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Teradyne Inc

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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation

Teradyne Holds a Wide Moat in Chip Testing and Is Dealing With Cyclically Soft Demand

Business Strategy and Outlook

Teradyne is a heavyweight supplier of automated test equipment for semiconductors, boasting market-leading capabilities that run the gamut of chips. It is one of two companies worldwide that can produce testers for the most cutting-edge semiconductors, thanks to robust engineering talent across hardware and software and a structural lead in organic investment. The firm is a vital partner to chipmakers across the industry and has an impressively strong relationship with Apple and Taiwan Semiconductor. Teradyne’s market leadership exhibits itself in industry-leading margins, strong returns on invested capital, and a top market share. We give the firm a wide economic moat rating.

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