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FORMFACTOR

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About FORMFACTOR

Welcome to FormFactor! On tonight's show, contestants dive off a high platform, retrieve a silicon wafer at the bottom of the water tank, and then run tests on the semiconductors! Using its interconnect technology called MicroSpring, FormFactor makes wafer probe cards that test semiconductor circuits (especially memory chips) while they are still part – more... of semiconductor wafers -- before the wafers are cut into individual chips. FormFactor touts the process for its cost-effectiveness, since it allows testing of many chips at once across a range of scales and temperatures. The company gets more than 80% of sales from the Asia/Pacific region.

Sales to its largest customer, Elpida Memory, accounted for 18% of 2011 sales, down from nearly half of sales in 2009. Other top customers include Hynix, Samsung Semiconductor, and Micron, which collectively make up 38% of sales. Elpida filed for corporate reorganization, equivalent to bankruptcy in Japan; FormFactor does not expect the filing to impact its results since sales to Elpida include sales to its Rexchip and Tera Probe units, which are not included in the reorganization.

Sales were down 10% in 2011 over 2010. Sales to the DRAM and Flash markets were down 12% and 18%, respectively. A 6% increase in sales to System-on-Chip (SoC) manufacturers could not offset the declines, which were driven by lower unit volume sales. Sales of wafer probe cards to DRAM manufacturers account for more than two-thirds of FormFactor's revenues. Lower average selling prices for DRAMs and NOR flash memories led memory makers to cut production and cancel or severely reduce orders for the company's wafer probe cards. Weakness in the global memory chip industry was further impacted by the flooding in Thailand, which significantly lowered disk drive production and, subsequently, DRAM demand.

In 2008 and 2009, the company responded to weakness in the global economy by restructuring, including several rounds of workforce reductions and the transfer of certain manufacturing operations to facilities in South Korea and Singapore. As business failed to recover in 2010 and 2011, FormFactor continued to slash headcount (by 19% in 2010 and another 5% in 2011), and reversed its plan to move manufacturing operations overseas. Instead, the company consolidated most of its manufacturing at its Livermore, California, facility. Though FormFactor continued to be unprofitable, it trimmed its net loss for 2011 to $66 million from $188 million the prior year.

Like all semiconductor equipment manufacturers, FormFactor makes substantial investments in R&D in order to develop next-generation process, architecture, and testing products. The company is focused on new product development for the SoC market, which is less volatile than the memory market. It also invests in technology through acquisitions. In 2009 the company purchased the intellectual property rights and technology assets of Electroglas' motion control automation segment through a bankruptcy auction.

In 2012 FormFactor bought MicroProbe, a provider of advanced SOC wafer test solutions, for $100 million in cash and $16.8 million in stock. The deal will boost FormFactor's share of the SOC probe card market and the company's sales.

FormFactor primarily manufactures its products in California. It also has operations in China, Japan, Singapore, South Korea, and Taiwan. – less

FORMFACTOR Employer Reviews
MEMS Advance Process Development Tech (Former Employee), Livermore, CANovember 13, 2013
WAREHOUSE MATERIALS MANAGER - CONTRACT (Former Employee), Livermore, CASeptember 27, 2013
Employee (Former Employee), Livermore, CANovember 22, 2012
Finance (Current Employee), Livermore, CASeptember 27, 2012
Sr. Process Tech (Former Employee), Livermore, CaJanuary 29, 2012