COHU

To enable world-changing tech by becoming the #1 supplier of semiconductor test and inspection solutions.

COHU SWOT Analysis

Updated: October 3, 2025 • 2025-Q4 Analysis

How to Use This Analysis

This analysis for COHU was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

While this represents what AI sees from public data, you know your company's true reality. That's why we recommend using Alignment.io and The System of Alignment™ to conduct your strategic planning—using these AI-generated insights as inspiration and reference points to blend with your team's invaluable knowledge.

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This Cohu SWOT analysis reveals a company at a pivotal crossroads. Its market leadership and substantial recurring revenue provide a stable foundation, yet it remains vulnerable to the semiconductor industry's inherent cyclicality and intense competitive pressure. The primary challenge is to transcend its identity as a capital equipment provider. The key priorities underscore a necessary strategic shift: aggressively pursue the secular automotive growth trend, transform the business model toward high-margin recurring software and services, and invest decisively in system-level test to capture the next wave of innovation. Executing this transition will determine if Cohu can achieve sustained, profitable growth and deliver superior shareholder value beyond the industry's boom-and-bust cycles. The path to becoming the undisputed #1 supplier requires this fundamental evolution.

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No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To enable world-changing tech by becoming the #1 supplier of semiconductor test and inspection solutions.

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Strengths

RECURRING: Strong recurring revenue base (~48%) provides stability.
DIVERSE: Balanced end-market exposure to Auto, Industrial, and Mobile.
PORTFOLIO: Industry's broadest portfolio of test & inspection handlers.
LEADERSHIP: #1 market position in handlers gives significant leverage.
INSTALLED: Large installed base creates sticky customer relationships.

Weaknesses

CYCLICALITY: Revenue highly susceptible to semiconductor industry cycles.
MARGINS: Gross margin pressure from product mix and intense competition.
INTEGRATION: Lingering challenges integrating multiple acquired companies.
SCALE: Smaller R&D budget compared to larger competitors like Teradyne.
SOFTWARE: Software and data analytics offerings are still nascent.

Opportunities

AUTOMOTIVE: Explosive growth in semiconductor content for EVs and ADAS.
ONSHORING: Government incentives (CHIPS Act) driving new fab investments.
SYSTEM-LEVEL: Growing need for system-level test for complex packages.
AI/ML: Leverage test data for AI-powered yield improvement services.
CONSUMABLES: Grow high-margin recurring revenue from contactor business.

Threats

COMPETITION: Intense price and innovation pressure from Teradyne/Advantest.
MACRO: Economic slowdown depressing customer capital expenditure budgets.
GEOPOLITICS: US-China trade restrictions impacting sales and supply chain.
CONCENTRATION: Revenue reliance on a few large OSAT and IDM customers.
DISRUPTION: New test technologies could make existing handlers obsolete.

Key Priorities

AUTOMOTIVE: Double down on the automotive market to capture secular growth.
RECURRING: Accelerate the shift to a recurring revenue software/service model.
SYSTEM-LEVEL: Invest heavily to win the emerging system-level test market.
EFFICIENCY: Drive operational efficiency to improve margins through cycles.

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COHU OKR

Updated: October 3, 2025 • 2025-Q4 Analysis

The Cohu OKR plan is a focused and potent blueprint for strategic transformation. It correctly prioritizes the most critical value levers: dominating the secular automotive growth wave and fundamentally shifting the business model towards predictable, high-margin recurring revenue. The objectives are bold and aspirational ('WIN AUTOMOTIVE', 'MODEL SHIFT'), providing clear direction. The key results are largely outcome-driven, translating strategic intent into measurable actions like securing flagship design wins and launching a subscription software product. This plan rightly connects investment in next-gen tech ('LEAPFROG TECH') with the financial discipline needed to fund it ('FORTIFY CORE'), creating a virtuous cycle for sustainable growth and market leadership.

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No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To enable world-changing tech by becoming the #1 supplier of semiconductor test and inspection solutions.

WIN AUTOMOTIVE

Become the undisputed test & inspection leader for auto chips.

WINS: Secure 5 flagship design wins for our next-gen thermal handler with top-tier automotive chipmakers.
MARKET: Increase automotive segment revenue to represent over 40% of total company revenue by year-end 2025.
PARTNERSHIP: Launch a strategic co-development program with a leading EV manufacturer for in-vehicle test solutions.
SOLUTION: Release a comprehensive system-level test solution tailored for ADAS and infotainment processors.

