FormFactor, Inc. (FORM): Business Model Canvas [Dec-2025 Updated]

You're looking for the real story behind FormFactor, Inc. (FORM)'s stock performance, and honestly, it all comes down to their pivot toward testing the most complex chips, like those powering AI. We've broken down their entire operation into the Business Model Canvas, showing how their dominant probe card business-which saw High-Bandwidth Memory (HBM) revenue surge to $37 million in Q2 2025-is built on deep R&D and strategic partnerships. This company is the gatekeeper for advanced packaging. See the full nine blocks below to understand exactly how their $1.18 billion in assets fuels their path to being the indispensable supplier for the memory giants.

FormFactor, Inc. (FORM) - Canvas Business Model: Key Partnerships

FormFactor, Inc. maintains deep, strategic relationships across the semiconductor ecosystem, which are critical for its test and measurement technology deployment.

Shipping in volume to all three major HBM manufacturers

FormFactor, Inc. is shipping in volume to all three major High Bandwidth Memory (HBM) manufacturers: Samsung, SK Hynix, and Micron Technology. This entrenched position is a direct result of the accelerating demand for HBM in AI accelerators. HBM probe card revenues specifically grew from $29.5 million in Q1 2025 to $37 million in Q2 2025. Overall DRAM probe card revenue for Q2 2025 was $57.1 million, making up 29.1% of total quarterly revenues.

The company's HBM engagement is a significant growth driver, though it introduces mix volatility; for instance, the ramp-up costs for a second HBM DRAM customer contributed to the non-GAAP gross margin being at the low end of the range at 38.5% in Q2 2025.

Minority equity investment in a multilayer organic substrates supplier

FormFactor, Inc. executed a minority equity investment in FICT Limited, a supplier of multi-layer organic substrates and printed circuit boards, in February 2025. The company acquired a 20% stake in FICT Limited. The acquisition cost for this strategic move was $67.2 million. This investment is intended to accelerate innovation in advanced probe cards for high-performance computing.

Collaboration with Delft Circuits for quantum computing test solutions

A partnership with Delft Circuits was announced on March 6, 2025, to integrate Delft Circuits' Cri/oFlex® product portfolio into FormFactor's cryogenic test systems. This collaboration directly addresses the need for scalable, high-density interconnects in quantum computing. The integration significantly increases channel density capabilities:

• Current FormFactor systems support up to 300 channels across 12 ISO-100 ports.
• The integration enables up to 160 channels per port.
• The total channel count capability rises to 1920 channels.

Strategic alliances with leading semiconductor foundries and logic customers

FormFactor, Inc.'s Foundry and Logic segment is supported by strong customer alliances. In Q2 2025, two Foundry and Logic customers each represented over the 10% threshold of total company revenues. Revenues from this segment in Q2 2025 were $100,000,000, an increase of $14,000,000 sequentially, representing 50.8% of total company revenues for the quarter. The company was also recognized as the number one global supplier in test subsystems and focused chip making equipment in the 2025 Tech Insights Global Customer Satisfaction Survey.

Long-term relationships with key memory manufacturers (Samsung, SK Hynix, Micron Technology)

The relationships with the three major memory manufacturers are central to FormFactor, Inc.'s probe card business, particularly with the HBM ramp. The competitive landscape among these memory giants is dynamic, with SK Hynix projected to overtake Samsung as the leading DRAM supplier by revenue in 2025. FormFactor, Inc.'s Q2 2025 performance reflects this environment:

FormFactor, Inc.'s total revenue for Q2 2025 was $195.8 million.

FormFactor, Inc. (FORM) - Canvas Business Model: Key Activities

You're looking at the core engine driving FormFactor, Inc.'s performance as of late 2025. The company's key activities are deeply tied to the most advanced nodes in semiconductor manufacturing, where testing complexity is soaring.

Designing and manufacturing advanced MEMS probe cards remains the bedrock. This activity is directly reflected in the segment's financial contribution. For the second quarter of fiscal 2025, the Probe Card Segment generated revenue of $162.1 million, showing strong sequential growth of 18.7% quarter-over-quarter, which outpaced the overall company's growth.

