Detailed Narrative
AI and Data Center Momentum
Demand from AI-related applications continues to accelerate, with AI accelerators, CPUs, and network processors representing approximately 71% of Aehr's total annual FY26 revenue. The lead AI processor wafer-level burn-in customer is significantly ramping products, driving increased forecasted capacity needs for FOX systems and WaferPaks. Aehr successfully completed benchmark testing of its wafer-level burn-in solution on a major AI processor, achieving results that exceeded expectations and produced better outcomes than package-level testing, leading to interest in pilot production test validation for a current high-volume device and evaluation of a second device.
Silicon Photonics Growth
Silicon photonics devices are gaining strong momentum as AI data center architectures increasingly rely on optical I/O and high-speed optical interconnects. Aehr's lead silicon photonics customer is ramping with follow-on orders for fully automated wafer-level burn-in systems. A newest major silicon photonics customer, a global leader in networking products, has provided a forecast for additional systems this calendar year to support next-generation hyperscale data center deployments, having already ordered two FOX test cells and two FOX-NPs.
Power Semiconductor Diversification
Aehr has made significant progress in power semiconductors, completing more than a dozen designs for gallium nitride (GaN) WaferPaks, now being sampled by potential customers. The company also completed the world's first 300-millimeter GaN wafer-level burn-in solution and closed the sale of its first FOX system for a silicon MOSFET wafer-level burn-in application. Aehr secured its first silicon carbide customer in Taiwan, chosen over a competitor due to technical superiority, cost, and reputation in the automotive industry.
Silicon Carbide Recovery and Orders
Encouraging signs of recovery are observed in the silicon carbide power semiconductor market. Aehr recently received approximately $8 million in new orders for silicon carbide WaferPaks, including expanded production orders from its lead silicon carbide customer and a key order directly from one of the largest automotive companies in the world for qualification of silicon carbide devices. Renewed demand is expected from automotive electrification and AI data center power infrastructure.
Memory Market Pursuit
Aehr continues to pursue opportunities in memory, including NAND flash and high-bandwidth memory (HBM) DRAM applications. Following a completed wafer-level burn-in benchmark with a global leader in NAND flash, discussions are ongoing for a development agreement to supply systems and WaferPaks for next-generation flash memories. The company is also in discussions with other key memory suppliers for HBM and standard DRAM/flash, aiming for agreements to develop enhancements to extend FOX systems into these markets, with potential orders in FY27 and ramps in FY28.
Package-Level Burn-in (Sonoma) Expansion
The package-level burn-in business for AI processors gained momentum, highlighted by record follow-on production orders from a lead hyperscale customer for Sonoma systems. This customer forecasts substantial expansion for a second device with twice the power. Aehr introduced an enhanced Sonoma high-power configuration designed for next-generation CPUs, GPUs, and high-performance network processors, expanding capabilities with up to 2,000 watts per device and optional full automation for continuous flow operation.
Manufacturing Capacity and Global Presence Expansion
To meet anticipated demand, Aehr has expanded manufacturing capacity in Fremont and began shipping Sonoma systems from a new contract manufacturer in Southeast Asia, adding capacity for over 20 additional Sonoma systems per month. The company also signed a new lease to expand its office in Hsinchu, Taiwan, to increase local sales and customer support, deepening engagement in the region and strengthening support for future production ramps.
Patent Litigation Update
Aehr continues to incur legal fees for its patent litigation against SEMI NEXUSTEST in China. The patent office in Beijing has upheld two of Aehr's Chinese patents, which is critical to the ongoing case. Additional legal expenses are anticipated in upcoming quarters as the company continues to protect its intellectual property rights.