Ichor builds the gas and chemical plumbing inside chip-making machines, mostly for Applied Materials and Lam Research.
Our viewNeutralMedium conviction
The scores
The profile · 1-4
Growth3/4 ↑
Revenue grew 11.6% in 2025 and 22.7% in Q2 2026, but it tracks equipment spending, rests on two customers and trails 2022.
Business quality2/4 ↑
One of two outsourced gas panel suppliers to Applied and Lam, but customers own the designs and parts follow SEMI standards.
Financial position3/4 ↑
About $136M of net cash after the share sale, but operating cash flow was minus $0.4M over four quarters as inventory grew.
Execution record2/4 ↑
A chief executive change, a 2025 restructuring with $19.8M of inventory write-downs, a missed Q2 midpoint, and an unpaid 2023 margin goal.
Per share capture2/4 →
Shares rose about 59% since 2020 through two share sales, while revenue per share fell from about $39 to $28.
Potential2/4 ↑
Equipment spending is forecast near $200B by 2028, but Ichor's share rests on purchase orders and a cycle others control.
Risk profile2/4 →
Applied and Lam bought 76% of 2025 sales on purchase orders, and either can move a platform to Ultra Clean or its own plants.
Valuation2/4 ↑
About 1.5 times sales against a 1.04 median, and 13.3 times 2027 forecasts that still need peak margins on 60% more revenue.
Evidence quality3/4 →
Results, the customer split, both suppliers' filings and SEMI's forecast are public; the margin path, capacity and order visibility rest on management's word.
The Verdict
We rate Ichor neutral. It is a weak business in a strong market: it builds gas systems for chip-making machines, but two customers buy three quarters of its sales, own the designs and keep a second supplier, so it keeps a thin slice of each sale. The market it serves is growing fast, and Ichor is growing with it. The price is full. At about 13 times the profit analysts expect in 2027, it already assumes that growth and margins back near the last peak, so a miss would hurt. Management says margins can go higher still; until they do, the good news is in the price.
The long caseChipmakers are buying more deposition and etch tools for AI memory and logic, and every one needs gas delivery that Applied and Lam mostly buy from two suppliers.
The evidence under this - 6 claims
C03facthigh confidence
Applied Materials bought $371.7M, 39.2% of 2025 revenue, and Lam Research $351.4M, 37.1%: 76% together, against 73% in 2024 and 82% in 2023, when they bought $295.1M and $286.8M. ASML bought $85.6M in 2023 and under 10% since.
The bargaining power sits with the customers: Ichor is about 3% of Lam's cost of goods, builds to Lam's and Applied's designs and can be partly replaced by Ultra Clean, so its margin is what its two customers allow, about a quarter of Lam's own.
derivedTwo customers bought 76% of 2025 sales (C03), own the designs and order without minimum volumes (C12), and keep a second qualified supplier (C13). Lam's gross margin is 50.5% (C15) against Ichor's 13.9% (C04), and Ichor's $351.4M of 2025 sales to Lam is about 3% of Lam's $11.5B cost of goods (C03, C15).
against this
Ichor's own components raise the share of each panel it designs and owns (C08), and a tool cannot ship without its panel, which gives a supplier leverage in a shortage.
current state · 2026-08-07written 2026-10-06
C16factmedium confidence
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
C21inferencemedium confidence
At $43.34 the shares cost about 1.5 times trailing sales, half again their six-year median, and 13.3 times analysts' 2027 earnings. Those earnings need revenue about 60% above the trailing year and a gross margin near 17%, about the 2022 peak, so the price still pays for the upcycle and the margin recovery together, though with less to spare than at $63.33.
derivedEnterprise value of about $1.52B (C19) over $1,013.8M of trailing revenue (C05) is 1.5 times, against a six-year median of 1.04 (S14); at that median the enterprise value needs about $1.46B of revenue. $43.34 over 2027 EPS of $3.27 (C20, struck 5 October) is 13.3 times. $3.27 on 38.5M shares at a 22% tax rate is about $160M of pretax profit, about 10% of $1,629.6M, which with operating costs near $110M a year needs a gross margin near 17%, against 16.6% in 2022 (C06).
against this
Management targets 20% gross margin with more of its own components inside each panel (C08), which would make 2027 consensus conservative and the multiple lower.