MODEL SHIFT

Transform into a recurring revenue-first business model.

RECURRING: Grow recurring revenue to achieve a 55% share of total company revenue for Q4 2025.
SOFTWARE: Launch our first subscription-based AI yield management software and secure 20 paying enterprise customers.
SERVICE: Increase high-value service contract attachment rate on new system sales from 60% to 80%.
CONSUMABLES: Grow test contactor revenue by 15% through targeted sales campaigns at our top 50 accounts.

LEAPFROG TECH

Pioneer the next generation of system-level test solutions.

SYSTEM-LEVEL: Launch our flagship system-level test platform, securing 3 lead customers for beta deployment.
AI-INSPECTION: Release a new vision system with a 2X improvement in defect detection accuracy using AI.
R&D: Allocate 60% of the R&D budget to new platform development in system-level test and AI analytics.
PATENTS: File 10 new patents related to heterogeneous integration and AI-driven adaptive test methodologies.

FORTIFY CORE

Achieve best-in-class operational and financial performance.

MARGIN: Achieve a non-GAAP gross margin of 50% for two consecutive quarters through product mix and cost controls.
LEAD-TIME: Reduce average system lead times by 20% through supply chain optimization and modular designs.
CASH: Generate over $100 million in free cash flow for the full fiscal year 2025 to reinvest in growth.
INTEGRATION: Complete the unification of all product software onto a single common user interface platform.

METRICS

Recurring Revenue as a Percentage of Total Revenue: >55%
Non-GAAP Gross Margin: >50%
Automotive Revenue as a Percentage of Total Revenue: >40%

VALUES

Customer Driven
Innovation
Integrity
Teamwork
Excellence

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COHU Retrospective

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Teradyne Advantest FormFactor Technoprobe S.p.A. Camtek

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To enable world-changing tech by becoming the #1 supplier of semiconductor test and inspection solutions.

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What Went Well

RECURRING: Recurring revenue met targets, providing a solid cash flow floor.
AUTOMOTIVE: Automotive segment continued to show strong, above-market growth.
COSTS: Operational expense control was effective in a down market.
CASHFLOW: Maintained positive free cash flow despite revenue headwinds.
DESIGN-WINS: Secured key design wins for next-gen automotive applications.

Not So Well

SYSTEMS: Systems revenue declined due to softness in mobile/consumer markets.
MARGINS: Gross margins were at the low end of guidance due to unfavorable mix.
GUIDANCE: Next quarter guidance reflects continued market uncertainty.
CHINA: Revenue in China was impacted by geopolitical tensions and restrictions.
UTILIZATION: Customer factory utilization rates remained below optimal levels.

Learnings

DIVERSIFICATION: Market diversification is critical to weathering cyclical downturns.
RECURRING: The recurring business model is proving its resilience and value.
INVENTORY: The industry is still working through a period of inventory correction.
INNOVATION: New product introductions are essential to gain share in recovery.
AUTO-FOCUS: The strategic focus on the automotive market is the right long-term bet.

Action Items

PRODUCT: Accelerate roadmap for system-level and automotive test solutions.
SALES: Focus sales efforts on securing new design wins in industrial/auto.
OPERATIONS: Continue disciplined cost management and supply chain optimization.
R&D: Protect R&D spending to ensure technology leadership for the next upturn.
RECURRING: Launch new initiatives to grow recurring service and software revenue.

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

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COHU Market

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Founded: 1947
Market Share: Leading share in handlers; strong #2 in contactors.
Customer Base: Global semiconductor manufacturers (IDMs, fabless, OSATs).
Category:
Semiconductor Equipment
SIC Code: 3825 Instruments for Measuring and Testing Electricity and Electrical Signals
NAICS Code: 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals
Location: Poway, California
Zip Code: 92064
Congressional District: CA-48 TEMECULA
Employees: 3300

Competitors

Teradyne View Analysis

Advantest View Analysis

FormFactor View Analysis

Technoprobe S.p.A. Request Analysis

Camtek View Analysis

Products & Services

No products or services data available

Distribution Channels

COHU Business Model Analysis

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Problem

High cost of chip failure in end systems
Need to maximize manufacturing yield/profit
Pressure to accelerate time-to-market
Complexity of testing next-gen chips

Solution

Automated test & inspection handlers
High-performance test contactor interfaces
Data analytics for yield improvement
Global service and application support

Key Metrics

Recurring Revenue % of Total Revenue
Gross Margin %
New Product Revenue
Market Share in Key Segments

