Ultra Clean Holdings Plunges 10.31% Amid Lawsuit, China Demand Woes

Ultra Clean Holdings, Inc. (NASDAQ:UCTT) experienced a significant drop of 10.31% in pre-market trading on April 29, 2025, reflecting a notable decline in investor sentiment.

Ultra Clean Holdings, Inc. is currently facing a class action securities lawsuit, which alleges that the company made misleading statements about the demand for its products in the Chinese market. The lawsuit claims that Ultra Clean Holdings provided investors with overly optimistic reports about the elevated demand from Chinese original equipment manufacturers (OEMs) and the general Chinese domestic market for its products throughout the fiscal year 2024. However, the company was allegedly concealing material adverse facts, including a customer ramp issue with one of its critical customers and a combination of inventory and demand corrections, which ultimately caused weakness for Ultra Clean in China.

On February 24, 2025, Ultra Clean published its fourth quarter and full year 2024 fiscal results, revealing that the company was facing "demand softness" in China. This revelation led to a dramatic decline in the company's stock price, falling from $36.06 per share on February 24, 2025, to $25.90 per share on February 25, 2025, a decline of over 28% in a single day. Investors and analysts reacted immediately to these revelations, leading to a significant drop in the company's stock price.