Aehr Test Systems (AEHR): Business Model Canvas [Dec-2025 Updated]

You're looking at Aehr Test Systems (AEHR) right now, and their business model is less about general testing and more about dominating the high-growth Silicon Carbide (SiC) market-the backbone of electric vehicles (EVs) and industrial power. The whole engine runs on their patented FOX-P platform, which gives customers the lowest cost of test and superior reliability screening, which is a massive win for automakers who need zero field failures. This focused strategy is defintely paying off, with Fiscal Year 2025 revenue guidance sitting at approximately $100 million, driven by system sales and that sweet, recurring WaferPak and DiePak consumable revenue. So, if you want to see how they're converting that SiC trend into concrete revenue streams and what near-term risks to watch, let's dig into the full Business Model Canvas below.

Aehr Test Systems (AEHR) - Canvas Business Model: Key Partnerships

You need to understand Aehr Test Systems' (AEHR) key partnerships because they directly map to the company's revenue diversification, which is the big story for fiscal year 2025. The shift away from a heavy reliance on a single Silicon Carbide (SiC) customer is crucial. For the full fiscal year 2025, SiC Wafer-Level Burn-In (WLBI) is tracking to less than 40% of the business, a sharp drop from over 90% in fiscal 2024, meaning new partnerships are driving the new growth.

Strategic alliances with major SiC wafer manufacturers

Aehr's foundational partnerships remain with major Silicon Carbide (SiC) wafer manufacturers, though the concentration risk has lessened. These relationships are long-term supply agreements that lock in the use of Aehr's FOX-P family of test and burn-in systems, which are essential for screening SiC MOSFETs (Metal-Oxide-Semiconductor Field-Effect Transistors) used in electric vehicles (EVs) and charging infrastructure. The core value here is 100% burn-in and traceability, which is non-negotiable for mission-critical automotive components.

The company's largest SiC customer, a multinational industrial corporation, continues to drive demand for the FOX-XP multi-wafer system. While the SiC market softened in early 2025, Aehr's customers were forecasting capacity expansion needs in the second half of calendar 2025, with production volumes ramping further into 2026. This is a classic capital expenditure (CapEx) cycle; you see the dip, but the long-term commitment is still there.

Collaboration with leading automotive Tier 1 suppliers

The key strategic move in fiscal 2025 was securing production orders from top-tier automotive and power semiconductor suppliers for Gallium Nitride (GaN) devices, marking a successful market expansion. In January 2025, Aehr received an initial production order from a top tier automotive semiconductor supplier for a FOX-XP Wafer-Level Test and Burn-in system specifically for their GaN power semiconductors.

This GaN-focused partnership is critical because the GaN market is projected to grow at a Compound Annual Growth Rate (CAGR) of more than 40%, reaching $2.5 billion in annual device sales by 2029. This initial production order, secured in Q3 fiscal 2025, validates Aehr's FOX-P platform for a new, high-growth, high-reliability automotive application.

Foundry partners for wafer-level burn-in process development

To support its aggressive expansion into new markets like Artificial Intelligence (AI) and High-Performance Computing (HPC), Aehr relies on partnerships with outsourced semiconductor assembly and test (OSAT) providers and specialized test houses. This isn't just selling a box; it's co-developing a high-volume process.

A prime example is the partnership announced on November 3, 2025, with ISE Labs. This collaboration focuses on Wafer-Level Test and Burn-in for high-power AI processors. This arrangement allows Aehr to offer a turnkey service solution, accelerating the adoption of its FOX-P platform by AI chip developers and major hyperscalers who prefer to outsource the complex, high-power burn-in process.

Another major win was securing a major hyperscaler as the first production AI customer in the packaged part burn-in (PPBI) space, utilizing the recently acquired Incal Technology's Sonoma systems. This customer is planning to ramp up production over the next year.

Here's the quick math on one new market: a leading advanced storage device manufacturer placed follow-on production orders totaling approximately $4.7 million for FOX-CP systems in March 2025, and this customer is a potential 10 percent revenue contributor for Aehr going forward.

Partner Category	Primary AEHR Product/Service	FY2025 Impact/Metric
Major SiC Power Semiconductor Mfrs	FOX-XP, FOX-NP Systems; WaferPak Contactors	SiC WLBI tracking to less than 40% of FY2025 revenue (down from 90%+).
Top Tier Automotive Semiconductor Supplier	FOX-XP High-Power Multi-Wafer System (for GaN)	Secured initial production order in January 2025 for GaN devices.
Leading Advanced Storage Device Mfr	FOX-CP Systems; WaferPak Contactors	Follow-on orders of approx. $4.7 million in March 2025. Potential 10 percent revenue contributor.
Major Hyperscaler (AI)	Sonoma PPBI Systems (via Incal acquisition)	Secured as first production AI customer for packaged part burn-in.
ISE Labs (Test House/OSAT)	Wafer-Level Test and Burn-in Services (AI/HPC)	Partnership announced November 2025 to offer turnkey AI/HPC WLBI services.

