ONTO — Haitong Initiation (Jul 2024)

Key Points

• Initiate with Outperform rating; Target Price $272
• Key beneficiary of GAA (Gate-All-Around) transistor adoption
• Positioned for AI semiconductor demand tailwinds
• Accelerating GAA technology adoption driving content growth
• Strong competitive positioning in advanced processing equipment

Investment Thesis

ONTO is positioned as a pure-play beneficiary of the structural shift to GAA technology in advanced semiconductor manufacturing. This transition requires new processing equipment, providing multi-year revenue growth opportunity. Additionally, AI infrastructure demand is driving incremental fab capacity and technology roadmap investments.

GAA Opportunity

• GAA represents next evolution in transistor architecture
• Requires new equipment integration into wafer fabs
• Multi-year capex cycle supporting ONTO revenue growth
• Competitive advantages in key processing steps

AI Benefit

• Incremental AI datacenter demand driving new fab construction
• Advanced node technology requirements supporting equipment sales
• Secular demand driver independent of macro cycles

Valuation & Target

• Rating: Outperform
• Target Price: $272
• Initiation Date: July 9, 2024

Source

• File: ONTO_initiation-Haitong-Key GAA and AI Beneficiary-9Jul2024.pdf
• Location: Dropbox/2. Semi/_Individual Stock/1. Semis/ONTO/
• Date: July 9, 2024

Related

• ONTO
• ONTO-3Q-Beat-4Q-Miss
• ONTO-Nano-RTEC-Merger
• GAA Technology
• AI Infrastructure