Semiconductor testing equipment maker Aehr Test Systems (NASDAQ:AEHR) stock is finally waking up through the meme stock route. The dormant micro-cap company has reached an inflection point with its chip testing systems, notably for the Silicon Carbide (SiC) wafer testing. SiC is used in high temperature and high voltage chips made popular by Tesla (NASDAQ:TSLA) using them in the Model 3 in 2019. SiC reduces power loss by 85% over traditional wafers and extends battery life by 25%. These chips are used in electric vehicle (EV) power trains and charging systems. It’s also a benefactor with Silicon Photonics (SiPh) used in high-speed data transmission tested on the wafer level. These three tailwinds including EVs, autonomous driving, and 5G rollout will help drive Aehr to the next level of growth. Prudent high-risk tolerant investors can look to scale into shares of Aehr at opportunistic pullback levels.
Q4 Fiscal 2021 Earnings Release
On July 15, 2021, Aehr reported its fiscal Q4 2021 results for the quarter ending May 2021. The Company reported diluted earnings-per-share (EPS) of $0.04. Revenues were up 102% year-over-year (YoY) to $7.6 million. Bookings rose 113% to $5.5 million. Aehr CEO Gayn Erickson commented:
“This last year we successfully implemented our FOX systems and DiePak Carriers for production test and burn-in of two new applications for 2D/3D sensors for mobile devices. We expect to see follow on orders for system capacity and DiePaks this year and continue to be optimistic about this market space. We are excited about our newest DiePak solution that is capable of handling extremely small and complex devices and very high power-density devices with higher parallelism than available before. With the momentum we are seeing for wafer-level test and burn-in of silicon carbide devices for electric vehicles, silicon photonics devices for data center and 5G infrastructure, and 2D/3D sensors for mobile devices, we are very confident in our growth projections this fiscal year.”
Aehr expects fiscal 2022 revenues to exceed $28 million. This represents a 70% YoY growth rate.
Conference Call Takeaways
Aehr CEO Erickson set the tone:
“We are seeing improvement in multiple test and burn-in segments including silicon carbide, silicon photonics and mobile sensors, each of which we expect will contribute to our expectations for significant revenue growth year-over-year in our new fiscal year.”
He detailed the SiC testing systems:
“Each of these silicon carbide focused FOX-XP systems are configured to test 18 silicon carbide WaferPaks in parallel in the footprint of a typical single wafer test solution by contacting and testing 100% of the devices in parallel on each wafer. Our solution cannot only test 4-inch and 6-inch silicon carbide wafers but can test the future 200-millimeter 8-inch wafers plan to be introduced over the next several years. Aehr provides a unique fully-integrated solution that includes the test systems full wafer WaferPak contactors and the WaferPak Aligners.”
He continued:
“In addition to the very large opportunity for silicon carbide with our lead customer, we’re currently engaged and detailed a very promising discussions with several other major suppliers of silicon carbide, some of which have also publicly indicated plans for significant capacity increases. We expect to move to on-wafer evaluations with multiple potential new customers this fiscal year.”
Supply Chain
CEO Erickson addressed the global chip shortage and supply chain concerns:
“Aehr has a very robust supply chain with world class subcontract manufacturers on subsystems of our test systems, contractors, WaferPak Aligner and DiePak Carrier. These subcontractors have successfully supplied the subsystems for years to Aehr and are very mature. In all cases, these suppliers have capacity well in excess of Aehr historical shipment and the ability to ramp significantly higher as well. We’re very confident in our ability to meet the customer forecasted demand plus considerable upside.”
AEHR Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the playing field for AEHR shares. The weekly rifle chart spiked on massive volume to peak off the $8.68 Fibonacci (fib) level. The weekly rifle chart uptrend is active with the rising 5-period moving average (MA) at $3.51 blasting through the weekly upper Bollinger Bands (BBs) at $4.86. The weekly stochastic is rising towards the 80-band. The daily rifle chart has a stalled uptrend as shares fell under the 5-period MA at $6.51 setting up a channel tightening potentially to the 15-period MA at $4.02. The daily upper BBs sit at $8.11. The daily market structure low (MSL) buy triggered on the breakout through $2.50. The daily stochastic peaked again off the 80-band setting up for another oscillation down or a cross back up.
High risk-tolerant investors can watch for opportunistic pullback levels at the $5.30 fib, $4.52 fib, $3.96 fib, $3.62 fib, and the $3.06 fib. The upside trajectories range from the $7.85 fib up towards the $11.34 fib level.