Cohu, Inc. (COHU): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of Cohu, Inc.'s business segments, and the BCG Matrix is defintely the right tool to map where the company should be allocating its capital in 2025. We see high-growth Stars like Neon HBM Inspection Systems, fueled by a 28% CAGR, sitting alongside reliable Cash Cows that bring in 63% of Q2 2025 sales through high-margin services, but we also have to address the drag from Dogs, evidenced by a $47.7 million GAAP net loss in the first half of 2025. This snapshot shows exactly where Cohu's future growth-like the Tignis AI/ML play-is being funded and where the capital needs to shift now.

Background of Cohu, Inc. (COHU)

You're looking at Cohu, Inc. (COHU), which is a key global technology player in the semiconductor equipment space. Essentially, Cohu, Inc. supplies the gear and services that chipmakers use to test, automate, inspect, and measure their products to ensure they work right and boost manufacturing yield. They serve a broad customer base, including major semiconductor manufacturers and test subcontractors worldwide.

Looking at the financials as of late 2025, the company has been navigating a mixed environment. For the third quarter of fiscal 2025, Cohu, Inc. reported net sales of $126.2 million, which followed a second-quarter GAAP revenue of $107.7 million. While the third quarter showed a GAAP net loss of $4.1 million or $0.09 per share, the second quarter had a larger GAAP loss of $16.9 million. Still, the first nine months of 2025 saw total net sales reach $330.7 million.

The revenue composition is definitely something to watch. In the second quarter of 2025, recurring revenue-which comes from things like service contracts and consumables-made up 63% of total sales. However, for the third quarter, management projected the mix to shift slightly, with recurring revenue expected to be around 53% of sales and systems revenue making up the remaining 47%. This business is heavily tied to end-markets like mobile, automotive, and increasingly, AI data centers, where they are pushing products like the Neon HBM inspection and Eclipse test handler.

Cohu, Inc. (COHU) - BCG Matrix: Stars

You're looking at the Stars quadrant for Cohu, Inc. (COHU), which means we are focusing on the business units that command a high market share in markets that are still expanding rapidly. These are the leaders right now, but they demand significant capital investment to maintain that lead and capture future growth. Honestly, they are the engine for tomorrow's Cash Cows, but today they are cash-neutral because of the reinvestment required.

The core of Cohu, Inc.'s current Star positioning rests on its penetration into high-growth, high-value semiconductor segments, primarily driven by Artificial Intelligence (AI) and High-Performance Computing (HPC) infrastructure.

The key products and segments fitting this profile are:

• Neon HBM Inspection Systems: High-growth AI/HPC market (28% CAGR) with 2025 revenue forecast raised to $10-$11 million.
• Semiconductor Test and Burn-In Sockets: Cohu holds the largest global market share at 19% in a market growing at an estimated 8.7% CAGR.
• ECLIPSE Test Handler: Secured a significant $28 million design-win order for mobile and automotive, shipping through Q4 2025.
• Advanced Automotive/Computing Test: Strategic focus on these high-growth end-markets, driving new system design wins.

Here's a quick look at the numbers supporting this categorization for Cohu, Inc.'s Stars:

The Neon platform is critical because it addresses the inspection and metrology needs for High-Bandwidth Memory (HBM) devices, which are essential for generative AI applications. The HBM market itself is seeing explosive growth, projected at a 28% CAGR through 2030, representing a potential revenue opportunity of more than $100 million for this class of metrology systems. Cohu, Inc. has already shipped its first system configured for HBM4 inspection, setting the stage for 2026 acceleration.

For the Test and Burn-In Sockets business, maintaining a high market share, stated at 19%, in a market expanding at 8.7% CAGR through 2033, solidifies its Star status. This segment benefits from the general need for high-reliability testing in expanding sectors like AI chip testing (49% driver) and test automation (41% driver).

The ECLIPSE Test Handler's success is evidenced by a major commitment from the market. Securing a $28 million design-win order specifically targeting mobile and automotive test, with shipments running through Q4 2025, shows strong current market acceptance in these high-growth areas. Furthermore, the focus on Advanced Automotive/Computing Test is reinforced by other system wins, such as securing roughly $1.7 million in new business, including the first Diamondx order for automotive and industrial testing.

To be fair, these Stars consume cash to fuel their growth, which is why they are not yet Cash Cows. The strategy here is clear: invest to keep that market share.

