Cohu, Inc. (COHU): Marketing Mix Analysis [Dec-2025 Updated]

You're trying to make sense of a cyclical semiconductor player that's actively de-risking its business model, and frankly, the latest numbers from Cohu, Inc. show a clear strategy taking hold. Honestly, when you see their Q3 2025 net sales land at $126.2 million with a 44.1% non-GAAP gross margin, you know the shift toward AI and software-like the Tignis acquisition in January-is paying off. The most compelling data point for me, as an analyst who's seen a few cycles, is that recurring revenue hitting ~55% in Q3 2025, which provides a solid floor under the capital equipment swings; plus, they just secured that crucial first system order in India. Let's dive into the Product, Place, Promotion, and Price mix that's making this transition work, from their high-bandwidth memory inspection tools to how they're pricing their services.

Cohu, Inc. (COHU) - Marketing Mix: Product

You're looking at the core offering of Cohu, Inc. as of late 2025, which is centered on equipment and services that optimize semiconductor manufacturing yield and productivity. This isn't just about selling boxes; it's about high-precision automation and data intelligence in a market that saw Cohu, Inc. post trailing twelve-month revenue ending September 27, 2025, of approximately $424.85 million.

Semiconductor Test Handlers and Core Platforms

The foundation of Cohu, Inc.'s hardware offering remains its diverse line of test handlers, which are essential for moving devices into and out of test sockets with precision. The Eclipse model stands out as a configurable OSAT (Outsourced Semiconductor Assembly and Test) friendly pick-and-place handler, engineered for a broad spectrum of semiconductors, including advanced CPUs and mobile processors.

Here are some concrete specifications you should note for the Eclipse platform:

• Capable of testing up to 16 ICs simultaneously.
• Operates across a temperature range of -55°C to +155°C.
• Achieves a throughput of up to 12,000 units per hour (UPH).
• Its integrated T-Core thermal controller supports device power dissipation up to 3,000W.

The company leverages over 50+ years of semiconductor test expertise in designing these systems.

High-Bandwidth Memory (HBM) Inspection Systems

The pivot toward Artificial Intelligence (AI) infrastructure is clearly reflected in the focus on High-Bandwidth Memory (HBM) inspection, primarily through the Neon platform. This system is architected for inspection and metrology of HBM devices, critical for high-performance computing (HPC) applications.

The financial impact of this segment is growing rapidly. Cohu, Inc. has raised its HBM revenue estimate for the full year 2025 to between $10 million to $11 million, up from near zero in 2024. This is against a backdrop where the total HBM market is expected to hit approximately $23 billion in 2025, with a projected compound annual growth rate (CAGR) of 28% through 2030. The company sees an opportunity for more than $100 million in revenue for this class of inspection metrology systems over time.

The Neon platform is already supporting next-generation technology, having shipped its first system configured for HBM4 inspection, supporting accelerators expected in 2026.

AI Process Control and Analytics Software

To enhance its hardware offering with data intelligence, Cohu, Inc. completed the acquisition of Tignis, Inc. in January 2025. Tignis provides artificial intelligence (AI) process control and analytics-based monitoring software. Honestly, the terms of this transaction were not material to Cohu's financials, which is important context for valuation, but the strategic value is clear: integrating AI software directly into the test workflow.

Interface Products and Analog Testing

Interface products, which connect the handler to the tester, are vital for signal integrity and precision. While the specific ULTRA-S contactor details aren't explicitly quantified here, we see evidence of wins in precision analog testing. For instance, Cohu secured a Diamondx order to support the testing of application-specific analog power integrated circuits for automotive and industrial segments.

The product line also includes handlers like the MT9510 XP / x16, a universal handler that provides full temperature control for packages in extreme conditions, ranging from -55°C to +175°C.

Services and Consumables Revenue

You need to know that a significant portion of Cohu, Inc.'s revenue is designed to be stable, coming from services and consumables. For the third quarter of fiscal year 2025, this recurring revenue accounted for approximately 55% of total net sales of $126.2 million. The guidance for the fourth quarter suggests this mix will move higher, targeting around 60% of sales, often carrying a mid-50s gross margin.

