Earnings

PDF Solutions CEO Scrambles To Get An eProbe Into China After Rethinking Trailing-Edge Chips

Backlog fell to $247.2 million from $270.7 million, and management is still counting on large fourth-quarter contracts to lift it.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 2 min read
Share
PDF Solutions CEO Scrambles To Get An eProbe Into China After Rethinking Trailing-Edge Chips

PDF Solutions CEO John Kibarian said on the company's Thursday earnings call that he wants to put an eProbe inspection tool into China by late this year or early next, calling the timing "tight" after the company misjudged the trailing-edge chip market. Ending backlog meanwhile fell to $247.2 million from $270.7 million in the second quarter.

A mistake on trailing-edge chips

PDF Solutions, which sells data software and inspection hardware that help chipmakers improve yield, expects to ship one more eProbe in the fourth quarter. Asked where it would go, Kibarian said he would like one "going in China if I could," because the company is missing a piece of that business.

He said PDF had assumed trailing-edge chips were not an important market for it. After what happened in the second quarter, he said, "we probably made a mistake on that," and the company is now trying to "scramble." The comment was about trailing-edge, and China came up as the place he wants covered.

He said PDF is still not very exposed to China. The eProbe, an electron-beam inspection tool, was sold mainly into leading-edge logic before; in the first half of this year PDF sold into 28-nanometer trailing-edge logic, and it shipped a DRAM pilot that is now installed at a customer. It is also starting an evaluation on flash.

Backlog dips, with big deals pending

CFO Adnan Raza said the decline came mostly from bookings timing on larger deals, not a single factor. Management still expects to end the year above the second-quarter level of about $271 million. Kibarian said a handful of large contracts are in play, and some will probably spill into the first quarter of next year.

Third-quarter revenue was a record $68.3 million, up 11% from the prior quarter and 20% from a year earlier, Raza said. Adjusted earnings were $0.40 a share, up from $0.25 a year earlier. PDF reaffirmed its 20% annual growth target for 2026. Kibarian put the equipment business, Symmetrix plus SecureWise, at about 20% of total revenue.

Spending to build more tools

Capital spending of $15.1 million in the quarter, mostly for eProbe tool builds, is the high mark for the year, Raza said, with the fourth quarter at or below it. Kibarian said much of the spending anticipates 2027, and PDF hopes to build more tools next year than this year.

More customers are now starting to run multiple machines, he said; before the third quarter, only one customer did. He said utilization often runs above 80% or 90%. Supply is a limit: the number of columns, long-lead parts, on order is up from last year.

Kibarian said management expects to give more visibility on 2027 eProbe builds when it reports next quarter.

Sources

More on PDF Solutions

All PDF Solutions (PDFS) coverage →

Read more