Key component suppliers for the FOX-P platform hardware

Aehr's core competitive advantage is its proprietary consumables, specifically the FOX WaferPak Contactor and the FOX DiePak Carrier. These aren't standard components; they are custom-engineered interfaces that connect the semiconductor wafer or die to the burn-in system. Aehr maintains a tight, defintely controlled supply chain for these items.

The relationships here are with specialized, high-precision manufacturing partners who can consistently produce these proprietary contactors and carriers. The importance of this is visible in the financials: WaferPak sales generated over $12 million in revenue in the first quarter of fiscal 2025, showing this is a high-margin, recurring revenue stream tied directly to their partners' production ramps.

The reliance on these few, highly specialized suppliers for the proprietary consumables is a key risk, but it also creates a powerful lock-in effect for the customer. Once a customer qualifies a device using the WaferPak, they are essentially committed to that supply chain for the life of that product line.

• Manufacture proprietary FOX WaferPak Contactors for full-wafer contact.
• Supply FOX DiePak Carriers for singulated die and module testing.
• Provide high-power components for the FOX-XP multi-wafer system.

Aehr Test Systems (AEHR) - Canvas Business Model: Key Activities

You want to know what Aehr Test Systems actually does to earn its money, and it boils down to three core, high-precision activities: inventing the next generation of burn-in technology, scaling production to meet new market demand, and protecting its turf with a global service and IP strategy. This isn't just about selling a machine; it's about selling a critical reliability standard for the world's most advanced chips.

Develop and refine proprietary FOX-P wafer-level burn-in technology

Aehr's main job is to keep their FOX-P platform ahead of the curve, especially as new semiconductor materials like silicon carbide (SiC) and gallium nitride (GaN) push power limits. In fiscal year 2025, the biggest move was delivering the industry's first production Wafer Level Burn-in (WLBI) system for Artificial Intelligence (AI) processors. That was a major technological and commercial milestone, moving burn-in for these high-power devices from the expensive package-level to the more cost-effective wafer-level.

They also significantly boosted the platform's power density. For new optical I/O and chip-to-chip communication devices, they rolled out a new system configuration that delivers up to 3,500 watts per wafer. Plus, they shipped an 18-wafer version of the FOX-XP system that handles up to 2,000 volts per wafer, complete with proprietary arc suppression technology. That's serious power control.

• Launched AI WLBI system for production.
• Increased power to 3,500 watts per wafer.
• Added FOX-CP for low-cost, single-wafer testing.
• Shipped 18-wafer FOX-XP for 2,000-volt testing.

High-volume manufacturing and assembly of test systems

Manufacturing is the engine that converts R&D wins into revenue. While the semiconductor market saw a temporary slowdown in some areas, Aehr's manufacturing activity was marked by a strategic shift and strong forward-looking demand. Total net revenue for fiscal year 2025 was $59.0 million, down from the prior year, but annual bookings-a key indicator of future production-jumped to $61.1 million, a 24% increase over fiscal 2024.

The company is defintely diversifying its production lines. Where SiC WLBI accounted for over 90% of revenue in fiscal 2024, it dropped to less than 40% in fiscal 2025, while AI processor burn-in exploded from zero to over 35% of annual revenue. The acquisition of Incal Technology last year also brought in the Sonoma ultra-high-power system for packaged part burn-in (PPBI), which is critical for AI accelerators and GPUs.

Here's the quick math on their production and market shift:

Metric	Fiscal Year 2025 Value	Context
Net Revenue (Full Year)	$59.0 million	Down from $66.2 million in FY2024.
Annual Bookings	$61.1 million	Up 24% from $49 million in FY2024.
Backlog (as of May 30, 2025)	$15.2 million	Represents confirmed future revenue.
AI Processor Burn-in Revenue Share	Over 35%	Grew from 0% in FY2024.
SiC WLBI Revenue Share	Less than 40%	Down from over 90% in FY2024.

Global field service and application engineering support

Selling a complex piece of capital equipment like a FOX-XP system requires deep, ongoing support. Aehr has installed thousands of systems worldwide, so their engineering team is constantly engaged in customer application work, ensuring their systems are correctly integrated into high-volume manufacturing lines.

A major focus in late 2025 has been application engineering for new markets. They've established a strategic partnership with a world's leading Outsourced Assembly and Test (OSAT) partner to deliver a turnkey solution for High-Performance Computing (HPC) and AI processors. This is less about fixing a broken machine and more about helping a customer define the process for burning in a new chip. They also maintain an installed base of over 100 Echo systems across more than 20 semiconductor companies, which drives recurring service and consumable revenue.

Continuous intellectual property (IP) portfolio expansion

The core value of Aehr is its proprietary technology, which is protected by a strong intellectual property (IP) portfolio. The continuous development of their FOX WaferPak Contactor and FOX DiePak Carrier systems, which are consumable IP assets, is a key activity.

