Entegris' Q2 2025: Key Contradictions on China Recovery, Margins, and Inventory Management

China business recovery and tariff impact, gross margin impact and optimization, fab utilization and wafer start growth, inventory management and gross margin optimization, China business and trade restrictions impact are the key contradictions discussed in Entegris' latest 2025Q2 earnings call.



Revenue Growth and Diversification:
- Entegris reported revenue of $792 million for Q2 2025, down 3% year-over-year but up 2% sequentially.
- The growth was driven by strong performance in key areas such as Materials Solutions sales, particularly in CMP slurries and pads, selective etch, and deposition materials.

Geographical Revenue Dynamics:
- Entegris' sales in China were flat year-to-date but showed a sequential increase of 8% in Q2.
- This was due to a slow start in the quarter followed by increased activity after tariffs were put on hold in May.

Manufacturing and Supply Chain Strategy:
- Entegris is progressing in its global manufacturing strategy, expecting to ramp volumes significantly in Taiwan and Colorado in the fourth quarter.
- This strategy aims to localize production and supply lines to better serve Asian customers, reducing lead times and working capital requirements.

Profitability Challenges and Inventory Management:
- Gross margin on a GAAP basis was 44.4% and 44.6% on a non-GAAP basis, impacted by tariffs, inventory management, and operational inefficiencies.
- The company is balancing gross margins and inventory levels to optimize costs, with expectations for improvement as facilities in Taiwan and Colorado ramp up.