This manufacturing focus is supported by continuous Research and Development (R&D) for next-gen test technologies. FormFactor, Inc. is actively qualifying solutions for future high-performance chips. Management confirmed progress in GPU qualifications, with volume orders for GPU probe cards anticipated in the first half of 2026. Furthermore, the company noted a multimillion-dollar contribution from custom ASIC testing, signaling R&D success in emerging areas.

The development of solutions for High-Bandwidth Memory (HBM) and Co-Packaged Optics (CPO) is a major growth driver. FormFactor, Inc. is shipping HBM probe cards in volume to all 3 major HBM manufacturers. In the third quarter of 2025, HBM revenue specifically reached $40 million. For CPO, the activity involves the installation of Triton silicon photonics test systems, with the move toward initial production of co-packaged optics scheduled for the first half of 2026.

Global customer support and field service for test systems is necessary because FormFactor, Inc. serves customers along the full semiconductor product life cycle. The company maintains a network of facilities to support these activities across Asia, Europe, and North America. This global footprint helps manage the complexity of high-volume production testing and characterization services.

Finally, Managing a global supply chain for specialized components involves strategic capital deployment to secure future cost structures and capacity. This activity is evidenced by the purchase of a manufacturing facility in Farmers Branch, Texas, which is intended to provide a clear path to lower ongoing manufacturing costs. The company is also managing external pressures, as tariffs continue to impose a headwind on gross margins, estimated at 150 to 200 basis points.

• Executed a minority equity investment in FICT to secure multilayer organic substrates.
• Began site work and equipment installation for the new Farmers Branch advanced manufacturing facility.
• Anticipated capital investment in the Texas facility for 2026 is $140 million.
• Navigating tariff headwinds that impact gross margin by 1.0 to 2.0 percentage points.

FormFactor, Inc. (FORM) - Canvas Business Model: Key Resources

You're looking at the core assets FormFactor, Inc. (FORM) relies on to deliver its specialized test and measurement solutions. These aren't just line items on a balance sheet; they are the physical and intellectual foundations of their value proposition in the semiconductor ecosystem.

The financial bedrock of these resources is substantial. As of the second quarter of fiscal 2025, FormFactor, Inc. reported Total Assets of approximately $1.18 billion. This figure reflects the investment in both tangible and intangible assets necessary to support their global operations and technology roadmap.

Advanced Intellectual Property (IP) and Proprietary Technologies

FormFactor, Inc.'s competitive moat is heavily defended by its intellectual property, particularly around its advanced probe card architectures. This IP directly supports the high-intensity testing required by modern semiconductor designs, such as those used in advanced packaging and AI.

The company's proprietary probe card technologies are central to this asset base. For instance, the SmartMatrix platform is engineered for demanding memory testing:

• Supports 300 mm full-wafer contact testing for devices like HBM (High Bandwidth Memory).
• Extends the architecture to support parallelism in excess of 3000 sites per wafer on a single touchdown.
• Utilizes Advanced Tester Resource Enhancement (ATRE) technology to support fast test speeds with clock rates of 125 MHz.
• Offers a temperature testing range from -40C to 125C for DRAM requirements.

The Pyramid Probes are another critical IP asset, especially for high-frequency applications. The Pyramid RF Probe cards deliver best-in-class RF performance and signal integrity, capable of probing beyond 80 GHz. This capability is vital for next-generation wireless RF and microwave production test.

Global Network of Manufacturing and Service Facilities

To serve its global customer base, FormFactor, Inc. maintains a distributed network. This physical footprint is essential for rapid service, repair, and scaling production to meet fluctuating semiconductor demand.

The company serves customers through its network of facilities spanning Asia, Europe, and North America. A significant recent investment in this network was the purchase of a new advanced manufacturing site in Farmers Branch, Texas, in June 2025 for $55 million dollars. This Texas site is a scarce, fit-for-purpose asset, including 50,000 square feet of clean room space. Furthermore, FormFactor, Inc. is committed to scaling this capacity, with over $140 million of capital investment planned for the Farmers Branch site in 2026.

The service capacity was also recently bolstered in Asia. In April 2025, FormFactor, Inc. doubled the cleanroom space at its Taiwan Service Center to streamline repair turnaround times and enhance local support.

