FormFactor Riding A Surge In Logic And Foundry

A surge in demand from foundry and logic customers has driven FormFactor (FORM) to a new decade high, with fourth quarter revenue set to jump almost 25% on renewed demand for probe cards at 5-10nm nodes. While this surge is likely not sustainable on an ongoing quarterly basis, FormFactor is clearly benefitting from the move to increasingly sophisticated chip architectures and packaging, allowing the company to even further separate itself from more commodity-type probe card manufacturers.

Valuation is problematic. Not unlike Teradyne (TER), which makes wafer test systems, FormFactor's multiples are pumped on the exceptional near-term revenue growth and improving margins. I can't really make the numbers work now, but investors who are more motivated by growth and momentum may still find something to like here.

Continue reading here:
FormFactor Riding A Surge In Logic And Foundry