FormFactor(US:FORM) ZACKS·2025-04-03 16:06Core Insights - FormFactor (FORM) is expanding its capacity in Taiwan to better serve customers in Asia, particularly in advanced packaging technologies driven by AI and high-performance computing [1] - Taiwan contributed 22.7% of total revenues, amounting to $173.5 million, reflecting a 17.4% increase compared to 2023 [2] - The company is facing weak demand in the semiconductor market, particularly in high-volume sectors like client PCs and mobile handsets, which is expected to continue into 2025 [3][4] Revenue and Market Performance - FormFactor's revenues from Taiwan reached $173.5 million, with significant contributions from other Asian markets: China ($103 million), Japan ($34 million), Singapore ($20.2 million), and Malaysia ($18.2 million) [2] - The company anticipates a reduction in demand for non-high bandwidth memory (HBM) DRAM probe cards due to export controls affecting shipments to China [4] - Despite current challenges, strong demand for HBM and Generative AI is projected to positively impact FormFactor's long-term prospects, contributing $100 million to revenues in 2024 [5] Future Outlook - The transition to new HBM4 designs is expected to drive significant growth in DRAM probe card demand starting mid-2025 [6] - FormFactor expects gross margin to contract in the near term due to a challenging product mix, with projections below the target of 47% on $850 million of annual revenues [7] - The Zacks Consensus Estimate for first-quarter 2025 revenues is $170.01 million, indicating a 0.76% year-over-year growth, while the estimate for 2025 revenues is $772.83 million, reflecting a 1.21% year-over-year growth [10][11] Stock Performance - FormFactor shares have declined 34.7% year to date, underperforming the broader technology sector and semiconductor industry [8] - Comparatively, shares of industry peers like Infineon Technologies have appreciated by 2.7%, while Nova Ltd. and Broadcom have seen declines of 2.7% and 25.8%, respectively [9]