Company Overview - FormFactor has a global presence with approximately 2,200 employees and manufactures over 115 million MEMS probes annually[7] - The company's trailing twelve months (TTM) revenue as of June 28, 2025, was $765 million[7] Financial Performance - In 2024, FormFactor's revenue was $764 million, non-GAAP EPS was $1.15, and free cash flow was $83 million[20] - The company's target model aims for $850 million in revenue, a non-GAAP gross margin of 47%, and non-GAAP diluted earnings per share of $2.00[90] Market Position and Growth - The advanced probe card market is estimated to be $2.6 billion in 2027[83] - FormFactor is targeting above-market growth in engineering systems, aiming for a 5%+ CAGR compared to the market's 3% CAGR[86] Industry Recognition - FormFactor was named the 1 global supplier in Test Subsystems and Focused Chip Making Equipment in TechInsights' 2025 customer satisfaction survey[25] - Intel recognized FormFactor with the 2024 EPIC Distinguished Supplier Award[35] Recent Financial Results - In Q1 2025, FormFactor's revenue was $171.4 million, with a gross margin of 39.2% and diluted EPS of $0.23[109] - In Q2 2025, revenue reached $195.8 million, but gross margin was 38.5% and diluted EPS was $0.27[109]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $1,510 million, a sequential increase of 14% and a year-on-year growth of 3% [5][17] - Gross profit for Q2 was $182 million, with a gross margin of 12%, impacted by preparation costs and foreign currency headwinds [17][20] - Operating income was $92 million, with an operating income margin of 6.1%, including a non-routine benefit of $32 million from a contingent payment [20] - Net income for Q2 was $54 million, resulting in an EPS of $0.22, which included $16 million attributable to the contingent payment [20] - The company ended the quarter with cash and short-term investments of $2,000 million and total liquidity of $3,100 million [22] Business Line Data and Key Metrics Changes - Communications revenue grew 15% sequentially, driven by the iOS ecosystem, while Android revenue remained flat sequentially but increased 7% year-on-year [6] - Computing revenue increased 16% from Q1, driven by new product ramps in Personal Computing and growth in Memory [7] - Automotive and industrial markets saw an 11% sequential growth, driven by new product launches for ADAS applications [8] - Consumer revenue increased 16% sequentially, attributed to market share gains in wearables and demand improvement in traditional products [10] Market Data and Key Metrics Changes - The computing market experienced an 18% year-on-year growth, marking it as the fastest-growing end market for the company [12][52] - The automotive market is expected to see low single-digit growth in the second half of the year, with a focus on advanced packaging technologies [72][84] Company Strategy and Development Direction - The company is focused on delivering differentiating technology solutions and expanding its global footprint to support customer supply chains [11] - Strategic investments are being made in advanced packaging technologies and test solutions to enhance competitive advantages [14][68] - The company plans to rationalize its manufacturing footprint, particularly in Japan, to align capacity with market conditions [23][72] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic operating environment with ongoing monitoring of export controls and trade policies [5][6] - The company expects strong Q3 revenue growth driven by new product launches in the premium smartphone segment and continued demand for AI applications [7][24] - Management expressed optimism about the automotive market's recovery, particularly in advanced packaging applications [72][84] Other Important Information - The company replaced its $600 million credit agreement with a new $1 billion revolver and executed a $500 million term loan to strengthen its balance sheet [21] - CapEx forecast for 2025 remains unchanged at $850 million, focused on expanding capacity for leading-edge technology [25][69] Q&A Session Summary Question: Can you provide more color on the short-term gross margin and long-term expectations? - Management indicated that short-term gross margin is impacted by unfavorable product mix and transition in manufacturing, with long-term improvements expected as optimization occurs [28][35] Question: What is the expected ramp for the 2.5D program in volume terms this year? - Management noted that the 2.5D program is crucial and is expected to ramp up as trade restrictions ease, with significant opportunities anticipated [40][42] Question: Are there any signs of demand pull-ins from customers? - Management observed some last-minute spot orders indicating inventory levels are stabilizing, but no active pull-ins were noted [46][47] Question: How does the company view the automotive market's long-term prospects? - Management maintains a positive long-term view on the automotive market, particularly in advanced packaging, despite current challenges in Japan [71][72] Question: What is the status of the tester fleet upgrades? - Management confirmed that upgrades are ongoing, involving both existing platforms and new testers, to meet increased requirements [85][86]

