FormFactor expands probe card partnership as Q2 revenue seen at $240M

The deal pairs FormFactor's proprietary probe card technology with Keystone's assembly and distribution network in Taiwan, targeting the rising test complexity of AI processors and high-bandwidth memory. Neither company disclosed the financial terms of the expanded agreement.

"As semiconductor technologies continue to evolve, the industry's testing requirements become increasingly demanding," Mike Slessor, chief executive officer of FormFactor, said. "This partnership builds on that foundation by extending the operational framework that supports our customers, strengthening our presence in a critical region of the global semiconductor supply chain."

FormFactor will retain ownership of its intellectual property and continue developing its probe card technologies in-house, while Keystone handles design, assembly, test, repair and distribution for designated products. The partnership targets applications spanning AI processors, high-performance computing, advanced packaging, memory and high-speed connectivity.

Jim Lee, chairman of Keystone Microtech, said the companies aim to address growing performance and quality requirements of advanced semiconductor testing. "By combining our complementary technologies, expertise, and commitment to innovation, we believe this collaboration will help accelerate the delivery of next-generation solutions for our customers," Lee said.

The probe card market is a critical but often overlooked link in the semiconductor supply chain. These custom devices connect test equipment to individual chips on a wafer, allowing manufacturers to identify defects before packaging — a step that becomes more important as chiplet architectures and advanced packaging techniques like TSMC's CoWoS (chip-on-wafer-on-substrate) multiply the number of dies per device. Every additional die in a package increases the probability of a single point of failure, driving demand for more thorough known-good-die testing.

FormFactor's second-quarter performance is expected to reflect these trends. The company guided for another sequential increase in DRAM probe card revenue, driven by accelerating adoption of its SmartMatrix full-wafer contactor technology by a second customer for HBM (high-bandwidth memory) testing. The transition from HBM3E to HBM4 — with higher stack counts and faster I/O speeds — increases test intensity per device, supporting favorable product mix. Foundry and Logic revenue also benefited from sustained demand for networking applications and data center CPU probe cards, according to the company's prior guidance.

FormFactor shares have gained 86.5% year to date, outperforming the broader S&P 500 information technology sector's 9.6% return. The stock trades at 8.15 times forward sales, a premium to the sector median of 6.18 times, according to data from Zacks. Rival Teradyne trades at 10.86 times forward sales, while KLA Corp. trades at 15.71 times.

Keystone Microtech, founded in 2006 and headquartered in Zhubei City, Taiwan, specializes in IC probe cards, load boards and testing boards. The company's shares on the Taipei Exchange fell 10% on July 28, while FormFactor shares declined 10.8% in the same session, though the moves appeared tied to broader market weakness rather than the partnership announcement.

FormFactor aims to double revenue by 2030 through secular growth in AI, HBM and advanced packaging, Slessor has said. The company's decade-long investment in silicon photonics and its Triton production platform also position it to benefit from the emerging co-packaged optics market in AI data centers, where electro-optical probe cards represent a potential growth avenue beyond traditional electrical testing.

This article is for informational purposes only and does not constitute investment advice.