecutive quarters, as shown on the slide. The results will be explained in the following pages. On page six, this shows the summary of results. Semiconductor component test systems. First of all, associated cells were 113.0 billion yen, sustaining a high level of cells as in the second quarter. robust tester demand from HPC AI-related applications, mainly dropper cells, with some contribution coming from HAI-related demand. Sales for mature and processed products, such as those for automotive and industrial equipment, remained soft. Memory tested cells were 54.6 billion yen, an increase of 18.7 billion yen quarter over quarter. Sales for deep ground, with this, particularly for HPM, have increased as well as for DRAM final test. Next, megatronic systems. Sales of device interface increase quarter over quarter, in tandem with increased sales of test step. As for services, sales of service, support, and system level test business remain nearly flat. quarter over quarter. Could you go to page seven, please? Special sales by region. For Taiwan, due to strengthened quality assurance requirements for high-end associate semiconductors from several U.S. public companies, sales to related factories have also increased further in the third quarter. South Korea, China, memory justice sales increased sequentially for DRAM. Please turn to page 8, please. The third quarter, sales, gross profit, and operating income. Due to a high level of sales bookings, the operating margin exceeded 30% as in the previous quarter. As I said earlier. On the other hand, gross profit margin decreased for all of the core. This is mainly due to changes in the product mix and the record of inventory variation losses on testers for non-AI applications where demand is soft. SGM-A, including all other income expenses, was 49.67 billion yen may be due to increasing expenses associated with increased sales. Next page. Here you can see cash flow and RNG. RNG expenses capex and D&A are illustrated on this slide. Capex increased compared to the second quarter. This was mainly due to investment related to the execution of operational excellence initiative as outlined in our third mid-term management plan. On the right, you can see cash flow. Operating cash flow and free cash flow increased reflecting high level of sales and profits.

Next page, please.

As announced today, the shared reportage program has been completed. The total number of shares acquired was about 5.71 million shares. For a total cost of about 15.08 billion yen, we have achieved the target announced in October. Well, we'll continue to work on balance sheet management for optimally balancing growth, investment, and capital efficiency. This concludes my presentation. Now, I'd like to hand over to Doug to go over S4 2024 Outlook.

