Ultra Clean CEO Says $5 Billion Revenue Capacity Matches Street's $250 Billion 2028 Equipment Forecast
CEO James Zhao said on the earnings call that no customer has yet given a figure for 2028, though analysts mostly sit at $250 billion.
Ultra Clean's planned $5 billion revenue run rate lines up with analysts' 2028 chip-equipment spending forecasts of about $250 billion, CEO James Zhao said on the company's earnings call Tuesday, after a UBS analyst argued the math pointed to $330 billion. Zhao added that he has not heard any customer put a number on 2028, the first quarter of which the company reported alongside record revenue of $759 million.
A correction to the $330 billion math
Ultra Clean, which makes subsystems and parts for semiconductor manufacturing equipment and cleans chipmaking tools, is adding space ahead of orders. The UBS analyst said that more than $5 billion of capacity would translate to $330 billion of wafer fab equipment spending, well above what people expect for 2028.
Zhao answered with "just a small correction." Using the ratio of Ultra Clean revenue to industry spending, he said, a $5 billion run rate corresponds to roughly $250 billion, which he called in line with the analyst's own forecast.
"I don't think any of the customers gave a clear WFE number beyond 27," Zhao said, adding that most analysts have 2028 at $250 billion. An analyst on the call said there was no reason to disagree.
Customers: 2027 solid, 2028 unnamed
Pressed by an analyst from Craig-Hallum, Zhao said 2027 is more solid, with customers saying above $200 billion. He said he can hear from customer earnings calls that 2028 is "more or less booked," but "I don't hear any of the customer gave that number yet."
On the UBS analyst's question about what Ultra Clean gets for its investment, Zhao said the industry is seeking long-term agreements, that discussions with key customers are open, and that the capacity it adds will be fully used by them.
Capacity ahead of demand
CFO Mike Keogh said the company expects about $4 billion of capacity in the first quarter, plus 15% to 20% of burst capacity to bridge to the next expansion phase. Growing to $5 billion-plus needs more capacity beyond the current footprint, he said, with roughly $80 million to $100 million of incremental investment through 2027 and 2028.
Zhao said a 26,000-square-foot Malaysia cleanroom expansion came online earlier than expected. The company expects to double its development capacity in Cebu, Philippines, add cleanroom capacity in Singapore and the Czech Republic, and double vertical manufacturing capacity in Malaysia and Thailand next year.
Third-quarter revenue rose 48.8% from a year earlier. Keogh guided fourth-quarter revenue to $800 million to $860 million, and said the company sold 2.2 million shares under its at-the-market stock program in the first week of the fourth quarter, for $169.1 million in net proceeds.
Ultra Clean's market value stood at $2.1 billion after Tuesday's call, and Keogh said it will add capacity beyond $5 billion in phases, pacing spending to customer demand.
Sources
- Ultra Clean Holdings Non-GAAP EPS of $1.15 beats by $0.21, revenue of $759M beats by $31.45M (NASDAQ:UCTT) | Seeking Alpha — seekingalpha.com
- Ultra Clean Holdings, Inc. (UCTT) Stock Price, News, Quote & History - Yahoo Finance — Yahoo Finance
- Ultra Clean Reports Third Quarter 2026 Financial Results — prnewswire.com
