Vedvati Shrotre

Vedvati Shrotre inquired about Onto Innovation's expectations for Semilab's revenue contributions in 2026 and whether the company's organic growth, excluding Semilab, is projected to outperform a 20% WFE growth rate.

Answer

Brian Roberts (CFO) stated that Semilab contributed $9 million in revenue in Q4 2025. For 2026, initial expectations were in the low hundreds to $110 million, but he noted that challenges in the power semiconductor market might impact this. Regarding organic growth, Brian Roberts (CFO) referred to Michael Plisinski's (CEO) earlier comments, which projected 30%+ growth for advanced packaging and mid-teens growth for advanced nodes, allowing analysts to calculate the overall growth rate.

Vedvati Shrotre asked how TSMC's plan to double advanced packaging CapEx would affect the linearity of Onto's 2.5D integration revenue. She also questioned if Onto's offering changes significantly between CoWoS-L and CoWoS-S technologies.

Answer

CEO Michael Plisinski explained that when a customer doubles capacity, process control tools are typically front-loaded to qualify new equipment, and he expects this to apply to 2.5D packaging. He also noted that new applications being qualified could increase capital intensity further. He stated there are no significant differences in their offering for CoWoS-L versus CoWoS-S.

Vedvati Shrotre asked for an update on the $120 million volume purchase agreement (VPA) for gate-all-around, visibility into 2025 HBM capacity additions, and the size of the power semiconductor opportunity given the auto market downturn.

Answer

CEO Michael Plisinski stated that visibility on the VPA remains strong across both customers involved, with a significant portion remaining for 2025. He acknowledged that HBM expansion plans appear muted for now but expects an increase will be necessary to support logic growth. For power semiconductors, Plisinski explained that record revenue is driven by customers' focus on improving yields during wafer size transitions, making it the second-largest market within the specialty and advanced packaging segment.

Vedvati Shrotre, Director at Evercore, inquired about Camtek's visibility beyond 2026, given the strong demand environment and growing backlog, specifically asking if there's any insight into 2027. She also sought Camtek's perspective on the advanced packaging market growth, noting the disparity between 40% growth cited by some DAP and edge players and high-teens growth from process control peers.

Answer

COO Ramy Langer confirmed that Camtek is starting to see signs and initial discussions for 2027, with customers talking about machine shipments for the first and second quarters, indicating a positive outlook beyond 2026. Regarding advanced packaging growth, Langer identified fan-out as a leading application and stated that the market is experiencing definite double-digit growth, though he refrained from quantifying a specific number for 2026 at this early stage.

Vedvati Shrotre (Evercore) inquired about Camtek's visibility extending beyond 2026 into 2027, and sought clarification on the disparity in advanced packaging market growth estimates from different industry players.

Answer

Ramy Langer (COO, Camtek) confirmed that Camtek is starting to see signs and initial numbers for 2027, with customers discussing machine shipments for Q1 and Q2. Regarding advanced packaging growth, he noted that leading applications include fan-out and regular bump inspection, and while it's definitely double-digit growth, it's too soon to quantify the exact number for 2026.

Vedvati Shrotre questioned the change in the full-year HPC contribution forecast from a 50-60% range to 50%. She also asked about the impact of the transition to HBM3E/HBM4 on inspection intensity and the competitive landscape in Korea.

Answer

Executive Ramy Langer clarified that the 50% HPC contribution is based on a higher total revenue forecast, meaning the absolute dollar amount for HPC remains on target. He noted that higher HBM stacks require more wafer scans, which is positive for business. He also stated that Camtek remains a main player in Korea, alongside Onto and KLA, without seeing significant new local competition.

Vedvati Shrotre asked about changes in Nova's lead times over the past three months and whether optical component constraints are a driver of the current lead time pressure.

Answer

President and CEO Gaby Waisman acknowledged increased pressure on lead times, which impacts visibility, but stated Nova is improving its operational agility and working with suppliers to ensure material and capacity availability for anticipated growth. She clarified that the lead time pressure is customer-driven, stemming from the need to convert CapEx into WFE and fab deliveries, and affects all components of Nova's metrology portfolio equally, not specifically optical components.

Vedvati Shrotre asked about how Nova's lead times have changed over the past three months and whether constraints in optical components are a significant driver of the current lead time pressures.

Answer

Gaby Waisman, President and CEO, acknowledged increased pressure on lead times, which impacts visibility, but stated Nova is enhancing its operational agility and working with suppliers to ensure material and capacity availability. She clarified that lead time pressure is customer-driven, stemming from the need to convert CapEx into WFE and fab deliveries, and affects all parts of Nova's metrology portfolio equally, not specifically optical components.

Vedvati Shrotre asked about the expected financial contribution and margin profile of the recent Sentronics acquisition, and whether Nova could quantify the revenue potential from its new chemical metrology facility.

Answer

President and CEO Gabriel Waisman noted that Sentronics' Q1 revenue is included in the forecast and that the company is well-positioned in a growing market. CFO Guy Kizner added that Sentronics aligns with Nova's financial model and is expected to be accretive within 12 months. Regarding the new facility, Waisman stated it provides capacity for future growth without providing a specific revenue figure.

Vedvati Shrotre asked about the key investment drivers and technology inflections in the memory space that benefit Nova. She also questioned if the trajectory to the $500 million GAA revenue target by 2026 has changed due to reported customer issues. Lastly, she inquired about Nova's China exposure outlook for 2025 compared to peers who are reducing theirs.

