Teradyne has recently spent $280 million on the acquisition of Nextest Systems, a key player in the flash memory ATE market.
Appearently Aehr and Nextest have similar products, to test flash / memory. What made Teradyne spend $280 million on the acquisition of Nextest Systems, while it could acquire Aehr for 1/5 of the cost?
With TER having a market cap of over $1.5b, you would assume they could have afforded either Nextest or AEHR, so the Nextest product mix must have provided a more complete line up with the Teradyne products.
It's interesting that Yahoo lists ATE (Advantest) as a direct competitor to both AEHR and Teradyne (TER), but doesn't list TER as a direct competitor to AEHR. I seem to recall during one of the conference calls that AEHR said they didn't think Nextest was a direct competitor.
From the 2007 AEHR 10-K, these are the primary competitors listed in various product lines at AEHR:
MTX Competition: Competing suppliers of burn-in and functional test systems include Advantest Corporation and Dong-Il Corporation.
FOX full wafer contact system competition: Competing suppliers of full wafer contact systems include Matsushita Electric Industrial Co., Ltd. and Delta V Instruments, Incorporated.
DiePak Competitors Competing suppliers of DiePak products include Yamaichi Electronics Co., Ltd.
I looked into the product descriptions of the companies. Teradyne/Nextest testers are for chip/system level tests, while Aehr testers are for waffer/die level tests. So the two companies do not compete with each other.
So there are still be chances that Teradyne acquires Aehr to expand its product offerings. After all, this stock is rather cheap, compared with Teradyne (P/E ~ 25) and Advantest (P/E ~ 69).