Crucially, protecting this IP is a major operational activity. Management has stated they anticipate incurring additional legal expenses in the upcoming quarters as they actively pursue and protect their IP rights in China, including a patent infringement action against a competitor. This legal defense is a non-negotiable cost of doing business and a necessary step to maintain their competitive moat in the global semiconductor test market.

Aehr Test Systems (AEHR) - Canvas Business Model: Key Resources

Patented FOX-P family of multi-wafer test and burn-in systems

The core physical resource for Aehr Test Systems is the proprietary FOX-P™ family of test and burn-in systems. This isn't just machinery; it's a patented, high-parallelism architecture that enables Wafer-Level Burn-In (WLBI) and packaged part burn-in (PPBI) for high-reliability semiconductors. This technology is defintely a key differentiator, especially as the industry shifts to smaller geometries and higher-power devices like those used in electric vehicles and AI.

The FOX-P platform includes systems like the FOX-XP, FOX-NP, and the single-wafer FOX-CP. The FOX-XP is a beast, capable of testing up to nine 300mm AI processor wafers simultaneously. That level of parallel processing for high-power devices is what unlocks the cost-of-test advantage for your customers. One clean one-liner: This system is the bottleneck breaker for semiconductor reliability.

Extensive IP portfolio covering wafer-level burn-in (WLBI)

Intellectual property is Aehr Test Systems' most valuable non-physical asset. The company holds an extensive IP portfolio, primarily centered on the technology required to contact, power, and thermally manage entire wafers during the burn-in process. This is the secret sauce that makes WLBI feasible for demanding applications like Silicon Carbide (SiC), Gallium Nitride (GaN) power semiconductors, and advanced Artificial Intelligence (AI) processors.

This IP is what allows the proprietary WaferPak™ Contactor to make full electrical contact with wafers up to 300mm for WLBI, and the DiePak® Carrier to test up to 1024 devices in parallel for singulated die. This technology moat is what keeps competitors at bay in the high-power, high-reliability segment. The ability to do WLBI for AI processors, a major milestone in fiscal 2025, is a direct result of this focused IP development over the last decade.

Highly specialized engineering and R&D talent

You can have the best patents, but without the people to execute, they're just paper. Aehr Test Systems' specialized human capital, particularly its R&D engineering team, is critical. They are the ones who solved the complex thermal and power delivery challenges required to perform burn-in on high-power devices like AI chips and SiC wafers-a feat that requires massive amounts of power and precise thermal control. Honestly, that's a tough engineering problem.

The company is actively expanding this resource, planning to increase R&D investments and hire additional talent in the US and the Philippines in fiscal 2026 to support the growing AI customer base and increase automation. This expansion shows a commitment to maintaining their technological lead in a rapidly evolving market.

Strong cash position, enabling focused expansion

A solid financial foundation is the resource that enables all others. Aehr Test Systems ended its fiscal year 2025 (May 30, 2025) with a strong cash position, giving them the flexibility to invest in R&D and manufacturing capacity without undue external pressure. This cash is essential for funding the expansion of their R&D resources and the facility upgrades they've been undertaking.

Here's the quick math on their financial resource strength from the close of FY2025:

Financial Metric (Fiscal Year Ending May 30, 2025)	Amount
Net Revenue (FY2025)	$59.0 million
Non-GAAP Net Income (FY2025)	$4.6 million
Total Cash, Cash Equivalents, and Restricted Cash (as of May 30, 2025)	$26.5 million

What this estimate hides is the strategic deployment of that cash; they've already spent $6.3 million on facility renovations, which significantly upgraded their manufacturing floor and customer labs for the FOX systems. This cash is being used to build a stronger physical and human resource base to handle future growth, which is a very smart move.

Aehr Test Systems (AEHR) - Canvas Business Model: Value Propositions

You're looking for the core economic and technical differentiators that make Aehr Test Systems a necessary partner, especially now that the semiconductor market is shifting so quickly. The direct takeaway is this: Aehr provides the only truly scalable, high-power wafer-level burn-in (WLBI) solution that drastically cuts the cost of test while guaranteeing the reliability needed for mission-critical devices like Silicon Carbide (SiC) and AI processors.

Honestly, the biggest value proposition isn't just the technology; it's the economic moat they've built around it. They've moved from being a SiC-dependent company to a diversified player, with fiscal year 2025 (FY2025) net revenue hitting $59.0 million, even amid a slowdown in the EV sector.

Lowest cost of test for high-volume semiconductor production

The FOX-XP platform is an economic game-changer for high-volume manufacturers. Traditional testing methods-doing burn-in after the wafer is cut and packaged-are slow and expensive. Aehr's wafer-level approach eliminates that cost by catching infant mortality failures before expensive packaging even happens.

