Cohu Inc (COHU)

History and Background

Cohu, Inc. was founded in 1957 and initially focused on manufacturing television cameras. Over time, it transitioned to becoming a global leader in back-end semiconductor equipment and services, including test handlers, interface solutions, thermal subsystems, and inspection and metrology equipment.

Core Business Areas

• Semiconductor Test and Inspection Equipment: Provides equipment for testing and inspection of semiconductors, including handlers, contactors, and vision inspection systems.
• Interface Solutions: Supplies interface solutions for semiconductor testing, including load boards and probe cards.
• Thermal Management: Offers thermal management solutions for various applications.

Leadership and Structure

Luis Mu00fcller serves as the President and CEO. The company operates with a functional organizational structure, dividing responsibilities across various departments like engineering, sales, and marketing, and manufacturing.

Key Offerings

• Diamondx Test Handlers: Diamondx test handlers are used for high-volume testing of semiconductors. Market share is estimated around 25% in the test handler segment. Competitors include Advantest and Teradyne.
• MEMS Test Modules: Modules specifically designed for testing MEMS devices. Precise market share data is unavailable, but Cohu holds a significant position in this niche. Competitors include Advantest and Teradyne for MEMS test solutions.
• Neon Inspection Systems: Automated optical inspection systems for semiconductor manufacturing. Market share is estimated around 10-15%. Competitors include KLA and Camtek.

Industry Overview

The semiconductor equipment industry is cyclical, driven by demand for semiconductors in various end markets, including consumer electronics, automotive, and industrial applications. It is highly competitive with technological innovation. Currently the chip shortage is ending and demand is correcting and prices will likely fall for equipment.

Positioning

Cohu is a mid-sized player in the semiconductor equipment industry, focused on back-end testing and handling. Its competitive advantages include specialized products, customer service, and cost-effectiveness.

Total Addressable Market (TAM)

The TAM for semiconductor equipment is estimated to be over $100 billion annually. Cohu's serviceable obtainable market (SOM) is a subset of this, focusing on its specialized segments. Cohu is positioned to capture a larger percentage of this TAM with a diverse product line and the recent acquisition of InPress Solutions.

Key Competitors

• ADNT
• TER

Competitive Landscape

Cohu competes with larger players like Advantest and Teradyne but differentiates itself with specialized products and customer service. Its smaller scale requires strategic focus.

InPress Solutions GmbH

• Year: 2024
• Acquisition Price (USD millions): 96
• Strategic Rationale: This acquisition strengthened Cohu's position in the interface solutions market by expanding its product offerings and customer base.

Ismeca Automation SA

• Year: 2018
• Acquisition Price (USD millions): 161
• Strategic Rationale: Expanded handler product portfolio and market presence.

Historical Growth: Historical growth has been cyclical, with periods of strong expansion followed by periods of contraction, mirroring the semiconductor market.

Future Projections: Analyst estimates vary, but the consensus is for moderate growth, driven by long-term trends in semiconductor demand. Revenue of $800 million in 2024, and $900+ million in 2025 expected

Recent Initiatives: Recent acquisitions such as InPress Solutions expand capabilities into new high-growth markets.

Cohu is a mid-sized player in the semiconductor equipment market. While it operates in a cyclical industry, its product diversification and strategic acquisitions are strengthening its position. The company is healthy but needs to keep up with rapidly changing technology to remain competitive in the sector, but faces strong competition from larger companies and economic risk.

Data Sources:

• Company SEC Filings (10-K, 10-Q)
• Analyst Reports
• Industry Publications

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Market conditions are subject to change, and past performance is not indicative of future results.