POWAY, Calif. - Cohu , Inc. (NASDAQ:COHU), a key player in semiconductor equipment and services, has secured a contract with a prominent European manufacturer for its Neon system, designed for high-speed handling and inspection of high-power silicon carbide (SiC) dies. The announcement, made today, reflects Cohu's expansion into SiC burn-in and stress-test processes.
The Neon system features a proprietary carrier concept capable of testing up to 150 devices simultaneously, which is expected to enhance test parallelism, yield, and productivity. Its interface solution can handle high-power tests up to 2,500V and dissipate heat up to 3,000W. Additionally, the system comes with vision inspection metrology technology for comprehensive 6-sided optical inspection at the micro-scale, aligning with stringent automotive industry standards for zero defects.
Cohu's AI inspection software, equipped with deep learning and neural networks, aims to boost inspection yield and throughput while lowering the total cost of ownership for customers. The company's move into the SiC power market, which is projected to reach $2.2 billion in 2024 with a compound annual growth rate of 25% through 2029, represents a potential $50 million market opportunity for Cohu in this equipment category.
Luis Müller, President and CEO of Cohu, expressed confidence in the new product configuration's ability to lower costs and increase yield and productivity for customers. The company has received multiple orders from a leading SiC power device manufacturer, signaling a strong entry into the market.
Cohu is recognized for its diverse product offerings that enhance yield and productivity in semiconductor manufacturing. This latest development is part of Cohu's strategy to adapt to the dynamic needs of the semiconductor industry and maintain its competitive edge.
The information in this article is based on a press release statement from Cohu, Inc. It is important to note that forward-looking statements in the release are not guarantees of future performance and are subject to risks and uncertainties.
In other recent news, semiconductor manufacturing service provider Cohu, Inc. has secured an initial order for its Neon inspection metrology platform from a top-tier U.S. semiconductor memory manufacturer. This development aligns with the growth trajectory of artificial intelligence and positions Cohu to tap into the high bandwidth memory (HBM) market, expected to reach approximately $23 billion this year. B.Riley adjusted its stock price target on Cohu to $34.00, down from the previous $40.00, while maintaining a Buy rating on the stock, citing current business trends and market challenges.
Cohu has also secured an order from a top automotive semiconductor manufacturer for its Diamondx platform, which is designed for power management device testing. The company reported Q2 revenues of nearly $105 million, in line with its guidance, and anticipates Q3 revenue to be around $95 million with a gross margin of approximately 45%. Despite challenges in the automotive and industrial markets, Cohu has qualified two new customers for its Krypton product in the automotive and aerospace sectors.
In addition, the company opened a new engineering design center aimed at increasing interface revenue penetration. Cohu expects a recovery in the semiconductor industry in the first half of 2025, with the industrial market predicted to pick up in Q1 2025. However, the timeline for the recovery of the automotive market, which is Cohu's largest segment, remains uncertain. These are recent developments that reflect Cohu's strategic focus on expanding its customer base and product offerings despite current market challenges.
InvestingPro Insights
As Cohu, Inc. (NASDAQ:COHU) ventures into the promising silicon carbide (SiC) market with its new Neon system, investors might be curious about the company's financial health and market position. According to InvestingPro data, Cohu's market capitalization stands at $1.17 billion, reflecting its significant presence in the semiconductor equipment sector.
Despite the positive news about the new contract and market expansion, InvestingPro Tips reveal some challenges. Analysts have revised their earnings downwards for the upcoming period, and the company is expected to face a sales decline in the current year. This aligns with the broader semiconductor industry's cyclical nature and recent market headwinds.
On a positive note, Cohu holds more cash than debt on its balance sheet, which could provide financial flexibility as it invests in new technologies like the Neon system. This strong liquidity position is further supported by the fact that the company's liquid assets exceed its short-term obligations.
However, investors should be aware that Cohu's stock price movements are quite volatile, which is not uncommon in the tech sector, especially for companies transitioning into new market segments. The company's P/E ratio of -41.44 and the fact that it's not been profitable over the last twelve months suggest that investors are pricing in future growth potential rather than current earnings.
For those interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable for understanding Cohu's market position and future prospects. There are 5 more InvestingPro Tips available for Cohu, providing a deeper dive into the company's financial health and market outlook.
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