Teradyne, Inc.

Semiconductor test equipment is sold in large discrete orders tied to chipmakers' capex cycles, with no subscription or recurring revenue base. Revenue fell roughly 28% peak-to-trough from FY2021 to FY2023, consistent with a business where order timing is entirely client-controlled and highly cyclical.

The Semiconductor Test segment represented approximately 82% of FY2025 revenue ($3.19B total), with Product Test and Robotics each contributing under 10%. The three segments share exposure to technology hardware capex cycles, limiting diversification across genuinely uncorrelated end markets.

Approximately 89% of FY2025 revenue was generated outside the United States, with Asia Pacific representing roughly 60% of the installed base. Heavy regional concentration amplifies geopolitical risk from US-China semiconductor export controls and Taiwan-related supply-chain tensions.

Semiconductor test platforms benefit from significant fixed-cost leverage once commercialized, with gross margins guided at 58.5-59.5% for Q1 2026. Operating leverage is real but bounded by hardware development cycles and escalating R&D requirements for AI compute testing platforms.

Equipment sales are transactional and capital-budget dependent, with no contractual recurring revenue stream. Platform loyalty creates a repeat-purchase dynamic when customers expand test capacity, but each purchase remains discretionary and tied to the semiconductor investment cycle.