Unique

Industry's broadest portfolio of handlers
Large installed base driving recurring sales
Deep integration with customer processes
DI-Core data analytics platform vision

Advantage

Proprietary IP and engineering expertise
Sticky customer relationships (high switching costs)
Global sales and support footprint
Economies of scale in manufacturing

Channels

Direct global sales & engineering teams
Strategic account management programs
Digital marketing and industry events
Customer service and support network

Customer Segments

Outsourced Semiconductor Assembly & Test (OSATs)
Integrated Device Manufacturers (IDMs)
Fabless semiconductor companies
Automotive & Industrial electronics makers

Costs

Research & Development (R&D)
Global manufacturing and supply chain
Sales, General & Administrative (SG&A)
Customer service and application support

COHU Product Market Fit Analysis

Updated: October 3, 2025

Cohu provides the critical test and inspection equipment that guarantees the world's most advanced semiconductors work flawlessly. By maximizing manufacturing yield and ensuring zero-defect reliability for leaders in automotive, 5G, and AI, the company accelerates their customers' time-to-market and enhances their profitability, underpinning the technology that is changing our world.

MAXIMIZING YIELD: Our solutions reduce defects, directly boosting your profitability.

ACCELERATING TIME-TO-MARKET: We enable faster production ramps for your most advanced chips.

ENSURING RELIABILITY: Our equipment guarantees quality for critical automotive and industrial applications.

Before State

Untested chips with unknown quality/defects
Inefficient manual or semi-auto inspection
Low manufacturing yield and high scrap rates
Inability to test at extreme temperatures

After State

100% tested, high-quality semiconductors
Automated, high-speed test and inspection
Maximized yield and production efficiency
Full characterization across all conditions

Negative Impacts

High cost of failure for defective chips
Slow production ramps and time-to-market
Brand damage from faulty end-products
Inability to meet automotive/5G standards

Positive Outcomes

Zero-defect reliability for critical apps
Faster revenue generation for new designs
Enhanced profitability and market share
Compliance with stringent quality demands

Key Metrics

Customer Retention Rates - High, >90% for top accounts

Net Promoter Score (NPS) - Estimated 40-50, varies by product

User Growth Rate - Tied to semiconductor industry CAPEX cycles

Customer Feedback/Reviews - Limited public reviews; B2B focus

Repeat Purchase Rates) - Strong, driven by installed base

Requirements

Deep understanding of chip packaging tech
Advanced robotics and thermal engineering
High-precision vision and sensor systems
Software for data analysis and control

Why COHU

Global application engineering support teams
Continuous R&D investment in core tech
Strategic acquisitions to fill portfolio gaps
Close collaboration with leading chipmakers

COHU Competitive Advantage

Broadest portfolio of handlers in industry
Large installed base drives recurring revenue
Decades of specialized engineering expertise
Global service network for rapid support

Proof Points

Trusted by all of the top 20 chipmakers
Market share leadership in core segments
Long history of enabling major tech shifts
~50% of revenue from recurring sources

COHU Market Positioning

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Strategic pillars derived from our vision-focused SWOT analysis

Dominate high-growth automotive & industrial segments.

Grow software & services to >55% of total sales.

Pioneer system-level test & AI data analytics solutions.

Achieve top-quartile margins and efficiency.

What You Do

Provides essential equipment for back-end semiconductor manufacturing.

Target Market

Semiconductor companies in automotive, industrial, mobile, and computing.

Differentiation

Broadest portfolio of test and inspection handling equipment.
Strong recurring revenue from a large installed base of systems.

Revenue Streams

Capital equipment sales (Systems)
Recurring (contactors, spares, service)

COHU Operations and Technology

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Company Operations

Organizational Structure: Business unit structure aligned with product groups (Handlers, Probes).
Supply Chain: Global supply chain with manufacturing in Asia, Europe, and North America.
Tech Patents: Extensive portfolio of patents related to handling, vision, and test.
Website: https://www.cohu.com/

Top Clients

Board Members

COHU Competitive Forces

Threat of New Entry

Low: High barriers to entry due to massive R&D costs, required IP, deep customer relationships, and need for a global support network.

Supplier Power

Moderate: Key components (robotics, optics, precision mechanics) have specialized suppliers, giving them some pricing power.

Buyer Power

High: Customers are large, sophisticated semiconductor manufacturers who can exert significant price pressure and demand customization.

Threat of Substitution

Low: There is no viable substitute for automated, high-throughput testing in semiconductor manufacturing. The process is essential.