Okay, let me start by first explaining our business environment. The semiconductor market in 2025 is expected to continue to be driven mainly by AI-related demand, as it was in 2024. Unit volumes continue to increase as more wafer advanced packaging capacity is coming online. At the same time, device complexity is driving increased test content. On the other hand, uncertainties about the future are continuing due to rising geopolitical risk and we continue to monitor these carefully. Based on this business environment, I will now explain the outlook for the semiconductor tester market. We have revised up our market size estimates for calendar year 2024, primarily reflecting the expansion of our tester supply capabilities. For 2025, we estimate the SOC tester market size now to be between 4.2 to 4.8 billion US dollars, and memory testers to be in the range of 1.7 to 2.2 billion US dollars. While the recovery in tester demand for applications other than AI such as for automotive and industrial equipment is expected to take more time, robust demand is expected to continue for AI related applications. Now, let me share the details of our FY 2024 forecast. We are revising our full year forecast upward as shown on this slide. We now estimate sales of 740 billion Japanese yen, operating income of 226 billion Japanese yen, income before tax of 225 billion Japanese yen, and net income of 167.5 billion Japanese yen. The upward revision of sales mainly reflects our timely procurement and enhanced supply capabilities, which were achieved through long-term agreements and diversification of the supply chain of our core parts. Our enhanced supply capabilities enable us to meet additional unforecasted demand alongside the ongoing strong demand for testers and AI-related applications, particularly for SOC in the fourth quarter. In addition, the end depreciation has been a tailwind. The gross profit margin for the full year is expected to be around 56%, slightly up from the previous forecast. In order to solve the challenges that our customers are facing in the increasingly complex semiconductor industry, we will continue our R&D and investment efforts to enhance the added value of testing, particularly targeting high growth areas. These efforts include the development and evaluation of new test solutions. The exchange rate assumptions for fourth quarter are 140 Japanese yen to the US dollar and 155 Japanese yen to the Euro. The latest forecast for the impact of exchange rate fluctuations on operating profit for FY24 is an increase of 1.3 billion Japanese yen for every one Japanese yen of depreciation against the U.S. dollar and a decrease of 300 million Japanese yen against the euro. Our year-end dividend forecast is Japanese yen 20 per share. Combined with the interim dividend of 19 yen, our annual dividend forecast is now 39 Japanese yen per share, which represents a dividend hike of 4.75 Japanese yen year over year. Next, I will explain the details of the sales forecast. First, let me discuss the semiconductor and component test system segment. For full year FY24, SOC tester sales forecast is 408 billion Japanese yen. That's an upward revision of 84 billion Japanese yen from the October forecast. Our efforts to improve supply chain management in order to keep up with the delivery requirements of HPC and AI customers have enabled us to increase the pace of supply. As a result, we have revised up our sales forecast. Our memory tester sales forecast is now 155 billion Japanese yen. That's an upward revision of 9 billion Japanese yen from the October forecast. The improvement of our product supply capabilities has shown steady progress every quarter. By responding to customers' robust investment appetite for DRAM in a timely manner, we expect to achieve sales growth. Now let me talk about our other business segments. First, for our mechatronics business in FY24, we have adjusted our sales forecast to 68 billion Japanese yen. With tester sales growth, our device interface sales are expected to increase year over year. We also anticipate solid sales of our nanotechnology products. In FY24, our service support and other sales forecast is now 109 billion Japanese yen. For support services, firm demand is anticipated due to the steady growth of our install base. In our SLT business, sales are expected to be roughly flat year over year as smartphone demand remains soft. Meanwhile, we continue our efforts to expand our customer base in order to achieve mid to long sales growth in this area. In the segment of HPC-AI, the increasing complexity of semiconductors and high reliability requirements are driving new demand for SLT, burn-in, and high-quality device interfaces. In SLT, we have won several new customers and expect to see this begin to contribute in the second half of our fiscal year 2025. For our test board consumable business, we have now brought our Taiwan factory online in our ramping production for high-performance products. Finally, I want to touch on a couple of strategic partnership agreements. We announced on January 9th that we have formed strategic partnerships with both Technoprobe and FormFactor. These partnerships involve both technology and manufacturing collaborations. Investments in and partnerships with two of the major probe card manufacturers ensure that customers have access to the best wafer test solutions. Increasing test complexity is becoming an industry challenge, especially for HBC related semiconductors. As we have explained in our midterm management plan briefing in June last year, in order to solve this challenge, we intend to form an ecosystem to provide higher performance test solutions to our customers. Therefore, we expect to continue expanding our partnerships and adding key partners into this ecosystem. Then one last thing, as for any potential impact in our business from the recent news related to DeepSeq or other AI models, it really is impossible for us to comment at this time. As of now, we have seen no indications from our customers of changes to their forecast. Having said that, the AI-related market is exhibiting remarkable progress, and we continue to keep a close eye on this development. As a general rule, we feel progress of AI development, including that of different AI models, has long-term positive implications on semiconductor demand and our test solutions. This concludes my presentation. Thank you for your attention.

Now I'd like to start the questions and answer session. We will receive questions in the following way. You are kindly requested to click participant icon on the web screen. Click raise hand. When our moderator calls your name, unmute button will pop up on the screen. Please unmute and identify yourself with your affiliation before asking questions. After your question is answered, could you please mute your microphone to cancel raise hand. We appreciate your cooperation. As we like to take questions from as many participants as possible, we'll take one question per person. If time allows, we will receive more questions until the planned closing time. As we use Japanese-English simultaneous interpretation, your country requested to speak slowly and concisely. It is highly appreciated if you could refrain from asking questions regarding specific companies. And we will take questions both in Japanese and English.

First question comes from . Please go ahead.

My question, I'd like to ask about market share. What market share do you expect for 2024 in both SoC tester and memory tester? And then do you anticipate these market shares changing into 2025? I've heard that your competitor has recently commented about the adoption of their testers by custom AC clients. So do you think the market is becoming more competitive? Thank you.

