Onto Innovation Inc
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Onto Innovation Inc
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Onto Innovation Inc
Onto Innovation makes inspection, metrology, and process-control tools used to build computer chips. Its machines help chipmakers and chip packaging plants find defects, measure tiny features, and keep production lines within spec. The company also sells related software, service contracts, and support that keep these tools running in factories. Its main customers are semiconductor manufacturers, foundries, memory producers, and advanced packaging shops. These buyers use Onto’s tools at different steps of chip production, from wafer fabrication to packaging and final testing. Onto makes money mainly by selling equipment upfront and then earning recurring service, spare parts, and software revenue after the sale. What makes Onto’s business important is that it sits in the quality-control layer of chipmaking. As chips get smaller and packaging gets more complex, manufacturers need more precise measurement and inspection to protect yield and reliability. That gives Onto a role as a specialized supplier that helps customers make better chips, not by making the chips themselves, but by helping factories see and control microscopic manufacturing problems.
Onto Innovation makes inspection, metrology, and process-control tools used to build computer chips. Its machines help chipmakers and chip packaging plants find defects, measure tiny features, and keep production lines within spec. The company also sells related software, service contracts, and support that keep these tools running in factories.
Its main customers are semiconductor manufacturers, foundries, memory producers, and advanced packaging shops. These buyers use Onto’s tools at different steps of chip production, from wafer fabrication to packaging and final testing. Onto makes money mainly by selling equipment upfront and then earning recurring service, spare parts, and software revenue after the sale.
What makes Onto’s business important is that it sits in the quality-control layer of chipmaking. As chips get smaller and packaging gets more complex, manufacturers need more precise measurement and inspection to protect yield and reliability. That gives Onto a role as a specialized supplier that helps customers make better chips, not by making the chips themselves, but by helping factories see and control microscopic manufacturing problems.
Strong quarter: Onto Innovation said first-quarter revenue, gross margin, operating margin, and EPS all came in above the high end of guidance, driven mainly by strength in advanced nodes and the start of Dragonfly G5 shipments.
Outlook raised: Management expects second-quarter revenue of $320 million to $330 million and now sees 2026 revenue above $1.3 billion, with second-half revenue growing at least 15% over the first half.
AI packaging momentum: Advanced packaging was a major growth driver, and management now expects that business to grow more than 50% in 2026, helped by Dragonfly G5, 3DI, and JetStep.
Rigaku deal: Onto deepened its metrology strategy by buying a 27% stake in Rigaku for about $710 million, aiming to create new software licensing and hybrid metrology opportunities over the next several years.
Margins improving: Despite higher input, fuel, and shipping costs, gross margin rose to 55.7% and operating margin to 26.7%; management expects further margin expansion through the rest of the year.
2027 upside: Management said it expects to outgrow WFE again next year, with Dragonfly G5, Atlas G6, silicon photonics, and panel-level packaging all seen as important contributors.
