Mid/Long-Term Management Policy

Updated October 2, 2023

In FY2018, Advantest formulated a 10-year mid- to long-term management policy (FY2018-FY2027), its "Grand Design," which defines the commitments and strategies needed for Advantest to continue to be a company that embodies its corporate purpose & mission of "Enabling Leading-edge Technologies." Since then, Advantest has strived to enhance its corporate value under the policy.

In FY2021, the Grand Design was updated in response to the improvement of our business performance and changes in the Advantest's environment, because the first mid-term management plan (FY2018–FY2020) (MTP1) had been successfully completed, and three years had passed since the formulation of the Grand Design. At the same time, Advantest formulated its second mid-term management plan (FY2021-FY2023) (MTP2), which was announced in May 2021, to ensure achievement of the Grand Design's goals. The entire company is working as one to achieve these targets.

1. Grand Design (10 years) (FY2018–FY2027)

< Vision Statement >

Adding Customer Value in an Evolving Semiconductor Value Chain

< Strategy >

Advantest is expanding its business domains beyond the development and sales of semiconductor volume production test systems to also include adjacent markets such as semiconductor design / evaluation processes and product / system level test processes, which are performed before and after semiconductor volume production processes, with the aim of expanding and growing corporate value.

To achieve the above, Advantest will engage with five strategic issues: reinforce core businesses, invest strategically; seek operational excellence; explore value to reach a higher level; pioneer new business fields; and further promote ESG initiatives.


We originally set annual sales of ¥300 billion to ¥400 billion as the ultimate goal of the Grand Design, and then in FY2021, revised the Long-Term Management Goal to "the early achievement of annual sales of ¥400 billion" thanks to the favorable progress of its business performance spurred by the progress of digital revolution and market share expansion. However, we achieved the goal in FY2021, ahead of the originally intended FY2027, amid the sustained expansion of the semiconductor tester market, etc.

Changes in the business environment and society which have provided us with a lot of growth opportunities since the time of the development of the Grand Design are expected to continue, such as the expansion in demand for semiconductors in the medium to long term. Advantest will continue to further promote the above five growth strategies aiming at enhancing our corporate value under such circumstances.

2. Outline of Second Mid-Term Management Plan (MTP2, FY2021-FY2023)

< Targeted management metrics >

Under MTP2, Advantest will promote efforts to strengthen its business for further growth, expand growth investment as well as shareholder returns, and strive to increase corporate value. Given this framework, the management metrics that are emphasized in MTP2 are sales, operating margin, net income, return on equity attributable to owners of the parent (ROE), and earnings per share (EPS). Advantest has been endeavoring to grow all these numbers. In order to evaluate the progress of the plan from a mid/long-term perspective, the Company uses three-year averages so as to level the impact of single-year performance fluctuations.

Regarding the management metrics of MTP2, in May 2021, the Company initially announced the outlook of financial metrics calculated based on the medium-term forecast of market trends. However, in FY2021 as the first year of MTP2, the markets of semiconductors and related products remained brisk beyond the assumption in the development of MTP2, and our business expansion measures also evolved steadily. In July 2022, the Company revised the targeted management metrics of MTP2 as follows, taking into account the solid progress of the plan; the comprehensive consideration of the forecast of our business environment until FY2023 including a stronger downward resilience in the semiconductor test equipment market driven by the diversification of semiconductor applications, higher difficulty levels for testing high-end semiconductors, and strong motivation of major chip makers to invest in advanced technologies, and based on the assumption that the downturn of global economy since 2022 will remain within the range of normal economic slowdown.

(*1) Exchange rate assumptions at the announcement in May 2021 were 1 USD = 105 JPY and 1 Euro = 130 JPY.

(*2) Exchange rate assumptions at the revision in July 2022 for results forecast from the second quarter to the fourth quarter of FY2022 and for FY2023 were 1 USD = 130 JPY and 1 Euro = 140 JPY. (Actual exchange rates for FY2021 were 1 USD = 112 JPY and 1 Euro = 130 JPY. Actual exchange rates for the first quarter of FY2022 were 1 USD = 124 JPY and 1 Euro = 134 JPY.)

(*3) Exchange rate assumptions for the FY2021-FY2022 (average actual results): Actual exchange rates for FY2021 were 1 USD = 112 JPY and 1 Euro = 130 JPY; Actual exchange rates for FY2022 were 1 USD = 134 JPY and 1 Euro = 140 JPY.

(*4) Advantest has changed its previously announced values due to a 4-for-1 stock split of shares of common stock, effective October 1, 2023 (values in parentheses are those before the split).

