Saturday, June 9, 2018

Volume And Complexity Creating Opportunities For FormFactor

As a company leveraged to both chip production volume and the increasing complexity of chip design and packaging, FormFactor (FORM) sits in a pretty good spot within the semiconductor equipment industry. Not only is demand for FormFactor’s probe cards tied to chip production volume, but the increasing sophistication of chip designs has increased testing demands and, I believe, expanded FormFactor’s competitive moat as solutions once deemed “good enough” no longer are.

FormFactor has been weak over the past year, hurt in large part by delays in Intel’s (INTC) ramp of 10nm chips. Then again, FormFactor has added a major new customer and the shares have already recovered some lost ground on the prospects for ongoing strength in memory and improving results in the second half of 2018. With the shares still offering some upside here, this looks like a name worth further due diligence.

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Volume And Complexity Creating Opportunities For FormFactor

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