News
Teradyne qualifies merchant data center GPUs for revenue contribution in second half
Wednesday, February 4, 2026 at 12:04 PM
Teradyne expects its mobile testing business to stay below previous peak levels despite transitions to 2nm and wafer-level multi-chip modules (WMCM) due to a saturated installed base. However, the company is currently qualifying merchant data center GPUs and expects to begin generating revenue from this segment in the second half of the year.
Context
Teradyne is pivoting its growth strategy toward high-performance AI compute as its traditional mobile testing business continues to stall. Despite the industry transition to 2nm process technology and advanced wafer-level multi-chip modules (WMCM), the company warns that the massive existing mobile installed base will likely prevent the segment from returning to its previous peak. This stagnation has forced a focus on data center infrastructure to drive future earnings.
The company is currently undergoing a critical qualification process for merchant data center GPUs, a move aimed at capturing a larger share of the AI accelerator market. Revenue from these merchant units is expected to begin contributing in the second half of 2026, acting as a significant follow-up to the $3.19 billion in total revenue reported for 2025. While Advantest currently leads in GPU testing, Teradyne is successfully scaling its AI footprint, with AI-driven demand already accounting for over 60% of its revenue in late 2025.
Management expects the AI compute market to serve as the primary engine for reaching its 2028 revenue target of $4.5 billion to $5.5 billion. Success in the upcoming merchant GPU ramp is essential for diversifying beyond custom ASICs and high-bandwidth memory, which fueled the company's 13% year-over-year growth in 2025. For the first quarter of 2026, Teradyne has guided for record revenue between $1.15 billion and $1.25 billion, driven almost entirely by the ongoing AI infrastructure buildout.
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