Makes the specialized contact tips and test systems that touch every point on a semiconductor wafer before it is cut into chips.
At a glance
- Depends onUpstream position: supplies 4 industries, depends on 0
- ScaleMarket cap is above the global median
Makes the specialized contact tips and test systems that touch every point on a semiconductor wafer before it is cut into chips.
FormFactor builds the probe cards that semiconductor fabs use to test every die on a wafer before it is cut — tiny spring-tipped arrays that must touch hundreds of pads simultaneously without damaging them, at geometries now smaller than ten microns. The springs are shaped by photolithography and electroplating rather than bent by hand, so the geometry can be controlled precisely enough to keep up with each successive node shrink at TSMC, Samsung, Micron, and others. Because each probe card is designed around one customer's specific pad layout, switching to a different supplier means running a six-to-twelve-month qualification from scratch while production testing stalls, which makes it easier for customers to stay than to leave. The same photolithographic fabrication also underpins FormFactor's cryogenic test systems, but if the company's patterning resolution cannot follow the next node's shrinking pads, the cantilever geometry goes out of spec and every customer qualification downstream stops with it.
How does this company make money?
The company charges per probe card sold, with prices ranging from thousands to tens of thousands of dollars depending on how complex the card is and how many contact points it has. It also sells capital equipment — the probe stations and thermal systems used in the test process. On top of that, it earns ongoing revenue from servicing those systems and selling the consumable parts that wear out and need to be replaced.
What makes this company hard to replace?
Switching to a different probe card supplier requires a full 6-to-12-month qualification cycle with the new vendor, during which production testing cannot use the new cards. Each probe card is designed around that specific customer's chip pad layout and cannot be swapped for a generic alternative. The probe station hardware is also integrated into existing fab automation and test software platforms, so replacing it means reworking those connections as well.
What limits this company?
The photolithography step used to pattern the spring contacts has a resolution limit. When a customer's next chip generation shrinks its pads below what that lithography step can print, the probe card goes out of spec and a new fabrication recipe must be developed from scratch. That development and validation process takes 6 to 12 months per customer per chip architecture, so the company can only serve a new generation as fast as it can run those qualification cycles — one at a time, for each named customer.
What does this company depend on?
The company cannot operate without MEMS fabrication equipment to manufacture the micro-spring probes, beryllium-copper and tungsten alloys for the probe tip materials, liquid helium to run the cryogenic probe stations, Cascade Microtech probe station platforms, and the semiconductor fab qualification processes that approve each new probe card design before it can be used in production.
Who depends on this company?
TSMC and Samsung rely on the company's probe cards to perform wafer-level testing on advanced logic chips during qualification — without them, that testing phase stalls. SK Hynix and Micron depend on it for high-bandwidth memory testing. RF chipmakers including Qorvo use the company's systems for millimeter-wave on-wafer measurements needed to develop 5G components.
How does this company scale?
Once a fabrication recipe is qualified for a customer's chip, it can be run across multiple production lines without redoing the underlying engineering work — so volume manufacturing scales relatively cheaply. What does not scale easily is the engineering effort to design and qualify each new probe card for a new customer or a new chip architecture. That requires specialized staff with deep semiconductor test knowledge and cannot be automated, so the bottleneck stays with the people and the qualification time, not the factory floor.
What external forces can significantly affect this company?
U.S. export controls on semiconductor test equipment restrict the company from selling to Chinese customers, cutting off a large part of the potential market. Liquid helium shortages — which can be triggered by geopolitical disruptions — directly threaten the operation of the cryogenic probe stations. On the other side, the CHIPS Act is pushing new semiconductor fabs to be built inside the United States, which drives demand for the kind of wafer-level test capability this company provides.
Where is this company structurally vulnerable?
If a new chip generation shrinks its pad pitch faster than the company can upgrade its photolithographic patterning capability, the spring geometry falls out of tolerance. The scrub characteristic degrades, the contact becomes unreliable, and the foundry or memory maker — TSMC, Samsung, SK Hynix, or Micron — must re-qualify a different probe technology. Once that happens, the incumbency the company spent multiple qualification cycles building is gone and must be rebuilt from zero.
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