Sorry, the mic's here. Yeah, we will be announcing in April about the final market share numbers for calendar year 2024. What I can say is that we are tracking at or above our midterm plan target, which was 58% or greater. So we are very confident that we're tracking to the plan for calendar year 2024. As for 2025, we do see some upside growth in our market share as well, and that will come from the addition of additional AI HBC customers, many of which are in that MAG7 and associated custom ASIC partners. So I can't comment on what our competitor is saying, but that's the view from our company.

Thank you. Just one follow-up question. Do you include the die-level test market for the 2025 market outlook?

I think the 2025 is a little premature to have any significance for the die level probe, die level handler market. We're seeing just initial evaluations going on in this year. And so for large quantity production level business, we would probably see that in the following year.

Thank you. That's very helpful.

Yoshida-sama, arigatou gozaimasu. Thank you, Yoshida-san. We'll take the next question.

Please go ahead.

Thank you.

I'll ask a question in Japanese on page 12. This is CY25-2, aren't we? And there are bullet points saying that there is increasing uncertainty about the future. So what's the backdrop for this? Are there specifics you have in mind? And it seems that your TAM-25 estimate range is rather broad. What kind of numbers do you have in terms of the minimum and the maximum numbers? And in terms of visibility for the second half of 25, do you have improved visibility now? Thank you. This is Nakahara speaking from sales. So if you ask your first questions, it was about CY25 in relation to increasing uncertainty in relation to geopolitical risks. So what we have sales all over the world. And given the current situation, let's say the Sino-U.S. risks, these are all cross-changing matters, and so things are still on searching. So we have to keep a close eye on this. And then for 2025 time estimate, your question was, about the range, right? So I would say, like, recently the market is fairly dynamic. And from maybe the late 2025 for high-end logic, there will be launches of next-generation devices. And there would be a change in process a lot of the time. And on top of that, the memory that goes with it will be also next generation and there'll be a higher stack. And so it's similar to what we experienced in 2024. It's hard to say to what extent complexity is going to increase. It's very hard to predict. So in that sense, we came up with this range. Did I answer all your questions? Did I?

Are you okay?

Sorry, I was on mute. So finally, our associate test for CY45, like, Compared to three months ago, how has the 7.525 outlook changed, particularly for high-end SOCs? So I think compared to our last trading call, I would say for SOC for CY25, three months ago, we made 3.95 billion yen, but this time our report is 0.5 billion. As Doug talked about earlier, There will be an increase in device volume and also increasing complexity factors. So I would say overall, the market is likely to increase. And in terms of half-on-half volume, let's say for the first half, we have better visibility for the first half versus the second half. So for the second half, as I said earlier, Given the upcoming launches of new devices, it's hard to say or hard for us to predict the extent of the complexity implications for us. Thank you.

Nakamura-sama, thank you very much.

Next question comes from Morgan Stanley, MUFG's Maragi-san.

Thank you.

It's good to speak with you. So, I would say what's wrong is the momentum for this fiscal year. But given how strong this year is, maybe next year is going to be a higher hurdle, and there will be a lot of disclosures in the media about, you know, yield of advanced packages. And, you know, you've benefited from very strong demand this year, given very low demand, you know, and some testers have benefited tremendously. But it means that the firm for next year is going to hire you when you have to suffer from a drop. What do you think, Matt, or Yas, Abihai-san or Nakahara-san? This is Nakahara speaking.

Hello.

So in terms of the high base you'll be facing next year in relation to strong benefit that you received from this year, the feedback that we've been speaking with customers and in terms of quality improvement and in terms of improvements on package side, that's what we've heard from customers and so But if we take this into account from volume and also given the complexity of next-generation devices, CY25 is likely to face an increase, see an increase. And so additionally, I would say my follow-up question is that that the recent surge in tester demand due to yield is still sustainable. Because of quality assurance, customers still have strong appetite and will continue to invest in testers. Is that correct? So in terms of existing generation devices, whether it's SoC or memory, there is yield improvement, quality improvement that may result in test production. But at the same time, in 2025, as next generation devices ramp up, there'll be new challenges that will emerge that would have quality implications that may impact tester demand. So these are the scenarios that we have factored into.