For a customer upgrading their system, the move from a 9-wafer to an 18-wafer FOX-XP configuration can effectively double the output without doubling the infrastructure footprint or labor costs. This dramatically slashes the operational cost per wafer, which is a vital advantage for chipmakers facing razor-thin margins in the SiC space. Here's the quick math on their FY2025 economics:

Financial Metric (FY2025)	Amount	Context
Net Revenue	$59.0 million	Reflects diversification beyond SiC into AI and GaN.
Gross Profit	$23.933 million	Indicates the margin on their high-value, proprietary systems and consumables.
Non-GAAP Net Income	$4.6 million	Shows profitability after adjusting for one-time items, proving the business model is sound.

Superior quality and reliability screening for SiC and GaN power devices

In critical applications like Electric Vehicles (EVs) and solar inverters, a single component failure can have catastrophic results. Aehr's systems deliver turnkey test and burn-in solutions where quality, reliability, and safety are defintely critical. The technology is designed to stabilize and screen every device on the wafer, testing for failures over hours or days, not just seconds.

This is especially true for wide bandgap materials like SiC and Gallium Nitride (GaN). For example, Aehr secured its first production order for GaN power semiconductors in FY2025 from a leading automotive semiconductor supplier. This move validates the FOX-XP's capability to handle the high-power, high-reliability needs of this rapidly growing market, which is projected to surpass $2 billion in annual device sales by 2029.

Scalable, flexible test solutions (e.g., FOX-XP, FOX-NP systems)

The FOX-P family offers a clear path from R&D to mass production. The two main systems provide flexibility that matches a customer's production maturity:

• FOX-NP: Low-cost entry system for initial qualification and new product introduction.
• FOX-XP: High-volume production workhorse, capable of testing up to 18 wafers simultaneously.

This scalability has been crucial in their FY2025 market expansion. The AI processor burn-in market, for instance, now accounts for over 35% of their business, up from near zero the year before. The FOX-XP is now being used to test up to nine 300mm AI processor wafers at once, confirming the feasibility and cost advantages of wafer level burn-in for these complex, high-power devices.

Reduced field failures and improved end-product reliability

The core value proposition boils down to mitigating risk for the end-user. By performing a comprehensive burn-in-a process that stresses the device to accelerate early-life failures-at the wafer level, manufacturers eliminate defective parts before they are packaged and shipped. This process is essential for semiconductors going into high-stakes applications like autonomous vehicles, data center power conversion, and medical devices.

The ability to identify and eliminate these early life failures directly reduces manufacturing costs and significantly improves overall yield. This preemptive screening is what allows their customers to confidently deploy semiconductors in products where failure is simply not an option.

Aehr Test Systems (AEHR) - Canvas Business Model: Customer Relationships

Aehr Test Systems' customer relationship model is fundamentally a high-touch, strategic partnership approach, moving beyond transactional sales to deep, long-term technical collaboration. This is essential because you are selling complex, high-reliability test and burn-in equipment (Wafer-Level Burn-In or WLBI) for mission-critical semiconductors like those used in electric vehicles and artificial intelligence (AI) processors.

The relationship is built on joint development and continuous support, which is defintely necessary when your customers are producing next-generation chips where failure is not an option. This model also drives a crucial recurring revenue stream from consumables and service contracts.

Dedicated, long-term strategic support for key accounts

Your largest customers are not just buyers; they are strategic partners whose production roadmaps directly influence your product development. This is a dedicated relationship model, focused on securing multi-year volume production orders and collaborating on future technology generations.

For example, a major hyperscaler-one of your first AI production customers-is already placing follow-on volume production orders for the Sonoma ultra-high-power packaged-part burn-in systems, demonstrating a deep, committed relationship. This level of engagement ensures your systems can handle the specific, high-power needs of their custom AI processors.

This strategic support extends to the supply chain, as seen in the development of a strategic partnership with a world-leading Outsourced Semiconductor Assembly and Test (OSAT) provider to offer advanced, turnkey wafer-level test and burn-in solutions for high-performance computing (HPC) and AI processors.

High-touch, consultative sales process for complex system integration

The sales cycle for a FOX-XP or Sonoma system is highly consultative, not a simple catalog order. It involves a detailed, high-touch process where your technical teams work closely with the customer's engineering and production staff to validate the solution for their specific devices.

A clear example of this is the 'paid evaluation' process you conduct with new customers, such as a leading AI processor supplier. This evaluation is comprehensive, including:

• Developing a custom high-power WaferPak contactor.
• Creating a full production wafer-level burn-in test program.
• Executing a comprehensive characterization and correlation plan to validate the system.

This consultative approach ensures the system is seamlessly integrated, which is critical given the complexity of testing devices like 300-millimeter AI processor wafers. Customer feedback is also directly integrated into product enhancements, such as the positive response to the Sonoma system's increased device power up to 2,000 watts and full automation features.

