This article first appeared on GuruFocus .
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Record-breaking Q2 2026 results with consolidated revenue of NT$13.503 billion, up 40% QoQ and 110% YoY, driven by strong AI server power applications.
-
Semiconductor testers segment showed robust growth, with Q2 revenue of NT$4.4 billion, up 29% QoQ and doubling YoY, fueled by system-level test (SLT) and photonics demand.
-
Received purchase orders for CPO insertion 3 and insertion 4, with insertion 4 being 100% exclusive to Chroma, indicating strong competitive positioning and future revenue visibility.
-
Solid financial position with net cash, cash and short-term investments of NT$13.68 billion, and improved inventory turnover days from 224 to 477, reflecting better operational efficiency.
-
Upgraded outlook for legacy semiconductor testers, expecting 10-20% growth this year due to increased demand from newcomers and existing makers shifting to high-end AI applications.
-
Strong order momentum for HVDC power testers, with customers blocking orders for the entire year and pushing for monthly shipments, indicating sustained demand.
Negative Points
-
Gross margin declined to 61% in Q2 from 63% in Q1, due to higher costs of components including DRAM, passive components, and ICs.
-
Potential price adjustments of up to 10% may be necessary to offset component cost increases, which could impact customer relationships or demand.
-
CPO technology remains challenging and complex, with customers only placing orders up to insertion 4, limiting long-term visibility beyond this year.
-
SLT testing times for AI chips like MI300 have increased to 6-8 hours from an initial target of 4 hours, potentially straining capacity and turnaround times.
-
The company does not provide clear guidance for the ATE/power business segment for the second half, creating uncertainty for investors.
-
Inventory levels remain high at NT$11.58 billion, reflecting preparation for future demand but also posing a risk if demand softens.
Q & A Highlights
-
Warning! GuruFocus has detected 2 Warning Sign with TPE:2360.
-
Is TPE:2360 fairly valued? Test your thesis with our free DCF calculator.
Q: Can you provide an update on the progress of HVDC-related power testers, particularly regarding shipment volumes and order momentum for 400V and 800V systems? A: Jennifer (IR): We have been delivering AI power testers almost every month, with shipments remaining consistent. There is no difference between 400V and 800V testers, and we have been shipping both since day one. Customers have already booked orders for the entire year, and they are not adjusting themthey keep pushing us to deliver more. Our Phase 2 facility, which was not ready last year, is now ramping up to address capacity constraints.
Q: Regarding the SLT (System Level Test) for AI chips like MI450 and Val Rubin, has the testing time increased compared to previous generations, and what is the current demand outlook? A: Jennifer (IR): Yes, testing time has increased significantly. For MI300, which has very high power density, the initial target was 4 hours, but it is now running between 6 to 8 hours. Customers recently revised their order units up by 70%, almost doubling the volume. We are also seeing new demand for CPUs, including from Google, and we have exposure to this growing segment. Deliveries for the new devices start in Q3, with CSC coming in Q4.
Q: Can you give us an update on the CPO (Co-Packaged Optics) business? Have there been any changes versus three months ago regarding orders for insertion 3 and insertion 4? A: Jennifer (IR): The order size has become bigger compared to three months ago. We have already received POs for insertion 3 and insertion 4, which will start contributing from the second half of this year. Insertion 4 is 100% initiated by Chroma with no competitors, while insertion 3 has existing peers, but we have better performance. Due to the complexity of CPO technology, customers have revised their orders upward. Currently, we have engagements with NVIDIA and Marvell, though Marvell is not yet ready as they are adopting different technology.
Q: Regarding the semiconductor testers segment, you mentioned momentum is increasing. Does this mean growth versus your initial expectations or just quarter-over-quarter growth? A: Jennifer (IR): The growth rate in Q2 increased compared to Q1, and this momentum will continue to increase in the second half. We are giving clear guidance that the second half will outperform the first half, driven by system-level testers for AI, HPC, and ASIC, as well as photonics from optical communication and CPO.
Q: On the mature or legacy semi-testing business, you were previously conservative. Has the demand outlook changed for this year? A: Jennifer (IR): Initially, we guided that legacy FT would be flat compared to last year. However, demand has increased, especially starting from Q2. This is because some legacy makers are shifting to high-end AI applications, and newcomers are entering the market and need to buy new tools. We now expect legacy to increase by 10% to 20% this year.
Q: Regarding the component cost increase that is a headwind for gross margin, is there a timeline for when the price hike will become effective? A: Lawrence Wu (CFO): The price increase could happen this year, very likely, with a potential increase of around 10%. Jennifer (IR) added that we cannot pass on the cost increase for current orders, especially since we need to prepare materials by carrying forward, but for new products, we can definitely reflect the price adjustment.
Q: Can you provide an update on the SLT (System Level Test) business for AI chips? Is the testing time becoming longer, and what is the demand outlook? A: Jennifer (IR): Yes, testing time has increased. For MI300, which is very challenging with high power density, the initial target was 4 hours, but it is now running between 6 to 8 hours. Customers recently revised their orders up by 70%, almost doubling the volume. We are also seeing new demand for CPUs, including from Google, and we have exposure to this growing segment. Deliveries for the new devices start in Q3, with CSC coming in Q4.
Q: Regarding the analytics handler business, when should we expect this business to see more meaningful revenue contribution? A: Jennifer (IR): It should contribute this year, but for the last ramp, it will likely take until next year to see a significant contribution.
Q: Regarding the ESF testers, you mentioned the second quarter included some battery revenue. How should we think about the rest of the year? A: Jennifer (IR): The pattern may not be similar to last time because we see battery sales demand continuing to increase. Orders are piling up, and we have more orders now than we did at the beginning of the year. It is hard to give specific guidance on which months will be strong, but you will see the increase very soon.
Q: Regarding the SLT handler for AI chips, what is the progress on that product? A: Jennifer (IR): It is doing very well. This is the first time we don't need to do a big box, and we are confident that the next customer will adopt it.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
