FormFactor (FORM) 28th Annual Needham Growth Conference Virtual summary

Business Overview and Technology Trends

• Trailing 12-month revenues reached $764 million, with Q4 guidance suggesting an $800+ million annual run rate, indicating business growth.

• The company operates in probe cards for wafer testing and engineering systems, with significant exposure to co-packaged optics (CPO) and high bandwidth memory (HBM) applications.

• Advanced packaging trends, such as chiplets and die stacking, are increasing the importance and complexity of wafer testing, especially for HBM DRAM.

• Strategic R&D partnerships with industry leaders, notably SK Hynix and Intel, have led to strong market share in HBM and CPO technologies.

• Recent organizational changes and leadership hires have focused on improving gross margins and operational efficiency.

Operational Changes and Manufacturing Footprint

• Announced factory realignment, consolidation, and reduction in force to drive efficiency and leverage market share.

• Closing two California sites and transitioning activities to a new facility in Farmers Branch, Texas, expected to increase capacity and flexibility while reducing costs, with first production targeted for end of 2026 and ramping into 2027.

• Site consolidation aims to optimize resource allocation and support growth in a strong demand environment.

• Capital expenditures are being reduced as a percentage of revenue, supporting organic growth and operational efficiency.

• Maintains a strong balance sheet with flexible cost structure and a new $150M revolving credit facility.

Market Positioning and Competitive Advantages

• Holds key supplier status with all three major DRAM manufacturers, with a particularly strong relationship with SK Hynix.

• Differentiated by ability to deliver high-parallelism, high-productivity probe cards operating at 11 Gbps, supporting market share growth.

• MEMS technology investments enable probe cards to handle higher power and current, providing a competitive edge as GPU and ASIC power requirements rise.

• Only a few global competitors possess comparable MEMS capabilities, leading to market consolidation.

• Early customer engagement and the largest R&D budget in served markets create high barriers to entry and technology leadership.