This recurring stream helps buffer the cyclical nature of capital equipment orders. Here's a quick look at the revenue split for Q3 2025:

The non-GAAP gross margin for the quarter, reflecting this mix, settled at 44.1%.

Cohu, Inc. (COHU) - Marketing Mix: Place

Cohu, Inc. (COHU) primarily utilizes a global direct sales channel to bring its test, automation, inspection, and metrology products and services to semiconductor manufacturers.

The distribution network is structured to support major test subcontractors globally, demonstrated by the introduction of the Eclipse handler model, which is specifically described as 'a configurable platform targeting share expansion at test subcontractors.'

Key end-markets driving demand for Cohu, Inc. (COHU) equipment include mobile, automotive, and computing segments.

The company has actively pursued geographical expansion, notably securing its first system order in the new geographical market of India for silicon carbide test during the second quarter of 2025.

The strategic focus on operational efficiency is reflected in an ongoing manufacturing transition, with management initiating the 2025 Restructuring Program to transition certain manufacturing from U.S./Europe locations, such as consolidating operations from La Chaux-de-Fonds, Switzerland, and Kolbermoor, Germany, into other lower cost locations owned by the Company.

This global footprint is supported by engineering investments, such as the 20,000 square foot design center opened in Penang, Malaysia, in June 2024, selected for its strategic proximity to the contract manufacturer and customer base.

The following table summarizes relevant financial and operational metrics from mid-to-late 2025 that reflect the 'Place' strategy:

The direct sales focus and product introductions target specific segments within the semiconductor manufacturing process:

• Mobile and Automotive: Secured a $28 million design-win order in Q2 2025 for the Eclipse handler serving these markets.
• Computing: Management highlighted acceleration in AI data center markets with the Neon HBM inspection and Eclipse test handler in Q3 2025.
• Test Subcontractors: New Eclipse handler model introduced to target share expansion at these entities.
• New Technology/Geography: First system order in India was for silicon carbide test.

The restructuring activities in 2025 are explicitly aimed at optimizing facilities and transitioning manufacturing to lower cost regions, which directly impacts the physical location of production and service delivery.

For example, Q1 2025 CapEx of $11.0 million was driven primarily by the purchase of the Malacca, Malaysia facility for approximately $9.0 million, indicating a commitment to expanding infrastructure in Asia.

Finance: draft 13-week cash view by Friday.

Cohu, Inc. (COHU) - Marketing Mix: Promotion

You're looking at how Cohu, Inc. communicates its value proposition to the market, which is heavily weighted toward financial performance milestones and strategic technology integration as of late 2025.

Investor relations via regular quarterly webcasts and financial releases.

Cohu, Inc. maintains a consistent cadence for communicating with the investment community. You can track their promotional narrative through scheduled releases, such as the fiscal 2025 second quarter results released on July 31, 2025, and the third quarter results released on October 29, 2025. Beyond scheduled earnings, management actively engages at industry events, presenting at the Stifel 2025 Midwest 1x1 Conference on November 6, 2025, and the Baird 2025 Global Industrial Conference on November 11, 2025. These appearances are key channels for delivering promotional messaging about operational execution and future outlook.

Publicizing major design-wins, like the $28 million Q2 2025 order.

A significant promotional point centers on securing large, specific orders. Cohu, Inc. publicized securing a $28 million design-win order during the second quarter of 2025, specifically targeting Mobile and Automotive test segments. This order is structured to ship across multiple quarters, with fulfillment extending through the fourth quarter of 2025. Furthermore, the company also announced $3,500,000 in new customer wins in Q2 across testers, handlers, and inspection systems.

Product launches focused on high-growth areas like AI and precision analog.

