Aehr Test Systems reiterates annual guidance, comments on Tesla statements

Aehr Test Systems (AEHR) announced that at the Power America conference on Wide Bandgap Semiconductors held in Raleigh, North Carolina, CEO Gayn Erickson spoke today on Aehr’s interpretation of Tesla statements made at Tesla’s Investor Day on March 1. Gayn Erickson, President and CEO of Aehr Test Systems, commented: "At Tesla’s Investor Day held in Austin, Texas yesterday, Tesla discussed their plans for a next generation drive unit that includes an electric motor with an integrated DC to AC power inverter based on silicon carbide semiconductor MOSFETs. In their presentation, Tesla stated that this new inverter would have a 75% reduction in silicon carbide. Aehr wants to make it clear that despite Tesla’s statements yesterday, Aehr does not expect a 75% reduction in the total market for silicon carbide wafers. In summary, we believe the announcement by Tesla does not impact the market significantly, either higher or lower, as they are adding a new half power drive train to be used on a new lower cost platform that will increase the market opportunities for Tesla and help drive volumes particularly in lower cost target markets such as China, but also in the US and around the world. The move to larger die to be packaged in module form is seen as a benefit for Aehr’s wafer level test and burn-in solution total available market. Specifically, Telsa clarified that the 75% reduction applies only to the next generation lower cost drive units to be included in the new model platform, which is still in development with a yet to be announced initial ship date. Tesla clarified that this will not impact the current high-performance model platforms including the Model S/X and Model 3/Y vehicles. Also, we believe that the new chips in the lower cost models will be 100 Amps per device versus 50 Amps per device today and likely 50% or more larger in surface area; therefore, the number of wafers required will be less impacted. This is important as Aehr’s total available market is primarily driven by the number of wafers required, not the number of devices. Tesla did not provide timing on availability of this new drive unit and platform nor whether it would coincide with a new Giga-factory such as the announced new factory to be built in Mexico, or whether this would or could be made in one of Tesla’s current Giga-factories. Tesla stated that this future platform and drive unit would still be on a 400V battery architecture… In addition, during the Q&A session, Tesla further clarified that the new inverters would be made from a new Tesla-proprietary custom module package, and that Tesla would purchase the die from multiple manufacturers and package them in this Tesla-proprietary custom module. Again, Aehr sees this as a natural roadmap and consistent with the roadmaps stated by major manufacturers of silicon carbide where the electric vehicle inverters will migrate multi-chip modules to reduce power conversion losses, improve thermal performance, simplify design, and lower overall cost of the inverter system… For its fiscal year ending May 31, 2023, Aehr is reiterating its previously provided guidance for total revenue to be $60 million to $70 million, with strong profit margins similar to last fiscal year. Aehr also continues to expect bookings to grow faster than revenues in fiscal 2023 as the ramp in demand for silicon carbide in electric vehicles increases exponentially throughout the decade."