Onto Innovation Sets New Revenue Record Despite Tariff Headwinds
Onto Innovation, a leading provider of advanced nodes and packaging solutions, has reported a record-breaking revenue quarter, defying market concerns over tariffs. According to the company's Q1 2025 conference call transcript, Onto Innovation delivered $267 million in revenue, driven by expansions in both the advanced nodes and packaging segments.
The growth was attributed to increasing investments in cloud and enterprise servers, as well as the growing demand for AI compute engines. However, the announced tariffs by the Trump administration are expected to impact the company's incoming costs due to tariff policies and potential retaliatory tariffs imposed by other countries.
In response, Onto Innovation is accelerating existing strategic programs to improve business continuity and resiliency. The company plans to install manufacturing capability in Asia, with shipments expected to begin in the second half of 2025 and approximately half of its product volume capable of being shipped from these new facilities by early 2026.
CEO Mike Plisinski highlighted the company's metrology business as a key driver of growth, benefiting from increased process control capital intensity of gate all around and memory. The company's optical metrology suite has delivered performance and cost of ownership advantages to customers, leading to record quarters for its newest products, Iris films metrology and Impulse 5 integrated metrology.
Specialty devices and advanced packaging markets declined from the record fourth quarter, but leaders in 2.5D packaging for AI have commented on improved long-term outlooks due to new AI models expected to lower barriers to entry and drive greater adoption of compute engines.
Onto Innovation's inspection tools have doubled in performance over the last two quarters, addressing some of the new requirements from customers. However, a new inspection platform capable of providing significantly better sensitivity and higher performance is being accelerated with customer collaboration.
The company is making steady progress with its 3DI technology, with 3DI bump metrology selected by two OSATs for applications requiring better throughput and repeatability.
As Onto Innovation continues to navigate the challenges of tariffs, it remains committed to delivering innovative solutions to meet the evolving needs of its customers. With a focus on business continuity and resiliency, the company is poised to drive growth and improve margins in the second half of 2026.
The future of Onto Innovation looks bright as it expands into new markets and technologies, including 3D interconnects and front-end macro inspection. The company's dedication to innovation and customer satisfaction positions it for continued success despite market headwinds.