Promotion ties directly to product advancement in key growth vectors. For precision analog, Cohu, Inc. highlighted the qualification of the ULTRA-S contactor for precision analog IC test in Q2 2025. In the AI space, the company emphasizes acceleration with the Neon HBM inspection system and the Eclipse test handler, which won production test business for next-gen AI processors. Management estimates that AI/edge/data center-related systems revenue will reach approximately $40 million for the full year 2025, up from near zero in 2024.

Strategic messaging emphasizes ~55% recurring revenue in Q3 2025.

The stability of the recurring revenue stream is a core promotional theme used to balance the cyclical nature of equipment sales. In the third quarter of 2025, recurring revenue accounted for approximately 55% of total net sales of $126.2 million. The forward-looking promotional guidance suggests this mix will continue to strengthen, forecasting the recurring revenue mix to rise to approximately 60% of total revenue in the fourth quarter of 2025.

Leveraging the Tignis acquisition to promote AI-driven software solutions.

The acquisition of Tignis, Inc., completed on January 7, 2025, is leveraged to promote Cohu, Inc.'s software and analytics capabilities. Tignis provides AI process control and analytics-based monitoring software, specifically the PAICe Monitor and PAICe Maker solutions. This move is promoted as Cohu, Inc.'s entry into the estimated $2.6 billion semiconductor process control market, deepening expertise in data science and adding advanced analytics to its DI-Core software platform.

Here's a quick look at the financial context supporting these promotional narratives:

The promotional focus on technology is supported by product advancements, as shown by the following:

• AI/Compute Exposure: Estimated AI-related system revenue of $40 million for 2025.
• Tignis Market Target: The acquired software targets the $2.6 billion process control market.
• Q2 Design-Win Value: The $28 million order is shipping through Q4'25.
• Q1 Recurring Growth: Recurring orders increased 28% quarter-over-quarter in Q1 2025.

Cohu, Inc. (COHU) - Marketing Mix: Price

You're looking at the realized pricing outcomes for Cohu, Inc. as of late 2025. The market's willingness to pay translated directly into the top line, showing the immediate effect of your pricing structure. Specifically, Q3 2025 net sales hit $126.2 million. That revenue supported a Non-GAAP gross margin of 44.1% for the same period. Honestly, maintaining that margin while navigating the capital equipment cycle is the core challenge here.

The pricing model Cohu, Inc. employs is designed to balance the lumpy, high-cost nature of capital equipment sales with the more predictable revenue from consumables and services. This strategy aims to smooth out the revenue curve and provide a more stable base for operational planning. Here's a quick view of how the revenue mix reflects this strategy:

The focus on consumables, which Cohu, Inc. often links to recurring revenue, shows a clear trend. In Q2 2025, recurring revenue was 63% of total sales, and for Q3 2025, it was 55%. Management is forecasting this recurring portion to increase again in Q4 2025 to about 60% of total revenue, suggesting that the consumable/service pricing component is gaining relative traction, which helps offset the variability in capital equipment pricing.

Looking ahead, the near-term pricing expectation is set by the guidance for the final quarter. Cohu, Inc. provided Q4 2025 sales guidance of $122 million +/- $7 million. This range suggests a slight sequential step-down from the $126.2 million achieved in Q3, which management attributes to systems revenue, but the projected Q4 Non-GAAP gross margin is slightly higher at approximately 45%. This implies pricing discipline is expected to hold even with the expected revenue mix shift.

To support growth initiatives and maintain strategic flexibility, Cohu, Inc. adjusted its capital structure through debt pricing in September 2025. This move impacts the overall cost of capital, which underpins future pricing decisions for equipment. Key details on this pricing action include:

• Aggregate principal amount of notes priced: $260.0 million.
• Interest rate on the notes: 1.50% per year.
• Maturity date: January 15, 2031.
• Initial conversion premium: Approximately 32.50% over the September 24, 2025, closing price of $20.51.
• Effective conversion price capped at a 100% premium, up to a stock price of $41.02 per share, via capped call transactions.

Finance: draft 13-week cash view by Friday.