Tel.

+44 (0)20 7232 3090 Traded on

AIM, London
Fax +44 (0)20 7232 3099 Stock Exchange

www.iirgroup.com Regulated and

LSE: IIR authorised by

Advantest Corporation 11 July 2008

Company News Alert

Significant decline in common stock price since our FY 2008 update report

Common HOLD Advantest Corporation’s (Advantest) common stock price has witnessed a substantial decline since
Direct access
our FY 2008 to report
update the full
datedreport
10 Junefree ofreflecting
2008, chargeinvestor
at concerns regarding global
Stock http://www.iirgroup.com/researchoracle/viewreport/show/20284
economic health and slowdown in the semiconductor sector. On 10 July 2008, Gartner, Inc. (Gartner),
Ticker: 6857.T reduced its y-o-y capital spending forecast for FY 2008 from its previous expectation of a 19.8%
decline to a 22.4% y-o-y decline, the implications of which could further impact the company’s
Target price: ¥2,539 revenues in CY 2H 08. Given the current volatility in financial markets coupled with our cautious short
Current price: ¥2,105 term outlook for the company, we maintain our HOLD rating for the Advantest common stock although
the current price suggests a BUY rating.
Price change We will reassess the common stock rating for once the company announces its 1Q 09 results on 25
since last report: (20.3%) July 2008.

ADR HOLD Although the current ADR price supports a BUY rating, we maintain our HOLD rating based on our
fundamental outlook as we do not anticipate a significant positive currency impact in the medium
term.
Ticker: ATE
Target price: US$24.18
Current price: US$19.70
We will reassess the ADR (1 ADR = 1 common share) rating for Advantest once the company
Price change announces its 1Q 09 results on 25 July 2008.
since last report: (20.9%)

Supervisor: Shilpen Shah
Analyst: Abhilasha Jha
Editor: Heloise Capon
Global Research Director:
Satish Betadpur, CFA
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com

Next news due: In our FY 2008 update report dated 10 June 2008, we reiterated the Advantest common stock a HOLD
1Q 09 results1, 25 July 2008 on fundamental grounds with a 6-12 month target price of ¥2,539, indicating a potential downside of
4%. Since then, the common stock has declined 20.4%.

In line with most technology stocks around the world, Advantest has experienced significant erosion in
its stock price as the semiconductor industry continues to struggle in the context of an unstable global
economy triggered by the subprime mortgage crisis in the US, inflationary pressures and reduced
consumer spending. 2008 is not expected to be a good year for semiconductor equipment vendors as
most manufacturers are reducing capacity expansion to counter declining demand and excess
capacity built-up. On 10 July 2008, Gartner further reduced its global semiconductor capital spending
forecast for 2008 from a 19.8% decline predicted in April 2008 to a 22.4% y-o-y decline. A further
reduction in capital spending could further hamper Advantest’s top-line growth in CY 2H 08. In
addition, reflecting macroeconomic concerns, the Topix Index has declined 6.8% since our previous
update report, closing at 830.67 on 11 July 2008. Given the current volatility in financial markets
coupled with our cautious short term outlook for the company, we maintain our current HOLD rating for
the Advantest common stock.

Footnote
1 Note that we have used the US convention to report fiscal years (e.g. fiscal year ending 31 March 2008 as FY 2008). Some Japanese firms describe their

fiscal year based on the start date, i.e. they refer to the fiscal year ending 31 March 2008 as FY 2007. Advantest follows the US convention of recognizing
fiscal years.

Page 1 Refer to footnote on page 1