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Cohu makes the machines and test gear that chipmakers use to check whether their chips work before shipping them.
Cohu is a backstage company in the chip world. It doesn't design chips or make them. It builds the equipment that chipmakers use after the chips come off the production line to test and handle them, plus the circuit boards and printed circuit assemblies used in defense, aerospace, and industrial products. Customers buy this gear because testing is how they avoid shipping broken parts and losing millions of dollars on bad batches.
The main problem Cohu solves is that chips are tiny, fragile, and made in huge volumes. Testing them by hand is impossible. Cohu's pick-and-place handlers move chips into and out of the test sockets that connect them to the test instrument, and its thermal systems keep the chips at the right temperature while they're checked. This covers everything from chips used in car electronics to the advanced chips that go into AI and data center systems. Its customers are mostly big semiconductor manufacturers and outsourced assembly and test suppliers in Asia, who pay for the equipment and then for ongoing service and spare parts. The business runs in cycles, and that matters for understanding it. Cohu's sales surge when chipmakers expand capacity and fall hard when they pause. Chipmakers have been cutting spending on test equipment recently, which hurt Cohu's revenue in 2024. Competition comes from other test equipment makers such as Advantest and Teradyne, who make the actual test instruments, while Cohu's niche is the handling and interface hardware around them. Management has been cutting costs and putting money into higher-end thermal and interface products, betting that testing gets harder and more important as chips become more complex. One thing to watch: Cohu's future is tied to whatever the chip industry does next. A boom in AI and automotive chips means more testing and more demand for Cohu's gear, but another pause in capital spending would hit it quickly. It's a small company in a capital-intensive niche, so its fortunes swing with the spending plans of a handful of very large customers.
Saved answer · last researched 21 Oct 2026
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