Cohu, Inc. (COHU): Business Model Canvas [Dec-2025 Updated]

You're digging into Cohu, Inc.'s core engine right now, looking for the definitive late-2025 snapshot of how they actually make money, so I've mapped out their entire operation across the nine building blocks of the Business Model Canvas. Honestly, the numbers from Q3 2025 tell a clear story: with net sales hitting $126.2 million and nearly 55% of that coming from stable, recurring sources like service and consumables, their strategy is clearly pivoting toward high-value recurring streams alongside system sales for advanced packaging and AI chips. This breakdown shows you exactly where their $198.2 million in cash and investments sits relative to their R&D spend and their massive installed base of nearly 25,000 systems. Dive into the table below to see the precise partnerships, customer segments, and cost structure driving this complex semiconductor equipment business.

Cohu, Inc. (COHU) - Canvas Business Model: Key Partnerships

You're looking at the structure Cohu, Inc. uses to get its test, automation, and analytics solutions into the semiconductor manufacturing process. These external relationships are crucial for both product development and market reach.

Integration partners for AI-driven process control software (Tignis)

Cohu, Inc. completed the acquisition of Tignis, Inc. on January 7, 2025. This was a fiscal 2025 event. The terms of the transaction were not disclosed, but the cash payment to acquire Tignis, Inc. was $34.9 million, net of cash received. Cohu, Inc. aims to expand its analytics offerings into the semiconductor process control market, which Tignis's PAICe Monitor and PAICe Maker solutions target, an estimated market size of $2.6 billion. Cohu, Inc. also secured new customers for Tignis software demonstrations in the first quarter of fiscal 2025. The integration adds advanced analytics to Cohu, Inc.'s DI-Core software.

Test subcontractors for shared market expansion (e.g., Eclipse handler)

Cohu, Inc. is actively targeting share expansion at test subcontractors with the introduction of a new Eclipse handler model. The Eclipse platform was selected by a leading U.S.-based semiconductor manufacturer & foundry services company for production testing of next-generation processor devices. The Eclipse handler delivers scalable performance for testing a wide range of semiconductors. The T-Core Active Thermal Control solution within the platform delivers up to 3kW power dissipation. The Eclipse XT variant offers throughput up to 12,000 UPH and an optional plunge force of 500 kgf.

Global network of third-party sales representatives and distributors

Cohu, Inc. markets its products globally using a combination of its direct sales force and independent sales representatives. The company's ability to service these channels is reflected in its recurring revenue stream, which represented 65% of net sales in fiscal 2024. For the first six months of 2025, recurring revenue was 63% of total revenue. Cohu, Inc. secured a $28 million design-win order in the second quarter of fiscal 2025 from a customer serving mobile and automotive end-markets.

The reliance on major customers is a factor in the sales channel strategy.

Technology partners for advanced component development

Cohu, Inc. works closely with customers to improve existing products and develop new ones. Research and development expense was $84.8 million in fiscal 2024. The focus on advanced testing, including for High Bandwidth Memory (HBM) inspection systems, shows development alignment with next-generation components. The company landed multiple design-wins and customer expansions with its testers, handlers, and interface products in the first quarter of fiscal 2025.

Strategic suppliers for critical semiconductor manufacturing components

The operational stability of Cohu, Inc. depends on its supply chain, as failure of sole source contract manufacturers or raw material providers is a noted risk factor. The company's current ratio stood at 4.39 as of late 2025, indicating short-term liquidity to manage component procurement. Total cash and investments at the end of the third quarter of 2025 were $198.2 million.

Key elements of the recurring revenue stream, which was 63% of sales in Q2 2025, rely on ongoing parts and services partnerships:

• Interface products
• Spares and kits
• DI-Core software
• Services

The third quarter 2025 net sales were $126.2 million, with recurring revenue accounting for approximately 55% of that quarter's sales.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Canvas Business Model: Key Activities

You're looking at the core engine of Cohu, Inc. (COHU) as of late 2025, which is all about turning complex semiconductor challenges into reliable, high-yield manufacturing steps. The Key Activities are where the capital and intellectual property get put to work, day in and day out.