I think I understand the question now. Thank you. I think if you're asking about what's going to trigger the slowing of the growth that we're experiencing right now, we don't see it so much because there's many factors involved in these advanced package SOCs. For one thing, there's going to be continuation of Moore's law, so there's going to be more transistors, which will lead to increased test times. As far as chiplet goes, it's just beginning now. I'm sure the advanced packaging has memory stacks and central processing and GPUs on it. But as those go into more of a chiplet environment, we expect to see more insertions happen at the wafer and the die level, which will have complexities. And then beyond that, there's even more things being added to the 3D package. And silicon photonics is going to be something that comes new. Which will add another layer of complexity. Um, so we don't really see complexity slowing down at all. Uh, and the appetite for additional test is still quite high because of the expense of these packages and the of these devices. So. Sure, there's going to be certain times where there's not as much of an increase as a prior generation, but there's going to be an increase. And what I'll say is that increase is coming on a larger fleet, a larger install base. So, as we proliferate more test systems into the field, even small increases in test content are going to lead to large levels of capacity increases. assuming that the volume stay the same or even increase. So hopefully that helps to add a little additional color.

Thank you. I can confirm our bullish view on Tesla market. Thank you.

Thank you. Next question.

Please go ahead. I think we're not able to hear the first part of your question, so please start again.

This is Hirakawa.

You said about volunteers of new generation devices. From supply chain, there are views or comments that are from what's been said before. Based on these changes, was your earnings impacted for the fiscal year ending March 25? Should we forecast these changes?

I want to make sure I understand her call us on the question. I think, you know, in fiscal 24, we're able to, um, address some of the additional demand because we opened up our capacity through supply chain and production. And I believe you're asking if we will see that continue for 2025 that that will have an impact. And the answer is, yes, we're always looking at our, uh, supply chain for component procurement and our ability to meet the customer demand. Um, right now we're stress testing, you know, our production to see the levels at which we can achieve even further growth. And we feel very comfortable right now with what we are doing in our supply chain. So we don't see any. Constraints to meeting our fiscal 2025 demand. So I'm hoping that, sorry for the Japanese.

No, no, no. Sorry for my, I apologize for my indirect question. The direct question is that we hear that there's a kind of a change in testing time in the supply chain. And my question was, did that give an impact to your revenues or not? And also, the Is it going to give some impact? Has it given the impact to your CY25 SOC tester demand? That is actually my question.

Oh, it's not about our procurement and supply chain.

Sorry about that.

I understand that. Yeah, the answer is no. You know, I think I understand what you're referring to. Yeah. And, you know, we don't see, you know, any of that right now. So we continue to see test content increase. And so we're preparing ourselves for additional increases for next generation devices.

Sure. Thank you very much.

Thank you, Hirakawa-san.

Next, Tokai Tokyo Intelligence, Kamisaki-san, please go ahead.

to the actual result for associate testers and memory testers. So starting with associate testers, it was flat P on Q for memory testers or Q on Q growth racing to have accelerated. In Q3, what kind of differences did you see between associate versus memory testers? With regards to generative AI that's having, giving us good strong demand for both SOC and memory. And so here you can see green colors that shows that memory tester shipment is growing a lot, Q and Q. So this is basically a reflection of delivery timeline requirements from customers. Many of our customers are international customers, and so they do business on a calendar year basis. So in Q3, we saw a lot of requests concentrated. And so our shipment-wise, we did our best to try to meet their delivery deadlines. Thank you. Well, demand-wise, you're saying that you didn't see a change in demand in Q3, right? Well, SOC is facing strong demand, but I wouldn't say there were outstanding, very strong changes in Q3.

Thank you, Kamisaki-san.

