Printed circuit board maker TTM Technologies Inc. (Nasdaq: TTMI) is clearly reaping the rewards of artificial intelligence.
After releasing fourth-quarter results on Feb. 5, shares in the following trading session soared as much as 23% to $30.41 – an all-time high.
While the shares have since settled to $25.68 at press time, that is still a 75% increase in the last 12 months.
The company expects products based on generative AI to keep boosting results this year, CEO Thomas Edman told stock analysts in a conference call after the release of the results.
“We saw increased demand from our semiconductor testing customers as generative AI drove increased purchases of automated testing equipment for the first quarter,” Edman said.
OC companies are increasingly touting AI capabilities in their products. For example, on Jan. 30, global IT services company UST in Aliso Viejo and Experian, a data and consumer credit reporting company in Costa Mesa, separately announced a strategic partnership to provide financial organizations with the opportunity to quickly innovate and improve their products using advanced AI technologies.
Increased Generative AI
TTM makes circuit boards, the internal parts that hold chips and other electronic components, for networking gear, computers, medical devices and aerospace parts.
In technical terms, the company manufactures technology solutions including mission systems, radio frequency (RF) components and RF microwave/microelectronic assemblies and quick-turn and technologically advanced printed circuit boards.
The company reported fourth-quarter adjusted profit of 60 cents per share on revenue of $651 million, topping the 47 cents on sales of $630 million expected by analysts.
TTM forecast current quarter profit of 37 cents to 43 cents a share on revenue of $600 million to $640 million; analysts projected a 37-cent profit on sales of $604 million.
Edman cited the increased demand from “certain networking customers.”
“Revenues reflected the fourth consecutive quarter (ended Dec. 30) of year-on-year growth due to demand strength in our aerospace and defense, data center computing and networking end markets, the latter two being driven by generative AI,” Edman said.
Operating margins were double-digit for the second consecutive quarter and reflected continued solid execution, the company said.
Ukraine, Middle East Funding
“The solid demand in the defense market is a result of a positive tailwind in previous defense budgets and supplemental funding related to conflicts in Ukraine and the Middle East,” according to CEO Edman.
The company is primarily a subcontractor to aerospace and defense manufacturers who sell the end products to the federal government. Its five largest customers account for about 41% of sales.
The company is expanding its facilities, having opened “a new state of the art” manufacturing facility in Penang, Malaysia, to service commercial customers in markets such as data centers and medical fields.
It is also starting construction on a new ultra-HDI manufacturing facility in Syracuse, New York, to manufacture advanced printed circuit boards; it is scheduled to open in 2026.
