Teradyne — AI supply-chain exposure

Teradyne makes automated test equipment — the machines that verify chips work before they ship — operating as one half of a duopoly with Advantest. Its systems test the compute and memory silicon behind AI: SoCs, HBM stacks, and DRAM. Every advanced chip has to be tested and burned in, so Teradyne sits just after fabrication and packaging in the chain, gating whether finished parts are good enough to sell. A large share of its demand is now tied to AI-related chips.

Its structural hook is that test is a mandatory, hard-to-skip step with only two credible suppliers. As chips grow more complex — more transistors, stacked memory, custom ASICs — they take longer to test, which pulls through more equipment per wafer. Teradyne has historically been strong in SoC and memory test while Advantest owned the merchant GPU segment; it is only now winning its first GPU production orders and contesting hyperscaler ASIC work. The model places it centrally because the duopoly structure gives durable pricing power over an unavoidable link.