Research and development (R&D) of new test and inspection platforms

Investment in R&D is a constant here, funding the next generation of yield-enhancing tools. For the full fiscal year 2024, Cohu, Inc. reported total research and development expense of $84.8 million. Looking into 2025, the first quarter saw R&D expense at $54.5 million, showing continued, significant investment in the product roadmap, even amid cyclical equipment sales fluctuations.

Manufacturing and assembly of semiconductor handling equipment

This activity covers the physical build of the test and handling systems. While direct manufacturing cost isn't isolated, the output is reflected in the top line. For the second quarter of 2025, net sales reached $107.7 million, with a non-GAAP gross margin reported at 44.4%. This margin reflects the cost of goods sold associated with manufacturing and assembly activities.

Global field service and support for installed base of ~25,000 machines

Supporting the installed base is a major activity driving stability. This is evident in the recurring revenue stream, which is a critical component of the business model. In the second quarter of 2025, recurring revenue-which includes services, spares, and kits-accounted for approximately 63% of total net sales. This high percentage underscores the scale of the global field service operation supporting the installed base, which management has historically referenced in the range of ~25,000 machines.

Software development for yield optimization (DI-Core, Tignis AI)

Developing and integrating advanced software is a key differentiator, especially post-acquisition. Cohu, Inc. completed the acquisition of Tignis, Inc. on January 7, 2025, with a cash payment of $34.9 million, net of cash received. This move was specifically to deepen expertise in data science and add advanced analytics to the existing DI-Core software suite. Tignis's solutions target the estimated $2.6 billion semiconductor process control market. The activity is already showing traction, as Cohu, Inc. signed new customers for Tignis software demonstrations in the first quarter of 2025.

Securing high-value, multi-year design wins

Winning new platform qualifications is essential for future equipment revenue. The company secured a significant design-win order in the second quarter of 2025, valued at $28 million, specifically for Mobile and Automotive test applications, with shipments scheduled through the fourth quarter of 2025. Furthermore, the focus on High Bandwidth Memory (HBM) inspection systems represents a substantial future opportunity; the HBM market itself is projected to represent an opportunity for more than $100 million in revenue for Cohu, Inc.'s class of inspection metrology systems.

Here's a quick look at the recent financial metrics tied to these activities:

The software development activity is directly aimed at capturing a piece of the larger market, as shown by the Tignis target market size:

• Targeted Semiconductor Process Control Market Size: $2.6 billion
• HBM Inspection Metrology Revenue Opportunity: More than $100 million for Cohu, Inc.
• Cash and Investments on Hand: $209.4 million as of end of Q2 2025
• Q1 2025 Share Repurchase Amount: Approximately $8.6 million

The success of these activities is measured not just in sales, but in operational efficiency improvements, like the 3-point quarter-over-quarter increase in test cell utilization to 75% in the second quarter of 2025.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Canvas Business Model: Key Resources

You're looking at the core assets Cohu, Inc. relies on to compete in the semiconductor equipment space. These aren't just line items; they are the actual engines driving their recurring revenue and technological differentiation. Here's the breakdown of what Cohu owns and controls as of late 2025.

Proprietary Technology and Intellectual Property

The value here is locked in the specialized hardware and software that solves specific, high-precision manufacturing problems for chipmakers. Cohu, Inc. protects its lead through patents covering its core inspection and thermal management systems.

• Proprietary vision technology (NV-Core): This is Cohu, Inc.'s unique inspection engine, enabling capabilities like 3D Flex for 3-dimensional topographic inspection, sidewall micro-crack detection, and true infrared inspection for sub-surface defects [cite: 7, 9, 12 from first search].
• Thermal Control: Key handler systems utilize unique T-Core active thermal control (ATC) technology to dynamically manage device heat during testing, which helps minimize test time and yield loss [cite: 9 from third search].
• Patents: The NV-Core technology itself is a key asset, with specific algorithms and hardware architectures protected, such as the one underpinning the Krypton inspection platform [cite: 6 from first search].

Global Installed Base and Operational Scale

A large installed base is a direct driver of stable, recurring revenue through consumables, spares, and service contracts. The sheer volume of deployed equipment gives Cohu, Inc. a significant recurring revenue stream.

