Cohu, Inc. (COHU): ANSOFF MATRIX [Dec-2025 Updated]

You're looking for clear, actionable growth paths for Cohu, Inc. right now, and after mapping their latest 2025 positioning, the strategy is definitely multifaceted. We see the company focusing on solidifying their base-pushing upgrades like the Eclipse handler to existing customers to grow that 63% recurring revenue-while simultaneously making big bets on the future, like prioritizing R&D for High Bandwidth Memory (HBM) inspection systems. Honestly, they are balancing near-term execution with significant long-term development, even looking at potential acquisitions in medical testing with their $209.4 million in cash. This isn't just maintenance; it's a full-spectrum strategy. Dive in below to see the precise actions Cohu, Inc. is taking across Market Penetration, Development, Product, and Diversification.

Cohu, Inc. (COHU) - Ansoff Matrix: Market Penetration

You're looking at how Cohu, Inc. can drive growth by selling more of its current test and automation gear into the customer base it already serves. This is about deepening relationships and maximizing the value from existing accounts. Honestly, the numbers from the second quarter of 2025 show a solid foundation to build on.

The recurring revenue stream, which is largely from consumables and services, is a key stability factor. For the second quarter of 2025, this segment represented 63% of total net sales, which hit $107.7 million.

To increase that recurring piece through longer service contracts, you're aiming to lock in that 63% share for longer periods. Think about the installed base of handlers and testers that need ongoing support and consumables to keep running at peak efficiency.

A major push here is getting existing customers to adopt the new Eclipse handler platform. This strategy is already showing traction; Cohu, Inc. secured a $28 million design-win order specifically for the Eclipse handler, targeting the mobile and automotive end-markets. This order is scheduled to ship through the fourth quarter of 2025, with $4 million recognized in the second quarter, and an expected $12 million to be recognized in both the third and fourth quarters of 2025.

Here's a quick look at the key metrics supporting this penetration strategy:

Leveraging utilization is critical for pushing consumable sales. The estimated test cell utilization rate climbed 3 points quarter-over-quarter to reach 75% in the second quarter of 2025. That 75% level historically signals the industry is entering a recovery cycle, meaning more chips are being processed, which directly drives higher-volume consumable demand.

Sales efforts are heavily focused on the mobile and automotive segments, as evidenced by that significant $28 million design-win order. Furthermore, the qualification of the ULTRA-S contactor unlocked an opportunity of approximately $20 million in the precision analog market. The broader automotive semiconductor market is projected by industry analysts to grow approximately 10% annually to reach $135 billion by 2028.

The push for market share against competitors in the socket space is supported by product enhancements, but you need to look at the competitive landscape carefully. Cohu, Inc. also secured its first system order from a customer in India for silicon carbide test, opening a new geographical opportunity, though this is technically Market Development, it reinforces the strength of the existing product portfolio being sold into established accounts.

• Q2 2025 Net Sales: $107.7 million.
• Q2 2025 Recurring Revenue: 63%.
• Q2 2025 Test Cell Utilization: 75%.
• Design-Win Order Value: $28 million.
• Precision Analog Market Unlocked: Approximately $20 million.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Ansoff Matrix: Market Development

Aggressively expand sales of existing handlers and testers into the new India geographical market.

The push into new geographies like India is supported by early traction in specialized areas. Cohu, Inc. received its first silicon carbide test system order from an Indian customer during the second quarter of fiscal 2025. This initial win provides a concrete foothold for expanding the installed base of current handlers and testers in that region. The company reported limited exposure to China, representing only a low single-digit percent of revenue in Q3 2025, making the focus on other high-growth Asian markets, like India, a clear strategic pivot for market development. The total revenue for the trailing twelve months ending September 27, 2025, stood at $424.85 million.

Target new customers in the 5G and advanced packaging markets with current test and inspection systems.

Current systems are being positioned directly into next-generation compute and memory applications. Management estimated roughly $40 million of AI-related system revenue for the full year 2025, driven by wins like the NEON HBM inspection repeat orders, including the first system configured for HBM4 shipment. The Eclipse thermal handler also secured production test business for next-gen AI processors, supporting devices up to 3,000W power. The recurring revenue stream, which management expects to be ~60% in Q4 2025, provides a stable base while these new system sales ramp up. The non-GAAP gross margin for Q3 2025 was reported at 44.1%.

Establish a dedicated sales team to penetrate the growing European automotive electronics manufacturing market.

Penetration into the automotive sector shows existing customer concentration, which a dedicated team could expand geographically. During the third quarter of 2025, two customers in the automotive segment each represented more than 10% of sales. This existing revenue concentration highlights the value of current systems in that market. The company is also targeting the precision analog market, unlocking approximately $20,000,000 through the Ultra S contactor qualification in Q2 2025. The Q3 2025 revenue was $126.25 million, up 32.5% year-over-year.

Partner with regional test subcontractors in Asia to expand the installed base of current equipment.

Expanding the installed base through partnerships is a way to increase recurring revenue without direct capital outlay for new facilities. The recurring revenue mix was 55% of total revenue in Q3 2025, showing the stability Cohu, Inc. can build upon with subcontractor agreements. The total net sales for the first nine months of 2025 reached $330.7 million. A significant design win secured in Q2 2025 for the ECLIPSE handler, valued at $28,000,000, is scheduled to recognize $12 million each in Q3 and Q4, which could be leveraged in partnership discussions.

Here are key financial metrics from the latest reported period:

The company secured a $28,000,000 design win for its ECLIPSE handler in Q2 2025, with $12 million expected in Q3 2025.

