Sunday, May 5, 2019

FormFactor Not Seeing A Sharp Turn Yet

I liked FormFactor (FORM) around the start of the year, as this market-leading wafer-testing company is driven by chip production volumes, not semiconductor equipment capex budgets, and ongoing migrations to more complex chip designs and packaging. Since then, the whole chip market has done better than I’d expected on renewed enthusiasm that the cycle correction will be short and fairly shallow, and FormFactor shares are up more than a third since that last article even with a pretty nasty post-earnings fall.

While I do still like the basic story at FormFactor, I think there’s still too much bullishness around the chip recovery story. With mixed reads from probe companies like FormFactor and Micronics and my own concerns that the correction process could take a little longer, I’d be careful about jumping in right away on this post-earnings decline.

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FormFactor Not Seeing A Sharp Turn Yet

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