[Company analysis] Advantest Corporation (アドバンテスト)

「Advantest Corporation (アドバンテスト)」is a major semiconductor manufacturing equipment company, and it has especially the world's highest level in measuring and testing equipment. In particular, they have the world's top share in various automatic test equipment fields including memory testers. 「Fujitsu(富士通)」, the top class Japanese IT company, owns 10% of the total shares of「Advantest」. The number of consolidated employees is approximately 4,457.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Advantest Corporation
Company name (Japanese)	アドバンテスト
Date of establishment	1954
Headquarters location	〒100-0005 東京都千代田区丸の内1丁目6番2号
Capital	32,400
Consolidated sales	282,456
Consolidated operating profit	64,662
Consolidated total assets	304,580
Consolidated capital	198,731
Capital adequacy ratio	65.2%
Consolidated number of employees	4,457

 

 

 

2. Summary and Features

 
In the past, Japan was a major semiconductor manufacturing country. But generalization of IC semiconductors let them move manufacturing facilities to overseas countries where production costs are relatively low. Therefore, while semiconductor production in Japan is declining, but Japanese semiconductor manufacturing equipment company still has the world's top sales. The representative companies are「Advantest Corporation」and「Tokyo Electron Ltd.」. In particular, the test equipment handled by「Advantest」 is indispensable in the semiconductor manufacturing process, the annual business result of this company relys on the situation of semiconductor industry.

「Advantest」was established in 1954 under the name「Takeda Riken Industries(タケダ理研工業株式会社)」. This company started the semiconductor test equipment business in 1972. It was listed on the Tokyo Stock Exchange in 1983. Since then, they have continued to expand their semiconductor test equipment business and have won the top share of the test equipment industry in the world by collaborating with affiliated companies not only in Japan but also in America, Europe and Asia. They are particularly good at memory, SoC and RF test equipment, with 52% market share for SoC test equipment and 58% for memory test equipment. In addition, they have approximately 4,500 employees worldwide, and overseas sales account for 90% of total sales.

The problem is, they tend to be overly dependent on the semiconductor industry. There is a super cycle in the semiconductor industry, and in general, it has been favorable and sluggish for one to several years. That means, there is a large fluctuation in market conditions, and this has caused a dramatic change in the annual results of 「Advantest」. Business diversification is essential to secure stable sales, that is why this company started to enter the medical field.

「Advantest」applied semiconductor test technology, in order to develop medical measuring instruments in collaboration with「Tohoku University」. In particular, they are focussing on the technology that can visualize the position and state of microvessels without damaging the skin by utilizing the measurement technology and laser ultrasonic technology accumulated in the semiconductor industry. And this techonology is expected to be applied not only in the medical field such as skin cancer and diabetes, but also other fields including beauty industry.

 

 

 

3. Major Business

 

■ Semiconductor and parts test equipment business
They are developing and manufacturing test equipment to test the behavior of various semiconductors mounted on smartphones, personal computers, automobiles, etc., and judge whether they are good or bad. It is the main business of「Advantest」and has the world's top share in this field.

■ Mechatronics related business
They also handle FA products such as test handlers and interface products such as IC sockets and change kits. They also provide a system that uses nanotechnology to measure defects in fine patterns on conductor wafers and nanoimprints in three dimensions.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		155,916	207,223	282,456
Consolidated operating profit		13,905	24,487	64,662
Consolidated total assets		231,603	254,559	304,580
Consolidated net assets		109,517	124,610	198,731
Breakdown of sales	Semiconductor・Electric component test equipment	101,262	140,864	211,713
	Mechatronics business	25,158	35,893	39,229
	Service business	29,496	30,466	31,514