SK Hynix completed the world's first development of HBM4 in September last year and transitioned to its Yangsan system. This memory, which is installed in NVIDIA's next-generation graphics processing units (GPUs), is created by stacking 16 DRAM chips into a single unit. The process requires high-difficulty work, as even a single defective chip among the 16th renders the entire finished product unusable. Because an undetected defect rate of just 1% can reduce the final yield by more than 10%, it is essential to perfectly inspect each individual chip for defects before the stacking process.
FormFactor (NASDAQ: FORM), a U.S.-listed company, is one of the key partners of SK Hynix and maintains a close relationship in the high-bandwidth memory (HBM) inspection sector. In June this year, at the SWTest (Semiconductor Wafer Test Conference) held in California, FormFactor jointly announced next-generation test technology for HBM with SK Hynix.
A probe card is a piece of equipment that simultaneously applies tens of thousands of needles, thinner than a human hair, to semiconductor chips on a wafer to verify whether electricity flows properly. Form Factor is the world's No. 1 company in this field. The company has demonstrated that its HBM probe card equipped with 60,000 needles maintains alignment even during tests involving alternating high and low temperatures.
The company, headquartered in Livermore, California, derives 30% of its revenue from SK Hynix. In addition, it counts six major semiconductor companies as clients—each accounting for more than 10% of total revenue—including Nvidia, TSMC, Samsung Electronics, Micron, and Intel. Its stock price has risen 3.4-fold over the past year, bringing its market capitalization to $10.1 billion (13.8 trillion won, based on an exchange rate of 1,365 won per dollar).
There is a reason the form factor is called the gateway to wafer inspection. Every time a foundry or memory company designs a new chip, it must create a new probe card that precisely matches the electrode layout of that chip; no universal product exists. Advanced cards, which cost between $500,000 and 0.2 billion won (6.8 billion to 27 billion won) each, wear out after hundreds of thousands of contacts, and they must be remade whenever the chip design changes. They are consumables that are sold repeatedly, much like photomasks. In addition, high-bandwidth memory (HBM) requires three times more probe cards than standard DRAM. The structure is such that inspection demand increases as stacking height rises and chips grow larger.
Mrs. Spring Achieves Global No. 1 in Just Eight Years by Pioneering Semiconductor Defect Inspection Method
The person who established the form factor is Igor Khandros, a Ukrainian immigrant. He studied metallurgical engineering at the Kyiv Polytechnic Institute and worked as an engineer at the Kyiv Foundry Research Institute before moving to the United States in 1979. After earning a Ph.D. in metallurgy from Stevens Institute of Technology in New Jersey, he joined IBM’s Yorktown Research Laboratory in 1986, where he was responsible for semiconductor packaging technology, which involves attaching chips to substrates and making electrical connections. In 1990, he also co-founded chip-scale packaging company Tessera.
Candros tackled the issue of inspection sequencing. In semiconductor manufacturing, hundreds or even thousands of chips are produced simultaneously on a single wafer. At the time, it was only possible to determine which chips were defective after they had been cut and packaged. This meant that packaging costs were incurred for defective chips before they were discarded. To inspect chips prior to cutting, needles had to be applied to the chip electrodes. However, as the electrodes became smaller in size and increased in number, manual needle placement by human operators reached its limits.
Candros solved this problem with MicroSpring technology, which uses semiconductor manufacturing processes to stamp out the needles themselves. The method involves producing tens of thousands of microsprings at once, much like printing a photograph, and aligning them with a wafer electrode array. Because of their spring structure, they do not break when pressed and can bounce back hundreds of thousands of times. He founded FormFactor in Elmsford, New York, in April 1993 and moved the headquarters to Livermore in 1995.
First-year revenue was $1.1 million (15 billion won), with Intel and Samsung Electronics serving as initial customers. Moore David, IVP, and Morgan Stanley invested in the company sequentially. The company posted its first profit in 2000, and in 2001, it ranked No. 1 globally in probe cards with revenue of $73.4 million (100 billion won). It listed on NASDAQ in June 2003, with shares rising 36% on the first day from an offering price of $14. The patents left behind by Candros number as many as 220.
Its heyday did not last long. In 2004, FormFactor sued a Korean probe card company for patent infringement at the Seoul Southern District Court, and in 2005 it filed a lawsuit with a court in Oregon, United States, but lost. In 2007 and 2008, Korea's Supreme Court ruled that the core claims of FormFactor's Korean patents were invalid, and the same decision was reached by the U.S. International Trade Commission (ITC). With the patent barrier collapsing, orders from Samsung Electronics and Hynix began flowing to competitors in Korea and Japan.
Candros stepped down as CEO in 2008 and left the company in 2009. This was followed by two years of turmoil during which the CEO position changed hands three times, and the stock price fell to $3.70 in November 2012. This level was one-quarter of the initial public offering price. The company began its recovery when it acquired competitor Microprobe in October 2012 for $100 million (136.5 billion won) in cash and $16.8 million (22.9 billion won) in stock. This acquisition added probe cards for logic semiconductors to a business that had been heavily concentrated in DRAM. Mike Slesar, who was CEO of Microprobe, became CEO of FormFactor in 2014.
