ADVANTEST CORPORATION

Shin-Marunouchi Center Building,1-6-2, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan Phone: +81-3-3214-7500Fax: +81-3-3214-7711

http://www.advantest.co.jp/en-index.shtml

Advantest America Corporation

3201 Scott Blvd.Santa Clara, CA 95054,U.S.A.Phone: +1-408-988-7700

Advantest (Europe) GmbH

Stefan-George-Ring 2,D-81929, Munich, GermanyPhone: +49-89-99312-0

Advantest (Singapore) Pte. Ltd.

438A Alexandra Road, #08-03/06, Alexandra Technopark,Singapore 119967Phone: +65-6274-3100

Stock Exchange Listings:Tokyo (Code: 6857)New York (Ticker Symbol: ATE)

Share Registration Agent:Tokyo Securities Transfer Agent Co., Ltd.Tougin Building, 1-4-2, Marunouchi,Chiyoda-ku, Tokyo 100-0005, Japan

Depositary Bank for ADRs:JPMorgan Chase Bank, N.A.4 New York PlazaNew York, NY 10004, U.S.A.

Contact AddressJPMorgan Service CenterP.O.Box 3408South Hackensack, NJ07606-3408, U.S.A.Phone: +1-800-990-1135

©2007 ADVANTEST CORPORATION Printed in Japan Bulletin No.NCP05-331 July ’07D

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CONTENTS

To Our Stakeholders 4Corporate Governance 9Directors and Senior Management 11Financial Highlights 13Financial Section 14

Advantest’s Business

As of the end of March 2007, the Advantest Group encompasses:

Advantest Corp., 40 consolidated subsidiaries, and one company

accounted for by the equity method. Our company is chiefly engaged

in the development, manufacturing, and sale of semiconductor and

component test systems and mechatronics-related products, and also

in the maintenance and servicing of these products. Of our three

reportable business segments — semiconductor and component test

systems, mechatronics (test handlers, device interface products, EB

lithography equipment), and services, support — the most significant

is semiconductor and component test systems, which accounted for

71.4% of sales in fiscal 2006. This segment encompasses our memo-

ry test systems for memory semiconductor devices and non-memory

test systems for semiconductors other than memory.

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Bigger Puzzle?Don’t despair.

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Complexity growing?

Don’t give up.

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Fiscal 2006 Business ResultsIn fiscal 2006, our business environment saw somesemiconductor manufacturers reducing capital spend-ing due in part to a decline in flash memory semicon-ductor prices, but the market generally held strong,buoyed by demand for digital consumer productssuch as mobile phones, flat-panel televisions, andgame consoles. Also favorable, semiconductor manu-facturers accelerated investments in 300-mm wafermanufacturing, and from the second half of the year,DRAM manufacturers increased capital spending,gearing up for the sale of personal computers withnew operating systems.

Under these circumstances, our company workedto expand sales by providing total solutions of prod-ucts and services to meet varied customer demands.We also further promoted production reformsthrough our just-in-time production system, intro-duced in August 2003, and took steps to improvequality and productivity and to reduce costs.

As a result, sales totaled 235.0 billion yen, down7.4%, income before taxes totaled 61.1 billion yen,down 9.4%, and net income fell 14.1% to 35.6 billionyen, each compared to the previous fiscal year.

Forecast for Fiscal 2007In fiscal 2007, we anticipate wider adoption of a newoperating system in PCs, and thus strong capitalinvestment for DDR2 DRAM semiconductors. Wealso expect a revival of capital spending for MPUs, acore component in personal computers. Regardingdigital consumer products, we forecast growth indemand for multi-function mobile devices and alsoinvestment for increased production of products such

as flat-panel televisions in anticipation of the 2008Beijing Olympics.

However, we have some concerns, includingrestrained capital spending due to an unpredictable bal-ance of supply and demand in the semiconductor mar-ket, sharp rises in raw material prices, exchange-raterisks, and the accompanying downward pricing pressure.