Market Overview - The global semiconductor wafer market is projected to reach approximately $11.5 billion in sales in 2024, with a shipment area of 12,266 million square inches, reflecting a year-on-year decline of 2.7%, marking a recent low [2][3] - The domestic semiconductor wafer market in China is expected to be around 15 billion yuan in 2024, with significant growth in 300mm wafer shipments, particularly from companies like Shanghai Xinsheng, which saw over 70% year-on-year growth [2][3] Industry Trends - By 2027, the demand for silicon wafers is anticipated to grow robustly due to increasing needs related to artificial intelligence and advanced processes, with domestic companies like SMIC and Huahong Group planning clear capacity expansions [3][4] - The 300mm wafer segment is expected to dominate, with global sales projected at around $8.5 billion in 2024, accounting for over 70% of the market, and a domestic market size of approximately 7.5 billion yuan, with a growth rate exceeding 50% [4][5] Pricing Dynamics - In 2024, the pricing of semiconductor wafers is expected to show a divergence, with 300mm wafers remaining stable due to demand from AI and storage chips, while prices for 200mm and smaller wafers are under pressure, with 200mm epitaxial wafer prices dropping over 15% [5][6] - Major players like Shin-Etsu Chemical and SUMCO are controlling production to maintain high margins, while domestic companies are aggressively expanding capacity and pricing their products 10%-15% lower than international competitors [7][8] Financial Performance - In 2024, the total revenue of listed companies in the silicon wafer industry is projected to be approximately 13.453 billion yuan, reflecting a year-on-year growth of 10.58%, with an average gross margin of about 21.14% [10][11] - TCL Zhonghuan and Huahong Group are leading in revenue, with TCL Zhonghuan generating 4.687 billion yuan and Huahong Group 3.388 billion yuan [11] Stock Market Performance - The silicon wafer industry experienced a turbulent stock market in 2024, with an overall decline of 25.13% by year-end compared to the beginning of the year, and a maximum drawdown of 41.51% [14][16] - Huahong Group was the only company to see a slight increase in market value, while TCL Zhonghuan and Shen Gong Co. faced significant declines of 41.41% and 33.55%, respectively [16][17]

Investment Ratings - The report maintains a "Buy" rating for TSMC, MediaTek, and ASE, indicating a positive outlook for these companies in the semiconductor industry [30][12][20]. Core Insights - There is a resurgence in investor sentiment around AI, particularly following Computex in mid-May, although many investors remain underexposed and cautious as they approach the typically soft third quarter [2][1]. - TSMC is expected to benefit from easing concerns over AI order cuts and increasing demand for advanced packaging technologies like CoWoS, with a projected revenue growth of 28.7% YoY in 2025 [5][6]. - MediaTek's AI ASIC project faces potential delays, but the long-term growth story in the ASIC market remains intact, with expectations of a 16% revenue CAGR from 2025 to 2027 [8][17]. - ASE is seeing increased investor interest due to its advancements in advanced packaging technology, with expectations for significant capacity increases in the coming years [10][11]. Summary by Company TSMC - TSMC is positioned as a leading global foundry with over 60% market share, expected to achieve a 20% revenue CAGR driven by AI and HPC demand [12][15]. - The target price for TSMC is set at NT$1,210, based on a P/E multiple of 20x [13][14]. MediaTek - MediaTek is transitioning towards AI applications, with a focus on smartphone processors and enterprise ASICs, aiming for a significant share in the US$45 billion ASIC market [17][8]. - The target price for MediaTek is NT$1,800, based on a P/E multiple of 20x [18]. ASE - ASE is recognized for its leadership in semiconductor assembly and test services, with a focus on advanced packaging technologies [19]. - The target price for ASE is NT$165, derived from a P/E multiple of 18x [21].

Investment Rating - The report initiates coverage of K&S (KLIC US) with a Buy rating, and BE Semiconductor (BESI NA) with a Neutral rating, while maintaining a Buy rating on ASMPT (522 HK) [3][6][11]. Core Insights - Advanced packaging (AP) is expected to evolve significantly from 2025 onwards, with a shift from CoWoS-S to CoWoS-L/R, increased adoption of SoIC driven by HBM5, and potential upgrades in InFO technology led by Apple [3][6]. - The semiconductor cycle's recovery is a key catalyst for K&S and ASMPT, given their substantial sales exposure to conventional packaging [3][6]. CoWoS Technology - CoWoS technology is transitioning from CoWoS-S to CoWoS-L, with TSMC expected to increase its CoWoS-L capacity from approximately 20% in 2024 to nearly 60% in 2025 [7][21]. - CoWoS-S is anticipated to face oversupply due to non-TSMC supply chain expansions, while CoWoS-L is expected to be in demand for high-end GPUs [7][28]. SoIC Technology - SoIC is projected to gain importance with the adoption of high-NA EUV technology, although headwinds are expected in 2025 due to limited new adopters and potential capex constraints from Intel [8][14]. - AMD is currently the major adopter of SoIC, with potential future demand driven by Apple and HBM technologies [8][14]. InFO Technology - Apple is likely to adopt upgraded InFO technology from 2026 onwards, necessitating capacity upgrades to accommodate new application processor designs [9][20]. - The transition from InFO-PoP to InFO-M is expected as the I/O count between DRAM and application processors becomes insufficient [9][20]. Company-Specific Insights - K&S is positioned to be the primary TCB supplier for TSMC's on-wafer process starting in 2025, benefiting from the shift towards CoWoS-L technology [3][6]. - ASMPT is expected to gain market share in the HBM market from a low base, with its TCB potentially adopted by TSMC and Apple in the future [3][6]. - BE Semiconductor faces challenges due to rich valuations and potentially disappointing hybrid bonding orders in 2025 [3][6].