The global installed base of test and inspection systems is substantial, providing a foundation for service revenue. As of early 2025, the Equipment Installed Base was reported at ~24,800 units [cite: 4 from third search]. This base supports the recurring revenue model, which accounted for 55% of total Q3 2025 sales, totaling approximately $69.42 million for that quarter ($126.2 million total revenue) [cite: 2 from first search].

Data Analytics and AI Software Platform

Cohu, Inc. has strategically bolstered its software capabilities through acquisition, integrating advanced AI to optimize equipment performance across the factory floor, not just within its own machines.

The company's data analytics offering is centered on two primary software suites:

• DI-Core Data Intelligence System: This is Cohu, Inc.'s core platform, now enhanced by the acquisition of Tignis [cite: 2 from second search, 10 from second search].
• Tignis Analytics Solution: Acquired to deepen expertise, Tignis provides AI process control and analytics-based monitoring software, including the PAICe Monitor (AI-driven anomaly detection) and PAICe Maker (AI-driven advanced process control) solutions [cite: 3 from second search, 7 from second search, 10 from second search].

Financial Strength

Liquidity is a key resource, allowing for strategic moves like acquisitions and capital deployment without immediate strain. The balance sheet reflects a solid cash position following recent financing activities.

Cash and investments totaled $198.2 million at the end of the third quarter of 2025 [cite: 2 from first search]. This was supplemented by the early Q4 2025 completion of an upsized convertible notes offering, which raised gross proceeds of $287.5 million [cite: 1 from first search]. The total debt remains relatively low at $18 million as of Q3 2025 [cite: 1 from first search].

Human Capital

The specialized nature of semiconductor testing requires deep, specific knowledge. The engineering and technical talent pool represents the human capital necessary to develop, deploy, and service these complex systems.

As of September 30, 2025, Cohu, Inc. employed 3,024 total people [cite: 1 from second search]. This pool is responsible for maintaining the technological edge in areas like high-speed handling, thermal management, and AI software integration.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Canvas Business Model: Value Propositions

You're looking at the core reasons why semiconductor firms buy equipment and services from Cohu, Inc. It's about making their complex chip production cheaper and faster. Here are the hard numbers supporting those claims as of late 2025.

Optimized semiconductor manufacturing yield and productivity

Cohu, Inc. supplies equipment and services designed to optimize yield and productivity across the semiconductor manufacturing process. The company supports a global installed base of nearly 25,000 machines spread across over 100 customers. The focus on operational excellence is a key value driver, reflected in the reported Non-GAAP Gross Margin of 44.4% for the second quarter of 2025.

High-speed, high-accuracy inspection for advanced packaging and HBM

The value proposition here centers on enabling the testing of next-generation components, particularly High Bandwidth Memory (HBM). Cohu, Inc. is accelerating in AI data center markets with its Neon HBM inspection platform. Revenue from the HBM inspection system was guided up to $8 million as customer demand strengthened in the second quarter of 2025.

Thermal solutions for complex, high-power device testing

The Eclipse test handler is a core offering providing advanced thermal control. This platform was selected by a major U.S. semiconductor manufacturer for production testing of next-generation processors. In the second quarter of 2025, Cohu, Inc. secured a significant $28 million design-win order for its Eclipse handler, serving mobile and automotive end-markets.

Recurring revenue stability through consumables and service contracts

Stability comes from repeat business, which includes consumables, service contracts, and software subscriptions like DI-Core data analytics. This stream proved resilient, accounting for 63% of total revenue in the second quarter of 2025. Even as system sales recovered, recurring revenue was expected to remain near this share, approximately 63%, in the third quarter of 2025. For the third quarter of 2025, net sales were reported at $126.2 million, with approximately 55% of that being recurring revenue.

Accelerated time-to-market for new semiconductor devices

Cohu, Inc.'s mission includes enabling customers to deliver innovative and high-quality products to market by helping them reduce costs and accelerate time-to-market. This is supported by the company's investment in R&D, which totaled $84.8 million in fiscal 2024. The company's solutions are designed to enhance the efficiency and reliability of semiconductor manufacturing processes.

Here's a quick look at the recent top-line performance underpinning these value drivers:

The company's cash and investments at the end of the third quarter of 2025 were $198.2 million. Cohu, Inc. provided sales guidance for the fourth quarter of 2025 in the range of $122 million, plus or minus $7 million.