Focus on recurring service and system upgrade revenue

A key financial component of your customer relationship strategy is the generation of predictable, recurring revenue from consumables and service. This is the classic razor-and-blade model applied to high-end semiconductor equipment.

Your revenue streams are structured to include the initial system sale (the razor) and the ongoing sales of proprietary contactors, spare parts, and service contracts (the blades and maintenance). For the first quarter of fiscal year 2026, which ended August 29, 2025, your contactor revenues (WaferPaks and burn-in modules) totaled $2.6 million, accounting for 24% of the total quarterly revenue of $11.0 million.

The total net revenue for the full fiscal year 2025 was $59.0 million. The focus on upgrades also extends the life and value of the installed base, such as the order received for an 18-wafer high-voltage system as a direct upgrade to a customer's existing FOX-XP configuration.

Fiscal Year 2025/Q1 2026 Customer Relationship Metrics	Value/Amount	Context
Full Fiscal Year 2025 Net Revenue	$59.0 million	Total revenue generated, down from $66.2 million in FY2024.
Q1 Fiscal 2026 Contactor Revenue (Recurring)	$2.6 million	Revenue from proprietary WaferPaks and burn-in modules (consumables).
Q1 Fiscal 2026 Contactor Revenue as % of Total Revenue	24%	Indicates the current recurring revenue contribution from consumables.
AI Processors Burn-in Revenue Share (FY2025)	Over 35%	Represents the rapid diversification into a new strategic customer segment in one fiscal year.
Silicon Carbide (SiC) WLBI Revenue Share (FY2025)	Less than 40%	Shows a shift from the FY2024 concentration of over 90%, highlighting customer base diversification.

The shift in revenue concentration, where silicon carbide WLBI dropped from over 90% of revenue in fiscal 2024 to less than 40% in fiscal 2025, while AI processor burn-in grew to over 35%, shows the success of the strategy to diversify the customer base beyond a single segment. Your ability to quickly pivot and secure new key accounts in high-growth markets like AI is a testament to this deep, collaborative relationship model. You're not just selling a machine, you're selling a production solution.

Aehr Test Systems (AEHR) - Canvas Business Model: Channels

For a company like Aehr Test Systems, which sells highly specialized capital equipment and proprietary consumables to a small, concentrated base of global semiconductor giants, the Channel strategy is not about retail distribution-it's about high-touch, direct technical engagement. The channel is essentially the direct relationship you build with a customer's engineering and procurement teams. That's a critical distinction.

In fiscal year 2025, with net revenue at $59.0 million, the channels were instrumental in the strategic pivot from a silicon carbide concentration to a broader market, including AI processors and Gallium Nitride (GaN) power semiconductors. The channel's job is to translate complex technical needs into sales for systems like the FOX-XP and the ultra-high-power Sonoma line.

Direct sales force targeting global semiconductor manufacturers

Aehr Test Systems operates primarily through a direct sales model, which is necessary when selling a complex, high-value product like a wafer level burn-in (WLBI) system. This sales force targets a finite list of top-tier semiconductor manufacturers and major hyperscalers that need high-reliability testing for devices going into electric vehicles (EVs), data centers, and AI clusters. The sales process is long, technical, and consultative, often involving a multi-quarter evaluation period.

This direct approach is supported by a global footprint, which includes a headquarters in Fremont, California, and established subsidiaries in key manufacturing regions. This structure ensures direct control over the customer relationship and the technical sales message, which is crucial when your product is a competitive advantage for the customer.

Here's the quick math: Aehr's total revenue for fiscal 2025 was $59.0 million. A significant portion of this revenue-specifically the system sales-is driven by this direct sales team closing large capital expenditure deals for the FOX-P family and the Sonoma systems.

Field Application Engineers (FAEs) providing technical pre-sales support

The FAE function, though perhaps not always called that internally, is the lifeblood of the pre-sales channel. These are the technical experts who bridge the gap between the customer's process requirements and Aehr's system capabilities. They are embedded in the sales process from the first technical presentation through the final system acceptance.

Their role is especially critical now, as the company diversifies its market. For example, shifting from Silicon Carbide (SiC) to Artificial Intelligence (AI) processors requires FAEs to master new, ultra-high-power testing requirements. The success of the FOX-XP system in securing the first AI processor customer for wafer level burn-in is a direct result of this deep technical channel support.

• Translate customer specifications into system configurations.
• Support on-site customer evaluations at the Fremont facility.
• Ensure the proprietary WaferPak/DiePak consumables work seamlessly.

Direct service and support teams for system installation and maintenance

Post-sale, the channel transitions to direct service and support. This is a non-negotiable part of the value proposition for highly complex, mission-critical equipment. Aehr Test Systems maintains a direct technical support channel, which is a key differentiator in the capital equipment market.

