Entegris Q1 2025: Navigating Tariff Turbulence and Contradictory Margin Outlooks

Impact of tariffs on revenue, gross margin expectations, tariff impact and market recovery, advanced packaging business growth, and impact of tariffs on gross margins are the key contradictions discussed in Entegris' latest 2025Q1 earnings call.



Revenue Performance and Tariff Impact:
- Entegris' first quarter revenue grew 5% year-on-year, excluding divestitures, but fell 9% sequentially.
- The sequential decline was primarily due to new tariff regimes impacting sales to China, with $50 million of potential lost sales in Q2 alone.

Material Solutions and Advanced Purity Solutions Segmentation:
- Material Solutions sales increased 8% year-on-year, driven by 20% growth in CMP slurries and pads.
- Advanced Purity Solutions sales rose 3% year-on-year, with a 11% sequential decline due to CapEx products like fluid handling and FOUP revenue contraction.

Investments in Manufacturing and R&D:
- Entegris made progress at its new Colorado manufacturing site, completing initial equipment qualifications and expecting customer qualifications to begin in the second half of the year.
- Continued advancement in the Kaohsiung, Taiwan facility, with plans to complete liquid filter qualifications by year-end.

Moly Deposition Materials and Customer Demand:
- Entegris is on track with commercial volumes of moly deposition materials, with strong engagement with major 3D NAND players and notable progress in moly etch chemistries.
- The company's offerings are perceived as the best in film conformality and cost of ownership, positioning it well for future growth.