Next, Okasan Securities, Shimamoto-san, please go ahead. My question is about the breakdown of SOC TAM estimate. If possible, I would like you to extract the AI part of TAM for CY24 and CY25, if it's difficult, then I think you have a breakdown usually between computing communications versus automotive industrial consumer GDIC. I think in FY24, the split is 90% versus 10%. For 2025, what kind of split do you expect for computing communications versus auto industrial consumer GDIC? Regarding TAM, it's difficult for us to extract just AI. So in terms of our categorization, which is computing applications versus automotive industrial consumer DDIC, I would say that maybe the split is approximately 70-30. So 70 is computing communication, just as ballpark figures. But in terms of our sales split, it is different, but computing communication is by far the largest. Thank you. There's actually one quick question. You said 70-30 split. like was that 24 is it likely to be similar for 25 well for 24 and 25 i would say the split is more or less the same so growth rate uh then would be similar for both right thank yes thank you also the split 70 30 split will not change but then uh the denominator is different. So there should be some difference between computing communications versus automotive or industrial, but that 70-30 split should remain valid. When you say it might be different, are you saying that computing communications will show a higher growth rate? Yes, that's correct, because the denominator is larger.

Thank you.

Thank you. Next, McCurry, capital Damien, please.

I'm going to ask this in English.

Yes.

Thank you so much. Thanks very much, Doug, for the great set of results, actually. Congratulations. I just want to follow up on the partnership with Technoprobe and Foam Factor. Could you contextualize maybe, you know, it's a bit early for next year, but let's say 26 and 27, would you see the push into salt tests at, you know, at Dyer or Wafer as being additive to the tester market? Or would you see efficiency gains as actually being, you know, in some senses leading to efficiency gains that will reduce the size of the market? Could you perhaps, you know, talk a little bit about, you know, the implications of the deal and how you feel about the long-term growth trajectory?

Yeah, sure. Sure. Thank you, Damien. Thank you for the nice comments for our results. So, yeah, certainly for the next couple years, we see definitely a shift left. As much testing that can be done at the wafer or dye level is going to help with the end product yields. As to more efficiency in those way for sort operations actually, you know, we see more. Insertions across the way for sort area and the reason for that is because there's just more sophistication, more complexity. At the die level, for example, you need, in order to have a real KGD, you need to have very, very good thermal solutions in order to do accurate die level testing. And so, you know, that involves a lot more complexity in the handling and the testing operation, as well as the associated probe cards that go into those insertions. Uh, so the reason that we, we, uh, develop these partnerships and by the way, we had very, very deep relationships with both these companies as well as other pro card companies in the industry. But the reason that we made these partnerships at this point was because of the complexity situation of needing to have a close technical collaborations. Because it's no longer a tester and a probe card and a prober or a handler. They have to be looked at as a total solution, as one test cell. And so the deep collaborations have to become even deeper. And so we felt it was necessary now to develop these relationships with these companies to address those complexities. 26, 27 is hard to tell if there will be efficiency gains, but we do know that there's going to be more opportunities in the wafer sort area. That being said, the final test and the system level tests are also increasing in their importance because that's the place where the actual all of the the dilates or chiplets become together and the test times get extended, and that's where the final test and screening happens. So those are also extremely important insertions. So hopefully that gives some color to your question.

Thank you. So my impression would be that you would consider essentially this would be too accretive to the overall time opportunity. Would that be correct?

Well, it's not a creative or dilutive. It's really a partnership with these companies to make sure that we're offering our customers the full solution set for, in this case, for wafer sort or die sort. And yeah, our partnerships involve equity investments in some cases. And so we have skin in the game, so to speak, with these companies to make sure that we're partnering at all levels, at the executive level and and at the technical levels.

If I may, just one additional follow-up, a short one. So obviously, this is, I would say, kind of a unique situation. I mean, I'm just wondering how this places Aventus in relation to your primary competitor, given that if you deliver this solution on time and to meet the customer needs, you would essentially be Uh, be ahead of the next competitor. I, I just can't see why a customer would have 2 solutions of this nature. Um, it essentially be an industry standard of sorts. Would you. I think that's overstating the case. Thank you. That's it.

Yeah, um, you know, I mean, I think, um. Um, we're doing this for the, the customer benefit, um, which is to develop the, the right solutions at the right time for our customers. Um, and so, um, right now, uh, we're in a very good position with our testers. Um, you know, it's, it's hard to to express it as industry standard, but in some cases, you know, we're driving towards that. And so the mission for us is to make sure that we drive integration on behalf of our customers. And that would extend to the probe cards, but also extends to other parts of the ecosystem that go into our test solution. So, you know, we expect to do more of these kind of things in order to accurately partner for our customers' benefit.