He holds a Ph.D. in aeronautics and physics from the California Institute of Technology (Caltech) and has previously worked at KLA, an inspection equipment company. In 2016, Slesser acquired Cascade Microtech for $352 million (480 billion won), adding a laboratory-grade inspection system business to the portfolio. He subsequently expanded the company's scope into optical communication inspection by acquiring FRT, HPD, and Keystone Photonics. Currently, approximately 80% of FormFactor's revenue is generated from probe cards, with the remainder coming from inspection systems for laboratories and Yangsan applications.
The competitive edge of FormFactor lies in the precision of its needles. Advanced logic and HBM require electrode spacing of less than 40 micrometers (μm), a level that cannot be handled by cantilever needles placed manually; instead, ultra-precision microelectromechanical systems (MEMS) needles manufactured through semiconductor processes are required. FormFactor holds this process in-house. A single card for DRAM can contain up to 100,000 needles, while cards for GPUs must withstand speeds of 448 Gbps per lane and power consumption exceeding 4 kW. The company addresses this market with two platforms: Apollo for logic, and SmartMatrix for DRAM and HBM. SmartMatrix is a technology that contacts an entire wafer at once to reduce test time, and the company announced in its second-quarter earnings announcement that two customers have adopted it for HBM4. Since its first shipment in 2012, HBM probe cards surpassed their 1,000th shipment in 2025 and are expected to exceed the 1st,500th shipment this year.
HBM inspection is particularly demanding due to heat. In HBM, microbumps, filler materials, and molding resins are stacked layer by layer between DRAM dies, but each material has a different degree of thermal expansion. When chips undergo alternating high-temperature and low-temperature tests, the positions of the electrodes shift slightly, and if current flows, heat concentrates in one area. If the probe misses an electrode, normal chips may be discarded as defective, or actual defects may go undetected.
The Form Factor Thermal Simulation Model (FTSM), jointly announced with SK Hynix in June this year, is a technology that pre-calculates how much a card will bend when the temperature changes, allowing for needle position correction during the manufacturing stage. The company also adopted heat-resistant materials and developed a new cooling system instead of a heating method. Verification using a card equipped with 60,000 needles showed that alignment was maintained in both high-temperature and low-temperature conditions, with predicted values matching measured values. Form Factor received SK Hynix’s Best Partner Award in 2024. Additionally, in the supplier customer satisfaction survey conducted by semiconductor research firm TechInsights against semiconductor manufacturers last May, it ranked first in the world in two categories: test subsystems and specialized equipment. This marks its 13th consecutive year as the top-ranked company in the testing sector.
The reason customers seek out form factors is not solely precision. Probe cards are custom-made products that must be newly developed for each chip design, requiring a response to design changes within three to six months. Form Factors operates design and production bases in Livermore and Oregon, while maintaining local support teams in South Korea, Taiwan, Japan, and Singapore. The company works alongside chip companies' design teams from the initial silicon validation stage all the way through to Yangsan. In January 2025, it also established strategic partnerships with Advantest, the top test equipment maker, and Technoprobe, the second-largest probe card manufacturer. This structure optimizes the test equipment and probe cards as a single package to reduce customers' testing costs.
The growth engine of the inspection systems segment is co-packaged optics (CPO). As electrical wiring between AI accelerators hit walls in terms of speed and power, a method emerged that attaches optical components directly next to chips to communicate via light. However, inspection was also an issue here. This is because if inspection is performed after packaging the optical components, even a single defect requires discarding the entire expensive GPU package. The company first shipped its Triton equipment, which inspects by simultaneously inputting light and electricity at the wafer stage, to Yangsan in 2025. The company explains that this method reduces inspection costs per good product by up to one-fifth compared to post-packaging inspection. This is based on experience supplying more than 100 units since launching the world’s first silicon photonics inspector in 2017.
The probe card market is estimated at $2.8 billion (3.8 trillion won) in 2025 based on FormFactor's valuation. Italy-based TechnoProbe, the second-largest player, recorded revenue of 62.84 million euros in 2025 and holds a 34% share of the logic market and a 60% share of the vertical MEMS segment. Test equipment manufacturer Teradyne owns a 10% stake in TechnoProbe. FormFactor leads in DRAM and HBM, while TechnoProbe dominates the logic sector. Japan's MJC serves the memory niche market, and Taiwan's MPI targets the mid-to-low price range. Domestic production efforts are underway in South Korea.
