Teradyne was founded by Alex d'Arbeloff and Nick DeWolf, two classmates who met at Massachusetts Institute of Technology (MIT) in the late 1940s when they lined up alphabetically in an ROTC class. After graduation, Alex and Nick pursued separate careers, getting together again in 1960 with the vision of starting their own company.

Alex and Nick foresaw that testing would become a bottleneck to high-volume production of electronic components unless the tasks performed by technicians and laboratory instruments could be automated. Their business plan involved of a new breed of "industrial grade" electronic test equipment, known as much for its reliability and economic payback as for its technical performance.

The pair rented space above Joe and Nemo's hot dog stand, on the corner of Kingston and Summer Streets in downtown Boston. It was a location they both could walk to from their homes, and convenient to public transportation for all employees. The new venture was named Teradyne because "it had to have a 'D' in it," according to DeWolf. "'Tera' is the prefix for 10 to the 12th power and 'dyne' is a unit of force. To us, the name meant rolling a 15,000 ton boulder uphill," he said.

Getting things rolling, d'Arbeloff and DeWolf learned how to run a company, and sell a new category of test equipment aimed at improving efficiency on the production floor. Teradyne's first product was a logic-controlled go/no-go diode tester, the D133. It was introduced in 1961 at a time when semiconductor manufacturers used sophisticated laboratory instruments to characterize devices and slow manual equipment in the factory. Manufacturers were at first resistant to putting sophisticated, automated equipment into their production process.

"Two years after we started peddling that first diode tester we couldn't make enough of the very same machine for the very same people," said DeWolf, after early customers discovered that increased production throughput rapidly paid back the diode tester's cost. Teradyne followed with products for testing resistors and transistors.

In 1966, Teradyne introduced an integrated circuit tester, the J259. It was the first tester to use a minicomputer to control a series of test steps, and it launched the automatic test equipment (ATE) industry. Ever since, Teradyne has been credited with a long string of technology "firsts."

Over the next 30 years, Teradyne focused on expanding its semiconductor test markets and extending its business into new markets that leverage the company's technology, customer relationships, and marketing expertise. New business areas also provide a buffer to the volatile swings of the semiconductor test market.

By the early 1970s, Teradyne's product line-up included ATE dedicated to memory devices and test systems for electronic subassemblies (printed circuit boards and backplanes). Teradyne also had established itself as a supplier of commercial backplane connection systems. By the end of the decade, Teradyne had a division supplying telecommunications test products, including an automated system for testing telephone subscriber lines.

In the 1980s, Teradyne expanded its subassembly test business by acquiring Zehntel, a leading manufacturer of in-circuit board test systems. In 1987, the company introduced the first analog VLSI test system, the A500, leading the market then, as Teradyne does today, in the testing of integrated devices that provide the interface between the analog world and digital data.

The 1990s brought more expansion and diversification. The company acquired Megatest Corporation, a San Jose, California semiconductor test company, and expanded its semiconductor test group to include testers that are significantly smaller and less expensive than the testers available at the time. The company also became a market leader in high end System-On-a-Chip (SOC) test with its Catalyst and Tiger test systems. This decade also saw the acquisition of several new ventures with products for testing software, computerized telephone systems, computer networks, and the Internet. These ventures were later spun off as an independent company.

In 2000, Teradyne Connection Systems acquired Herco Technologies and Synthane-Taylor in California, while in 2001, Teradyne acquired circuit board test and inspection leader GenRad and merged it into the Assembly Test Division. Diagnostic Solutions, which was a division of GenRad that made test equipment for the automotive manufacturing and service industries, became a separate product group for Teradyne. Teradyne continued its investment in R&D and has developed several new products in all its markets. In 2003, the company formally opened its Shanghai facility, where three product divisions-Semiconductor Test, Assembly Test and Connection Systems-are manufacturing, selling and supporting products for the growing Chinese electronics market.

Teradyne's sold its Connection Systems business in late 2005. Today, Teradyne has two major business groups, Semiconductor Test, and the Systems Test Group (Assembly Test, Diagnostic Solutions and Broadband Test).

Teradyne founder Nick DeWolf left Teradyne in 1971 to pursue personal and other business interests. He passed away in 2006. Alex d'Arbeloff stayed on, retiring from his position as Chairman of the Board at Teradyne in May 2000. George Chamillard succeeded Alex as Teradyne Chairman, President and CEO. In 2003, Mike Bradley was named President of the company in 2003 and CEO in 2004. Chamillard retired as Chairman at the end of 2006.