BOSTON -- Teradyne Inc.'s outlook remains cloudy in spite of a recent uptick in orders for its automatic test equipment (ATE) from several established and new customers, reportedly including Texas Instruments Inc., according to analysts.
It's been a rough time for Teradyne and other ATE companies. The downturn in the ATE business caused Teradyne earlier this month to reduce its workforce and lower its forecast for the second quarter of 2001.
It will also report its first loss since 1991. In fact, the company's business is down by more than 50% from the peak in the third quarter of 2000 (see June 19 story ).
Teradyne is also reportedly losing market share in the ATE business against the likes of Advantest, LTX, and other vendors, according to analysts.
In the third quarter of 2001, the company's prospects may improve--at least to a small degree. "Although significant uncertainty remains, our primary research suggests Teradyne's third quarter may show sequential uptick in orders," said Timothy M. Arcuri, who tracks the company for Deutsche Banc Alex. Brown in San Francisco.
Teradyne's "visibility is still limited to one month and the company is exhibiting significant caution," the ATE analyst said.
But Teradyne is not benefiting from larger-volume capacity buys for its ATE equipment, Arcuri said. Instead, like most ATE houses, the Boston-based company is plodding along with lower-volume "technology buys," he said.
Teradyne is also entering into a new product cycle, but there is good and bad news for the company. It has received multiple system orders for its new Tiger line of high-end, mixed-signal ATE products from a new customer, reportedly including TI, according to Arcuri. Other customers for the Tiger system include Advanced Micro Devices Inc. and Agere Systems Inc., he said.
Despite the orders, Teradyne may be still losing ground with the Tiger, where there is some "market share loss concerns," he added.