Shares in semiconductor testing tools firm Aehr Check Techniques (AEHR 4.81%) slumped by 8.6% within the week to Friday morning. The transfer got here because the market digested the information of Chinese language start-up DeepSeek’s launch of its up to date synthetic intelligence (AI) fashions.
Why it issues to Aehr Check Techniques
The information is related to the corporate as a result of buyers hope that development within the AI processor market (Aehr lately signed up its first AI buyer) will assist offset weak point in its core silicon carbide chip market over the close to to medium time period.
DeepSeek’s low-cost AI options threaten U.S. AI firms and, in flip, the businesses that present them with infrastructure and know-how options. This contains the AI processors that want the wafer-level burn-in check tools Aehr presents. Certainly, Aehr desires to develop into this market to assist diversify its income streams.
Aehr’s core market (historically about 90% of its income stream) is the silicon carbide wafer-level check and burn-in tools market. This market is dominated by demand for electrical autos (EVs) and EV charging networks, contributing 70% of market demand.
Sadly, it is a market whose near-term development is challenged by disappointing EV gross sales as a result of ongoing comparatively excessive rates of interest. Certainly, administration already informed buyers on an earnings name this 12 months that “development in silicon carbide gross sales outdoors of China ought to stay difficult earlier than recovering in calendar 2026.”
Picture supply: Getty Photographs.
Aehr Check Techniques in 2025
There is a wholesome bull-and-bear debate over Aehr Check Techniques, and the bull case suffered a setback this week. Nonetheless, it is not clear that the expansion of DeepSeek’s AI will not truly result in a pickup within the adoption of AI functions. That will in all probability be extra of a plus than a unfavourable for AI processor firms and, in flip, Aehr’s efforts to promote into it.
Lee Samaha has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