Our company will deal with this by taking steps tofurther increase orders and sales by strengtheningmarketing and development systems and introducingappropriately timed new products that anticipate cus-tomer needs. To further increase cost competitiveness,through the company-wide Activate 21 initiative, we arerevising business processes company-wide, improvingproduction efficiency, and taking steps to further boostprofitability.

To Our Stakeholders

Toshio MaruyamaRepresentative Board DirectorPresident and CEO

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A Year of Opportunities for GrowthThe semiconductor market in 2006 was valued atabout 250 billion dollars. The market for semiconduc-tor test systems is around 5 billion dollars, represent-ing only about 2% of the semiconductor market. Togrow in this niche market, we must continue expand-ing market share, and fortunately, with the progressof end-user products, the business environment pres-ents a wealth of opportunities for our company.

For example, with the introduction of a new PCoperating system, a shift is taking place toward high-er performance MPUs and faster and higher capacitymemory. For next-generation MPUs, we anticipategrowth in demand for our T2000 open-architectureSoC test system, and the price competition amongMPU manufacturers and efforts toward cost reduc-tion will be an opportunity to make the most of thesuperior cost effectiveness of the T2000.Furthermore, owing to our core competency andstrength in memory test technology, we are ahead ofthe curve in responding to the industry’s increasingmemory speeds and have a distinguished productlineup of high-speed memory test systems on-board,including the T5588.

In addition, with the anticipated advances in appli-cations for mobile devices, including mobile phones,LCD televisions, and automobiles, we expect higherdemand for other semiconductor test systems,including the T5300 series memory test system, thenew T6373 LCD driver IC test system, and the T6500series SoC test system.

Expanding Market ShareTo expand market share, we are working to strengthenour development and manufacturing systems.

Specifically, in addition to strengthening our engineerrecruitment procedures, we have plans for a new clean-room building in the grounds of Advantest LaboratoriesLtd. in Sendai, as well as for a new company, AdvantestComponent, Inc., to carry out integrated developmentand production of key devices such as MEMS switchesused in semiconductor test systems and of other elec-tronic parts.

In manufacturing, through the company-wide adop-tion of the just-in-time production system, we willstrengthen systems for all departments, including thedevelopment, sales, and administrative divisions, to pro-vide backup to the production departments. In addition,as part of our relocation activities, we will move produc-tion sites to improve efficiency in development, produc-tion, and distribution. Furthermore, we will strive toimprove quality at a components and design level as well,not simply in manufacturing.

These efforts will contribute to our ability to create anenvironment capable of bringing high-quality products tomarket in a timely manner, seizing business opportuni-ties, and expanding our market share.

T2000

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The best configurationfor you, we know it.

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Nothing puzzlingfor us in

global markets.

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Advantest’s CSR EffortsAt the same time that our company strives for futuregrowth, through our Corporate Social Responsibility(CSR) committee, we are also monitoring and super-vising all corporate social responsibility activities,including the areas of environment, human rights, anddisclosure, in order to fulfill our corporate socialresponsibilities to all our stakeholders.

In October 2006, we formulated our “CSR Policy,”consisting of five categories: “Harmonizing withSociety,” “Respecting our Customers,”“Respectingour Shareholders and Investors,” “Respecting ourSuppliers,” and “Respecting our Employees.” Theseguidelines were included in the “Advantest Code ofConduct,” revised in April 2007, and redistributed to allour employees.

In the future too, we will continue to ensure thateach and every employee holds an awareness of corpo-rate citizenship, we will seriously consider environmen-tal problems and their future course, and we will worktowards sustainable corporate growth, so future gener-ations can enjoy our precious natural environment.

Basic Policy on Profit Appropriation and DividendsBased on the premise that long-term and continuedgrowth in corporate value is fundamental to the creationof shareholder value, our company has considered theconsistent distribution of profits to be the most importantmanagement priority and has maintained a policy to con-tinue with constant dividend payouts. While aiming tomake consistent distributions, because of the fluctuationof the market in which we operate, we make dividendpayouts following a target payout ratio of 20% or more.Accordingly, in response to the consistent support wehave received from our shareholders, we have, based onthe above profit distribution policies, increased the year-end dividend per share by 15.0 yen, from the 17.5 yen ofthe previous forecast to 32.5 yen.

