Semiconductor testing company FormFactor and Teradyne are joining forces to improve methods of testing semiconductors.

Teradyne, a test equipment manufacturer, also agreed to make a $300 million strategic equity investment in FormFactor as part of the agreement.

The companies said Monday that they entered a "broad technology collaboration" to develop testing architectures and infrastructure for next-generation semiconductor devices.

The agreement should help meet the testing, scalability, and time-to-market needs of the semiconductor industry, FormFactor Chief Executive Mike Slessor said.

"By combining FormFactor's deep expertise in device characterization, probing, interfaces, and production test solutions with Teradyne's test platforms, we can help customers accelerate innovation and move more efficiently from technology development to high-volume manufacturing," he said.

Shares in FormFactor rose 4% to $135.50 in after-hours trading on Monday. The stock closed down 6.7% at $130.28, and has more than doubled in value year to date.