  FY2021-FY2023 average FY2021-FY2022 average performance(*3)
  Published in May 2021(*1) Published in July 2022(*2)
Sales ¥350-380B ¥480-520B ¥488.5B
Operating Margin 23-25% 27-30% 28.7%
Net Income ¥62-70B ¥98-120B ¥108.9B
Return on Equity (ROE) 20% or more 30-35% 34.9%
Earnings per share (EPS)(*4) ¥80-93

< Cost / Profit Structure >

To create corporate value over the long-term in a sustainable manner, Advantest will further strengthen its R&D investments, secure needed human resources and enhance human resource development, and reinforce its parts procurement capabilities, which are foundational to increasing added value and maintaining sustainable competitiveness.

It must be borne in mind that factors such as prolonged shortages of components such as semiconductors, geopolitical risks, ongoing inflation, and falling consumption all contribute to considerable uncertainty regarding the future of the global economy and Advantest's business environment. Advantest will strive to achieve the above targets by flexibly responding to changes in the external environment, such as implementing cost controls as necessary.

< Capital Policy >

Advantest’s capital policy under MTP2 prioritizes business investments for growth while flexibly utilizing liabilities (debt) from a balance sheet management perspective that considers both capital efficiency and cost of capital. Advantest’s  policy is to maintain financial soundness and establish an appropriate capital structure to strengthen the foundations of its business and create sustainable corporate value. As a measure of financial soundness, Advantest seeks a shareholders' equity ratio of 50% or more, and sets ROE as an indicator of capital efficiency.

< Growth Investments & Shareholder Returns Outlook >

Advantest’s capital allocation policy aims to use the cumulative operating cash flow of ¥280 -360 billion expected during the MTP2 period as a primary source of funds, and allocate it appropriately to growth investments and shareholder returns after periodic reviews of cash on hand levels. Regarding resource allocation for growth investment, we will increase capital investment related to R&D and production, in response to expectations for long-term semiconductor market expansion and further semiconductor performance gains. The company currently expects to spend a cumulative total of ¥70 billion on capital investments and ¥100 billion on strategic investments such as M&A over the MTP2 period.

Regarding shareholder returns, Advantest will maintain its existing returns policy, assuming that its business environment remains stable during the MTP2 period. Specifically, Advantest will maintain stable dividends with a minimum semi-annual dividend of ¥12.5 per share and a minimum annual dividend of ¥25 per share(*1), while simultaneously aiming for a total annual return ratio(*2) of 50% or more. Advantest will also seek to enhance shareholder returns and improve capital efficiency through dividends and share repurchases.

(*1)Due to a 4-for-1 stock split of shares of common stock, effective October 1, 2023, the Company has changed its dividend from ¥50 per share for a semi-annual and ¥100 per share for annual.

(*2) Total return ratio:(Dividend + share repurchase)/consolidated net income

< Progress >

Advantest is working on MTP2 as the three years to strengthen the foundation for the greater growth of Advantest in the semiconductor market, which is expected to expand further in the medium to long term. In the period from FY2021 to FY2022, Advantest steadily implemented following initiatives, along with the five strategic issues raised in the Grand Design under the medium- to long-term perspective.

Initiatives on strategic issues and their progress
Strategies Progress
1. Reinforce Core Businesses, Invest Strategically
  • We continued to expand each of our test solutions, starting with the V93000 EXA Scale in FY2021. In FY2022, we further strengthened our growth foundation with the launch of the inteXcell, an innovative new memory test cell, and the acquisition of Italian company CREA, a major power semiconductor test equipment manufacturer.
  • We further enhanced our responsiveness to customer needs with ongoing sales / support hiring.
2. Seek Operational Excellence
  • The TechInsights Customer Satisfaction Survey named Advantest the SPE industry leader for the third consecutive year.
  • Launched global business operation initiatives to enhance efficiency and aim for a business process reform.
3. Explore Value to Reach a Higher Level
  • We made progress in developing the AI/HPC, smartphone, and automotive markets for our SLT products.
  • We strengthened our test interface business by acquiring US company R&D Altanova in FY2021, and Taiwanese company Shin Puu (scheduled for completion in FY2023 1Q).
  • We continued to enhance the foundational services offered by Advantest Cloud Solutions™ (ACS).
4. Pioneer New Business Fields
  • We established a system for promotng new businesses, including medical equipment such as fluorescence detection systems.
5. Enhance ESG initiatives
  • Introduced a CxO system to clarify management accountability in order to reinforce a global HQ management system further.
  • We formulated and promoted an ESG Action Plan, which serves as the framework for our ESG initiatives. It helped us to expand our social contributions through our business and improve our ESG external evaluations in FY2022.

In FY2023, as the final year of MTP2, Advantest will work toward the achievement of MTP2 targets, positioning FY2023 as the year to promote the stronger and more resilient business foundations.

Updated July 28, 2022