Cohu is evolving from a cyclical test-equipment supplier into an AI/HBM-enabled, recurring-revenue semiconductor “razor-and-blades” platform—levered to the next upcycle but exposed to geopolitics and CapEx swings.
Overview
Cohu is a critical enabler of the semiconductor back-end, supplying test handlers, testers, interface products, inspection/metrology, factory automation, and analytics software that help chipmakers maximize yield and reliability. Its Systems business (handlers like Eclipse; testers like Diamondx; inspection/metrology such as Neon/Krypton) is cyclical and linked to IDM/OSAT CapEx, but Cohu has structurally improved resilience by expanding recurring revenue—roughly 55–63% of sales in recent 2025 quarters—through high-margin interface consumables (contactors/probe cards), services, and software. The early-2025 Tignis acquisition strengthens DI-Core with AI process control and predictive maintenance, positioning Cohu as a smarter-factory partner. The company is heavily exposed to Asia-Pacific (70%+ of revenue), aligning it with the global manufacturing hub but raising geopolitical risk. As of late 2025/early 2026, Cohu is positioned to benefit from AI/HPC and advanced automotive electronics, particularly via HBM inspection and high-thermal-capacity handling. With ~$1.38B market cap, shares at ~$28.99, and added liquidity/flexibility from a $287.5M convertible issuance, Cohu enters the next potential upcycle with a more recurring, software-augmented model—though GAAP profitability remains the key execution milestone.