2026-10-22editedre-struck at the 2026-10-21 close of $43.34 (from $63.33) on the daily review's maintenance route -- drift -31.6%, past the 12% trigger. Trailing sales, share count and 2027 consensus EPS held as struck on 5 October; no new print or filing since.
forward · 2026-10-22written 2026-10-06
C06facthigh confidence
Revenue was $914.2M in 2020, $1,096.9M in 2021 and $1,280.1M in 2022, fell 36.6% to $811.1M in 2023, then rose to $849.0M in 2024 and $947.7M in 2025. GAAP gross margin was 16.2% in 2021 and 16.6% in 2022 against 12.7% in 2023 and 9.3% in 2025; the GAAP operating margin was 7.4% and 6.7% in 2021 and 2022 and negative in every year since.
Management plans about 100 basis points of gross margin gain in each remaining quarter of 2026 and says it sees more than one path to 20%, no longer requiring its flow controller. Its own components were about 25% of content in Q2 and should be about 30% exiting Q3 and 35% exiting Q4. It says current plants can support $500M of quarterly revenue and upwards of $3B a year with targeted spending.
Gross margin has never been above 16.6% in a year (C06), and the 2023 performance shares paid nothing on their gross margin goal (C25).
forwardwritten 2026-10-06
01
The company
A chip-making machine works by feeding exact amounts of gases and liquids into a chamber where a silicon wafer is etched or coated. Ichor builds the panels that do that metering: valves, pressure regulators and flow controllers joined by ultra-clean welded tubing.
It sells them to the companies that make the machines, which would otherwise build the panels themselves or buy from a rival. Ichor builds to the customer's own design, in plants in the United States, Mexico, Singapore and Malaysia.
The evidence under this - 3 claims
C01facthigh confidence
Ichor designs and makes fluid delivery subsystems for semiconductor equipment: gas delivery systems, chemical delivery systems, weldments, precision machined parts and its own components such as valves and flow controllers. It reports one segment, makes them in the United States, Mexico, Singapore and Malaysia, had 1,891 employees and 557 contingent workers, and sells under 10% of revenue outside the chip industry.
Ichor's 10-K says OEMs typically own the design rights to their products, that it has no long-term contracts requiring fixed or minimum volumes and works on purchase orders, and that it competes with suppliers and in some cases with OEMs' internal manufacturing groups, facing more if they chose to build these systems themselves. Its valves are built to SEMI specifications and compatible with all current competitive systems; it holds 103 granted patents.
SEMI's F82 standard sets the properties and dimensions of mass flow controllers and meters for 1.125-inch surface-mount gas distribution systems, so the components inside a gas panel follow common footprints that any qualified maker can build to.
A standard footprint does not make a supplier's welding and clean-room line qualified on a customer's tool, which is where switching takes time.
current state · 2026-10-06written 2026-10-06
How it makes money
Ichor is paid per panel and part shipped, on purchase orders with no minimum volumes, so its sales rise and fall with how many machines its customers build. Applied Materials bought 39% of 2025 sales and Lam Research 37%.
It keeps little of each sale: about 14 cents of every dollar after the cost of making it in Q2 2026, against about 50 cents at Lam.
The evidence under this - 4 claims
C03facthigh confidence
Applied Materials bought $371.7M, 39.2% of 2025 revenue, and Lam Research $351.4M, 37.1%: 76% together, against 73% in 2024 and 82% in 2023, when they bought $295.1M and $286.8M. ASML bought $85.6M in 2023 and under 10% since.
In 2025 revenue was $947.7M, up 11.6%. GAAP gross margin was 9.3% and non-GAAP 12.2%; the GAAP operating loss was $39.3M and the net loss $52.8M, $1.54 a share, against non-GAAP net income of $7.9M, $0.23 a share. Cash from operations was $29.9M and capital spending $36.2M.
