Advantest Corp recently noticed an increase in demand for its chip-testing devices, due to the surge in interest for OpenAI’s ChatGPT and other unique uses of Artificial Intelligence (AI). The rise in demand for their products comes from the intense development and growth of powerful computing clusters and training systems that run on AI, which is stimulating and motivating chipmakers to buy more of Advantest’s testing tools and devices.
Yasuo Mihashi, the co-chief strategy officer of Advantest, articulated this demand for Advantest’s products in an interview with Bloomberg. Despite the weak market for consumer electronics and a restrict trade campaign by the US to limit the use of advanced semiconductors, the ongoing AI race is pushing up the orders from AMD and Nvidia, the two head chipmakers who rely on Advantest as their main testing tool supplier.
Advantest’s stocks have sky-rocketed this year, closing in on its all time high, due to the trend of increasing AI applications and uses of powerful computing. According to its estimates, the company’s operating profit in the fiscal year ending in March is expected to expand by 48% to ¥170 billion (1.3 billion dollars).
Google, Microsoft and many other tech giants have already started integrating AI into their infrastructure, while China is also joining in on the race, leading from SenseTime Group Inc, Baidu Inc and Alibaba Group Holding Ltd. are all seeking to create a powerful AI platform of their own.
For training AI models and operating them, data centers are essential. This needs access to thousands of graphics processing units (GPUs), which are the best hardware for analyzing data in real time. The analyst from Ichiyoshi Research Institute, Mitsuhiro Osawa, mentioned that demand for data centers, testers, and GPUs will certainly develop rapidly, despite restrictions against China.
Performance and quality are being pushed to the limits due to the increasing use of AI, explained Masahiro Wakasugi, a Bloomberg Intelligence analyst. This raises the need for chip testers, to help manufacturers assure dependable performance and quality of their products.
Advantest competes with North Reading, Massachusetts-based Teradyne Inc. in supplying these chip testers. They offer a highly stable solution that is not tied to a specific fabrication process and thus sees little restrictions legally.
According to Toyo Securities analyst Hideki Yasuda, the revenue for high-performance GPU chip testers will be surpassing that of smartphone chip testers within the next couple of years. Chipmakers require more testing tools to ensure the performance and quality of their products and are thus wanting to buy more testing tools.
Company Mentioned:
Advantest Corp is a Tokyo-based company and the industry’s dominant provider of chip-testing devices. It’s stocks have surged by 36% this year, due to the fervor for Artificial Intelligence (AI) applications, and is estimated to have a revenue of ¥170 billion (1.3 billion dollars) for the fiscal year ending in March. Its main competitors are AMD and Nvidia, two main suppliers of AI-training semiconductors, and are facing is North Reading-based Teradyne Inc in supplying these testing tools.
Person Mentioned:
Yasuo Mihashi is the Co-Chief Strategy Officer of Advantest Corp and is responsible for overseeing their strategic decisions that affect the company. He is the one who noticed the spike in demand and orders for their chip-testing devices due to the surge of interest in OpenAI’s ChatGPT, AI applications, and other uses. In an interview with Bloomberg, he also mentioned that Advantest is the industry’s dominant player and will continue to benefit as AI use grows.