Competitive Rivalry

High: Dominated by a few large players (Cohu, Teradyne, Advantest). Competition is fierce on technology, price, and support.

Analysis of AI Strategy

Updated: October 3, 2025 • 2025-Q4 Analysis

The Cohu AI SWOT analysis highlights a significant, yet challenging, opportunity. Cohu's core strength is its proprietary access to immense, high-value manufacturing data—a formidable asset in the AI era. However, the company is hampered by a hardware-centric culture, legacy systems, and a talent gap. The strategic imperative is clear: Cohu must pivot from selling boxes to monetizing intelligence. This requires building a unified data platform, launching a breakthrough AI-powered inspection product to create a competitive moat, and developing a subscription-based yield optimization service. Acquiring a specialized AI team could be a critical accelerant. Successfully harnessing AI will not just be an incremental improvement; it will be fundamental to defending its market position and unlocking a new, high-margin business model.

Teradyne Advantest FormFactor Technoprobe S.p.A. Camtek

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To enable world-changing tech by becoming the #1 supplier of semiconductor test and inspection solutions.

Strengths

DATA: Access to vast datasets from millions of devices tested globally.
HARDWARE: Existing advanced vision systems are a platform for AI models.
ACCESS: Deeply embedded in customer workflows, enabling data partnerships.
EXPERTISE: Decades of process control knowledge to inform AI development.
INSTALLED: Large installed base for deploying and validating AI solutions.

Weaknesses

TALENT: Shortage of specialized AI/ML engineers versus software giants.
LEGACY: Existing software infrastructure not built for modern AI/ML ops.
DATA-SILOS: Inconsistent data formats across different product lines.
MONETIZATION: Unclear strategy for monetizing AI-driven data products.
CULTURE: Hardware-centric engineering culture slow to adopt software-first.

Opportunities

INSPECTION: AI-powered visual inspection to detect previously unseen defects.
YIELD: Predictive analytics to help customers optimize manufacturing yield.
MAINTENANCE: Predictive maintenance services for Cohu's installed base.
AUTOMATION: Generative AI for automated test program creation and debug.
PROCESS: AI-driven adaptive test to reduce test time and increase throughput.

Threats

COMPETITORS: Teradyne and Advantest investing heavily in their own AI platforms.
STARTUPS: Agile AI-native startups could disrupt the inspection market.
SECURITY: Customer reluctance to share sensitive production data in the cloud.
OBSOLESCENCE: Rapid pace of AI innovation making current models outdated.
COST: High cost of developing and maintaining cutting-edge AI solutions.

Key Priorities

PLATFORM: Unify data collection across all systems onto a single AI platform.
INSPECTION: Launch next-gen AI-powered visual inspection to leapfrog rivals.
YIELD-MGMT: Develop a high-margin, subscription-based yield management app.
TALENT: Acquire a small AI team or aggressively hire to build capabilities.

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COHU Financial Performance

AI-Powered Insights

Claude

Gemini

GPT

Cohu, Inc. Investor Relations Website (SEC Filings, Presentations)
Cohu Q3 2024 Earnings Call Transcript and Press Release
Yahoo Finance (Market Cap, Financial Data)
SEMI and Gartner industry reports on semiconductor capital equipment
Competitor financial reports (Teradyne, Advantest)

Profit: Net income varies with cycles; focus on non-GAAP operating margin.

Market Cap: ~$1.5 Billion (as of late 2024)

Stock Performance

Annual Report: Available on Cohu's Investor Relations website.

Debt: Manageable long-term debt, focused on deleveraging post-acquisitions.

ROI Impact: Cyclicality impacts short-term ROI; long-term value from R&D/IP.

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Market Leader

ICM Index

STRATEGIC ADVISOR ASSESSMENT

Cohu is a solid Market Leader with a strong portfolio and clear vision, but its ambition is category-specific, not society-shaping. The SWOT is balanced, reflecting its vulnerability to market cycles. The OKRs are strong and address key weaknesses. A significant opportunity exists in AI, but execution risk remains. The growth multiplier is modest, reflecting a mature market and high competitive intensity, but the strategic shift towards recurring revenue and automotive provides a solid foundation for value creation.

SWOT Factors

Upside: 70.0 Risk: 73.3

OKR Impact

AI Leverage

Top 3 Strategic Levers

Accelerate recurring revenue model shift via software/AI.

Dominate automotive test to capture secular growth.

Execute on a unified data/AI platform across all products.

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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