Here's a quick look at the scale of their installed physical assets:

Specialized Engineering Talent for Test and Measurement

The complexity of the technologies, like the SmartMatrix 3000XP supporting 125 MHz clock rates and the Pyramid RF probes operating beyond 80 GHz, necessitates a highly specialized workforce. This talent pool, comprising engineers skilled in advanced packaging, high-speed digital, and RF design, is a non-negotiable key resource. Honestly, without the people who can design, qualify, and service these intricate systems, the physical assets and IP are just expensive metal and silicon.

The company's focus on advanced packaging and AI applications means this talent must continuously evolve to support new device architectures and test challenges, ensuring yield optimization and faster time-to-market for customers.

FormFactor, Inc. (FORM) - Canvas Business Model: Value Propositions

You're looking at what FormFactor, Inc. promises its customers-the core benefits they deliver that justify their position in the market. It's all about enabling the next wave of silicon performance.

Enabling reliable testing of complex, next-generation chips

The complexity of chips, especially those for AI accelerators, demands superior test solutions. FormFactor, Inc. is a pivotal supplier of probe cards for High-Bandwidth Memory (HBM), which is indispensable for these accelerators. The company ships in volume to all three major HBM manufacturers, which include Samsung, SK Hynix, and Micron Technology, showing its entrenched position in this critical area. For instance, HBM revenues alone surged by $7.4 million to reach $37 million in the second quarter of 2025, demonstrating the immediate value derived from testing these advanced memory architectures. These solutions are essential for testing complex, stacked memory chips. FormFactor, Inc.'s served available market (SAM) expanded to $2.75 billion in 2024, with continued growth anticipated from these advanced segments.

Precision and quality for high-volume production test

This value proposition is validated by industry recognition. FormFactor, Inc. was named the #1 global supplier in Test Subsystems in the TechInsights' 2025 global semiconductor industry customer satisfaction survey. This marks twelve consecutive years the company has been recognized in this category, which covers probe cards, test sockets, and device interface boards. This consistent top ranking reflects high customer rankings for quality and technology leadership across high-volume manufacturing.

Solutions for high-growth markets like AI and 5G (HBM, mmWave)

The focus on AI-driven applications is clearly translating into segment performance. The Probe Card segment, which services these high-growth areas, generated $162.1 million in revenue in the second quarter of 2025, representing an 18.7% quarter-over-quarter increase. This contrasts with the Systems segment, which saw a sequential reduction. The company's strategy is to be a key supplier to all leading customers in the industry, growing and diversifying its HBM demand profile.

Here's a quick look at the recent financial context underpinning this market focus:

Reducing overall cost of test and improving production yields

The drive for better profitability is directly tied to the value delivered to the customer through efficiency. FormFactor, Inc. is focused on rapid, immediate gross margin improvement, which management attributes to specific actions like automation, yield improvements, and cycle-time reductions. The reported non-GAAP gross margin increased from 38.5% in the second quarter of 2025 to 41.0% in the third quarter of 2025, a 250 basis point increase. The long-term target model projects operating margin expansion from 11.9% to 22.0%, signaling a commitment to translating technological leadership into sustainable, profitable growth for the company and, by extension, cost-efficiency for the customer.

The core value propositions FormFactor, Inc. emphasizes are:

• Enabling testing for advanced nodes and 3D IC architectures.
• Securing top global ranking in Test Subsystems for twelve consecutive years.
• Shipping HBM testing solutions to three major manufacturers.
• Targeting non-GAAP gross margin expansion to 47.0%.
• Achieving a long-term revenue goal of $850 million.

The company's Q4 2025 revenue guidance is set at $210 million ± $5 million, with an expected net income per diluted share of $0.19 ± $0.04.

Finance: draft 13-week cash view by Friday.

FormFactor, Inc. (FORM) - Canvas Business Model: Customer Relationships

You're looking at how FormFactor, Inc. keeps its most important customers locked in, which, in this business, means deep, technical partnership. It's not just about selling a product; it's about being indispensable to the next generation of silicon.

Dedicated, long-term technical collaboration with leading customers

FormFactor, Inc. embeds its expertise directly into customer roadmaps. This isn't transactional; it's about co-development for the most complex challenges, like High Bandwidth Memory (HBM) and advanced packaging. The company's strategy is clearly focused on being a key supplier across the board, which is evidenced by their success in the HBM space.

