FormFactor, a leading provider of semiconductor test and measurement solutions, just dropped a bombshell of a guidance, sending shockwaves through the tech world. While analysts are excitedly buzzing about the 50% sequential growth in high-bandwidth memory (HBM) probe card revenue, there's a hidden detail in the transcript that points to a potential goldmine FormFactor might be sitting on: the burgeoning market of HBM3E.

Yes, you read that right. While everyone is fixated on the HBM3 ramp, FormFactor casually mentioned shipping HBM3E probe cards 'in some significant volume.' This seemingly innocuous statement might be the canary in the coal mine, signaling an impending surge in demand that could add tens of millions to FormFactor's top line – a detail seemingly missed by the Wall Street crowd.

Let's break it down. Analysts expect FormFactor's HBM revenue to reach approximately $60 million in Q2 2024. Assuming their prediction of quarterly doubling from 2023 levels holds true, we're looking at a potential $120 million annual HBM revenue by year-end. However, this estimate predominantly factors in HBM3 demand, overlooking the potential contribution of HBM3E, which, based on FormFactor's own words, is already contributing 'significant volume.'

Now, here's where the hypothesis gets interesting. What if HBM3E adoption accelerates faster than anticipated? We know the industry is rapidly moving towards more complex and performance-hungry memory solutions to fuel the insatiable appetite of generative AI. HBM3E, with its enhanced bandwidth and power efficiency, is poised to capitalize on this trend, potentially leapfrogging HBM3 adoption in specific applications.

Consider this: If FormFactor's 'significant volume' of HBM3E probe card shipments translates to even 20% of their projected $120 million annual HBM revenue, we're talking about an additional $24 million purely from HBM3E. Now, factor in the potential for this figure to grow exponentially as HBM3E gains traction, and you start to see the outlines of a hidden goldmine.

The silence from analysts on this specific detail is surprising. Perhaps they're discounting HBM3E's potential or focusing solely on the immediate HBM3 ramp. However, FormFactor's quiet disclosure suggests they're already witnessing a shift, a shift that could significantly amplify their growth trajectory.

There's a historical precedent here. FormFactor was similarly cautious about the sustainability of the surge in demand back in 2019. At the time, they attributed the fourth-quarter strength to transient factors, only to be proven wrong as the growth proved persistent. Could history be repeating itself with HBM3E?

The signs are compelling. As major players like Samsung forecast a threefold increase in HBM demand this year, with another doubling expected the following year, the stage is set for an HBM tidal wave. And FormFactor, quietly riding the crest of the HBM3E wave, might be holding the key to unlocking a multi-million dollar secret, one that could propel them beyond their current target model and redefine their financial landscape.

Projected HBM Revenue Growth for FormFactor

The following chart illustrates the potential revenue growth from HBM, including the potential impact of HBM3E.

"Fun Fact: FormFactor holds the Guinness World Record for the 'smallest functional gear.' This achievement underscores their prowess in micro-engineering and aligns perfectly with their dominance in the demanding world of advanced packaging."