Furthermore, our company, through a resolution ofthe Board of Directors, repurchased its shares, up to avolume of 3.6 million shares or total value of 20 billionyen. By May 17, 2007, we had repurchased 3.6 millionshares.

In the future as well, we will take the initiative in provid-ing profit distributions based on our consolidated results.

Toshio Maruyama

Representative Board DirectorPresident and CEO

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Corporate Governance

Directors

The Board of Directors has the ultimateresponsibility for the administration of theaffairs of the Company. The Company’s arti-cles of incorporation limit the number of direc-tors to ten. Directors are elected at a generalmeeting of shareholders, and the standardterm of directors is one year. Directors mayserve any number of consecutive terms. TheBoard of Directors elects one or more repre-sentative directors from among its members,each of whom has the authority individually torepresent the Company. From among itsmembers, the Board of Directors may electthe chairman and the vice chairman. None ofthe directors of the Company has a servicecontract with the Company that provides forbenefits upon termination of service.

Pursuant to the Company Law and theCompany’s articles of incorporation, and tothe extent permitted by the laws and regula-tions, the Company may, by resolution of theBoard of Directors, exempt liabilities of itsdirectors (including persons who have previ-ously served as the Company’s directors) forfailing to perform their duties. The Companymay enter into contracts with outside direc-tors to limit their liabilities for a failure to per-form their duties, provided that the maximumamount of liabilities under such contracts shallbe the total of the amounts provided in eachitem of Article 425, Paragraph 1 of theCompany Law.

Corporate Auditors

The Company’s articles of incorporation pro-vide for no more than five corporate auditorsand the Company currently has two CorporateStanding Auditors and three outside corporateauditors (of the three outside corporate audi-tors, one is a Corporate Standing Auditor).Corporate auditors are elected at the generalmeeting of shareholders and the standardterm of office of corporate auditors is fouryears. Under the Company law, at least half ofthe corporate auditors are required to be per-sons who have not been a director, account-ing counselor (if an accounting counselor is acorporation, an employee of such corporationwho executes its duties), executive officer,manager, or employee of the Company or anyof its subsidiaries at any time in the past.Corporate auditors may not at the same timebe directors, accounting counselors (if an

accounting counselor is a corporation, anemployee who executes its duties), executiveofficers, managers, or employees of theCompany or any of its subsidiaries. TheCompany increased the number of requiredoutside corporate auditors from one to two,and again from two to three, at the generalmeetings of shareholders held in June 2003and June 2007, respectively, in order tostrengthen the auditing function of the boardof corporate auditors. Corporate auditors areunder a statutory duty to oversee the admin-istration of the Company’s affairs by its direc-tors, to audit its financial statements to besubmitted by its Board of Directors to the gen-eral meetings of the shareholders and toreport their opinions thereon. They are alsorequired to attend the meetings of the Boardof Directors and to express their opinions, butare not entitled to vote.

Corporate auditors constitute the board ofcorporate auditors. The board of corporate audi-tors has a statutory duty to prepare and submitan audit report to the directors each year. A cor-porate auditor may note his or her opinion inthe audit report if his or her opinion is differentfrom the opinion expressed in the audit report.The board of corporate auditors is empoweredto establish audit policy, methods to investi-gate the state of business operations andassets and other matters relating to the execu-tion of duties by corporate auditors.

Pursuant to the Company Law and theCompany’s articles of incorporation, and tothe extent permitted by the laws and regula-tions, the Company may, by resolution of theBoard of Directors, exempt liabilities of its cor-porate auditors (including persons who havepreviously served as the Company’s corpo-rate auditors) for failing to perform theirduties. The Company may enter into con-tracts with outside corporate auditors to limittheir liabilities for a failure to perform theirduties, provided that the maximum amount ofliabilities under such contracts shall be thetotal of the amounts provided in each item ofArticle 425, Paragraph 1 of the Company Law.

