Elizabeth Sun

Elizabeth Sun asked Guy Kizner about the sequential decrease in gross margin guidance for Q1 2026 to 58% and inquired whether Nova's accumulated Gate-All-Around revenue for 2024-2026 is expected to exceed the $500 million target.

Answer

Guy Kizner, CFO, explained that the Q1 gross margin guidance of 58% reflects the current specific product mix for the quarter, emphasizing that margins fluctuate quarterly and the annual basis is more representative, with no structural changes. Gaby Waisman, President and CEO, confirmed that Nova is on track to meet the $500 million accumulated revenue target for Gate-All-Around for 2024-2026, with 2026 expected to be higher than 2025.

Elizabeth Sun asked for clarification on the Q1 gross margin guidance, specifically the reason for the sequential decline to 58%, and inquired about the Gate-All-Around accumulated revenue target of $500 million by 2026, questioning if recent announcements suggest it might be exceeded.

Answer

CFO Guy Kizner explained that the Q1 gross margin guidance of 58% (plus or minus 1 percentage point) reflects the current specific product mix for the quarter, emphasizing that margins can fluctuate quarterly and should be viewed annually, with no structural change. President and CEO Gaby Waisman confirmed Nova is on track to reach the $500 million accumulated revenue target for Gate-All-Around for 2024-2026, with 2026 expected to be higher than 2025.

Elizabeth Sun inquired about Entegris's expectations for advanced packaging revenue in 2026, noting it's a smaller part of total revenue but with recent POR wins and efforts in HBM.

Answer

Dave Reeder (CEO, Entegris) noted that advanced packaging grew nicely in 2025 (roughly $100M+) and is expected to continue growing nicely in 2026. He mentioned sampling of new product lines for this market, with more focused efforts expected to yield greater benefits in 2027 and beyond, as the market's complexity aligns with Entegris's product portfolio.

Elizabeth Sun asked about AI's percentage of Entegris's total revenue, given it's 5% of wafer starts but Entegris has higher content for AI-related products. She also inquired about expectations for advanced packaging revenue in 2026, noting its smaller but growing contribution, POR wins, and HBM efforts.

Answer

CEO Dave Reeder stated that approximately 60% of Entegris's 2025 revenue came from advanced nodes (logic 7nm and below, and the last two generations of memory), which is expected to grow as AI drives demand for incremental capacity and memory. For advanced packaging, Dave noted it grew nicely in 2025 (around $100 million+) and is expected to continue growing in 2026. He mentioned product lines are sampling now, with others to follow later in the year, and while more significant benefits are anticipated in 2027 and beyond, it is a growing, complex market that aligns well with Entegris's product portfolio.

Elizabeth Sun inquired about the outlook for the Foundry and Logic market this year, considering both the upside from networking and potential GPU qualification, and the softness in traditional markets like smartphones and PCs. She also asked for clarification on the target model gross margin of 47%, specifically whether it includes the 200 basis points tariff impact, and inquired about the mitigation methods being implemented for tariffs and potential upside from these efforts.

Answer

CEO Mike Slessor stated that FormFactor expects the Foundry and Logic market to grow overall, with the company aiming to gain share, highlighting the successful shift towards high-performance compute (e.g., networking switches) and the achievement of record revenue without the large microprocessor IDM being a 10% customer as testament to this diversification. Senior VP Aric McKinnis clarified that the 47% target model gross margin does not include tariffs, so the adjusted target is 45% with the 200 basis point tariff headwind. He explained that the primary mitigation path is pursuing "drawbacks" with the customs department to reclaim paid tariffs, but noted it's a detailed, time-intensive process that could take several quarters to show P&L benefits.

Elizabeth Sun asked for FormFactor's outlook on the functional logic market this year, considering upsides from networking and GPU qualification balanced against softness in traditional smartphone and PC markets. She also asked Senior VP Aric McKinnis if the 47% target model gross margin includes the 200 basis points tariff impact, what mitigation methods are being implemented for tariffs, and the potential upside from these efforts.

Answer

CEO Mike Slessor expects the functional logic market to grow for FormFactor and overall, driven by share gains and a shift towards high-performance compute applications like networking switches. He highlighted achieving record revenue without the traditional large microprocessor IDM as a 10% customer, demonstrating diversification. Senior VP, FormFactor, Inc. Aric McKinnis clarified that the 47% target model gross margin does *not* include tariffs, and they are targeting 45% adjusted for the 200 basis point tariff headwind. Mitigation efforts involve 'drawbacks' with customs, but benefits may take several quarters.