The company's ISO 9001 certification, held since 1997, is a clear signal that the service and support channel is highly structured and quality-controlled. This direct service model handles everything from initial system installation to ongoing maintenance and spare parts supply, ensuring maximum uptime for the customer's production lines. If onboarding takes 14+ days, churn risk rises, so direct control over this channel is defintely a priority.

Selective use of international sales representatives in specific regions

While the core channel is direct, Aehr Test Systems uses a hybrid model for international reach, employing a selective network of local sales representatives and maintaining its own subsidiaries in strategic global semiconductor hubs. This allows for local language support and navigation of regional business customs, while still keeping technical sales and support direct or tightly managed.

The company explicitly manages sales channels for key global regions, reflecting the need for local presence in areas with high semiconductor manufacturing volume. This blend of direct and representative channels is essential for managing the global nature of their customer base.

Channel Focus Area	Geographic Channel Presence	Fiscal 2025 Channel Activity Context
Direct Sales Force	U.S. Sales, Europe Sales, China Sales, Japan Sales, Korea Sales, Taiwan Sales, Other Asia Sales	Drove full-year net revenue of $59.0 million; secured major hyperscaler as a new AI customer.
Technical Pre-Sales (FAEs)	Global, supporting all sales regions	Enabled the expansion into new markets: AI processors, GaN power semiconductors, and silicon photonics.
Consumables Sales	Global, high volume repeat business	WaferPak and DiePak consumables accounted for 30% of Q4 fiscal 2025 total revenue.
Direct Service & Support	Fremont, CA HQ, and international subsidiaries (e.g., Germany, Philippines, Japan)	Maintained ISO 9001 quality standard; provided installation and maintenance for high-power systems like the Sonoma line.

Aehr Test Systems (AEHR) - Canvas Business Model: Customer Segments

You're looking at Aehr Test Systems' customer base, and the biggest takeaway for fiscal year 2025 is the dramatic shift in revenue concentration. What was once nearly a single-customer-type business-Silicon Carbide (SiC)-is now a rapidly diversifying portfolio, with new, high-growth segments like Artificial Intelligence (AI) processors now representing a major portion of sales.

In fiscal 2024, Silicon Carbide wafer-level burn-in (WLBI) accounted for over 90% of the business. By the end of fiscal 2025 (May 30, 2025), that SiC share was tracking to less than 40%, with AI processors filling the gap, representing over 35% of the business in just their first year. This diversification is a defintely positive de-risking move.

Customer Segment Focus Area (FY2025 Trend)	Primary Application	FY2025 Revenue Contribution (Approximate)	Key Customer Activity
Silicon Carbide (SiC) Power Semiconductors	Electric Vehicles (EVs) & Charging Infrastructure	Less than 40% (Down from 90%+ in FY2024)	Continued production volume, but growth slowed.
Artificial Intelligence (AI) Processors	Data Centers, High-Performance Computing (HPC)	Over 35% (New major segment in FY2025)	Secured a major hyperscaler as a first production customer.
Emerging Gallium Nitride (GaN) Power Devices	Mid-Power Applications (Solar, Automotive, Data Center Power)	Small, but expanding	First production order secured from a leading automotive semiconductor supplier.
Data Storage Devices	Hard Disk Drives (HDD)	Small, but growing order bookings	Follow-on system orders received from a top global supplier.

Global manufacturers of Silicon Carbide (SiC) power semiconductors

This group remains a core customer, but its dominance is waning. SiC manufacturers use Aehr's FOX-XP systems for Wafer-Level Burn-In (WLBI) to ensure the reliability of power semiconductors, which is critical for the electric vehicle market. About 70% of the SiC market's largest segment is tied to EVs and their charging infrastructure, so their production schedules directly impact Aehr's revenue. Here's the quick math: with total fiscal 2025 net revenue at $59.0 million, less than $23.6 million (40% of $59.0M) came from this segment, a significant drop from the prior year's concentration. The slowdown in SiC growth has forced the strategic pivot, but the long-term opportunity, with a projected compound annual growth rate (CAGR) exceeding 40% for the SiC wafer market over the next five to seven years, means these customers are still vital.

Automotive and industrial power module suppliers (Tier 1s)

This segment is less about the semiconductor manufacturer and more about the end-user application. These customers, often Tier 1 automotive suppliers or industrial power companies, demand extremely high reliability for their power modules. They are the ones driving the adoption of both SiC and Gallium Nitride (GaN) devices. For instance, the first production order for GaN devices came from a leading automotive semiconductor supplier, specifically for the FOX-XP high-power multi-wafer production system. This shows the Tier 1s are actively pushing for the reliability screening that Aehr's burn-in solutions provide, especially as they integrate new wide bandgap semiconductors into critical systems like autonomous vehicles and solar inverters.

Emerging Gallium Nitride (GaN) power device producers

GaN represents a significant new growth vector, offering a much broader range of applications than SiC. This customer group includes producers targeting mid-power applications where high efficiency is key, such as:

• Data center power conversion.
• Solar energy inverters.
• Consumer electronics and PCs.
• Automotive systems (beyond the main EV traction inverter).