Growth of 30% for Four Consecutive Quarters… Targeting Doubled Revenue and $5 EPS by 2030
According to an analysis by global investment information firm Wren Research, this structure means that FormFactor's performance is directly tracking the pace of the transition to HBM4. In the second quarter (announced on July 29), revenue reached $258.2 million (352 billion won), a 31.9% year-on-year increase, marking the highest quarterly figure in the company's history. The adjusted gross profit margin rose to 53.3%, up nearly 15 percentage points from 38.5% a year earlier, while adjusted earnings per share (EPS) of $0.82 were three times that of the previous year. In particular, the fact that revenue grew by more than 30% and profit margins surged sharply during the past fourth quarter highlights how steeply the company has entered its current growth phase.
By business segment, DRAM probe card revenue reached $82.9 million (113 billion won) in the first quarter, a 70% increase, with two-thirds of that amount attributable to HBM. Foundry and logic probe card revenue rose 30% to $111.2 million (152 billion won). Revenue from the inspection systems segment surged 74% to $48.5 million (66 billion won) in the second quarter. CPO inspection revenue is expected to exceed the initial forecast of 0.1 billion won to 0.2 billion won by the third quarter. By region, South Korea accounted for the largest share at 35.6% of first-quarter revenue. The single-customer concentration for SK Hynix spiked to 29.5%, up from 19.2% in the fourth quarter of last year, while Nvidia became a customer accounting for more than 10% of revenue (10.2%) for the first time in the first quarter. Conversely, the share of revenue from China declined from 14% two years ago to 7% last year amid expanded U.S. export controls.
Annual revenue was $763.6 million (1.042 trillion won) in 2024, $785 million (1.071 trillion won) in 2025, and $484.3 million (661 billion won) in the first half of 2026. The Q3 guidance is revenue of $270 million (369 billion won), an adjusted gross margin of 54%, and EPS of $0.86. Last year's annual EPS was $1.30, but this year it will surpass that figure in just two quarters. Cash and marketable securities stand at $345.7 million (472 billion won), while long-term debt is $10.5 million (14.3 billion won), effectively representing a debt-free management structure.
The company presented its 2030 targets at an annual investor briefing held on the New York NASDAQ on May 11. The key goals include revenue of $1.6 billion (218 billion won), which is double that of 2025, a gross profit margin of 55%, earnings per share (EPS) of $5, and operating profit five times higher. These targets are based on the increasing number of High Bandwidth Memory (HBM) stacks, rising power and speed requirements for GPUs and custom AI chips, and the opening of the Co-Packaged Optics (CPO) inspection market. The target market identified by the company is projected to grow from $3.1 billion in 2025 to $4.5 billion in 2030, representing an annual growth rate of 8%. The company plans to increase its own revenue at twice that speed to raise its market share to 36%. To achieve this, it is building a new plant in Farmers Branch, Texas. Production is scheduled to begin by the end of this year, with output from Yangsan set to increase in the first quarter of next year, and contributions to profit margins expected to start in 2028. Capital expenditure for this year is projected at $140 million to $170 million (19 billion to 23 billion won). As of the end of last year, the company had 2,153 employees, comprising 1,298 in production and 422 in research and development. The management team is composed of former executives from KLA, ASML, AMD, Onto, and Texas Instruments.
The average target price among 11 Wall Street analysts is $127.45. The closing price on the 25th, at $129.69 (177,000 won), has already surpassed this average target. The stock price rose to $160.27 on June 30 before falling by 19%. In its second-quarter conference call, the company stated that supply chain constraints are hindering capacity expansion and that it is unable to accept all orders from new CPU customers. This means that growth will be constrained by production capacity until the Texas factory begins full-scale operations in 2027.
The key variables that will determine the direction of stock prices going forward are the fourth-quarter guidance to be released in the third-quarter earnings report at the end of October, and the shipment pace of HBM4 by SK Hynix and Micron. This is because probe card orders are typically booked one quarter ahead of memory shipments.
◇ Key milestones in form factor history
Founded in April 1993 by Igor Khandros in Elmsford, New York. Relocated to Livermore, California in 1995.
Microspring made with 1995 semiconductor process launched; first revenue $1.1 million
In 2001, the company ranked first in the world for probe card sales with $73.4 million in revenue.
Listed on the NASDAQ in June 2003 at an initial public offering price of $14, with a 36% gain on its first day.
2004–2010 Korea PICOM vs. Japan MJC patent lawsuit; Korean Supreme Court ruling invalidating the patent; ITC determination of no violation
Candros retired in 2009. In November 2012, the stock price hit an all-time low of $3.70.
In October 2012, the company acquired Microprobe and entered the logic probe card market. It subsequently shipped its first high-bandwidth memory (HBM) probe card.
CEO Mike Slesser took office in 2014. Acquired Cascade Microtech in 2016.
SK Hynix's revenue share in the first quarter of 2026 was 29.5%, with Nvidia becoming its first customer to account for more than 10%.
May 2026 Investor Presentation: Targets $1.6 Billion in Revenue and $5 EPS by 2030
SK Hynix and Joint Announcement of HBM Probe Card Thermal Calibration Technology in June 2026
Second-quarter revenue for July 2026 was $258.2 million, marking four consecutive quarters of 30 percent growth
in STOCK
