Onto Innovation's Q4 2024 Earnings Call: A Deep Dive into Contradictions on HBM Capacity, AI Packaging Growth, and Demand Challenges

These are the key contradictions discussed in Onto Innovation's latest 2024Q4 earnings call, specifically including: HBM Capacity Expansion and Demand, AI Packaging Revenue Growth, and AI Packaging Demand Concerns:



Record Revenue and Growth:
- Onto Innovation reported record revenue of $264 million for Q4, up 5% sequentially and 21% year-on-year.
- Growth was driven by strong demand in specialty devices and advanced packaging markets, led by AI packaging and power devices.

AI Packaging Demand:
- AI packaging revenue more than doubled year-on-year, with a record quarter driven by strong demand for 2.5D Logic packaging.
- Growth was supported by increasing orders from HBM and metrology revenue exceeding $50 million in advanced packaging.

Advanced Nodes Momentum:
- Logic and memory revenue grew consecutively for the fourth quarter, with gate all around revenue nearly doubling compared to the prior quarter.
- Demand for Iris film metrology reached nearly $100 million, marking a strong growth trajectory for 2025.

Gross Margin and Operational Improvements:
- Gross margin improved to nearly 55% in Q4, marking a 300 basis point improvement since the beginning of the year.
- Strong operating income growth was supported by improved operational efficiency and R&D investments.

Power Device Expansion:
- Power device revenue set another record, contributing to the second-largest market in Q4.
- Although end market demand delayed several customer expansions, companies focused on yield improvements, benefiting from Onto's solutions and applications.