This comes after AEM’s presentation at the second CGS-CIMB Tech/EV conference on March 29, where the company announced its Test 2.0 solutions, which lowers cost of testing and provides a more complete test coverage for the new generation of semiconductor chips.
According to the report, AEM believes that its ability to customise solutions to the needs of their customers through Test 2.0 is their key competitive differentiating factor.
“The company believes its new customers could account for 10%-20% of FY2023 revenue, with further growth expected in FY2024 and beyond,” say the analysts.
They analysts add that AEM has seen stronger-than-expected orders from its major customer and earlier-than-expected success in securing orders from other potential customers.
See also: CGS-CIMB sees AEM's 'possible recovery' from 2HFY2023 and potential earnings recovery for FY2024
Separately, updates from its key customers reveal a positive outlook on trade flows for AEM.
Intel updated that its fourth-generation Xeon processor for data centres, was being shipped to over 50 original equipment manufacturers (OEM) after receiving 450 design wins following a one-year delay.
Intel’s fifth generation processors are also scheduled to ship in 4Q2023 and 2024 respectively.
Intel also projected that the data centre processors market (by revenue) could see a low-20% CAGR over FY2022 to FY2027, from over US$40 billion ($53.4 billion) to exceed US$10 billion in FY2027.
However, the analysts view delivery delays and the loss of the sole supplier status for its major customer as downside risks that could negatively affect AEM’s profitability.
As at 1.26pm, shares in AEM are trading 24 cents higher or 1.89% up at $3.24.