Significant Differences in Corporate

Governance Practices between the

Company and U.S. Companies Listed on

the New York Stock Exchange

Pursuant to home country practices exemp-tions granted by the New York Stock

Exchange, or the NYSE, the Company is per-mitted to follow certain corporate governancepractices complying with Japanese laws, reg-ulations and stock exchange rules in lieu ofNYSE’s listing standards. The United StatesSecurities and Exchange Commission, or theSEC, approved changes to the NYSE’s listingstandards related to corporate governancepractices of listed companies in November2003, as further amended in November 2004.The Company is exempted from the approvedchanges, except for requirements that (a) theCompany’s audit committee satisfy therequirements of Rule 10A-3 under the U.S.Securities Exchange Act of 1934 as amended,or the Exchange Act, (b) the Company mustdisclose significant differences in the corpo-rate governance practices followed by theCompany as compared to those followed bydomestic companies under the NYSE listingstandards, (c) the Company’s CEO must noti-fy the NYSE of material non-compliance with(a) and (b), and (d) the Company must submitannual and interim written affirmations to theNYSE. The Company’s corporate governancepractices and those followed by domesticcompanies under the NYSE listing standards,or NYSE Corporate Governance, have the fol-lowing significant differences:

1. Directors

The Company currently has two outside direc-tors on its Board of Directors. Unlike NYSECorporate Governance, the Company Law ofJapan and related legislation (hereinafter inItem 6.C, the “Company Law”), do notrequire Japanese companies with boards ofcorporate auditors such as the Company tohave any outside directors on its Board ofDirectors. While NYSE Corporate Governancerequires that the non-management directorsof each listed company meet at regularlyscheduled executive sessions without man-agement, the Company currently has no non-management director on its Board ofDirectors. Unlike NYSE CorporateGovernance, the Company Law does notrequire, and accordingly the Company doesnot have, an internal corporate organ or com-mittee comprised of only outside directors.

2. Committees

The Company has not established commit-tees responsible for director nomination, cor-

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porate governance and executive compensa-tion as required by NYSE CorporateGovernance, but it has adopted a system ofcorporate auditors based on the CompanyLaw and integrated such system into theCompany’s corporate governance structure.In addition, in connection with such system ofcorporate auditors, the Company has electedto establish a nomination and compensationcommittee, which is an optional committeeunder the Company Law.

Pursuant to the Company Law, theCompany’s Board of Directors nominates andsubmits a proposal for appointment of direc-tors for shareholder approval. The sharehold-ers vote on such nomination at theCompany’s general meeting of shareholders.The Company Law requires that the respec-tive total amount of remuneration, among oth-ers, (remuneration, bonus, and other consid-eration for services related to employment) tobe paid to all directors and all corporate audi-tors must be determined by a resolution ofthe general meeting of shareholders, unlesstheir remuneration is provided for in the arti-cles of incorporation. The distribution of remu-neration among directors is broadly delegatedto the Company’s Board of Directors and thedistribution of remuneration among corporateauditors is determined by the board of corpo-rate auditors.

3. Audit Committee

The Company avails itself of paragraph (c)(3)of Rule 10A-3 of the Exchange Act, which pro-vides a general exemption from the auditcommittee requirements to a foreign privateissuer with a board of corporate auditors, sub-ject to certain requirements which continue tobe applicable under Rule 10A-3.

Consistent with the requirements of theCompany Law, the Company elects its corpo-rate auditors through a resolution adopted at ageneral meeting of shareholders. TheCompany currently has four corporate audi-tors, which exceeds the minimum number ofcorporate auditors required pursuant to theCompany Law.

Unlike NYSE Corporate Governance, theCompany Law, among others, does notrequire corporate auditors to establish anexpertise in accounting nor are they requiredto present other special knowledge and expe-rience. Under the Company Law, the board of

corporate auditors may determine audit poli-cy, methods to investigate the state of busi-ness operations and assets and other mattersrelating to the execution of duties by corpo-rate auditors, prepare corporate auditors’reports and give consent to proposals of thenomination of corporate auditors and account-ing auditors.