Cohu, Inc. (COHU) - Canvas Business Model: Customer Relationships

You're in the semiconductor equipment space, so you know that relationships aren't just nice-to-have; they dictate the flow of capital equipment orders and the stability of the aftermarket business. Cohu, Inc. (COHU) focuses heavily on embedding itself within the workflows of its major clients.

Dedicated account management for large, global Integrated Device Manufacturers (IDMs)

Cohu, Inc. (COHU) serves semiconductor integrated device manufacturers (IDMs), fabless design houses, and test subcontractors globally, with sales and service offices in Asia across Singapore, Malaysia, Thailand, Philippines, Taiwan, China, South Korea, and Japan. Repeat sales to existing customers represent a significant portion of net sales, and a limited number of customers account for a substantial percentage of consolidated net sales. For instance, in fiscal year 2024, STMicroelectronics comprised 12.0% of consolidated net sales. This concentration necessitates deep, dedicated engagement with these top-tier partners.

Long-term service contracts providing stable, recurring support

The service and aftermarket segment is crucial for buffering the cyclical nature of capital equipment sales. This recurring revenue stream, which includes consumable kits, interface products, and ongoing service contracts, is a key focus area for management. The stability of this revenue is evident in recent quarters:

The goal is to maintain this recurring share near the recent high of 63% as system sales recover. That recurring revenue provides a buffer against swings in capital equipment orders.

Collaborative design-in process for new equipment platforms

Success depends on anticipating market trends, which Cohu, Inc. (COHU) achieves by working closely with its largest customers on product development. This collaboration is critical for ensuring new equipment meets the price, performance, and functionality requirements of advanced semiconductor manufacturing. The tangible result of this close partnership is seen in new business awards; for example, in the second quarter of fiscal 2025, Cohu secured a $28 million design-win order from a customer serving mobile and automotive end-markets.

Technical support and training for complex equipment operation

Supporting complex equipment operation is inherent to the business, especially with advanced solutions like the Tignis software for AI process monitoring demonstrations. The company's focus on optimizing yield and productivity implies a necessary level of post-sale technical engagement. Test cell utilization statistics are a key metric management monitors, with utilization reported as being up a few points across all segments in Q2 2025.

Direct sales and engineering consultation for custom solutions

The sales motion involves more than just transactional equipment delivery; it requires engineering consultation to deliver custom solutions. Cohu landed multiple design-wins with its testers, handlers, inspection systems, and interface products in Q1 2025, indicating a consultative sales approach is necessary to secure these platform integrations. The product portfolio is differentiated and broad, enabling optimized yield and productivity across various customer needs.

• Customers rely on Cohu, Inc. (COHU) for automated test systems, interface products, and inspection metrology solutions.
• New customers were signed in Q1 2025 for AI process monitoring demonstrations of Tignis software.
• The company must attract and retain experienced personnel to support future growth, given the high competition for engineering talent.

Cohu, Inc. (COHU) - Canvas Business Model: Channels

Direct sales force targeting major semiconductor manufacturers globally is supported by a structure that includes key engineering, sales, and administrative personnel located in various international sites. The company markets products worldwide through this direct sales force combined with independent sales representatives. This approach is necessary to remain competitive by maintaining localized customer support and service centers worldwide.

Regional sales offices and field service centers are critical for supporting global sales and services to the semiconductor industry. Cohu, Inc. operates in Asia with sales and service offices in multiple locations.

• North America Locations: San Diego (HQ), Milpitas, Norwood, St. Paul, and Lincoln.
• Europe Locations: Kolbermoor (Germany), Grenoble (France), Agrate (Italy), and La Chaux-de-Fonds (Switzerland).
• Asia Locations: Singapore, Malaysia (Melaka, Penang), Thailand (Bangkok), Philippines (Baguio City, Laguna), Taiwan, China, and Korea.

Select third-party distributors are used for market reach expansion, though the primary model relies on the direct sales force and independent sales representatives. The company outsources manufacturing of many semiconductor automated test equipment products to a contract manufacturing partner, Jabil Circuit, Inc., at its facility in Penang, Malaysia.