In the June 2026 quarter revenue was $294.8M, up 15% from March and 22.7% from a year earlier, below the $300M midpoint of the $290M to $310M guide. GAAP gross margin was 13.9% and non-GAAP 14.1%; the GAAP operating margin 2.4% and non-GAAP 5.5%. GAAP net income was $1.0M, $0.03 a share, and non-GAAP EPS $0.34. Cash from operations was minus $15.9M after a $38.4M rise in inventory.
historical · Q2 2026 (quarter to 26 June 2026)written 2026-10-06
C12facthigh confidence
Ichor's 10-K says OEMs typically own the design rights to their products, that it has no long-term contracts requiring fixed or minimum volumes and works on purchase orders, and that it competes with suppliers and in some cases with OEMs' internal manufacturing groups, facing more if they chose to build these systems themselves. Its valves are built to SEMI specifications and compatible with all current competitive systems; it holds 103 granted patents.
Gas and chemical delivery systems, weldments and machined parts built to Applied's own designs.
Lam Research
37%
Gas delivery systems and components built to Lam's designs for its process tools.
Other customers
24%
Other equipment makers, including ASML, and aerospace and defense machining, under 10% of revenue.
Who runs it
Phil Barros, an engineer who joined Ichor's engineering team in 2010 and ran its technology from 2015, became chief executive in November 2025. Greg Swyt has been finance chief since 2023.
Directors and officers own 1.7%. The chief executive sold 21,000 shares in February outside a pre-set plan. Pay rewards sales, margins and cash flow, and half the long-term award depends on 2027 margins and cash; the 2023 award paid nothing on its margin goal.
The evidence under this - 3 claims
C24facthigh confidence
Phil Barros became chief executive on 3 November 2025, after Jeff Andreson, chief executive from 2020, stepped down under a succession plan announced in August 2025. Barros was chief technology officer from 2015 and head of engineering from 2010, after working at Applied Materials. Greg Swyt has been finance chief since July 2023.
Directors and officers own 1.7%; BlackRock holds 14.9%, Invesco 8.7% and Barrow Hanley 5.6%. The chairman bought 20,000 shares at about $15 in November 2025 and sold about 29,900 in August and September 2026 at $50 to $68 under a Rule 10b5-1 plan. The chief executive sold 21,000 shares at $46.63 in February 2026 outside a plan, and two directors also sold; 35.3% of shares sold in the window were under plans.
Barros earns a $700,000 salary with a 70% bonus target and received a $3.5M grant, half restricted and half performance shares, priced at $16.54. The bonus pays on revenue, non-GAAP gross and operating margin and non-GAAP free cash flow. The 2025 performance shares pay 50% on shareholder return against a semiconductor index, 30% on 2027 non-GAAP gross margin and 20% on 2027 free cash flow; a 2024 tranche needs non-GAAP gross margin of 20% for two quarters by 2028. The 2023 grant paid nothing on its gross margin goal.
Once Ichor's lines are approved to build a machine's panel, moving that work elsewhere means approving a new supplier, so customers tend to stay. Applied and Lam bought more from Ichor in 2025 than in 2023.
The hold is weak, though. The customers own the designs, order as they go and keep Ultra Clean approved as a second supplier, and the parts follow an industry standard. Ichor's sales to Lam are about 3% of what Lam spends making its machines, so Lam sets the terms.
The evidence under this - 6 claims
C13facthigh confidence
Ichor's 10-K says the fluid delivery market is concentrated and names Ultra Clean Technology as its competitor. Ultra Clean's own 10-K names Ichor Systems and Fujikin as its principal competitors for gas delivery systems; it had $2,054.0M of 2025 revenue, $1,799.3M from products, with Applied Materials and Lam Research 58.7% of the total.
Applied Materials bought $371.7M, 39.2% of 2025 revenue, and Lam Research $351.4M, 37.1%: 76% together, against 73% in 2024 and 82% in 2023, when they bought $295.1M and $286.8M. ASML bought $85.6M in 2023 and under 10% since.
