Advantest has a 70-year legacy. How has the company evolved, and what are some of the newer innovations shaping its future?
Advantest started as a few guys in a garage in Japan, much like Hewlett-Packard, focused on test and measurement instrumentation. Over time, we’ve evolved into an automated test company, and more recently, into a full test solutions provider. For the past decade, we’ve been assembling the necessary pieces, both organically and through acquisitions, to complement our core ATE business. This has expanded into areas like material handling, thermal control, device interfacing, software, and even data analytics powered by artificial intelligence. This evolution from a pure test equipment provider to a test solutions company has allowed us to offer a more comprehensive service to our clients. Whether it's improving test reliability through AI or managing thermal control and interfacing complexities, we're positioned to support the growing complexity of the semiconductor industry. This migration from equipment to solutions is our future.
Test was once seen as a necessary evil in semiconductor manufacturing. How has that perception changed, and why is testing more critical today?
Historically, test was viewed as a necessary but not value-adding part of the semiconductor process. The focus was more on front-end equipment, where the actual semiconductor creation added value. But with the increasing complexity of semiconductor devices, the economics have shifted. Testing is now a crucial part of the process to ensure reliability, and the feedback loop between test and design is essential. We work closely with design companies, especially fabless companies, which are among our largest customers. The coupling of design and testing has increased the importance of our role in the semiconductor ecosystem. The reliability and feedback we provide to these companies help improve the design process, making testing a key element of semiconductor manufacturing.
Advantest operates globally with a strong presence in both the U.S. and APAC. What are the strengths and challenges of having one foot in each region?
Our global footprint is necessary due to the way the semiconductor supply chain is structured. Design is primarily done in the U.S., while manufacturing is concentrated in Asia, especially Taiwan. With only 7,500 employees across 18 countries, we must be where our customers are, to support their factories and needs. We also benefit from having major R&D centers in Japan, Germany, and the U.S. Each region brings unique strengths: Japan’s long-term philosophy, Germany’s precision engineering, and the U.S.’s innovation drive.
The industry is moving towards more advanced packaging and higher levels of automation. How is Advantest adapting to these changes, particularly in automated test and measurement?
Advanced packaging, like 3D stacking and hybrid bonding, is changing the game for us. While Moore’s Law is slowing down, packaging innovations are driving new demands. The complexity of combining different semiconductors into a single package increases the amount of test content required. We’re seeing thermal levels in tests jump from one to three kilowatts and higher density interconnects, along with high-speed, high-density channels. This creates significant opportunities for us as a testing company, but it also requires us to offer complete solutions. We can’t just test individual components anymore; we need to manage the entire test process.
What does your R&D roadmap look like as you approach 2027, particularly given the big transformations in AI, semiconductors, and supply chain resilience?
Our R&D roadmap is deeply aligned with the industry and our customers. We continue to focus on core products like instrumentation software, ensuring that product releases coincide with when the devices require them. Beyond that, we are also tackling significant industry problems, such as high-bandwidth memory that complements AI’s SOC aspect, optical silicon photonics testing, and more advanced packaging solutions like known good die (KGD) for chiplets. These challenges demand a cross-functional approach, which involves multiple internal teams and external partners working together to address the next wave of industry needs.
Looking ahead, we foresee Advantest playing a bigger role in supplying and supporting the entire test flow as the industry continues to grow rapidly. As our customers scale, they’re asking us to take on more tasks traditionally handled by their internal teams. This shift will likely lead us to offer more service-level solutions, possibly in analytics or new product introductions. While we're setting the foundation for this transition now, the key challenge will be how we monetize the added value we bring over the next three to five years.
What are some of the challenges that keep you up at night as you lead Advantest into the future?
Right now, my biggest concern is supply chain challenges and being able to deliver to the industry fast enough. The demand for our test solutions is incredibly high, and the last thing we want is to be the bottleneck that prevents our customers from capitalizing on the opportunities they've worked so hard for. Supply chain constraints are at the forefront of my mind, but fortunately, our strong R&D and manufacturing processes give me confidence in our operations. What worries me most is under-delivering on our customers' expectations. We have a great team, and operational issues aren’t the primary source of concern. It’s more about meeting the growing demand and ensuring we continue to provide the solutions our customers need in a timely manner. That’s what keeps me focused.
Looking towards 2027, where do you see Advantest fitting into the industry, and what milestones are you aiming to achieve?
Our midterm plan, released in June, outlines our growth trajectory, and I see no reason to expect anything but continued upward momentum. While we can never predict external factors like an oversupply or economic downturns in 2026 or 2027, the overall long-term outlook for the industry is positive.
Our focus will remain on making the right investments and hitting key performance indicators (KPIs). We closely monitor our six key stakeholders, including shareholders, employees, communities, and customers. We are also committed to addressing environmental and sustainability goals, such as managing our carbon footprint and aligning with scope 1, 2, and 3 emissions targets. It's a complex responsibility to balance the needs of so many different stakeholders, but we’re laser-focused on managing employee attrition, delivering on financial metrics like EPS and ROIC, and supporting the communities we serve across different regions. These are the core milestones that will guide our path forward.