The commitment to long-term collaboration is what underpins their market position. For instance, in the third quarter of fiscal 2025, FormFactor, Inc. reported quarterly revenues of $202.7 million, with a non-GAAP gross margin of 41.0%, showing that customers are valuing this essential, high-quality technology. Furthermore, the company has a stated long-term financial target to achieve a 47% gross margin on $850 million in annual revenue, which requires sustained, high-value engagement.

High-touch, consultative sales and engineering support

The support structure is clearly high-touch, as the market feedback confirms. You don't get top rankings without engineers spending serious time on-site solving problems. This consultative approach is what helps customers accelerate their time to market for AI and advanced node devices.

The proof is in the recognition. TechInsights' 2025 global semiconductor industry customer satisfaction survey highlighted this strength, giving FormFactor, Inc. high marks for service.

Focus on customer satisfaction, earning five-star ratings in 2025

FormFactor, Inc. has made customer satisfaction a measurable, public metric. In May 2025, the company announced it secured five-star ratings across multiple categories in the TechInsights survey. This is a significant achievement in a sector where supplier performance is rigorously scrutinized.

Here's a quick look at the top global rankings FormFactor, Inc. achieved in the 2025 TechInsights survey:

This recognition marks the twelfth consecutive year FormFactor, Inc. has been recognized in the Test Subsystems category, which includes critical items like probe cards, test sockets, and device interface boards.

Providing essential technologies across the full IC lifecycle

FormFactor, Inc.'s relationship spans the entire journey of an integrated circuit (IC). They provide the necessary test and measurement technologies from the earliest stages through to final production. This full-lifecycle support means their tools are used for characterization, modeling, reliability testing, design de-bug, qualification, and production test.

The demand for these essential technologies is directly tied to major industry trends:

• Enabling new test capabilities for AI, 5G, and quantum applications.
• Supporting advanced nodes and 3D IC architectures.
• Ensuring functionality and quality before packaging for advanced devices.

Strategic engagement with all three major HBM manufacturers

The push for AI performance is heavily reliant on High Bandwidth Memory (HBM), and FormFactor, Inc. has successfully positioned itself as a critical supplier to this ecosystem. The company is executing a strategy to diversify its HBM demand profile by engaging with all major players.

The results of this strategy are visible in the financials. In the second quarter of 2025, HBM probe card revenue reached $37 million, up from $29.5 million in the first quarter of 2025. Management confirmed that FormFactor, Inc. is now shipping in volume to all three major HBM manufacturers. Still, the revenue stream remains concentrated, as HBM revenue continues to be skewed towards their largest customer, consistent with the current market share split.

Finance: draft 13-week cash view by Friday.

FormFactor, Inc. (FORM) - Canvas Business Model: Channels

You're looking at how FormFactor, Inc. gets its advanced test and measurement solutions into the hands of the world's leading chipmakers. It's a mix of direct selling, global support infrastructure, and new domestic manufacturing capacity.

Direct sales force to major semiconductor manufacturers

FormFactor, Inc. serves its multinational customer base through a direct engagement model, which is necessary given the highly technical nature of its advanced probe cards and systems. The company's technology is essential to manufacturing microchips, and it has an installed base of over 10,000 probe systems globally. This direct channel is responsible for delivering the bulk of the company's revenue, which reached $202.7 million in the third quarter of fiscal 2025. The Probe Card Segment, a core product delivered through these channels, generated $162.1 million in revenue in the second quarter of fiscal 2025.

Global network of service centers in Asia, Europe, and North America

FormFactor, Inc. maintains a widespread international presence to provide localized support, application engineering expertise, and timely delivery. This network is critical for supporting the full IC life cycle, including repair and advanced packaging technology collaboration.

The company recently doubled down on its Asian footprint. For example, the Taiwan Service Center expansion, announced in April 2025, features double the cleanroom space to streamline repair turnaround times for customers developing AI and HPC chips.

