Is Onto Innovation Inc. (ONTO) A Good Stock To Buy Now? - Insider Monkey

Onto Innovation Inc. (ONTO), a semiconductor equipment provider specializing in defect inspection and metrology tools, has attracted attention due to its role in AI infrastructure development. The com... Read original →

Onto Innovation’s integration of X-ray and optical metrology is triggering a cascade in advanced packaging: its Dragonfly G5 is now pivotal for HBM and CoWoS yield, while the Rigaku acquisition enables hybrid inspection critical for sub-2nm GAA processes. This raises entry barriers and pressures rivals like KLA to accelerate multimodal strategies. Geopolitically, U.S. export controls increase ONTO’s servicing costs in Taiwan, China and Hong Kong, China—but enhance its indispensability in non-U.S. supply chains. Competitively, KLA may bundle EDA with inspection tools, while NVIDIA and SK Hynix could pre-reserve ONTO capacity to secure HBM output. Over the next 18 months, as AI chip stacking complexity surges, defect inspection will shift from a support function to a yield bottleneck—solidifying ONTO’s pricing power. Its current ~40x forward P/E understates this structural re-rating.