• Neon HBM revenue estimate raised from $7 million to $10-$11 million for 2025.
• ECLIPSE order shipping completion targeted for Q4 2025.
• Test cell utilization was up 3 points quarter-over-quarter to 75% in Q2 2025.

Cohu, Inc. (COHU) - BCG Matrix: Cash Cows

You're looking at the core engine of Cohu, Inc.'s financial stability here-the Cash Cows. These are the business units or product lines that dominate mature segments, meaning they don't require massive reinvestment to maintain their position, but they churn out serious cash flow for the rest of the company.

For Cohu, Inc., this quadrant is heavily supported by the recurring revenue streams and the established base of their interface products. This stability is what lets the company fund riskier ventures, like those Question Marks we'll discuss later, or service corporate obligations. Honestly, this is the part of the portfolio you want to protect and 'milk' passively.

Here's a quick look at the Q2 2025 numbers that define this cash-generating machine:

The recurring revenue stream is key to the Cash Cow designation. It's stable, high-margin revenue from consumables, service, and software, which accounted for 63% of the total Q2 2025 sales of $107.7 million. That's roughly $68 million flowing in from sources that aren't dependent on landing a big new system order that quarter.

The margin profile supports this cash generation. The Non-GAAP Gross Margin was reported at a consistently strong 44.4% in Q2 2025. While the GAAP Gross Margin was slightly lower at 43.7%, the non-GAAP figure shows the underlying operational profitability when you strip out certain non-cash or one-time items. This margin, combined with controlled operating expenses of $47.7 million in the quarter, translates directly into reliable cash flow.

The Established Test Contactor Portfolio, which includes products like the Ultra-S contactor that just achieved a critical design win, is the physical backbone fueling this recurring revenue. These interface products are consumables that must be replaced, keeping that high-margin revenue flowing. Furthermore, the company's overall financial health, evidenced by the total cash and investments reaching $209.4 million at the end of Q2 2025, offers significant financial stability, allowing Cohu, Inc. to manage its operational needs without stress.

Here are the key characteristics supporting the Cash Cow status:

• Recurring Revenue Stream accounted for 63% of Q2 2025 sales.
• Non-GAAP Gross Margin was a solid 44.4% in Q2 2025.
• Total cash and investments stood at $209.4 million end of Q2 2025.
• Test cell utilization across segments averaged 75% in Q2 2025.
• Secured a $28 million design-win order for Mobile and Automotive test.

To maintain this position, Cohu, Inc. is focusing investments on efficiency, like the ongoing manufacturing transition to Asia and software enhancements for yield. They aren't pouring money into massive new market creation here; they are optimizing the existing high-share assets. Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - BCG Matrix: Dogs

You're looking at the parts of Cohu, Inc. (COHU) that aren't pulling their weight in terms of growth and market share, the classic Dogs in the BCG framework. These are the areas where cash gets tied up without much return, making divestiture or aggressive cost-cutting the usual playbook.

Underutilized Asian Factories: Operational restructuring in 2025 to reduce costs points to low-efficiency, low-return assets.

The company took direct action to address these drag factors. Cohu, Inc. was restructuring underutilized Asian factories, aiming to reduce operating expenses to $48 million in the second quarter of 2025. This target represented a 23% sequential decline from the first quarter of 2025's operating expenses of $69.6 million (GAAP). This move signals that these facilities were consuming cash or operating at low efficiency, a hallmark of a Dog unit.

Legacy Handler Platforms: Older, less differentiated handler models serving mature, low-growth segments with limited competitive advantage.

While Cohu, Inc. is upgrading its ECLIPSE test handler to enhance versatility across mobile, computing, and automotive applications, the underlying segments these older platforms serve are likely mature and low-growth. The shift in revenue mix suggests this. Recurring revenue, which often comes from maintenance and consumables for installed base equipment, was 63% of total revenue in the second quarter of 2025, but it dropped to approximately 55% of net sales in the third quarter of 2025. That sequential drop in the recurring revenue percentage suggests that the newer, high-growth system sales (like those for AI/HBM) are growing faster than the revenue base supported by legacy equipment.

General Consumer Electronics Test: Segments outside of mobile/AI that are subject to the deepest cyclical swings and lower long-term growth.

The strategic focus is clearly on high-growth areas like AI data center markets with the Neon HBM inspection and the Eclipse test handler. Segments outside this advanced focus, which would include general consumer electronics testing, are inherently subject to deeper cyclicality and lower secular growth rates. These are the areas that struggle to generate significant cash flow or market share gains against newer technology demands.