The Q3 2025 outlook guided revenue to be approximately $125,000,000 plus or minus $7,000,000.

• Q3 2025 revenue growth year-over-year was 32.4%.
• The estimated test cell utilization rose to 75% in Q2 2025.
• The Q4 2025 projected revenue is around $122 million (midpoint).
• The company raised gross proceeds of $287.5 million from a convertible note offering.
• The Q3 2025 non-GAAP EPS was -$0.06.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Ansoff Matrix: Product Development

You're looking at Cohu, Inc. (COHU) pushing new silicon testing solutions into the market. This is about developing products for your existing customer base, which means you need to show traction and investment in these new platforms.

For the first nine months of fiscal 2025, Cohu, Inc. reported net sales of $330.7 million, with third quarter 2025 net sales landing at $126.2 million. The company reported a GAAP net loss of $4.1 million for the third quarter of 2025. To support this product push, Research and development expenses for the first quarter of 2025 were $23,152 thousand.

Here's a quick look at the financial context surrounding these product ramps:

Accelerate the rollout of the new Eclipse handler model to expand share at test subcontractors.

• The Eclipse test handler is noted as accelerating growth in AI data center markets.
• Cohu, Inc. had over 6,000 gravity handler installations globally by February 2024.
• The SO1000 model, a gravity handler, led installations at 3,200 units as of February 2024.

Prioritize R&D investment in the High Bandwidth Memory (HBM) inspection systems for computing customers.

• Cohu, Inc. raised its 2025 forecasted HBM revenue to $10-$11 million.
• The company shipped its first system configured for HBM4 inspection.
• The broader HBM market is projected to be approximately $23 billion in 2025.
• AI/edge/data center-related systems revenue reached about $40 million for the first nine months of 2025.

Commercialize the ULTRA-S contactor to capture the precision analog IC test market segment.

The focus here is on capturing a specific market segment with the ULTRA-S contactor. Cohu, Inc. had 3 customers accounting for over 10% of sales in Q3 2025, showing concentration in their existing customer base that new products aim to diversify against.

Integrate advanced thermal control features into existing test systems for high-power chips like silicon carbide.

The product development includes integrating advanced thermal control, specifically the proprietary T-Core Active Thermal Control (ATC) solution, into the Eclipse platform. This solution is engineered to manage high-performance computing processors. The T-Core thermal solution delivers up to 3kW power dissipation with ultra-fast temperature ramp rates.

Finance: review Q4 2025 revenue guidance of $122 million ± $7 million against current product pipeline milestones by next Tuesday.

Cohu, Inc. (COHU) - Ansoff Matrix: Diversification

You're looking at how Cohu, Inc. can move beyond its core semiconductor testing and inspection business, which is smart because even with Q3 2025 revenue hitting $126.2 million, relying solely on one cyclical industry carries risk. The strategy here is pure diversification, taking existing tech or cash and pushing it into new markets or new business models.

The Tignis acquisition, completed January 7, 2025, is the first real-world step in this direction, even though its initial target was the $2.6 billion semiconductor process control market. This move, funded by cash on hand, brings AI/ML expertise that can absolutely be repurposed. Honestly, the key is how you deploy that newly acquired intellectual property.

For instance, integrating the Tignis AI-driven process monitoring software into non-semiconductor industrial IoT sectors is a clear diversification play. Think about applying the PAICe Monitor anomaly detection platform to, say, complex chemical processing or aerospace manufacturing lines. This leverages the technology Cohu just bought without waiting for the next semiconductor upcycle. It's about finding new revenue streams for proven tech.

Developing new inspection tools specifically for the rapidly accelerating AI data center markets beyond High Bandwidth Memory (HBM) is a necessary evolution, not a total diversification, but it broadens the product application within a high-growth adjacent space. Cohu noted securing new business wins in Q3 2025, including an order for DiamondX, showing they are actively pushing new products into the market, even if the primary focus remains on silicon.

The idea to use the $209.4 million cash and investments balance-which was the figure at the end of Q2 2025-to acquire a company in the medical device testing space is a classic diversification move. It swaps capital for a foothold in a less volatile, highly regulated industry. To be fair, by the end of Q3 2025, cash and investments had settled at $198.2 million after funding operations and the Tignis deal, which cost a reported $34.9 million cash payment on January 7, 2025. Still, that leaves substantial liquidity for a strategic bolt-on acquisition in a new vertical.

Creating a new software-as-a-service (SaaS) offering for factory-wide yield management using Tignis technology shifts the revenue model. Instead of just selling equipment and consumables (where recurring revenue was 55% of Q3 2025 sales), a true SaaS model offers subscription-based, high-margin recurring revenue. This leverages Tignis's PAICe Maker advanced process control solution to offer a continuous monitoring service, which analysts always like to see.

Here's a quick look at the financial context surrounding these strategic moves:

The opportunities for this diversification quadrant look like this:

• Integrate Tignis software into non-semiconductor industrial IoT.
• Target the medical device testing sector for acquisition.
• Expand AI data center tool focus beyond HBM.
• Transition Tignis analytics to a pure SaaS model.
• Leverage the 55% recurring revenue base for a higher-margin software offering.

If onboarding new industrial IoT clients takes longer than the 13-week cash flow projection for Q4 2025 (where sales are guided between $115 million and $129 million), the SaaS revenue ramp will be critical to cover operating expenses, which were $48 million in Q3.

Finance: draft the pro-forma impact of a $50 million medical device acquisition on the Q4 2025 cash position by next Tuesday.