Aehr Test Systems (AEHR) Stock Climbs On Massive Purchase Order

Aehr Test Systems (NASDAQ: AEHR) is screaming for the top for the second consecutive trading session, and for good reason. The company announced that it has received a $10.8 million single purchase order. Here’s what’s going on:

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AEHR Stock Climbs On Purchase Order

In the press release, Aehr Test Systems said that it received a $10.8 million single purchase order from its lead silicon carbide test and burn in customer. The company went on to say that the order is for multiple FOX-XP systems and full sets of WaferPak Contactors to meet their increasing production capacity needs. 

AEHR also said that the customer is a leading Fortune 500 supplier of semiconductor devices with a significant customer base in the automotive semiconductor market. Moreover, the company expects both the FOX systems and WaferPaks to ship within the next six months. 

For those of you who haven’t been following the company, the FOX-XP system, available with multiple WaferPak Contactors or multiple DiePakTM Carrier configurations, is capable of functional test and burn-in/cycling of integrated devices like silicone carbide power devices, silicon photonics as well as other optical devices, 2D and 3D sensors, flash memories, Gallium Nitride, magnetic sensors, microcontrollers, and other leading-edge ICs in either wafer form factor, before they are assembled into single or multi-die stacked packages, or in singulated die or module form factor. 

Management Commentary

In a statement, Gayn Erickson, President and CEO at AEHR, had the following to offer:

These follow-on orders for additional FOX-XP systems and WaferPaks are the result of our working closely with this lead customer to achieve their test requirements and validation of our FOX-P platform and WaferPak full wafer contactors as their production qualified solution. This customer continues to forecast orders for multiple additional FOX systems and WaferPak Contactors this fiscal year and a significant number of systems and WaferPaks over the next several years due to electric vehicle semiconductor test and burn-in demand.

Each of these silicon carbide-focused FOX-XP systems is configured to test eighteen silicon carbide wafers in parallel in the footprint of a typical single wafer test solution, while contacting and testing 100% of the devices in parallel on each wafer. Our solution can not only test 100mm and 150mm diameter silicon carbide wafers, but can test the future 200mm wafers planned to be introduced over the next several years. Aehr provides a unique fully integrated solution that includes the test systems, full wafer WaferPak Contactors, and WaferPak Aligners.

Silicon carbide power semiconductors have emerged as the preferred technology for battery electric vehicle power conversion in on-board and off-board electric vehicle battery chargers, and the electric power conversion and control of the electric engines. These devices reduce power loss by as much as > 75% over power silicon alternatives like IGBT (Insulated-gate bipolar transistor) devices, which has essentially changed the entire market dynamic. The challenge with silicon carbide is that it is known to have high infant mortality rates. However, with the reliability burn-in and screening that Aehr is able to offer with our FOX product solutions, these defects can be removed to provide extremely reliable devices for these mission-critical applications.

Aehr’s FOX-XP solution allows for one of the key reliability screening tests to be completed on an entire wafer full of devices, basically testing all of them at one time, while also testing and monitoring every device for failures during the burn-in process to provide critical information on those devices. This is an enormously valuable capability, as it allows our customers to screen devices that would otherwise fail after they are packaged into multi-die modules where the yield impact is 10 times or even 100 times as costly. Our FOX-P family of products are very cost-effective solutions for ensuring the critical quality and reliability of devices in this market, where performance and reliability can not only mean increased battery life, but also whether you have to walk home from a vehicle whose power semiconductor fails in the power train.

The power semiconductor market for electric vehicles is expected to triple between 2020 and 2026, growing at a nearly 26% CAGR to $5.6 billion, according to Yole research. And a report from Deloitte forecasts total electric vehicle sales will grow at a CAGR of 29% from 2020 to 2025, before reaching 31.1 million by 2030 and securing approximately 32% of the total market share for new car sales. These stats highlight the tremendous opportunity Aehr Test has in front of it with its wafer level test and burn-in solution for electric vehicle semiconductors.

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The Bottom Line

The bottom line here is simple. The news released by Aehr Test Systems proved to be overwhelmingly positive. After all, we’re talking about a company with a market cap of around $80 million that just announced a purchase order worth nearly $11 million. That’s a massive order that will surely represent a significant increase in the company’s top-line revenue. 

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