Company Overview - FormFactor has a global presence with approximately 2,150 employees and manufactures over 115 million MEMS probes annually[7] - The company's trailing twelve months (TTM) revenue as of October 30, 2024, was $742 million[7] - FormFactor is recognized by industry leaders such as Intel, Samsung, Micron, SK hynix, and TSMC[7] Financial Performance - In 2023, FormFactor's revenue was $663 million[20] - The company's non-GAAP EPS in 2023 was $0.73[20] - The free cash flow for 2023 was $11 million[20] - The non-GAAP gross margin in 2023 was 40.7%[20] - The target model revenue is $850 million, with a target non-GAAP EPS of $2.00[87] - The target free cash flow is $160 million[87] Market and Growth - The advanced probe card market is estimated to be $2.0 billion, while the engineering systems market is $0.5 billion[47] - The advanced probe card market is expected to grow at an annual rate of 8%[52] - The engineering systems market is expected to grow at an annual rate of 3%[52] - FormFactor estimates its growth in the advanced probe card market to be 10%+ CAGR[79]

Company Overview - Onto Innovation is a high-tech capital equipment company specializing in optical process solutions for semiconductor and related markets[6] - The company has a trailing twelve month (TTM) revenue of $846 million[7] - The company's TTM adjusted EPS is $3.99[7] - The company has over 10,000 employees[7] - The company has over 1,500 active metrology & inspection tools installed[7] Market Trends and Growth Drivers - The AI server market is expected to grow at a compound annual growth rate (CAGR) of 42%[9] - Chiplet packaging is expected to grow at a CAGR of 80%[9] - Global EV charging station is expected to grow at a CAGR of 46%[9] - The company estimates its Total Available Market (TAM) will increase threefold due to the AI era, reaching $12.3 billion[12] Financial Guidance and Long-Term Model - The company's Q2 2024 revenue guidance is between $230 million and $240 million[32] - The company's Q2 2024 gross margin guidance is between 52% and 54%[32] - The company's Q2 2024 diluted EPS guidance is between $1.14 and $1.26[32] - The company's long-term organic operating model targets $1.8 billion in revenue[33]

Core Viewpoint - TSMC's CoPoS packaging technology is gaining attention in the market, with plans for its first production line set to be established by 2026 and large-scale production expected between late 2028 and 2029, with NVIDIA as the first customer [1][2] Group 1: CoPoS Technology Development - TSMC's CoPoS is a variant of the CoWoS technology, designed to optimize space and reduce costs, with dimensions of 310x310 mm [1] - The focus of CoPoS packaging will be on advanced applications such as AI, with specific processes targeting companies like Broadcom, NVIDIA, and AMD [1][2] Group 2: Production Timeline and Facilities - TSMC's AP7 facility in Chiayi is planned to have eight phases, with CoPoS expected to achieve large-scale production in phase P4 [2] - The AP7 site is strategically chosen for its larger area and advanced technology, allowing for the integration of multiple packaging technologies [2] Group 3: Future Production and Technology Integration - The timeline for CoPoS includes equipment testing starting mid-next year, with small-scale production anticipated in 2027, followed by process validation and large-scale production by the end of 2028 [2] - TSMC aims to provide optimal solutions by integrating various technologies such as SoIC, CoWoS, and CoPoS for HPC chip packaging below 2nm [2]

Novel multi-die packaging platform enables multi-die architectures with lower power consumption and reduced total cost  Industry-first modular RDL interposer offers an alternative to traditional silicon interposers and enables supply chain flexibility for data center infrastructure Solution is production-qualified and now entering production ramp in support of customer-specific AI accelerator designsSANTA CLARA, Calif., May 29, 2025 /PRNewswire/ -- Marvell Technology, Inc. (NASDAQ: MRVL), a leader in data ...

Group 1 - Deca Technologies has signed an agreement with IBM to implement its M-Series™ and Adaptive Patterning® technologies in IBM's advanced packaging facility in Bromont, Quebec [1][2] - The collaboration aims to enhance IBM's advanced packaging capabilities, positioning the Bromont plant as a critical hub for high-performance packaging and chiplet integration [2][4] - Deca's M-Series platform is recognized as the highest-volume fan-out packaging technology globally, with over seven billion units shipped, and the MFIT™ technology offers cost-effective alternatives for chiplet integration [3][6] Group 2 - The partnership reflects a shared commitment to advancing semiconductor packaging, combining IBM's capabilities with Deca's technology to expand the global supply chain for high-performance chiplet integration [4][5] - Advanced packaging and chiplet technology are essential for improving computing solutions in AI and data-heavy applications, with Deca's involvement ensuring IBM's Bromont facility remains innovative [5] - Deca Technologies is a leading provider of advanced packaging technology, with its M-Series™ fan-out technology emerging as a key industry standard for future semiconductor applications [6]