The Company currently has three corpo-rate auditors who satisfy the requirements of“outside corporate auditor” under theCompany Law. Unlike NYSE CorporateGovernance, under the Company Law, atleast one-half of the corporate auditors of theCompany must be “outside corporate audi-tors,” which is a person who was not a direc-tor, an accounting counselor (if an accountingcounselor is a corporation, an employee ofsuch corporation who carries out its duties),executive officer, general manager, or anyother employee of the Company or any of itssubsidiaries at any time in the past. Corporateauditors may not at the same time be direc-tors, an accounting counselor (if an account-ing counselor is a corporation, an employeewho carries out its duties), executive officer,general manager, or any other employee ofthe Company or any of its subsidiaries.

4. Corporate Governance Guidelines

The Company is required to adopt or disclosecorporate governance guidelines underJapanese laws and regulations, including theCompany Law and the Securities andExchange Law of Japan or stock exchangerules. Pursuant to the Company Law, theCompany is required to decide to implement astructure as required by an ordinance of theMinistry of Justice (the “Internal ControlSystem”) in order to ensure directors’ compli-ance with applicable laws and regulations andthe Company’s articles of incorporation whileexecuting their duties and joint stock compa-nies’ proper business operation, and isrequired to disclose the decision to imple-ment the Internal Control System, policiesand the conditions of its corporate gover-nance in its business report, annual securitiesreport and certain other disclosure docu-ments in accordance with the Company Law,the Securities and Exchange Law, and appli-cable Cabinet ordinances and stock exchangerules in respect of timely disclosure.

5. Code of Business Conduct and Ethics.

Unlike NYSE Corporate Governance, underJapanese law (including the Company Lawand the Securities and Exchange Law ofJapan), and stock exchange rules, theCompany is not required to adopt a code ofbusiness conduct and ethics for directors, offi-cers and employees. Accordingly, theCompany is not required to adopt and dis-close a code of business conduct and ethicsfor these individuals. However, in accordancewith the Company Law, the Company hasdecided to implement the Internal ControlSystem as a structure to ensure that direc-tor’s execution of their duties at meetings ofthe Board of Directors complies with applica-ble laws and regulations and the Company’sarticles of incorporation. Furthermore, theCompany has established a code of ethicsconsistent with Section 406 of the Sarbanes-Oxley Act.

6. Shareholder Approval of Equity

Compensation Plans

Unlike NYSE Corporate Governance, in whichmaterial revisions to equity-compensationplans of the listed companies are subject toshareholder approval, pursuant to theCompany Law, if a joint stock companydesires to adopt an equity-compensation planfor directors as compensation to directorsother than cash, such company is generallyrequired to obtain shareholder approval by an“ordinary resolution.” In addition to the aboveapproval, when the Company previouslydesired to adopt an equity-compensation planunder which stock acquisition rights are grant-ed on favorable terms to the recipient underthe plan (except where such rights are grant-ed to all of its shareholders on a pro-rata basisat the same time), then the Company hasobtained shareholder approval by a “specialresolution” of a general meeting of sharehold-ers, where the quorum is one-third of the totalnumber of voting rights and the approval of atleast two-thirds of the voting rights represent-ed at the meeting is required.

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Directors and Senior Management

Board of Directors

Shimpei TakeshitaChairman of the Board

Toshio MaruyamaRepresentative Board Director

Naoyuki AkikusaDirector

Yasushige HagioDirector

Junji NishiuraDirector

Hiroji AgataDirector

Takashi TokunoDirector

Hiroshi TsukaharaDirector

Yuichi KuritaDirector

Corporate Executive Officers

Toshio MaruyamaPresident and CEO

Senior Executive Officers

Junji NishiuraTechnology and Production

Hiroji AgataSales and Marketing

Takashi TokunoProducts

Corporate Auditors

Takashi TakayaCorporate Standing Auditor

Hitoshi OwadaCorporate Standing Auditor

Megumi YamamuroCorporate Auditor

Jiro HanedaCorporate Auditor

Jiro Haneda Hitoshi Owada Hiroshi Tsukahara Hiroji Agata Yasushige Hagio Toshio Maruyama

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07Executive Officers

Masao ShimizuSenior Vice President, DI Business Group

Masao ArakiPresident and CEO, Advantest Customer Support Corporation

Hideaki ImadaSenior Vice President, 2nd Test System Business Group

Akira HatakeyamaPresident,Advantest Manufacturing, Inc.

