Onto Innovation (ONTO) Citi’s 2026 Global TMT Conference summary

Market and product developments

• Stronger WFE cycle with increased customer confidence and multi-year expansion plans shared, driving growth above market rates.

• Rapid adoption of new products like Dragonfly G5 and Atlas G6, with Atlas G6 seeing faster-than-expected customer uptake due to compelling value.

• Backlog exceeds $1.1 billion, with 60%-70% scheduled for 2026; focus is on building backlog for 2027 and maintaining supply chain readiness.

• Growth in 2027 expected to outperform the market, driven by new product adoption and expansion into front-end and specialty device markets.

• Backlog is broad-based across end markets but concentrated in core products like OCD metrology and inspection.

Segment and application growth

• Advanced packaging grew 80% this year, outpacing advanced nodes at 35%; both segments expected to continue growing, with packaging leading.

• Growth in packaging is balanced between memory and logic, with logic becoming more competitive and driving new opportunities.

• High share maintained in memory, with share gains in logic packaging tied to high-resolution Dragonfly G5 adoption.

• Large Dragonfly orders from OSATs reflect both customer-specific expansions and broader industry trends toward outsourcing and higher volume.

• High share in high-end OSAT applications, especially in 2D and growing traction in 3D bump metrology.

Technology and innovation

• Dragonfly G5 targets new high-resolution applications, especially in front-end and specialty devices, with significant growth expected in 2027.

• G5 is margin accretive, offering better ASP and margin profile.

• Silicon photonics presents a $500M+ SAM by 2030, with inspection as the largest opportunity and metrology also gaining traction.

• Adoption speed of silicon photonics depends on server and rack-level integration, with industry commitment from major players.

• Data center power is a small but emerging growth area, with potential impact expected from 2027 onward.