Here's a look at the key geographic hubs supporting this channel:

Direct distribution of Probe Cards and Systems

The distribution of Probe Cards and Systems represents the primary revenue driver. The Systems Segment, which includes the distribution of new systems, brought in $33.7 million in revenue in the second quarter of fiscal 2025. The overall revenue for the last twelve months ending September 27, 2025, was $759.31 million. The company's ability to execute on these direct sales is reflected in its quarterly performance:

• Q3 Fiscal 2025 Revenue: $202.7 million.
• Q2 Fiscal 2025 Revenue: $195.8 million.
• Q1 Fiscal 2025 Revenue: $171.4 million.

New advanced manufacturing facility in Farmers Branch, Texas

FormFactor, Inc. is expanding its domestic manufacturing footprint with a new advanced facility in Farmers Branch, Texas, which began site work and equipment installation in November 2025. This move is a significant capital commitment to bolster U.S. capacity in the semiconductor supply chain.

The financial commitment and physical scope are substantial:

• Planned capital investment for 2026: Over $140 million.
• Acquisition cost of the initial site: $55 million.
• Clean room space included in the acquired site: 50,000 square feet across four structures.
• Projected job creation: Hundreds of new, highly skilled jobs.

This facility is positioned to support the expected long-term demand for probe-card products, particularly those for High Bandwidth Memory. Finance: draft 13-week cash view by Friday.

FormFactor, Inc. (FORM) - Canvas Business Model: Customer Segments

You're looking at the core buyers for FormFactor, Inc. (FORM) as of late 2025; these are the companies driving the demand for their advanced probing and testing solutions. The customer base is highly concentrated in the leading edge of semiconductor manufacturing, which means revenue can swing based on the capital expenditure cycles of just a few major players.

Leading DRAM and NAND flash memory manufacturers represent a critical segment, especially with the massive push toward High Bandwidth Memory (HBM). FormFactor, Inc. (FORM) reported that HBM contributed $32 million to the record DRAM revenue of $63.3 million in the fourth quarter of fiscal 2024. For the full fiscal year 2024, HBM revenues totaled $126 million, showing a nearly $100 million increase over fiscal 2023. By the second quarter of 2025, FormFactor, Inc. (FORM) confirmed they were shipping in volume to all three major HBM manufacturers. Flash revenue in Q2 2025 was $5.5 million, making up 2.8% of total revenues for that quarter.

Foundry and Logic customers, which include designers of mobile application processors, have seen more volatility. In the fourth quarter of fiscal 2024, Foundry and Logic revenue was $83 million, which represented 44% of total company revenues then. This segment saw a sequential increase in the first quarter of 2025, reporting $85 million, a 2.4% rise from the prior quarter. Management has expressed an expectation for this business to return to approximately $100 million per quarter as the year progresses, contingent on a PC refresh cycle.

The focus on High-Performance Computing (HPC) and AI chip designers is intrinsically linked to the HBM strength, but also shows up in other areas. The Systems segment, which supports these advanced compute applications, generated $33.7 million in revenue in the second quarter of 2025, making up 17.2% of total company revenues that quarter. FormFactor, Inc. (FORM) is actively working on new customer qualifications in high-performance-compute applications to capture more market share.

While specific revenue breakouts for these niche areas aren't always public, the structure of FormFactor, Inc. (FORM)'s Probe Card segment clearly delineates the primary customer groups:

The demand from Automotive, aerospace, and defense semiconductor companies is generally captured within the broader Foundry & Logic or Systems segments, often involving specialized, lower-volume, high-reliability testing needs. FormFactor, Inc. (FORM) continues to pursue new customer qualifications in these areas, though they are not the primary revenue drivers compared to memory and leading-edge logic.

For Scientific institutions utilizing cryogenic and thermal systems, the relevant revenue stream is the Systems segment, which includes specialized equipment. This segment saw revenue of $34.8 million in the first quarter of 2025, comprising 20.3% of total company revenues. Growth here is explicitly tied to innovations in areas like quantum computing, which requires the precise thermal and cryogenic testing capabilities FormFactor, Inc. (FORM) provides.

