Shares in semiconductor test equipment company Aehr Test Systems (AEHR -3.92%) rose by 12.5% in the week to Friday. It's been a good week for semiconductor stocks in general, and a good week for Aehr's probable new customers as well.
Aehr Test Systems is in an unusual position in 2025
You can usually get a good sense of where a small company is headed by examining its customers' spending plans, and that's certainly the case with Aehr. Unfortunately, it's a lot harder to read the tea leaves this year. Traditionally, its largest customer is ON Semiconductor, to which Aehr sells silicon carbide wafer-level burn-in (SiC WLBI) solutions.
For reference, SiC WLBI sales accounted for 90% of Aehr's business in 2024. Still, as disclosed on the recent fiscal third quarter 2025 earnings call, "this year it's tracking to less than 40%, with artificial intelligence (AI) processors burn-in representing over 35%."
ON Semiconductor and other SiC companies are suffering this year due to their focus on the automotive electric vehicle (EV) market.
Aehr's new customers
Aehr has diversified into other markets, attracting new customers in turn. CEO Gayn Erickson disclosed that Aehr had four customers representing 10% of its revenue in the third quarter. Assuming ON Semiconductor is the customer in SiC WLBI, this leaves three other customers: two in separate AI processor markets and one in the gallium nitride (GaN) WLBI market.
Image source: Getty Images.
While these three customers aren't named, they might be names like Nvidia or one of the hyperscalers in AI. Meanwhile, a company like Navitas Semiconductor (which announced a significant deal with Nvidia recently) could be the GaN customer. Moreover, Nvidia's earnings report this week confirmed the AI market remains in a growth trajectory.
In short, investors bid up the stock on positive news flow from customers in its end markets.
