Onto Innovation Raises Advanced Packaging Outlook to 80% on Dragonfly G5 Demand

Onto Innovation reported second-quarter revenue of $343.1 million, a 35.3% year-over-year increase, sending shares up 14% the following day as analysts raised estimates and price targets. The full-year EPS consensus jumped 13% from $7.11 to $8.04, representing 63% annual growth versus 2025, while next year's consensus vaulted 17% from $10 to $11.72 for a potential advance of 46%. Non-GAAP gross margins expanded to 57.0% from 54.5% a year earlier, non-GAAP operating margins reached 30.0%, and non-GAAP diluted EPS came in at $1.93, with the company holding $1.88 billion in cash and short-term investments. On August 17, Goldman Sachs analyst James E Schneider initiated coverage with a Strong Buy rating and a $400 price target, matching the Street high set by Jefferies' Blayne Peter Curtis, while Needham's Charles Shi raised his target to $360 from $330 and Evercore ISI's Mark Lipacis lifted his to $390 from $350. In August 2026, Onto completed a $710 million strategic investment for a 27% equity stake in Rigaku, targeting the estimated $1 billion hybrid metrology market, and the company said demand for its Dragonfly G5 packaging inspection platform is projected to grow over 50% through 2026.

KLA Corporation's backlog climbed to $12.57 billion at the end of fiscal 2026 from $7.86 billion a year earlier, driven primarily by demand tied to the AI infrastructure buildout. In the fourth quarter of fiscal 2026, the company raised its calendar 2026 wafer fabrication equipment market expectation, including advanced packaging, to the low-$150-billion range, up from its earlier view of more than $140 billion and compared with roughly $120 billion in calendar 2025. KLA expects second-half calendar 2026 revenues to increase roughly 20% from the first half as additional supply becomes available, and it forecasts advanced-packaging process-control systems revenues of approximately $1.1 billion in calendar 2026, up more than 70% year over year. Rivals are expanding too: Applied Materials expects its process diagnostics and control business to grow more than 50% in 2026, while ASML Holding expects full-year 2026 advanced foundry and logic revenues to rise about 25%, memory revenues to increase 75% and EUV revenues to grow roughly 45%. KLA shares have risen 55.7% year to date, and the Zacks Consensus Estimate for its earnings stands at $1.18 per share, unchanged over the past 30 days and implying 34.09% year-over-year growth.

Taiwan Semiconductor Manufacturing Co is accelerating its 2-nanometre capacity expansion, with monthly output projected to reach about 120,000 wafers by the end of 2026, ahead of earlier expectations of 90,000 to 100,000 wafers, according to Taiwanese publication EDN. Customers including Apple, Nvidia, AMD, Qualcomm and MediaTek have recently raised orders for TSMC's 2nm family capacity by 10% to 20%, the report said, citing industry sources. TSMC is bringing five 2nm fabs online this year, two in Hsinchu and three in Kaohsiung, according to senior vice president Hou Yung-ching. Hou said first-year 2nm wafer output would be 45% higher than the first-year output of 3nm in 2023, while 2nm capacity is expected to grow at a compound annual rate of 70% from 2026 to 2028.