The GaN market is projected to surpass $2 billion in annual device sales by 2029, with a CAGR exceeding 40%. Aehr's early production win with an automotive supplier for their GaN WLBI solution positions them to scale up with these customers as the technology matures, just as they did with SiC.

Integrated Device Manufacturers (IDMs) requiring high-volume burn-in

This category has expanded dramatically in fiscal 2025 to include major players in the Artificial Intelligence and data center space. The need for burn-in for AI processors (both Wafer-Level Burn-In and Packaged Part Burn-In) is a huge new market. One major hyperscaler, a company developing its own AI processors, is now a production customer. The revenue from AI burn-in alone was over 35% of the total business in FY2025. What this estimate hides is the potential scale; even a 0.1% increase in yield from moving burn-in to the wafer level is incredibly significant for companies shipping billions of dollars of AI devices annually.

Other IDMs in this segment include:

• Silicon Photonics IDMs: Multiple customers, including the largest supplier of silicon photonics integrated circuits, are using the FOX systems for optical chip-to-chip communication devices.
• Data Storage IDMs: A lead customer, one of the top global suppliers of data storage devices, is ordering multiple FOX-CP solutions for burn-in and stabilization of new devices in hard disk drives. Bookings from this new market accounted for about 10% of total order bookings in fiscal 2025.

Aehr Test Systems (AEHR) - Canvas Business Model: Cost Structure

You're looking at Aehr Test Systems' cost structure, and the story for Fiscal Year 2025 (FYE May 30, 2025) is simple: the company is a high-tech manufacturer, so its costs are dominated by complex production and a heavy, necessary investment in next-generation technology. The total cost of operating the business-Cost of Goods Sold (COGS) plus all operating expenses-was $64.645 million for the year, which is a big number against $58.968 million in revenue, resulting in an operating loss of $5.677 million.

This is a capital-intensive model. You can't build wafer-level burn-in systems (WLBI) for Artificial Intelligence (AI) processors and silicon carbide without spending serious money on materials, engineering talent, and R&D. Here's the quick math on the major cost centers.

Cost Category (FYE May 30, 2025)	Amount (Millions of US $)	Percentage of Total Revenue ($58.968M)
Cost of Goods Sold (COGS)	$35.035	59.4%
Research & Development (R&D) Expenses	$10.419	17.7%
Selling, General & Administrative (SG&A) Expenses	$19.191	32.5%
Total Operating Costs	$64.645	109.6%

Significant R&D Investment in Next-Generation Test Technology

Aehr Test Systems is a technology leader, and that position is expensive to maintain. You see this directly in the R&D budget, which is a critical, non-negotiable cost. R&D expenses for fiscal year 2025 totaled approximately $10.419 million, an increase of about $1.7 million over the $8.719 million spent in fiscal year 2024.

This spending isn't optional; it's what keeps them ahead in high-growth markets like AI and Gallium Nitride (GaN) power semiconductors. They're investing in things like the high-power FOX-XP multi-wafer systems for AI processors and developing new WLBI systems for flash memory. R&D costs are primarily driven by:

• Compensation and benefits for product development personnel
• Outside development service costs for specialized engineering
• Stock-based compensation for engineering talent

High Cost of Materials and Manufacturing for Complex Test Systems

The core of the cost structure lies in the Cost of Goods Sold (COGS), which hit $35.035 million in FY 2025. This figure is nearly 60% of total revenue. This isn't a high-margin software business; it's a capital equipment business where the physical product is complex and costly to build.

The gross margin decreased by 8.5 percentage points in FY 2025 compared to the prior year, so the cost-to-revenue ratio actually worsened. This was due to several factors that speak to the complexity of their product portfolio:

• Amortization of acquired intangible assets from the Incal Technology acquisition
• Inventory variance charges, which signal volatility in parts and production planning
• A shift in product mix toward lower-margin systems or consumables

The high cost of materials is baked into their proprietary consumables-the WaferPak Contactors and DiePak Carriers-which are essentially custom-engineered interfaces for each customer's wafer. That's a defintely high-value, high-cost component.

Direct Labor and Overhead for System Assembly and Testing

Embedded within that $35.035 million COGS is the direct labor and manufacturing overhead. Building a FOX-XP system, which can test up to nine 300mm AI processor wafers simultaneously, requires highly skilled labor and a controlled facility.

The costs here include the technicians assembling the precision mechanics, the engineers performing final system testing, and the overhead of the Fremont, California, facility. When shipment volumes are lower, as they were in FY 2025 due to reduced system orders in the silicon carbide market, the fixed overhead costs get spread over fewer units, which pushes the per-unit cost up and pressures the gross margin.

Field Service and Support Personnel Expenses

The Selling, General, and Administrative (SG&A) expenses, which amounted to a calculated $19.191 million for FY 2025, cover all non-production and non-R&D costs. This is where you find the expense for field service and support.

