What it does
Teradyne makes equipment that tests semiconductors and other electronics, as well as robots used in factories and warehouses. Founded in 1960, it is headquartered in North Reading. Greg Smith is chief executive officer.
Its semiconductor test systems check chips at different stages of production: on the silicon wafer, after packaging and at the system level. Customers use the equipment to check quality and performance, improve production yields and manage testing costs. Teradyne also tests memory devices and data storage products.
The Product Test business supplies equipment and services for electronic and photonic components and assemblies. Applications include circuit-board inspection, wireless testing, data-center technology, and defense and aerospace systems. These tools can be used both to develop products and to test them during manufacturing.
Teradyne’s Robotics business sells collaborative robotic arms under the Universal Robots brand and autonomous mobile robots under the Mobile Industrial Robots brand. Manufacturers and logistics operators use them for production and material handling. The company sells test equipment mainly to semiconductor manufacturers, chip designers and their manufacturing partners; its robots reach industrial customers principally through distributors and equipment makers.
In Q3 2026, Teradyne introduced the Universal Robots Gen 7 Cobot platform and the Ultraflex Plus S tester for edge AI devices. It said electronics and semiconductors had become its largest robotics vertical.
How it makes money
Teradyne earns revenue by selling test systems and robots, along with related services. Its test businesses sell and support equipment worldwide; orders can combine products and services, or multiple products. The company allocates the transaction price among the distinct products and services in a bundled order. It does not disclose a general price list or a recurring-revenue commitment for those services in the material available here.
Semiconductor Test is the largest business. Its FLEX platform tests multiple devices in parallel, while the Magnum platform tests memory such as DRAM and high-bandwidth memory. Other systems test power devices, image sensors, storage drives and chips at the system level. Semiconductor Test generated $2.5 billion in FY2025, or 79.1% of company revenue.
Product Test sells test systems, instruments and services for electronic and photonic assemblies and components. Its customers use the equipment in development as well as production. Robotics sells collaborative arms and mobile robots; its offerings include software for programming and operating the machines. Product Test generated $358.0 million in FY2025, while Robotics generated $308.3 million.
For FY2025, product revenue was $2.7 billion and service revenue was $529.8 million; total company revenue in Q3 2026 topped $1.3 billion.
In Q3 2026, Teradyne reported $138 million of Product Test revenue and $96 million of Robotics revenue. It said AI-related demand was driving business across its groups, including memory testing, data-center interconnect testing and robot-assisted assembly.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Product | $2.7 billion | 83.4% | 15.9% |
| Service | $529.8 million | 16.6% | 0.93% |
Customers and how it sells
Semiconductor Test customers include integrated device manufacturers that make silicon wafers, chip designers that outsource fabrication, foundries and companies that assemble and test packaged chips. Product Test serves customers in computing and data centers, automotive and industrial markets, defense and aerospace, and consumer electronics. Robotics customers include manufacturers and logistics operators.
The company distinguishes between a customer that specifies a test platform and one that purchases the equipment. A chip designer, for example, can choose a platform while a supply partner places the order. In 2025, Teradyne’s five largest direct customers together accounted for 44% of consolidated revenue. One direct Semiconductor Test customer accounted for 19%, including revenue specified by other customers. Two specifying customers drove 12% and 10% of consolidated revenue, respectively.
Teradyne sells mainly through its own sales force, while Robotics products are sold principally through distributors and equipment makers. It has sales and service offices across North America, Central America, Asia and Europe. Customers outside the United States accounted for 89% of consolidated revenue in 2025, with geography assigned by customer-site location. In FY2025, China revenue was $451.3 million and Korea revenue was $446.3 million.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| CHINA | $451.3 million | 19.4% | 20.3% |
| KOREA | $446.3 million | 19.2% | −35.8% |
| Americas | $425.5 million | 18.3% | −2.27% |
| Europe, Middle East and Africa | $224.2 million | 9.65% | −12.7% |
| Europe | $215.4 million | 9.27% | −14.3% |
| Rest Of The World | $132.5 million | 5.70% | 24.8% |
| MALAYSIA | $107.4 million | 4.62% | 72.1% |
| SINGAPORE | $95.2 million | 4.10% | 5.67% |
| PHILIPPINES | $92.5 million | 3.98% | 72.5% |
| THAILAND | $67.6 million | 2.91% | 37.3% |
| JAPAN | $65.6 million | 2.82% | −58.9% |
Suppliers and costs
Teradyne’s products use electronic and mechanical components from a range of suppliers. Some are standard items; others are made to its specifications. Most components are available from multiple suppliers, but certain items come from a sole source. Teradyne has experienced component delivery delays and says a sole-source supplier’s delay or failure to deliver could temporarily affect the business.
Test equipment is manufactured primarily by subcontractors and contract manufacturers, with significant operations in Malaysia. Robotics manufacturing is primarily performed at Teradyne facilities in Denmark and the United States. In 2026, the company qualified a second contract manufacturer for its Ultraflex Plus platform and was working to do the same for its memory test platform.