Thanks very much, Doug. I appreciate that.

Thank you, Damien.

We'll take the next call from Yoshioka-san, Nomura Securities.

Hello, this is Yoshioka speaking from Nomura.

My question will be about AI devices. In the initial presentation, you said AI devices. contributed to third quarter associate tester business. So my question is that for 2024, to what extent did you see benefits from Edge AI? Previously, AI accelerator was the main driver for longer test time, but with Edge AI, it's also pushing test time longer as well. And how is that taking place? Finally, for 2025, you presented the associate time outlook. Does that, like how much have you factored in contributions from Edge AI?

Thank you, Yoshiko-san. our business is still being driven largely by data center AI. And that's the customers can imagine. As far as edge, we have seen some goodness in edge compute when it comes to some of the consumer electronics in the handsets. A lot of the handsets now are equipped with a lot of AI compute capabilities. And so that is leading to some business upside. But, you know, it's clear that most of our business is going into more infrastructure level AI. Um, moving forward, um, we do expect there to be some additional business, um, in 25 that is related to the edge. But I do believe by and large in 25, you'll still, uh, the lion's share of our business will be driven still by, uh, data center business. I think also, it's important to mention that the definition of, uh, originally everyone was thinking a, it's going to be in PC, tablet phones and more of the consumer applications. And I think. What we're seeing now is that AI at the edge will really extend into kind of industrial applications. And so there's a lot of work being done, for example, in the area of robotics. People are talking about billions, millions if not billions of robots having edge compute. So our definition of edge compute really needs to evolve. not just into the consumer space like handsets, but into other things. And ultimately, you know, there'll be the potential for the full humanoid and autonomous vehicle level of edge compute. But the edge compute definition is definitely now evolving, which will be good for the volume of AI-based semiconductors.

Thank you. How about testing time? Does test time for each semiconductor get longer than general semiconductor?

It will be longer than what historically has been at the edge. So if you looked at an AP handset, certainly the test times are going to be extended because those devices are becoming – more complicated and have to run different kinds of workloads. And so there will be extension. Now, I don't believe that, you know, the test times are going to be anywhere equivalent to what we're seeing on the data center side. And that is a function of, you know, how complex the devices are, as well as the economics behind, you know, the edge versus infrastructure business.

Thank you for your answer. Sure.

Yoshioka-sama, arigatou gozaimasu.

Thank you, Yoshioka-san. Well, we are close to the end of hours, so we'll just take the last question. UBS Securities, Yasui-san, please go ahead. Hello, this is Yasui speaking from UBS. I have one question for 2025. for associate tester demand driver, would it be TPGPU or custom AC, which would be a bigger driver for 525 from Advantis perspective? And also from Chan perspective, would it be AC versus other devices?

This 1 is sensitive, so it's, it's really, uh, it's very difficult for us to disclose. Um, you know, what I, what I mentioned before is that, um, you know, we work with all of the, the, what we call the Meg 7 companies, uh, who are developing their own, uh, silicon, um, and and also the partners that they have in the custom basic. So it's difficult to say, depending upon the application that they're working on, co-working. So I apologize, but we could not elaborate further on that business segment.

Can you elaborate a little bit more on the customer ethics side only, I think? You don't need to explain each specific customer, but Bopak number 2526, I think last year, Aravind mentioned that you have been involved in many major projects. Do you have better outlook compared to last year?

Yeah, we're very bullish and positive in this custom ASIC business. And as far as trying to quantify the TAM size, probably the easiest way is to point you to some of the public statements about the TAM of those customers and what they see for their business. And then apply, you know, some, uh, test intensity to that, um, that those test intensities will be probably higher than the average, uh, test intensity. And so you can do some, some math based upon some of the, the, you know, sent reports on the, uh, the tam size for those custom basic companies.

And one last follow-up question regarding market share. Within custom ASIC, do you assume you gained market share or flourished or down this year?

We assume we will gain. Thank you very much. Sure.

Yasui-sama, arigatou gozaimashita.

Thank you, Yasui-san. We apologize. For difficulty with audio, especially for the translator channel, we will conclude the third quarter briefing. Thank you for your participation.