Answer

Gabriel Waisman, executive, identified current memory demand as being driven by DRAM, particularly for high-bandwidth memory (HBM) applications. He anticipates DRAM demand will grow more in the first half of 2025, with a NAND recovery in the second half. Waisman firmly stated there is no change to the $500 million GAA revenue forecast by 2026, expressing confidence in Nova's strong position. Regarding China, he reiterated that demand remains robust, but its overall share of sales will naturally moderate as advanced node business accelerates in other regions.

Vedvati Shrotre requested an update on the qualification process for GPUs and custom ASICs, and whether FormFactor expects to generate revenue from both opportunities in the second half of the year. She also asked if FormFactor could quantify the market opportunity for GPUs and custom ASICs. Finally, she inquired whether pricing could become a driver for gross margin expansion, given the increasing test complexity in foundry logic and HBM DRAM.

Answer

CEO Mike Slessor confirmed existing multimillion-dollar revenue from custom ASICs with ongoing growth, and stated that the GPU qualification is making excellent progress, currently in reliability testing, with revenue expected from this merchant GPU qualification in the second half of the year. He estimated the merchant GPU opportunity to be around $50 million in 2025, primarily with a competitor, and noted that the custom ASIC opportunity is harder to size but shows significant growth, making both areas key focuses for market share and coverage. He acknowledged that delivering incremental value can lead to sharing in that value through product attributes like higher throughput or better yield, and noted that for super important customer programs, FormFactor can share in the value created. Senior VP Aric McKinnis added that while pricing opportunities are welcome, the main path for gross margin improvement is through long-term controllable cost reductions, not pricing.

Vedvati Shrotre requested an update on the qualification process for GPUs and custom ASICs, confirming expectations for revenue generation in the second half of the year from both opportunities. She also asked if the opportunity size for these segments has been quantified. Additionally, she inquired if pricing could become a driver for gross margin expansion, given the increasing test complexity in foundry logic and HBM DRAM, beyond the current cost-focused strategies.

Answer

CEO Mike Slessor stated that custom ASICs already have multi-million dollar design wins and revenue from mid-2025, with continued growth expected. For GPU qualification, they are in reliability testing and anticipate merchant GPU revenue in the second half. He estimated the merchant GPU opportunity at around $50 million in 2025, with significant growth potential. He noted that delivering incremental value can lead to shared compensation, but Senior VP, FormFactor, Inc. Aric McKinnis emphasized that cost control remains the primary path for long-term gross margin improvement, not pricing.

Vedvati Shrotria sought clarification on whether the merchant GPU win would influence the first-half versus second-half dynamics of 2026 revenue and if it's incorporated into the new target model. She also asked about the potential for the Robotics business to exceed breakeven revenues, driven by the large e-commerce program.

Answer

CEO Greg Smith confirmed that a significant merchant GPU ramp would impact the second half of 2026 and is included in the $6 billion target model, though it assumes incremental share gains over years, not a radically high initial share. For Robotics, he stated the goal is breakeven for 2026, with the large e-commerce customer's revenue expected to triple between 2025 and 2026, and grow substantially post-2026, contributing positively beyond 2026.

Vedvati Shrotria sought clarification on whether the merchant GPU win impacts second-half versus first-half dynamics and if it's included in the new target model. She also asked if the ramping large e-commerce program in robotics could lead to revenues exceeding the breakeven point for that business.

Answer

CEO Greg Smith confirmed that a significant merchant GPU ramp would impact the second half and is part of the $6 billion target model, though it assumes an incremental, not radically high, share gain over years. For robotics, Greg Smith stated the goal is breakeven this year, with the large e-commerce customer's revenue expected to triple between 2025 and 2026, growing substantially post-2026, positioning the business to contribute positively beyond 2026.

Vedvati Shrotre asked about HBM, specifically the new singulated die test insertion and Q3 volume shipments, inquiring if this is becoming the norm, if it increased demand, and if all suppliers are expected to adopt it. She also asked for color on how much compute is part of SoC in the second half of 2025, and if current data suggests compute is a stronger driver than the analyst day projection of one-third mobility, one-third compute, and one-third auto industrial for 2028.

Answer

CEO Greg Smith clarified that only one major manufacturer is routinely performing singulated stack HBM testing, and its proliferation depends on significant downstream yield improvement. CFO Sanjay Mehta stated that the second half business is very strongly driven by compute (VIP and networking). Mr. Smith added that AI-driven segments accounted for 50% of Q3 total revenue, rising to 60% in Q4, confirming a significant shift in business composition and indicating the updated long-term model in January will heavily weight compute and AI-driven memory.

Vedvati Shrotre asked for clarification on the adoption of HBM singulated die testing, inquiring if it's becoming a norm and if all suppliers are expected to adopt it. She also sought color on the proportion of compute within SoC revenue in the second half of 2025 and how the 2028 model composition might shift given compute's strong driver status.

Answer

CEO Greg Smith clarified that only one major manufacturer is routinely performing singulated stack HBM testing, and its broader proliferation depends on significant downstream yield improvements. CFO Sanjay Mehta stated that compute (VIP and networking) is a 'very significant component' of the second half business. Mr. Smith added that AI-driven segments (memory and SoC compute) accounted for 50% of total revenue in Q3 and are projected to be 60% in Q4, indicating a 'very different composition of business.' He confirmed the long-term model update in January would reflect a much heavier weighting on compute and AI-driven memory.