Web-based portals are used for customer interaction, including a Customer Portal, Help Center options, and the EducATE Knowledge Center for training. Software updates and technical documentation are accessible through these digital channels.

Direct engagement with test subcontractors for handler sales is evident through specific product wins targeting this segment. For instance, a design-win order of $28,000,000 for the ECLIPSE handler from an existing customer, with $12 million expected in Q3 2025 and $12 million expected in Q4 2025, targets these end-markets. Furthermore, the qualification of the ULTRA-S contactor unlocked approximately $20,000,000 in the precision analog market, which includes sales to subcontractors.

The channel performance and operational scale are reflected in the following 2025 financial and operational metrics:

The company relies on repeat sales to existing customers, though no single customer accounted for 10% or greater of consolidated net sales in Q2 2025. The sales structure supports product lines including Test Handlers, Semiconductor Testers, Interface Solutions, Inspection and Metrology, and the DI-Core Data Intelligence System.

Cohu, Inc. (COHU) - Canvas Business Model: Customer Segments

You're looking at Cohu, Inc.'s customer base as of late 2025, which shows a clear strategic pivot toward high-growth, high-complexity areas like AI and memory, while maintaining foundational support from established sectors.

Cohu, Inc.'s customer base is broadly defined as semiconductor integrated device manufacturers (IDMs), fabless design houses, and test subcontractors throughout the world. The company's recurring revenues, which are more stable, represented about 55% of total revenue for the third quarter of 2025. For context, recurring revenue was 63% of total revenue in the second quarter of 2025.

The expected revenue mix for the third quarter of 2025 was approximately 47% from systems and 53% from recurring revenue. It's important to note that in the second quarter of 2025, no single customer accounted for more than 10% of sales, though STMicroelectronics represented 12.0% of consolidated net sales in 2024.

Global Integrated Device Manufacturers (IDMs)

IDMs form a core part of Cohu, Inc.'s traditional customer base, alongside fabless design houses and test subcontractors. These customers rely on Cohu, Inc.'s equipment for testing and handling their manufactured chips. The company's test cell utilization across all segments saw an increase of three points quarter-over-quarter to reach 75% in the second quarter of 2025.

Large-scale Outsourced Semiconductor Assembly and Test (OSAT) companies

Test subcontractors, which includes OSATs, are a key segment. Cohu, Inc. is targeting share expansion at these subcontractors with the introduction of a new Eclipse handler model. These partners are critical in the outsourced testing and packaging portion of the semiconductor supply chain.

Automotive and industrial semiconductor manufacturers (e.g., Krypton platform focus)

Demand from the automotive segment is a noted area of focus, though recovery was noted as not yet broad-based as of mid-2025, with growth still closely tied to the mobile segment. However, Cohu, Inc. secured a $28 million design-win order from a customer serving mobile and automotive end-markets in Q2 2025, with shipments expected through the fourth quarter of 2025. The company also unlocked new opportunities with the first silicon carbide test system order, which aligns with automotive and industrial needs.

High-Bandwidth Memory (HBM) and AI data center chip producers

This represents a significant strategic growth area, with management explicitly shifting focus toward AI, HBM, and computing market penetration. Cohu, Inc. raised its forecasted revenue from HBM inspection systems for 2025 to between $10 million and $11 million. The company shipped its first system configured for HBM4 inspection, supporting next-generation AI accelerators expected in 2026. The overall HBM market opportunity for this class of inspection metrology systems is estimated to represent more than $100 million in revenue.

Precision analog and power management IC manufacturers

Cohu, Inc. is actively expanding its footprint in precision markets. The company qualified the ULTRA-S contactor for precision analog IC test, which unlocked approximately $20,000,000 in that market segment. This diversification strategy is noted for increasing the resilience of Cohu, Inc.'s revenue base beyond traditional consumer electronics.

The following table summarizes key financial metrics and customer segment highlights as of late 2025 data:

The company's strategic shift is evident in the product wins, such as the Eclipse handler selected for next-generation AI processor devices by a leading U.S. manufacturer. Also, the first system configured for HBM4 inspection was shipped, signaling readiness for future AI accelerator ramps.