Yasuhiro KawataSenior Vice President, Cost Planning Group

Takashi SugiuraSenior Vice President, FA Business Group

Managing Executive Officers

Hiroshi TsukaharaSenior Vice President, 1st Test System Business Group

Yuichi KuritaSenior Vice President, Corporate Planning Group

Yuri MoritaSenior Vice President, Corporate Affairs Group

Jiro KatohSenior Vice President, Production Support Group

Takao TadokoroSenior Vice President, Sales and Marketing Group

Hiroyasu SawaiSenior Vice President, SE Group

Yoshiro YagiVice President, Sales and Marketing Group

Shinichiro KuroeVice President, Sales and Marketing Group

Takashi SekinoSenior Vice President, Technology Development Group

Hiroshi NakamuraSenior Vice President, Financial Group

Yoshiaki YoshidaVice President,Corporate Planning Group

Minoru MorishitaManager, Nanotechnology 2nd Business Division

Shimpei Takeshita Naoyuki Akikusa Junji Nishiura Takashi Tokuno Yuichi Kurita Takashi Takaya Megumi Yamamuro

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Financial Highlights

Net Sales (Billions of yen)

300

250

200

150

100

50

2003/3 2004/3 2005/3 2006/3 2007/3

0

Net Income (loss) (Billions of yen)

50

20

30

40

10

0

-10

-20

2003/3 2004/3 2005/3 2006/3 2007/3

-30

Net Income Per Share (Yen)

250

150

200

100

50

-50

0

2003/3 2004/3 2005/3 2006/3 2007/3

-100

Total Assets (Billions of yen)

400

300

200

100

2003/3 2004/3 2005/3 2006/3 2007/3

0

Advantest Corporation and Consolidated Subsidiaries

2003 2004 2005 2006 2007 2007

Yen U.S. Dollars(in millions, except (in thousands, except

Years ended March 31: per share and share data) per share and share data)

Consolidated Statement of Operations Data:

Net sales ¥97,740 ¥174,218 ¥239,439 ¥253,922 ¥235,012 $1,990,784

Operating income (loss) (16,743) 30,960 60,719 64,458 56,792 481,084

Income (loss) before income taxes (18,688) 28,878 61,808 67,454 61,090 517,493

Net income (loss) (12,994) 17,329 38,078 41,374 35,556 301,194

Net income (loss) per share:

Basic* (66.00) 88.19 194.77 223.17 190.01 1.61

Basic weighted average shares outstanding* 196,890,222 196,501,660 195,500,690 185,389,026 187,128,842 187,128,842

As of March 31:

Total assets ¥281,224 ¥330,808 ¥296,769 ¥350,776 ¥366,374 $3,103,549

Total stockholders’ equity 210,663 221,768 206,749 257,927 294,797 2,497,221

Note 1: The above financial data were prepared under U.S. GAAP. Note 2: In this annual report, amounts reported in Japanese yen have been translated into U.S. dollars for the convenience of readers.

The rate used for this translation was $1.00=¥118.05, the approximate exchange rate in Japan on March 31, 2007.

*On October 1, 2006, the Company conducted a two for one stock split of shares of its common stock. Net income (loss) per share and averagenumber of shares outstanding for each period presented have been restated to reflect the effects of the stock split.

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This Financial Section contains information extracted from the Company’sannual report on Form 20-F, as filed with the U.S. Securities andExchange Commission on June 28, 2007. For more details, please refer tothe aforementioned Form 20-F.

