Key Findings: Onto Innovation’s Advanced Packaging Business Soars by 80%, Driven by Next-Gen Products
Onto Innovation has announced an impressive 80% year-over-year growth in its advanced packaging business for 2026. This significant expansion is almost equally fueled by strong demand from High Bandwidth Memory (HBM) and 2.5D logic applications. Notably, the company’s new Dragonfly G5 platform has been adopted for HBM4 launches and 2.5D AI packaging, and alongside the Atlas G6, is anticipated to drive further growth beyond 2027. The company is significantly benefiting from structural demand increases stemming from the escalating complexity of semiconductor manufacturing, AI workloads, High-Performance Computing (HPC), and data center expansions.
Technical and Market Details: Precision Process Control and Panel-Level Packaging Expansion
Onto Innovation’s equipment plays a crucial role in process control, inspection, and metrology, enabling chip manufacturers to detect defects and characterize features in advanced semiconductor and packaging lines. As chip architectures become more sophisticated, incorporating stacking and heterogeneous integration, advanced tools for identifying defects, improving yields, and maintaining production quality become indispensable. The company’s Dragonfly G5, a process control tool excelling in optical inspection, 3D metrology, and packaging lithography, is rapidly gaining market adoption. Furthermore, while panel-level packaging is still in its early stages, Onto Innovation projects it to grow into a $1 billion market within a few years, targeting $200-300 million in revenue from this segment. The company’s record order backlog is directly linked to AI-related capital expenditures, sustained by high demand for HBM.
Background and Industry Context: AI Revolution Demands Enhanced Precision
The AI revolution places unprecedented demands on the semiconductor industry, particularly in advanced packaging, where high-density integration and complexity are rapidly increasing to maximize chip performance. Consequently, even minute defects in the manufacturing process can severely impact overall product yield, making traditional inspection and metrology techniques increasingly inadequate. High-precision process control solutions, such as those offered by Onto Innovation, are vital for overcoming these challenges and enabling the mass production of cutting-edge chips. The company’s tools and software serve as essential infrastructure for leading fabs to maintain high yields.
Future Outlook: Sustained Innovation and Expanding Market Opportunities
Onto Innovation is actively engaged in price negotiations for both new and existing products as it prepares for the 2027 budgeting season, aiming for continued revenue expansion. The rapid adoption of the Dragonfly G5 and Atlas G6 underscores the company’s technological leadership and market relevance. The ongoing growth in the AI, HPC, and advanced packaging markets will serve as long-term growth drivers for Onto Innovation. Proactive entry into emerging markets like panel-level packaging is expected to further broaden the company’s future growth opportunities, solidifying its central role in the evolution of the semiconductor industry.
Get our weekly technology intelligence — free
Receive an infographic that lets you judge at a glance whether each field’s analysis report is worth reading.
Subscribe Free — Weekly Tech Intelligence
By subscribing, you’ll receive Troy-Technical’s weekly technology intelligence newsletter.
- Your email and selected fields are used only to deliver the newsletter.
- We never share your information with third parties.
- You can unsubscribe anytime via the link in each email.
See our Privacy Policy for details.
Takes about a minute · Unsubscribe anytime
Comments