Reflecting On Semiconductor Manufacturing Stocks' Q1 Earnings: Teradyne (NASDAQ:TER)

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how semiconductor manufacturing stocks fared in Q1, starting with Teradyne (NASDAQ:TER).

The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.

The 14 semiconductor manufacturing stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.9% below.

In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.

Teradyne (NASDAQ:TER)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Teradyne reported revenues of $685.7 million, up 14.3% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

“Teradyne delivered 14% year-over-year growth in the first quarter driven by strong results in Semiconductor Test. System-on-a-Chip (SOC), primarily for Mobile, was the strongest growth driver,” said Teradyne CEO, Greg Smith.

The stock is up 2.2% since reporting and currently trades at $78.52.

Is now the time to buy Teradyne? Access our full analysis of the earnings results here, it’s free.

Best Q1: FormFactor (NASDAQ:FORM)

With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors.

FormFactor reported revenues of $171.4 million, up 1.6% year on year, outperforming analysts’ expectations by 0.9%. The business had a strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

The market seems happy with the results as the stock is up 5.1% since reporting. It currently trades at $29.51.

Is now the time to buy FormFactor? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Photronics (NASDAQ:PLAB)

Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.

Photronics reported revenues of $211 million, down 2.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.

As expected, the stock is down 15.2% since the results and currently trades at $17.03.

Read our full analysis of Photronics’s results here.

Lam Research (NASDAQ:LRCX)

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Lam Research reported revenues of $4.72 billion, up 24.4% year on year. This number topped analysts’ expectations by 1.7%. It was a strong quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.

The stock is up 22.8% since reporting and currently trades at $81.84.

Read our full, actionable report on Lam Research here, it’s free.

Kulicke and Soffa (NASDAQ:KLIC)

Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices

Kulicke and Soffa reported revenues of $162 million, down 5.9% year on year. This result came in 1.9% below analysts' expectations. Overall, it was a softer quarter as it also logged a significant miss of analysts’ adjusted operating income and EPS estimates.

The stock is up 1.5% since reporting and currently trades at $32.22.

Read our full, actionable report on Kulicke and Soffa here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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