You can see the focus on high-value segments is translating into specific design wins, even if the overall revenue recovery isn't fully broad-based yet. Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Canvas Business Model: Cost Structure

The Cost Structure for Cohu, Inc. (COHU) is heavily influenced by the nature of complex semiconductor equipment manufacturing and the ongoing need to fund innovation. You see this reflected in high costs tied directly to production and significant investment in future technology.

High cost of goods sold (COGS) for complex equipment manufacturing is a primary driver. This is evident when looking at the gross margin figures. For the third quarter of fiscal 2025, the GAAP gross margin was reported at 43.8%, meaning COGS represented 56.2% of net sales for that period. Even on a non-GAAP basis, the gross margin for Q3 2025 was 44.1%. This high percentage of revenue consumed by COGS points directly to the expense of materials, labor, and overhead required for building sophisticated test and inspection systems.

Significant R&D investment to maintain technology leadership is non-negotiable in this sector. Cohu, Inc. must spend heavily to keep pace with advanced semiconductor nodes. For the first quarter of 2025, Research and Development expense totaled $23,152 thousand. For context, R&D in the full fiscal year 2024 was $84.8 million.

Regarding Operating expenses, management provided forward-looking guidance that aligns with recent performance. For the third quarter of 2025, operating expenses were projected at about $50 million. The actual reported operating expenses for Q3 2025 were slightly better, coming in at $48 million, which was $2 million lower than guidance, partly due to the timing of R&D material receipts. The projection for Q4 2025 OpEx is also around $50 million. Selling, General, and Administrative (SG&A) for Q1 2025 was $22,336 thousand.

The company also carries costs related to integration and optimization efforts. Amortization of acquired intangible assets, stemming from past deals like the January 7, 2025 acquisition of Tignis, Inc., is a recurring non-cash charge. In the first quarter of 2025, this amortization expense was $30,011 thousand. For comparison, the full fiscal year 2024 amortization was $39.1 million.

Finally, the Costs associated with the 2025 strategic restructuring plan are a specific, discrete cost. Cohu, Inc. initiated this program in February 2025 to lower its cost structure amid an industry downturn. The company expected to incur total pretax charges in the range of $6.1 million to $7.2 million throughout fiscal 2025 related to this plan, primarily for severance and termination benefits.

Here's a quick look at some of these key cost components for recent periods:

These costs are managed through several levers. You can see the focus on managing variable costs through the gross margin, and fixed/semi-fixed costs through the restructuring and OpEx management.

• Restructuring involves consolidating operations in Switzerland and Germany.
• Headcount reductions are planned in the U.S. and Asia as part of the 2025 plan.
• Non-GAAP measures are used by management to exclude items like restructuring costs and amortization for assessing core profitability.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Canvas Business Model: Revenue Streams

You're looking at the revenue engine for Cohu, Inc. (COHU) as of late 2025. The business model clearly leans on a mix of upfront equipment sales and more stable, ongoing service and product revenue. This balance helps smooth out the cyclical nature of capital equipment spending in the semiconductor industry.

The most recent concrete data point is from the third quarter of fiscal 2025. Cohu, Inc. (COHU) Q3 2025 net sales totaled $126.2 million. Of that total, approximately 55% was recurring revenue. This is a slight dip from the 63% recurring mix seen in Q1 and Q2 2025, but the guidance for Q4 2025 suggests a rebound, projecting the recurring mix to move toward ~60%. For context, the non-recurring system sales component in Q3 2025 would represent the remaining ~45% of the total sales.

Here's a quick look at the key financial snapshot from that period:

The revenue streams break down across the following core areas:

• System sales of test handlers, inspection, and metrology equipment. This includes major equipment like the Eclipse test handler, which supports up to 3,000W device power, and the Neon HBM inspection system, which saw repeat orders in Q3 2025.
• Recurring revenue from consumables (test contactors, interface products). This stream benefits from design wins like the Ultra-S contactor in the precision analog market.
• Service and support contracts for the installed base. This contributes to the stable recurring portion of the revenue base.
• Software licensing and subscription fees. This is exemplified by the company signing new customers for demonstrations of Tignis software in Q1 2025.

The AI/data center segment is a clear growth driver for the systems portion, with the 2025 AI/edge/data center-related systems revenue run-rate estimated around ~$40 million, up from near zero in 2024. Finance: draft 13-week cash view by Friday.