For a company selling mission-critical equipment globally, a robust field service team is essential for uptime and customer retention. These costs include:

• Compensation for sales, marketing, and G&A personnel
• Travel expenses for field service engineers and sales teams
• Legal and accounting service costs for a publicly traded company

The acquisition of Incal Technology, Inc. in FY 2025, which cost $11.1 million in cash, also added to the administrative and integration costs, expanding the SG&A base to support the new packaged part test solutions like the Sonoma family.

Aehr Test Systems (AEHR) - Canvas Business Model: Revenue Streams

Aehr Test Systems' revenue streams are a mix of capital equipment sales and high-margin, recurring consumables and services, but the company's total revenue for the latest fiscal year came in below prior expectations due to market headwinds. For the fiscal year (FY) ended May 30, 2025, the company reported total net revenue of $59.0 million, a decline from the prior year, reflecting a period of strategic diversification away from a heavy reliance on the Silicon Carbide (SiC) market.

Sales of the FOX-P wafer-level burn-in and test systems

The core of Aehr's revenue comes from the sale of its FOX-P family of systems, which includes the high-power, multi-wafer FOX-XP and FOX-NP, and the single-wafer FOX-CP. These are capital equipment sales, meaning they are large, non-recurring purchases by customers. The systems are critical for wafer-level burn-in (WLBI) and test, a process that removes early device failures and is now expanding into high-growth areas like Artificial Intelligence (AI) processors.

While product revenue overall decreased in FY 2025, the company secured a major milestone by shipping the industry's first production WLBI systems specifically designed for AI processors. This new high-power FOX-XP system can test up to nine 300mm AI processor wafers simultaneously, a significant technological and commercial breakthrough.

Sales of proprietary WaferPak and DiePak consumable contactors

This is the high-margin, recurring engine of the business, and it's defintely a key focus for long-term profitability. The proprietary WaferPak Contactors and DiePak Carriers are consumables that must be purchased for every new device design or as replacements for wear and tear, directly tying revenue to customer production volume.

In the fourth quarter of FY 2025 alone, WaferPak revenues were $4.2 million, representing a substantial 30% of the total quarterly revenue of $14.1 million. This revenue stream is crucial because it generates consistent sales from the installed base of FOX-P systems. In the first quarter of FY 2025, WaferPak sales were strong, generating over $12 million in revenue. The ongoing demand for new WaferPak designs, particularly from the SiC market and new AI customers, drives this continuous revenue.

Recurring revenue from system upgrades and maintenance contracts

Aehr generates a smaller but stable stream of recurring revenue from services, which includes maintenance contracts, repairs, and system upgrades. This services revenue acts as a buffer against cyclical downturns in capital equipment sales. Here's the quick math: in FY 2025, the services revenue increased by $1.7 million, partially offsetting a decline in product revenue. This highlights the value of the installed base and the high-reliability requirement of the semiconductor testing process. One clear action is that the company received its first order for an 18-wafer high-voltage system as an upgrade to a customer's current FOX-XP configuration, showing the upgrade path is a viable revenue source.

The stability of this revenue stream is supported by the technical complexity of the FOX platform, which requires specialized support and parts. It's a classic razor-and-blade model, where the system sale is the razor and the consumables/services are the recurring, high-margin blades.

Fiscal Year 2025 revenue guidance and actual results

The company's actual financial performance for the fiscal year ending May 30, 2025, was impacted by a broader semiconductor industry slowdown and delayed shipments. While the company had initially reiterated a guidance for total revenue of at least $70 million, the final reported net revenue for FY 2025 was $59.0 million. This is a critical data point for investors to map near-term risk. What this estimate hides is the strategic pivot: the company successfully diversified its revenue streams, with SiC representing less than 40% of FY 2025 revenue, down from 90% in FY 2024, and AI processors contributing more than 35% of revenues, up from 0% in the prior year.

The table below summarizes the key financial figures for the last completed fiscal year.

Financial Metric	Fiscal Year Ended May 30, 2025 (Actual)	Notes
Total Net Revenue	$59.0 million	Down from $66.2 million in FY 2024.
GAAP Net Loss	$(3.9) million	Reflects a transition year with revenue decline.
Non-GAAP Net Income	$4.6 million	Excludes certain non-cash items.
Services Revenue Increase	$1.7 million	Increase over the prior fiscal year.
AI Processor Revenue Contribution	>35%	Up from 0% in FY 2024, showing successful diversification.
Silicon Carbide Revenue Contribution	<40%	Down from 90% in FY 2024.

The shift in revenue mix is a positive long-term signal, even with the lower top-line number. You're seeing a business move from a single-market concentration to a multi-market model, which reduces future cyclical risk. The immediate next step is for Finance to track the Q1 FY 2026 WaferPak revenue to confirm the sustained, high-margin consumable demand.