Here's a quick look at the financial reality that supports classifying these areas as Dogs, showing the overall drag on the firm:

Negative GAAP Net Loss: The company posted a GAAP net loss of $47.7 million for the first six months of 2025, indicating a drag on overall profitability.

The bottom line clearly shows the impact of these lower-performing units, even with non-GAAP adjustments showing some operational improvement. For the first six months of fiscal 2025, Cohu, Inc. reported a GAAP net loss of $47.7 million, translating to a loss of $1.02 per share. This contrasts with a GAAP net loss of $30.4 million for the same period in 2024. The persistent GAAP losses suggest that the costs associated with maintaining these lower-share, low-growth assets, even after restructuring efforts, continue to outweigh their contribution. The third quarter 2025 GAAP loss was $4.1 million, bringing the nine-month total loss to $51.8 million.

These Dogs represent capital that could be better deployed elsewhere. Consider the following implications:

• Avoidance of expensive turn-around plans for these specific assets.
• Prime candidates for divestiture to free up trapped capital.
• Cash is being consumed by restructuring efforts, not just operations.
• The $47.7 million six-month GAAP loss is a direct measure of the overall drag.

Finance: draft a list of assets/product lines associated with the Q1 restructuring charge by next Tuesday.

Cohu, Inc. (COHU) - BCG Matrix: Question Marks

You're looking at the new ventures Cohu, Inc. (COHU) is funding that are in hot, growing markets but haven't captured significant market share yet. These are the cash consumers right now, but they hold the potential to become tomorrow's Stars. Honestly, it's a classic high-risk, high-reward setup for these specific business units.

The Q3 2025 results show the company is still investing heavily, reporting nine months of 2025 net sales of $330.7 million against a GAAP loss of $51.8 million. The cash position, while solid with $198.2 million in cash and investments at the end of Q3 2025, is being deployed to build share in these areas.

Tignis AI/ML Software

The acquisition of Tignis, Inc., finalized on January 7, 2025, positions Cohu, Inc. (COHU) directly into the artificial intelligence (AI) process control and analytics-based monitoring software space. This market is definitely growing rapidly, estimated to be worth about $2.6 billion for semiconductor process control. Because this is a new software offering integrated post-acquisition, its initial market share contribution to the overall revenue of $126.25 million in Q3 2025 is likely small, meaning it consumes cash for integration and market penetration efforts.

• Acquisition completed on January 7, 2025.
• Target market size estimated at $2.6 billion.
• Strategy focuses on expanding analytics offerings.

Silicon Carbide (SiC) Test Systems

Cohu, Inc. (COHU) is making a calculated entry into the high-growth power semiconductor market with its SiC test systems. The broader SiC power market was projected to be approximately $2.2 billion in 2024, carrying a 25% CAGR through 2029. This segment represents a specific $50 million market opportunity for Cohu, Inc. (COHU) in this equipment category. The low market share is evidenced by securing only the first system order from a customer in India for SiC test during Q2 2025. This initial order is a key indicator of low current share but high growth potential in a specific niche.

New Eclipse Handler Model for Subcontractors

The introduction of a new Eclipse handler model is explicitly designed for share expansion at test subcontractors. While the Eclipse platform has a history, this new iteration requires investment to displace incumbents in the subcontractor space. A concrete measure of early success, or at least significant design-in activity, was the $28 million design-win order secured in Q2 2025 for the Eclipse handler, though this revenue will ship over multiple quarters in 2025. This large, multi-quarter booking represents the investment needed to gain traction against established competitors.

Expansion into New Geographies

Geographic expansion, specifically into India, is another area consuming capital for sales and support infrastructure before generating substantial returns. Cohu, Inc. (COHU) announced the successful sale of its first system in India during the second quarter of 2025. This initial sale, which also happened to be for SiC testing, signals the start of building a market presence in a new region, which inherently requires upfront investment in local capabilities to build market share over time.

Here's a quick look at the market context and initial financial markers for these Question Marks:

The company's Q4 2025 revenue guidance is set around ~$122 million $\pm$ $7 million. To convert these Question Marks to Stars, Cohu, Inc. (COHU) must rapidly increase the market share captured by these new initiatives, likely requiring continued heavy investment from the existing cash reserves. Finance: draft 13-week cash view by Friday.