Advantest Corporation (kabushik (NYSE:ATE)

Consolidated Statements of Operations

Years ended March 31, 2013, 2014 and 2015

Management Discussion and Analysis

Net Sales

Advantest’s net sales increased by ¥51,451 million, or 46.0%, compared with fiscal 2013, to ¥163,329 million in fiscal 2014. This was primarily as a result of engaging in sales promotions for non-memory test systems for which demand growth has been particularly strong, as well as expanding its customer base across all business segments. It is estimated that the fluctuations in exchange rates during fiscal 2014 contributed to an increase of Advantest’s net sales by ¥9,745 million in fiscal 2014.

The following is a discussion of net sales for Advantest’s Semiconductor and Component Test System, Mechatronics System and Services, Support and Others Segments. Net sales amounts discussed include intercompany sales between segments.

Semiconductor and Component Test System Segment

In fiscal 2014, net sales of Advantest’s Semiconductor and Component Test System Segment accounted for 66.3% of total net sales. Net sales of Advantest’s Semiconductor and Component Test System Segment for fiscal 2014 increased by ¥35,303 million, or 48.3%, compared with fiscal 2013, to ¥108,320 million. It is estimated that fluctuations in exchange rates during fiscal 2014 contributed to an increase of Advantest’s net sales in its Semiconductor and Component Test System Segment by ¥7,079 million.

Net sales of test systems for non-memory semiconductors in fiscal 2014 increased by ¥36,705 million, or 74.0%, compared with fiscal 2013 to ¥86,319 million. This increase was mainly due to demand for non-memory test system being strong throughout the period, driven by robust sales of new high-end smartphones and by expansion of LTE base station infrastructure in China and the growth of the Chinese LTE smartphone market.

Net sales of test systems for memory semiconductors in fiscal 2014 decreased by ¥1,402 million, or 6.0%, compared with fiscal 2013 to ¥22,001 million. This decrease was mainly due to significant constraints in capital investments by Advantest’s major customers.

 
Mechatronics System Segment

Net sales of the Mechatronics System Segment including test handlers, device interfaces and business related to nano-technology increased by ¥13,363 million, or 89.2%, compared to fiscal 2013 to ¥28,347 million in fiscal 2014. This increase was mainly because nanotechnology business generated higher profits and net sales by capturing increasing demand associated with miniaturization of semiconductors and 3D chip architectures, and also because demand for device interfaces and test handlers that is closely correlated with the tester market also grew in connection with increased demand for semiconductor test systems.

Services, Support and Other Segment

Net sales of the Services, Support and Other Segment increased by ¥2,601 million, or 10.8%, compared with fiscal 2013 to ¥26,752 million in fiscal 2014, mainly due to efforts to improve the profitability of the field services business generated positive results, including an increased number of annual maintenance contracts, and the newly developed and launched SSD (solid state drive) test system, developed in anticipation of strong growth in the SSD market, contributing to net sales starting in fiscal 2014. The main businesses in the Services, Support and Others Segment were maintenance services, leasing and rentals and new businesses.

Geographic Markets

Advantest experienced an increase of 46.0% in net sales in fiscal 2014, which was primarily due to increase in sales in the Americas, Taiwan and China.

Net sales in Japan increased by ¥899 million, or 7.4%, compared with fiscal 2013 to ¥13,120 million in fiscal 2014. This increase was mainly due to a strong demand for non-memory test systems.

Net sales in Asia (excluding Japan) increased by ¥31,777 million, or 38.9%, compared with fiscal 2013 to ¥113,438 million in fiscal 2014. Net sales in Korea decreased by ¥2,698 million, or 8.7% compared with fiscal 2013. This decrease was mainly due to the significant constraints in capital investments by Advantest’s major customers. Net sales in Taiwan increased by ¥22,613 million, or 67.8% compared with fiscal 2013. Net sales in China and the rest of Asia (excluding Japan, Taiwan and Korea) increased by ¥11,862 million, or 68.5%, compared with fiscal 2013. The increase in sales in Taiwan and China were mainly due to increase in sales to chipmakers related to smartphones, many of which are in Taiwan and China. It is estimated that fluctuations in exchange rates during fiscal 2014 contributed to an increase of Advantest’s net sales in Asia by approximately ¥6,528 million.

Net sales in the Americas increased by ¥16,975 million compared with fiscal 2013 to ¥27,695 million in fiscal 2014. This increase was mainly due to increase in sales to chipmakers related to smartphones, many of which are in the Americas. It is estimated that fluctuations in exchange rates during fiscal 2014 contributed to an increase of Advantest’s net sales in the Americas by approximately ¥1,746 million, primarily due to the appreciation of the U.S. dollar against the Japanese yen.

Net sales in Europe increased by ¥1,800 million compared to fiscal 2013 to ¥9,076 million in fiscal 2014. This increase was mainly due to a strong demand for non-memory test systems. It is estimated that fluctuations in exchange rates during fiscal 2014 contributed to an increase of Advantest’s net sales in Europe by approximately ¥855 million.

