Onto Innovation (ONTO)

Semiconductor metrology & inspection specialist — process control for AI advanced packaging/HBM and sub-2nm gate-all-around

AI exposure 63% — derived from reported segment revenue, not asserted.

Where it sits

Silicon Layer → Semiconductor Equipment · figures rebased to Q2 2026, reported 2026-08-06

Pure-play semiconductor process-control toolmaker (metrology/inspection) — B1 Semi Equipment; toolmaker not OSAT; direct KLA peer; AI-packaging/HBM exposure

Reported segments

Semiconductor metrology & inspection — 100% of revenue

Onto Innovation (~$1.3B annualizing off Q2 2026's record $343.1M, +35.3% YoY) — semiconductor metrology + inspection. One reportable segment; the company discloses a market mix rather than segments. Q2 2026: Advanced Packaging & Specialty Devices was nearly 50% of revenue at an all-time high (Dragonfly inspection +30% sequential, driven by 2.5D logic, HBM and silicon photonics; the specialty half — power, SiC — actually declined sequentially), Advanced Nodes was a record ~$120M (~35%, +50% sequential, ~60% memory / ~40% logic on Atlas G6 transistor metrology below 2nm), and Software &…

How the 63% is built

Semiconductor metrology & inspection — 100% of revenue × 63% AI-driven (estimate). Built from the disclosed Q2 2026 market mix. (1) Advanced Packaging & Specialty Devices ~50% of revenue: advanced packaging is now comfortably more than two-thirds of that line (HBM, 2.5D logic, panel-level, silicon photonics/co-packaged optics — effectively all AI) because specialty devices declined sequentially…

Investment read

Moat. Metrology and inspection specialist with two independent design-in positions rather than one: Dragonfly inspection in advanced packaging — 2.5D logic, HBM, silicon photonics, nearly 50% of Q2 2026 revenue at an all-time high with Dragonfly revenue +30% sequential — and Atlas G6 gate-all-around metrology, designed in at several nodes below 2nm. The April 2026 Rigaku partnership adds a third, still-unproven leg: X-ray process control for exotic materials in advanced logic, memory and packaging, a roughly $1B served market Onto could not previously address. KLA still dominates process control…

Bottleneck / pricing power. Stronger than 'moderate': non-GAAP gross margin reached 57.0% in Q2 2026 with the 2026 expansion target raised from 200bps to roughly 350bps, on a Dragonfly G5 ASP mix that is still early. Backlog passed $1B for the first time (~$1.1B, with 30-40% covering 2027) and management is negotiating 2027 volume purchase agreements — order flow is converting into contracted visibility.

Role in the AI stack. The advanced-packaging metrology/inspection specialist.

Connected companies

Taiwan Semiconductor (TSM) — ONTO supplies: metrology/inspection (Dragonfly) for advanced-node + 2.5D logic packaging
Intel (INTC) — ONTO supplies: process-control tools for advanced-node manufacturing
Micron Technology (MU) — ONTO supplies: 3D bump metrology + 2D inspection for HBM/memory
SK Hynix (SKHY) — ONTO supplies: Dragonfly 2D inspection + 3D bump metrology for HBM; Onto's >$240M HBM volume agreement customer is not publicly named
Amkor Technology (AMKR) — ONTO supplies: inspection/metrology + lithography for advanced packaging (OSAT)
KLA Corporation (KLAC) — ONTO competes with: process control — Onto (metrology/inspection specialist) vs KLA (category leader)
Applied Materials (AMAT) — ONTO competes with: marginal metrology/inspection overlap — Onto specialist vs AMAT's smaller process-control line (AMAT is mostly deposition/etch)
Hitachi (HTHIY) — ONTO competes with: metrology/inspection peers, but Hitachi is e-beam CD-SEM vs Onto's optical/packaging metrology — adjacent modalities
Samsung Electronics (SSNLF) — ONTO supplies: Gap-fill, not a new disclosure. Onto's Advanced Nodes line (~$120M in Q2 2026, ~60% memory / ~40% logic) was attributed on the call to 'broad-based strengthening demand across logic and memory…

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