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Ultra Clean Holdings, Inc. (UCTT) is a leading developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. The company operates through two main segments, focusing on designing, engineering, and manufacturing production tools, components, and providing precision cleaning and coating services. UCTT's offerings support semiconductor and display capital equipment markets, as well as semiconductor device makers and wafer fabrication equipment markets.
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Products - Designs, engineers, and manufactures production tools, components, parts, modules, and subsystems for the semiconductor and display capital equipment markets. Key offerings include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics, process modules, and other high-level assemblies.
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Services - Provides ultra-high purity parts cleaning, process tool part recoating, surface encapsulation, and high-sensitivity micro-contamination analysis. These services are targeted at semiconductor device makers and wafer fabrication equipment markets, supporting the production of advanced semiconductor devices through precision cleaning and coating.
- Considering the reported softer demand and inventory adjustments in China, what specific cost mitigation measures and operational adjustments are you implementing to offset the impact on overall profitability in Q1 2025?
- With Q4 margins pressured by a lower high-margin product mix and additional inventory true-ups, how do you plan to restore product gross margins in the near term while managing mix risk?
- Given your guidance of flattish revenue in the first half and a recovery expected in Q3, what are the key catalysts and contingency plans if the anticipated turnaround is delayed?
- In light of your ongoing review of balance sheet alternatives and potential M&A opportunities, what specific financial triggers or market metrics would prompt a shift in your capital structure strategy?
- Since you noted that export control restrictions did not impact shipments due to localized manufacturing, how resilient is this strategy against potential future shifts in global trade policy, and can it sustain revenue amid evolving export controls?
Competitors mentioned in the company's latest 10K filing.
| Company | Description |
|---|---|
Ichor Systems, Inc. | The principal competitor for gas delivery systems. |
One of the principal competitors for other critical subsystems. | |
Foxsemicon Integrated Technology Inc. | One of the principal competitors for other critical subsystems. |
One of the principal competitors for other critical subsystems. | |
One of the principal competitors for other critical subsystems. | |
Fujikin Incorporated | One of the principal competitors for other critical subsystems. |
VDL ETG | One of the principal competitors for other critical subsystems. |
One of the principal competitors for other critical subsystems. | |
Swagelok | A principal competitor for gas delivery component solutions. |
A principal competitor for gas delivery component solutions. | |
Watlow | A principal competitor for gas delivery component solutions. |
Pentagon Technologies | A main competitor in the U.S. for services, cleaning and coating offerings. |
Cleanpart | A main competitor in the U.S. for services, cleaning and coating offerings. |
KoMiCo | A main competitor in South Korea for services, cleaning and coating offerings. |
Balazs (an Air Liquide company) | A primary competitor for analytical services. |
Cerium Labs | A primary competitor for analytical services. |
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Lam Research | Provides cleaning, coating, and manufacturing services | All | 31.9% of revenue in 2024 , 34.0% in 2023 , 39.5% in 2022. Part of the 41.9% combined A/R in 2024 and 26.8% in 2023. |
Applied Materials | Provides critical subsystems, cleaning, coating, services | All | 22.6% of revenue in 2024 , 23.4% in 2023 , 23.2% in 2022. Part of the 41.9% combined A/R in 2024 and 26.8% in 2023. |
ASML Holding NV | Provides semiconductor equipment manufacturing partnerships | All | Individually over 10% of A/R in 2024. Part of the 41.9% combined total A/R in 2024. No specific revenue data available. |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
HIS Innovations Group | 2023 | Ultra Clean Holdings acquired 100% of HIS Innovations Group for an initial cash payment of $50 million with additional earn-out considerations (up to $50 million for FY2023 and up to $20 million for financial targets in 2024–2025), representing a price multiple of 8.3x adjusted EBITDA. This acquisition broadens UCT’s semiconductor sub-fab capabilities, adding high-value, higher-margin product offerings and expanding its market by approximately $1.5 billion, while allowing HIS to continue operating in Hillsboro, Oregon. |
Ham-Let (Israel-Canada) Ltd. | 2021 | Ultra Clean Holdings completed the acquisition of Ham-Let for a total purchase consideration of approximately $362.9 million (including $273.5 million of equity and $91.3 million of net debt) and financed part of the deal with an additional $355.0 million credit facility. This strategic move expanded UCT’s reach in the semiconductor equipment market by providing access to advanced process valves, fittings, and hoses—critical components in ultra-clean systems—and broadened its vertical capabilities across multiple industries. |
Recent press releases and 8-K filings for UCTT.
- Q1 2025 Revenue & Breakdown: Total revenue reached $518.6M (down from $553.3M in the prior quarter) with $457.0M from products and $61.6M from services .
- EPS & Earnings: GAAP EPS declined to $0.28 from $0.51 with a GAAP net loss of $(0.5)M; on a non-GAAP basis, the company generated $12.7M net income (or $0.28 per diluted share) .
- Guidance: Q2 expected revenue is forecasted between $475M and $525M .
- Tariff & Supply Chain Impact: The company is managing uncertain tariff impacts causing order pushouts, with significant tariff costs on customer-specified components expected to be passed on to customers .
- Cost Optimization: In response to a prolonged downturn, Ultra Clean is reducing costs—including headcount and footprint reductions—to adjust from an anticipated $4B run rate to $2B, aiming to protect profitability .
- Jim Scholhamer resigned as CEO effective March 4, 2025 due to personal health reasons, triggering an immediate leadership change
- Clarence Granger, Chairman and founding CEO, has been named Interim CEO while the board launches a search for a permanent replacement, considering both internal and external candidates
- The leadership team remains committed to operational excellence and ensuring business continuity during the transition
- The company will maintain its China for China strategy by continuing operations at its Shanghai facility despite near-term equipment challenges
- Q4 2024 Financial Highlights: Total revenue of $563.3M, GAAP net income of $16.3M, with non-GAAP net income of $22.9M and EPS of $0.51 .
- Full Year 2024 Performance: Revenue reached $2,097.6M and GAAP net income of $23.7M, reversing prior losses .
- Q1 2025 Guidance: Revenue expected between $505M–$555M and EPS guidance of $0.22–$0.42, alongside ongoing cost and capital structure reviews .
- Product & Services Breakdown: Products generated $503.5M at a 15.2% gross margin while Services contributed $59.8M at a 29.8% gross margin .
- Operational Efficiency: Operating expenses declined as a percentage of revenue despite a slight contraction in product gross margins due to shipment mix .
- China Market Exposure: Approximately $40M in Q4 and $215M for the full year, with near-term softness expected in Q1 and Q2 .