Advantest’s overseas sales as a percentage of total sales was 92.0% and 89.1% for fiscal 2014 and 2013, respectively.

Net Income (Loss)

As a result of the foregoing, in fiscal 2014, Advantest’s net income improved by ¥48,488 million compared to fiscal 2013, resulting in an income of ¥12,948 million.

TOKYO, JAPAN--(Marketwired - Mar 16, 2015) - Leading semiconductor test equipment supplier Advantest Corporation (TSE: 6857) (NYSE: ATE) has received its first order from Shanghai Haier IC, an IC design company in China that develops microcontrollers, embedded memories and radio-frequency (RF) connectivity semiconductors, for a V93000 Smart Scale™ tester in the cost-efficient Dragon configuration with a highly compact A-Class test head, Advantest's smallest. Shanghai Haier IC will use the tester in embedded Flash, RF microcontroller (RF-MCU) and digital probe testing for all of the products on its technology roadmap, most of which rely on embedded Flash memory for applications such as smart grid, smart home, the Internet of Things (IoT), industrial controls and consumer electronics.

"We were looking for a universal platform that could efficiently test our full range of devices while achieving the lowest cost of test and reducing our time to market," said Wang Zhenyu, Operation Director of Shanghai Haier IC. "Advantest's V93000 system has the scalability and flexibility to meet our performance demands while also supporting us in simplifying our supply chain."

"For Smart Meter device testing, our V93000 offers higher multi-site efficiency, faster test times and a lower cost of test than the testers Shanghai Haier IC had used in the past," said Hans-Juergen Wagner, senior vice president of the SoC Business Group at Advantest Corporation. "At the same time, the scalability of the V93000 platform allows them to address the broad test challenges of the IoT market. It's this type of industry-leading performance that has enabled the V93000 to reach record sales in the past year, making it the world's most popular semiconductor test platform."

The modular V93000 platform can be custom-configured to ensure maximum system loading and provide the highest return on investment (ROI) for each user. It features a universal per-pin architecture for highly efficient multi-site testing of digital I/O protocols, non-volatile memories and A/D and D/A converters, making a dedicated analog card obsolete. In addition, the V93000 tester's capabilities can be extended with an entry Port Scale RF configuration, which enables a 40 percent cost-of-test advantage over PXI-based RF solutions.

ADVANTEST CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended March 31, 2012, 2013 and 2014

Management Discussion and Analysis

Revenue

Advantest’s net sales decreased by ¥21,025 million, or 15.8%, compared with fiscal 2012, to ¥111,878 million in fiscal 2013. This was primarily due to significant constraints in capital investments by some of Advantest’s major customers since last summer, particularly for non memory test systems. It is estimated that the fluctuations in exchange rates during fiscal 2013 contributed to an increase of Advantest’s net sales by ¥12,083 million in fiscal 2013.

Net Income

As a result of the foregoing, in fiscal 2012, Advantest’s net income decreased by ¥1,626 million compared to fiscal 2011, to a loss of ¥3,821 million.

TOKYO, JAPAN--(Marketwired - Mar 10, 2014) -  Leading semiconductor test equipment supplier Advantest Corporation (TSE: 6857) (NYSE: ATE) has introduced two new test modules for high-speed, cost-efficient testing of radio-frequency (RF) ICs used in cell phones and wireless LAN devices built to meet 802.11ac and LTE-Advanced mobile communication standards. Both the 32-port WLS32-A module and the 16-port WLS16-A module are fully compatible with Advantest's widely used T2000 platform.

The new modules use vector signal generation (VSG) and vector signal analysis (VSA) software to meet the wide-range modulation challenges presented by today's most advanced portable electronics. Each module offers a wide modulation bandwidth of 80 MHz combined with waveform generator software and modulation analysis software for 802.11ac and LTE-Advanced protocols.

"With these new modules, we are continuing to provide our customers with the versatile test solutions they need to address high-volume wireless communication markets with minimal investment," said Dr. Toshiyuki Okayasu, executive officer and executive vice president, SoC Test Business Group at Advantest Corporation.

The flexible T2000 platform has a scalable architecture that allows customers to change modules and configure the system to test virtually any semiconductor devices. This enables the tester to match both current and future testing requirements, whereas most other testers must be locked into a dedicated equipment configuration. The T2000 family of test systems is used in the world's most advanced semiconductor design and production lines by integrated device manufacturers, fabless companies and outsourced semiconductor assembly and test (OSAT) foundries around the world.

Shipments of Advantest's T2000 WLS32-A and WLS16-A modules are expected to begin in the second quarter of this year.

ADVANTEST CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements—(Continued)

Reportable operating segment information during the years ended March 31, 2011, 2012 and 2013 was as follows: