Core Insights - Onto Innovation Inc. reported Q3 2025 earnings of $0.92 per share, exceeding the Zacks Consensus Estimate by 5.8%, but down from $1.34 in the prior year [1][9] - The company experienced a 13.5% year-over-year decline in revenues, totaling $218.2 million, which was slightly below the consensus mark but above the midpoint of its guidance [2][9] Revenue Breakdown - Specialty devices and advanced packaging revenues accounted for 52% of total revenues, amounting to $113 million, with expectations to rebound to approximately $150 million in Q4 [3] - Revenues from advanced nodes were $54 million, representing 25% of total revenues, with a forecast to double to about $300 million in 2025 from $148.5 million in 2024 [3] - Software and services revenues were $51 million, making up 23% of total revenues [3] Technology Highlights - Onto's Dragonfly 3Di technology was qualified by two major high-bandwidth memory customers, securing orders for 2.5D logic applications essential for AI accelerators and advanced GPUs [4] - Initial shipments of Atlas G6 OCD systems were made to leading logic and memory customers, with more shipments planned for Q4, indicating strong ongoing demand [4] Q4 Outlook - The company anticipates about 18% revenue growth in Q4, primarily driven by strong demand for 2.5D packaging, with revenues expected to range between $250 million and $265 million [5][11] - Gross margin is projected to improve by about 50 basis points sequentially, with a forecasted range of 53.5% to 55% [12] Margin and Expenses - Non-GAAP gross margin was reported at 54%, slightly down from 54.5% in the previous year, impacted by tariff effects [6] - Non-GAAP operating income decreased to $46.1 million from $70 million year-over-year, with operating expenses rising to $71.9 million [6][7] Liquidity Position - As of September 27, the company had $983.9 million in cash and cash equivalents, with total current liabilities of $162.9 million [8] - The company generated a record $83.4 million in cash from operations, representing a cash conversion of 185% of non-GAAP net income [10] Acquisition Plans - Onto Innovation plans to acquire Semilab for $432.3 million in cash and 641,771 shares, valuing the deal at approximately $495 million, which is about $50 million lower than the original terms [10]

Joining us this morning, Stacy Rasgen Bernstein, senior analyst. Stacy's got an outperform on Qualcomm target of 185. Stacy, what a great time to have you on.I mean, what do you make of this reaction and and the overall move. >> Yeah, you bet. So, today's probably a good day to announce something like this.Now, people actually forget Qualcomm has actually sold AI accelerators for for quite a while. They've had the AI 100. The these look like next generation parts.Um, so we'll see if they can compete or not. ...

They're talking about a collaboration of 10 gigawatts of custom AI accelerators. Open AAI designing these accelerators and systems. They'll de developed and deployed in partnership with Broadcom.Uh essentially their own chips and systems for OpenAI that they can embed uh and again I'm reading from the release here. What is learned from developing Frontier models and products directly into the hardware. Jim, now as opposed to that Nvidia deal which captured the market's imagination a couple of weeks back, th ...

Investment Rating - The report assigns an "Overweight" rating to TSMC with a price target of NT$1,275.0 by December 2025 [2][28]. Core Insights - TSMC is expected to maintain strong structural growth drivers due to its near-monopoly position in AI accelerators and edge AI, supported by a robust process roadmap and industry-leading packaging technology [28]. - The report anticipates a significant ramp-up in TSMC's wafer-level multichip module (WMCM) capacity, particularly for high-end iPhone models, which could lead to substantial revenue growth [5][11]. - CoWoS (Chips-on-Wafer-on-Substrate) capacity is projected to remain tight through the second half of 2025 but is expected to reach a more balanced situation by the second half of 2026 [3][4]. Summary by Sections CoWoS Capacity and Demand - TSMC's CoWoS capacity is expected to grow significantly, reaching 102,000 wafers per month (wfpm) by the end of 2027, with a growth rate of 138% in 2025 [3]. - NVIDIA's CoWoS demand is projected to grow by 25% in 2026, reaching 538,000 units, driven by the migration to the Rubin platform [4][9]. - Overall CoWoS consumption is forecasted to increase from 679,000 wafers in 2025 to 1,132,000 wafers in 2027, reflecting a year-on-year growth of 32% [9]. WMCM Capacity and Adoption - WMCM capacity is expected to reach 27,000 wfpm by the end of 2026 and ramp up to 40,000 wfpm by the end of 2027, driven by Apple’s adoption in high-end iPhone models [5][11]. - If all iPhones were to migrate to WMCM long-term, this would require approximately 90,000 wfpm of WMCM capacity, indicating a significant expansion plan [5]. Customer Demand and Projections - Broadcom is expected to see steady growth in CoWoS consumption, particularly for Google TPUs, while new customers like Meta are anticipated to ramp up in 2026 [4]. - AMD's CoWoS forecasts remain muted for 2025 and 2026, with potential growth expected in the MI450 series in late 2026 and beyond [4]. - The report highlights that the CoWoS ecosystem is maturing, with more non-AI processors beginning to adopt CoWoS packaging, indicating broader market adoption [4]. Future Outlook - TSMC's structural growth is expected to be supported by price hikes on leading-edge nodes and a strong ramp-up of N2 technology in 2026 [28]. - The report suggests that TSMC will likely raise its FY25 USD revenue guidance, alleviating concerns regarding gross margin impacts from overseas expansion and currency fluctuations [28].