In this article I will be exploring two interesting companies that many investors might not have heard of yet. These remain deeply embedded in the complex value chain of advanced chip manufacturing. Making these companies more relevant each day with the incoming wave of AI capital expenditure investments.
Onto Innovation Incorporated ($ONTO)
Context
Onto Innovation is a semiconductor equipment company, specialized in semiconductor inspection machinery. The company originated in the US in the late 70s as Rudolph Technologies Incorporated. Soon it expanded with a solid customer base. Finally in 2019 merged with Nanometrics Incorporated, another semiconductor equipment company, to form Onto Innovation Incorporated. Although the company is a Small Cap, currently valued at around $10 billion dollars, it has a high relevance in the semiconductor value chain, which is why I believe it is worth analyzing. Currently, the industry leader in the inspection machinery sector is KLA corporation, valued around $202 billion dollars. This gives a glimpse of the market value for the products made by Onto Innovation. Which might suggest that many investors still overlook the company despite its strong position in the industry.
Products
Onto Innovation is part of the AI hardware ecosystem and value chain. Many inspection and metrology stages of chip manufacturing use their products. These include unpatterned wafer quality inspection, metrology for transistors and silicon die interconnects. Onto Innovation also provides solutions for defect inspection in both, wafer and advanced packaging which are complemented by their in-house analytics software. The company’s products, ultimately help improve the process control and yield evaluation for their customers.
Onto Innovation’s product portfolio serves different semiconductor related subindustries. DRAM manufacturers such as Samsung, SK Hynix or Micron, use Onto’s products. In fact, ‘Aspect System’, and ‘Atlas G6 System’ focus on memory device inspection, valuable for such manufacturers. Moreover the latest development from Onto Innovation the ‘Dragonfly G3 System’, serves the advanced packaging inspection needs of semiconductor manufacturers.
Therefore, Onto Innovation plays a significant role in the supply chain of advanced semiconductor manufacturing. Their value proposal helps increase the industry’s manufacturing control and quality insights. Moreover, their solutions improve the reliability and performance of the inspected semiconductor devices.
Financials
On paper, Onto Innovation looks promising. In 2025 the record quarterly revenue was $267 million ( 1.1% YoY ). On the other side, the full year revenue reached $1.005 billion (1.8% YoY). Nonetheless, the earnings decreased 67% YoY and the gross margin fell from 50.2% to 46.4%. On the other hand, the company’s overall outlook remains positive. The company guidance for 2026 is optimistic. Management expect the Q1’s revenue to be around $280 million and gross margin between 54.6% and 55.6%.
Based on the latest earnings report, a wave of semiconductor machinery investment is expected in the near future. Such could have a positive impact in the companies revenue. In fact, Mike Plisinski, CEO of Onto Innovation, mentioned the following: ‘With global AI investment fueling a robust upcycle in semiconductor capital equipment spending, our deep and broad portfolio across advanced packaging, advanced nodes and specialty devices positions us to capitalize on the high growth segments of the market. We are also seeing strong customer engagement across our new products to address their most critical metrology and inspection challenges, reinforcing our confidence in our ability to outgrow the semiconductor equipment market in 2026 and beyond.’
This expected demand is already materializing. The company has already closed a purchase agreement worth $240 million with a leading high bandwidth memory (HBM) manufacturer. Their newest system, the ‘Dragonfly G3’, could begin reaching these HBM manufacturers by 2027.
Author’s opinion
From my perspective, Onto Innovation seems like a strong investment opportunity that many investors might yet not recognize. Its business stays outside of the headlines, even if it is critical for the AI infrastructure investment. Additionally in the past years companies like KLA Corporation have overshadowed Onto Innovation. However, as Hyperscalers raise their capital expenditure in the coming years, Onto could continue to expand its customer base. That growth may come from sectors facing rising demand and pricing, such as RAM, HBM, storage, and advanced packaging.
In summary, Onto Innovation plays a key role in the inspection phase of semiconductor manufacturing, their products are highly relevant for the industry and are already receiving orders for the coming years for their last equipment, the ‘Dragonfly G3’, which is expected to be used in HBM manufacturing lines.
AIXTRON ($AIXXF)
Context
AIXTRON has a long history in chemical vapor deposition Industry. Founded in Germany in the 80s, it has expanded both in its customer base and research labs around the globe. The company is currently valued around $4.4 billion, and is part of the so-called AI backend infrastructure segment. Moreover, it has become a key player that enables the broader AI ecosystem to operate. AIXTRON’s position as an industrial manufacturer puts it in a solid position for further growth in the sector.
Products
The products offered by AIXTRON mainly focus on vapor deposition machinery, which allows semiconductor foundries to deposit uniform thin films of a wide range of materials, including GaN (Gallium nitrate) and SiC (Silicon carbide) onto silicon wafers. Their products have a significant relevance in the optoelectronics manufacturing segment and in the power electronics business; since both applications are used in the data center infrastructure and AI-related capital expenditure. From the optoelectronics standpoint, its deposition systems, ‘AIX 2800G4’ and ‘G10-AsP’ have been widely adopted by customers. Such is the case of Lumentum ($LITE) and Applied Optoelectronics ($AAOI) -Both companies place orders in 2016 and 2019 respectively for the AIXTRON’s AIX 2800G4-. AIXTRON is a key player, because their machines have the unique ability to handle and deposit material on several wafers at once, needed to produce lasers and transceivers used in data centers.
Finally, it is worth mentioning that AIXTRON has solutions in the power electronics market, which supported the buildout of electric vehicles infrastructure in past years. Those same solutions may become necessary again as newer AI architectures demand more power and continue to evolve. This is the case with the new 800-volts architecture in NVIDIA’s Vera Rubin servers, which could shape future data center designs.
Financials
In the last earnings report, AIXTRON’s management team declared that the company achieved robust financial results despite the market conditions. For fiscal year 2025, the company experienced a 12% YoY reduction in revenue and a 24% YoY reduction in EBIT. Management explained the results partially as the overcapacity in the power electronics sector, which led to lower orders for their deposition machines. Nonetheless, they expect that as the rest of the AI infrastructure buildout continues, their optoelectronics related products will experience the strongest growth, compared to the rest of their product lines.
Despite the difficult past year for AIXTRON, management also declares that their long term growth drivers remain intact and expect that the optical communications for AI applications and GaN power semiconductors will be the main source of revenue growth.
Author’s opinion
From my personal point of view, AIXTRON is an important company in the optoelectronics manufacturing value chain. I expect the AIXTRON to become even more relevant especially now that companies such as Applied Optoelectronics and Lumentum forecast stronger demand during the coming years. Moreover, a second important tailwind for the company in the near future might be the expected increase in demand from companies such as Delta Electronics ($2308.TW) that might require some of AIXTRON’s products for manufacturing their own power electronic solutions. That being said, at only $4.4 billion in valuation, I believe that AIXTRON could experience continuous growth as the AI buildout super cycle consolidates and consider it a stock that many investors might still be overlooking and definitely one that should seriously consider adding to their portfolios.
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