• The company is focused on improving profitability, aiming for a 47% non-GAAP gross margin on $850 million of annual revenue.
• Tariffs impacted Q1 2025, causing a mid-single-digit million-dollar reduction in revenues for multinational customers outside the free trade zone.
• FormFactor, Inc. (FORM) is now shipping HBM probe cards to all three major memory manufacturers.
• Export controls limited shipments of non-HBM DRAM probe cards to China, impacting early 2025 performance.

Finance: draft Q3 2025 cash flow variance analysis by Monday.

FormFactor, Inc. (FORM) - Canvas Business Model: Cost Structure

The Cost Structure for FormFactor, Inc. (FORM) in late 2025 is heavily weighted toward operating expenses required to support advanced semiconductor testing solutions. You see significant investment in the intellectual property that drives their value proposition, alongside the direct costs of producing those complex probe cards and systems.

Key operating expenses for the second quarter of fiscal 2025 highlight this structure. The Cost of Revenue was approximately $122.8 million for Q2 2025. Research & Development (R&D) expenses were reported around $118.3 million in Q2 2025. Selling, General, and Administrative (SG&A) expenses for the same period totaled about $136.1 million.

Manufacturing and operational costs reflect FormFactor, Inc.'s global footprint, which includes recent strategic capacity additions. The company closed the acquisition of a Farmers Branch manufacturing facility, which provides operational flexibility in a lower operating cost region. This move is designed to help manage the ongoing expense base.

Capital expenditure (CapEx) is a necessary outflow to secure future capacity, especially for advanced packaging technologies. For the third quarter of fiscal 2025, capital expenditures were reported as $\text{7,505}$ (unit context not specified in the immediate data set, but representing a period outflow). This follows a period where Free Cash Flow for Q2 2025 was negative at ($47.1 million), partly due to investing activities. Looking ahead, FormFactor, Inc. has planned a significant capital investment of $140 million for the new Texas advanced manufacturing facility in 2026.

The cost profile is also influenced by the drive for margin improvement, as seen in the gap between current and target profitability metrics:

• Q2 2025 Non-GAAP Gross Margin was 38.5%.
• FormFactor, Inc. aims for a long-term gross margin target of 47% on $850 million in annual revenue.
• Q3 2025 non-GAAP gross margin guidance was set at 40.0% (±1.5%).

FormFactor, Inc. (FORM) - Canvas Business Model: Revenue Streams

You're looking at the core ways FormFactor, Inc. brings in cash, which is heavily weighted toward hardware sales for semiconductor testing. The latest figures from the second quarter of 2025 show the picture clearly. Total revenue for Q2 2025 hit \$195.8 million, marking a solid $\text{14.3\%}$ sequential increase from the prior quarter, though it was $\text{0.8\%}$ lower year-over-year.

The dominant source is the Sales of Probe Cards segment. For Q2 2025, this segment generated \$162.1 million, which was an $\text{18.7\%}$ jump sequentially. This strength is being fueled by advanced memory technology. Specifically, revenue from High-Bandwidth Memory (HBM) probe cards was a major driver, surging to \$37 million in Q2 2025, representing a \$7.4 million increase from the first quarter.

The second major component is the Sales of Systems, which includes probe stations and thermal sub-systems. This segment brought in \$33.7 million in Q2 2025. To be fair, this was a slight sequential decrease of \$1.1 million from the first quarter, which management attributed to seasonality and product mix shifts.

Here's the quick math on how those two main segments stack up for Q2 2025:

Looking ahead, FormFactor, Inc. expects the Full year 2025 revenue to be around \$0.77 billion. This projection suggests continued, albeit perhaps more moderate, growth through the second half of the year, building on the Q2 momentum.

Beyond the primary hardware sales, FormFactor's revenue model also includes Services and support for installed base of test equipment. While the Q2 breakdown of $\text{\$162.1 million}$ (Probe Cards) plus $\text{\$33.7 million}$ (Systems) equals the total revenue, this services component is embedded in the overall revenue recognition, supporting the installed base and ensuring ongoing customer engagement.

The underlying drivers within the Probe Card revenue stream are detailed by the technology focus:

• Foundry and Logic probe card revenues were \$100,000,000 in Q2 2025.
• DRAM probe card revenues totaled \$57,100,000 in Q2 2025.
• HBM probe card revenue growth was significant, reaching \$37 million.

Finance: draft 13-week cash view by Friday.