TOKYO: Japan’s Advantest Corp said on Wednesday it sees the use of high-end semiconductors for generative artificial intelligence applications feeding into a recovery in demand for its chip testing machines.

Advantest, a dominant player in chip testing equipment with U.S. peer Teradyne Inc, said it expects the market to contract this year due to customers holding excess inventory.

The company’s operating profit fell 68% to 14.3 billion yen ($101.8 million) in the April-June quarter. It highlighted weakness in the smartphone market and a slowdown in investment in data centres but expects a recovery next year.

“Despite the fall this year I believe we will eventually face a growth curve,” Advantest CEO Yoshiaki Yoshida told an earnings briefing.

Advantest shares closed down 1.7% ahead of earnings and have more than doubled in value since the start of the year. ($1 = 140.4300 yen)

Reuters