Teradyne says component lead times for its testers have lengthened and that it has been ordering and holding inventory against those longer lead times. It also reports inflationary pressure across its supply ecosystem. Product mix affects gross margin, while research and development and spending to reach customers are operating costs. In Q3 2026, the company said both types of operating expenditure increased to support future growth.
- Revenue$3.2B
- Cost of revenue−$1.3B
- Research and development−$504.6M
- Selling, general and administrative−$648.9M
- Other operating costs−$53.8M
- Operating income$650.1M
Competitive position
Teradyne competes in each of its business segments. Semiconductor Test rivals include Advantest, SPEA and Cohu. Product Test competitors include Keysight Technologies, Test Research and Rohde & Schwarz. In Robotics, the company competes with traditional industrial robot makers such as ABB and FANUC, collaborative robot suppliers such as Doosan, and mobile robot makers such as Omron.
The company also faces competition from emerging Asian suppliers and from equipment developed internally by some customers. It says some competitors may have greater financial and other resources, and that rival products can have performance characteristics equal or superior to its own. Teradyne says it has lower share in compute than in some other semiconductor test markets, although it is gaining share there.
Its FLEX architecture supports parallel testing and uses the IG-XL software environment. The Universal Robots business has an ecosystem of outside components, kits and applications built around its cobot technology. Teradyne also protects its technology and brands through patents, trademarks, trade secrets and agreements, among other methods.
Our reading: The established test platforms and associated software provide a competitive advantage because customers can use and reconfigure them across different devices, but competing platforms limit its strength. Our reading: The robotics ecosystem adds useful choices for customers, though the number of competing robot suppliers makes it an incomplete barrier. Our reading: Intellectual property provides some protection, but it is not absolute: Teradyne says competitors can develop similar technology and its protections may lapse or be invalidated.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Advantest Corporation | Semiconductor test equipment | High |
| SPEA S.p.A. | Semiconductor test equipment | Medium |
| Cohu, Inc. | Semiconductor test equipment | Medium |
| Keysight Technologies | Product test equipment | Medium |
| Test Research, Inc. | Product test equipment | Medium |
| ABB | Industrial robots | Medium |
| FANUC | Industrial robots | Medium |
| Omron | Autonomous mobile robots | Medium |
Growth opportunities
Teradyne’s growth plans center on testing more of the chips, connections and systems used in AI infrastructure, as well as using robots in electronics assembly and logistics. In 2025, AI-related customer demand drove the majority of its revenue in the second half of the year. In Q3 2026, Teradyne said AI-driven revenue represented more than 60% of total revenue.
The company is pursuing compute customers that want more than one test-equipment supplier. In Q3 2026, it said its first hyperscaler customer was in a mature dual-vendor phase, a second had passed qualification, and a third was in initial qualification. It expects additional revenue from a merchant GPU customer in 2027, although customer purchases depend on their production schedules.
Memory is another focus. Teradyne introduced the Magnum E2 DRAM tester in Q3 2026 and expects growth in its memory business in 2027 as manufacturers add capacity. It also announced a FormFactor partnership covering optical testing and other opportunities. Its MultiLane Test Products joint venture supplies equipment for high-speed connections used in data centers.
For Robotics, Teradyne is working with physical-AI partners and manufacturers building servers. It expects wider deployment at a large customer in 2027, while noting that the pace depends on that customer’s schedule. Teradyne sees a path for the automated test equipment market to reach or exceed $20 billion by the end of the decade; that is the company’s market view, not a revenue target.
- $3.7BFY2021
- $3.2BFY2022
- $2.7BFY2023
- $2.8BFY2024
- $3.2BFY2025
- $5.2BFY2026 guidance
Structural risks
- Customer concentration: Test equipment demand is concentrated among a limited number of customers. The loss of a significant customer, or a substantial reduction in its demand, could materially affect Teradyne’s business and results.
- Industry cycles and order timing: Global and industry-specific economic cycles are difficult to predict. Customers can delay deliveries or cancel backlog orders, so backlog at a given date does not necessarily indicate sales in the following period.
- Trade restrictions: Export controls and other trade rules have limited sales and the ability to compete in certain markets. Changes to tariffs, restrictions or government policy could affect costs, supply chains and market access.
- Supply and capacity: Some components come from sole sources, and component lead times have lengthened. Teradyne says unexpected demand may take longer to fulfill than it did a year earlier.
- Technology and competition: Teradyne must develop products that meet changing customer requirements and compete with rival systems, while protecting its intellectual property and avoiding infringement of others’ rights.
- Foreign currency: Most Robotics revenue is denominated in foreign currencies. Teradyne says a stronger U.S. dollar would negatively affect that revenue.
Bottom line
Our reading
Our reading: Teradyne is principally a semiconductor test-equipment business, with smaller product-test and robotics operations that also serve electronics manufacturing. Its platforms and software give it established ways to serve customers, while competition and concentrated purchasing limit that advantage. [item1]
Our reading: AI infrastructure demand has become central to growth, but customer schedules, supply constraints and the pace of new deployments can make that growth uneven. [item1] [call_prepared]