Can AEHR Turn Silicon Photonics Momentum Into Sustained Growth?

Aehr Test Systems, Inc. AEHR is gaining momentum in silicon photonics, giving it another potential growth driver alongside AI processors. Demand for production burn-in is increasing as AI data centers rely more on optical I/O and high-speed interconnects. The company believes the silicon photonics and optical test and burn-in market could become a meaningful long-term growth driver.

Aehr’s lead silicon photonics customer is ramping up production and has placed follow-on orders for fully automated wafer-level burn-in systems. Its newest major customer, a global networking products provider, expects additional systems as it expands capacity to support next-generation hyperscale data center deployments. The customer first engaged with AEHR last November and has already ordered two FOX test cells and two FOX-NP systems.

The financial opportunity is becoming more visible. Management currently expects silicon photonics to account for roughly 15-20% of fiscal 2027 revenues, while total revenues are projected to be in the band of $130-$150 million. The outlook is largely based on current customers, and AEHR is not assuming any memory revenue in this guidance. Non-GAAP net income is also expected to reach 18-22% of total revenues in fiscal 2027.

Continued production ramp ups and additional system orders will be important to watch. The company’s growing presence across existing and new customers could help expand the contribution of this market to fiscal 2027 revenues. With silicon photonics already expected to account for 15-20% of fiscal 2027 revenues, further customer ramp ups could make it an increasingly important part of AEHR’s growth.

AEHR’s Key Competitors

Aehr operates in a highly competitive semiconductor test equipment market, competing with established players like FormFactor, Inc. FORM and Teradyne, Inc. TER.

FormFactor is seeing demand for its semiconductor test solutions from AI, advanced packaging and silicon photonics. FORM is positioned to benefit as chipmakers increase testing requirements for increasingly complex semiconductor devices.

Teradyne is benefiting from semiconductor testing demand linked to AI and advanced computing. TER also has a broad customer base across the semiconductor industry, giving it exposure to continued investments in data centers and next-generation computing.

AEHR’s Share Price Performance, Valuation & Estimates

AEHR’s shares have surged 59.3% over the past month, outperforming the broader industry’s 17.9% growth.

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Aehr’s shares are trading at a premium. In terms of the forward 12-month price-to-sales (P/S), AEHR is trading at 25.65X, higher than the industry’s 6.67X.

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The Zacks Consensus Estimate for AEHR’s fiscal 2027 earnings is pinned at 70 cents per share, implying a sharp increase from 3 cents a year ago.

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