FormFactor Inc
SWB:FMF
FormFactor Inc
FormFactor Inc., a crucial player in the semiconductor industry, operates as a vital cog in the complex machinery of chip manufacturing. Founded in 1993 and headquartered in Livermore, California, the company has carved its niche in the realm of semiconductor test and measurement, catering primarily to the needs of integrated device manufacturers (IDMs), foundries, and fabless companies. The crux of its business lies in the design and manufacturing of advanced wafer probe cards, which serve as critical tools for testing the electrical properties of semiconductor wafers—essentially ensuring that the intricate circuitry of chips functions correctly before they embark on their journey into countless electronic devices worldwide. The company's expertise in precision engineering allows it to deliver high-performance testing solutions that help its clients manage complex semiconductor device technology with high levels of accuracy and efficiency.
Revenue streams for FormFactor emerge from its ability to supply these sophisticated wafer probe cards, which are indispensable in the semiconductor production process. These products are particularly essential for technologies advancing toward smaller, more powerful, and more energy-efficient chip designs, a demand driven by industries such as consumer electronics, automotive, data centers, and telecommunications. By focusing on innovation and strategic customer relationships, FormFactor capitalizes on expanding semiconductor applications across various sectors. Its business is fueled not merely by the sale of these essential testing tools but also through ancillary services involving periodic maintenance and upgrades, ensuring sustained engagement with its clients. As FormFactor continues to adapt to the rapid changes in technology, it remains firmly positioned to profit from the ever-growing need for more sophisticated semiconductors.
FormFactor Inc., a crucial player in the semiconductor industry, operates as a vital cog in the complex machinery of chip manufacturing. Founded in 1993 and headquartered in Livermore, California, the company has carved its niche in the realm of semiconductor test and measurement, catering primarily to the needs of integrated device manufacturers (IDMs), foundries, and fabless companies. The crux of its business lies in the design and manufacturing of advanced wafer probe cards, which serve as critical tools for testing the electrical properties of semiconductor wafers—essentially ensuring that the intricate circuitry of chips functions correctly before they embark on their journey into countless electronic devices worldwide. The company's expertise in precision engineering allows it to deliver high-performance testing solutions that help its clients manage complex semiconductor device technology with high levels of accuracy and efficiency.
Revenue streams for FormFactor emerge from its ability to supply these sophisticated wafer probe cards, which are indispensable in the semiconductor production process. These products are particularly essential for technologies advancing toward smaller, more powerful, and more energy-efficient chip designs, a demand driven by industries such as consumer electronics, automotive, data centers, and telecommunications. By focusing on innovation and strategic customer relationships, FormFactor capitalizes on expanding semiconductor applications across various sectors. Its business is fueled not merely by the sale of these essential testing tools but also through ancillary services involving periodic maintenance and upgrades, ensuring sustained engagement with its clients. As FormFactor continues to adapt to the rapid changes in technology, it remains firmly positioned to profit from the ever-growing need for more sophisticated semiconductors.
Record Results: FormFactor posted record quarterly and annual revenue in Q4 2025, with gross margin and EPS exceeding both Q3 and the high end of outlook.
Strong Margin Expansion: Gross margin improved by 290 basis points sequentially to 43.9%, outpacing expectations and hitting mid-40% levels three quarters ahead of plan.
Q1 Outlook Upbeat: Management expects sequentially higher revenue and gross margin in Q1 2026, guiding to $225 million in revenue and 45% gross margin.
Operational Improvements: Gains in margin and output are driven by workforce reductions, better manufacturing yields, and reduced cycle times, not one-time factors.
HBM & DRAM Strength: Growth is led by high-bandwidth memory (HBM) driven by the HBM4 transition, with FormFactor gaining share at all three major HBM manufacturers.
Capacity Expansion: The Farmers Branch facility is on track to come online later in 2026, providing structurally lower cost and supporting further growth.
Share Gain Opportunities: FormFactor is making progress in GPU and custom ASIC probe cards, expecting revenue from these areas in the second half of 2026.
Tariff Impact: Tariffs continue to be a 200 basis point headwind on gross margin, with ongoing mitigation efforts but slow recovery.
