Advantest lifts FY26 outlook on AI tester boom

Advantest has raised its full-year guidance for the fiscal year ending March 2027, reflecting much stronger-than-expected demand for semiconductor testing equipment used in artificial intelligence applications. The company now forecasts revenue of ¥1.863 trillion and operating profit of ¥967 billion, while net profit is expected to reach ¥741.5 billion. Management also projects that second-half operating margins will exceed 50%, supported by stronger system-on-chip (SoC) tester sales and an improved product mix even after accounting for higher component costs.

The upgraded outlook follows a period of exceptional performance driven by testing demand for high-performance AI semiconductors, including GPUs, custom ASICs and CPUs. Advantest also cited expanding data center investment as a key driver, particularly for memory test systems serving DRAM and non-volatile memory.

For the April-September 2026 first half, Advantest reported revenue of ¥845.2 billion, up 60.5% year-on-year, and operating profit of ¥456.8 billion, up 96.5%. Net profit for the period rose 117% to ¥368.1 billion, while profit before tax increased 121.3% to ¥510.2 billion. Revenue, operating profit, pre-tax profit and net profit all reached record first-half levels.

In the July-September quarter, sales reached ¥477.7 billion, representing an 81.7% increase from a year earlier, while operating income climbed to ¥266.8 billion. The operating margin for the quarter stood at 55.9%, with gross margin at 71.1%, both reflecting significant improvements. Quarterly net income totaled ¥193.3 billion, corresponding to a net income margin of 40.5%.

Advantest’s profitability was supported not only by strong core operations but also by roughly ¥57 billion in financial income in the first half, mainly valuation gains on investment securities. The company noted that a weaker yen also aided results.

AI-related applications dominate Advantest’s business mix, with the company indicating that about 90% of forecast FY26 sales are tied to computing and communications and about 10% to automotive, industrial, consumer and display driver IC segments. In Q2, SoC Test Systems accounted for ¥353.3 billion of sales, out of ¥436.7 billion for the overall Test Systems segment. Memory Test Systems contributed ¥53.4 billion, while Other Systems added ¥29.9 billion. The Services & Others segment generated ¥41.1 billion, including ¥25.6 billion from Support Services.

The Americas were Advantest’s largest regional market in the quarter, generating ¥261.3 billion in sales and representing more than half of total revenue. Europe contributed ¥64.6 billion, Taiwan ¥38.1 billion, China ¥29.5 billion, South Korea ¥15.7 billion and Japan ¥1.8 billion, underlining the global spread of AI-related semiconductor development and testing activity.

Advantest’s board approved an interim dividend of ¥49 per share, up ¥20 from a year earlier, resulting in total interim dividend payments of ¥35.376 billion with an effective date of December 1, 2026. The company is targeting a total payout ratio of 50% or more over three years under its Third Medium-Term Management Plan.

Following the Q2 FY26 presentation on October 28, 2026, Advantest’s share price rose 3.16% to ¥34,930, trading near the upper end of its 52-week range of ¥18,270 to ¥41,990. Management stated that production capacity expansion will be accelerated to meet strong AI-driven demand and noted that internal discussions have begun on a potential further expansion to 20,000 units. The company expects the semiconductor market to grow strongly in 2026, with the semiconductor tester market projected to reach a record high, while the direct impact of higher logistics costs linked to Middle East tensions on earnings is expected to remain limited.