CONTENTS

Management’s Discussion and Analysis of Financial Conditionand Results of Operation ............................................................... 16

U.S. GAAP Selected Consolidated Financial Data ........................... 19Consolidated Balance Sheets ........................................................... 21Consolidated Statements of Income ............................................... 23Consolidated Statements of Stockholders’ Equity .......................... 24Consolidated Statements of Cash Flows ........................................ 25Notes to Consolidated Financial Statements.................................... 26

FINANCIAL SECTION

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Cautionary Statements with Respect to Forward-Looking StatementsThis annual report contains “forward-looking statements” that are based on Advantest’s current expectations, estimates, and projections. These forward-looking statements are subject toknown and unknown risks, uncertainties, and other factors that may cause Advantest’s actual results, levels of activities, performance, or achievements to be materially different from thoseexpressed or implied by such forward-looking statements. These factors include: (i) changes in demand for the products and services produced and offered by Advantest’s customers, includ-ing semiconductors, communications services, and electronic goods; (ii) circumstances relating to Advantest’s investment in technology, including its ability to timely develop products thatmeet the changing needs of semiconductor manufacturers and communications network equipment and components makers and service providers as well as risks associated withAdvantest’s investment in OPENSTAR®, an industrywide open architecture for SoC testing; (iii) significant changes in the competitive environment in the major markets where Advantest pur-chases materials, components, and supplies for the production of its principal products or where its products are produced, distributed, or sold; and (iv) changes in economic conditions, cur-rency exchange rates, or political stability in the major markets where Advantest procures materials, components, and supplies for the production of its principal products or where its productsare produced, distributed, or sold. A discussion of these and other factors which may affect Advantest’s actual results, levels of activity, performance, or achievements is contained in the“Operating and Financial Review and Prospects,” “Key Information - Risk Factors,” and “Information on the Company” sections and elsewhere in Advantest’s annual report on Form 20-F,which is on file with the United States Securities and Exchange Commission.

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CONTENTS

To Our Stakeholders 4Corporate Governance 9Directors and Senior Management 11Financial Highlights 13Financial Section 14

Advantest’s Business

As of the end of March 2007, the Advantest Group encompasses:

Advantest Corp., 40 consolidated subsidiaries, and one company

accounted for by the equity method. Our company is chiefly engaged

in the development, manufacturing, and sale of semiconductor and

component test systems and mechatronics-related products, and also

in the maintenance and servicing of these products. Of our three

reportable business segments — semiconductor and component test

systems, mechatronics (test handlers, device interface products, EB

lithography equipment), and services, support — the most significant

is semiconductor and component test systems, which accounted for

71.4% of sales in fiscal 2006. This segment encompasses our memo-

ry test systems for memory semiconductor devices and non-memory

test systems for semiconductors other than memory.

ADVANTEST CORPORATION

Shin-Marunouchi Center Building,1-6-2, Marunouchi, Chiyoda-ku,Tokyo 100-0005, Japan Phone: +81-3-3214-7500Fax: +81-3-3214-7711

http://www.advantest.co.jp/en-index.shtml

Advantest America Corporation

3201 Scott Blvd.Santa Clara, CA 95054,U.S.A.Phone: +1-408-988-7700

Advantest (Europe) GmbH

Stefan-George-Ring 2,D-81929, Munich, GermanyPhone: +49-89-99312-0

Advantest (Singapore) Pte. Ltd.

438A Alexandra Road, #08-03/06, Alexandra Technopark,Singapore 119967Phone: +65-6274-3100

Stock Exchange Listings:Tokyo (Code: 6857)New York (Ticker Symbol: ATE)

Share Registration Agent:Tokyo Securities Transfer Agent Co., Ltd.Tougin Building, 1-4-2, Marunouchi,Chiyoda-ku, Tokyo 100-0005, Japan

Depositary Bank for ADRs:JPMorgan Chase Bank, N.A.4 New York PlazaNew York, NY 10004, U.S.A.

Contact AddressJPMorgan Service CenterP.O.Box 3408South Hackensack, NJ07606-3408, U.S.A.Phone: +1-800-990-1135

©2007 ADVANTEST CORPORATION Printed in Japan Bulletin No.NCP05-331 July ’07D

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