Ichor's 10-K says OEMs typically own the design rights to their products, that it has no long-term contracts requiring fixed or minimum volumes and works on purchase orders, and that it competes with suppliers and in some cases with OEMs' internal manufacturing groups, facing more if they chose to build these systems themselves. Its valves are built to SEMI specifications and compatible with all current competitive systems; it holds 103 granted patents.
SEMI's F82 standard sets the properties and dimensions of mass flow controllers and meters for 1.125-inch surface-mount gas distribution systems, so the components inside a gas panel follow common footprints that any qualified maker can build to.
A standard footprint does not make a supplier's welding and clean-room line qualified on a customer's tool, which is where switching takes time.
current state · 2026-10-06written 2026-10-06
C28inferencemedium confidence
The bargaining power sits with the customers: Ichor is about 3% of Lam's cost of goods, builds to Lam's and Applied's designs and can be partly replaced by Ultra Clean, so its margin is what its two customers allow, about a quarter of Lam's own.
derivedTwo customers bought 76% of 2025 sales (C03), own the designs and order without minimum volumes (C12), and keep a second qualified supplier (C13). Lam's gross margin is 50.5% (C15) against Ichor's 13.9% (C04), and Ichor's $351.4M of 2025 sales to Lam is about 3% of Lam's $11.5B cost of goods (C03, C15).
against this
Ichor's own components raise the share of each panel it designs and owns (C08), and a tool cannot ship without its panel, which gives a supplier leverage in a shortage.
current state · 2026-08-07written 2026-10-06
C15facthigh confidence
Lam Research's revenue rose 26.0% to $23,232.7M in its year to June 2026 at a 50.5% gross margin, leaving about $11.5B of cost of goods. Its 10-K says its manufacturing mainly assembles and tests components, sub-assemblies and modules, and that it outsources certain aspects of manufacturing to scale up or down.
historical · Lam fiscal year to 28 June 2026written 2026-10-06
The threat
Ultra Clean, twice Ichor's size, builds the same systems for the same two customers and names Ichor as its main rival. Fujikin, a private Japanese maker, and Compart Systems, owned by a Shanghai-listed group, also sell gas systems.
The customers can also build panels themselves; Ichor's own annual report says it already competes with their in-house groups.
The evidence under this - 4 claims
C13facthigh confidence
Ichor's 10-K says the fluid delivery market is concentrated and names Ultra Clean Technology as its competitor. Ultra Clean's own 10-K names Ichor Systems and Fujikin as its principal competitors for gas delivery systems; it had $2,054.0M of 2025 revenue, $1,799.3M from products, with Applied Materials and Lam Research 58.7% of the total.
Shanghai Wanye bought Compart Systems, a Singapore maker of gas delivery components and assemblies with plants in China and Malaysia, for $398M in 2020; DC Advisory advised the buyer.
Ichor's 10-K says OEMs typically own the design rights to their products, that it has no long-term contracts requiring fixed or minimum volumes and works on purchase orders, and that it competes with suppliers and in some cases with OEMs' internal manufacturing groups, facing more if they chose to build these systems themselves. Its valves are built to SEMI specifications and compatible with all current competitive systems; it holds 103 granted patents.
Lam Research's revenue rose 26.0% to $23,232.7M in its year to June 2026 at a 50.5% gross margin, leaving about $11.5B of cost of goods. Its 10-K says its manufacturing mainly assembles and tests components, sub-assemblies and modules, and that it outsources certain aspects of manufacturing to scale up or down.
historical · Lam fiscal year to 28 June 2026written 2026-10-06
The rivals:UCTT, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
Ticker
Rival
Where it competes
How far along
Priced against it
UCTT
Ultra Clean HoldingsPriced against it: Same product
Fluid delivery subsystems for chip equipment
On sale
Same product
Private
FujikinPriced against it: Private
Fluid delivery subsystems for chip equipment
On sale
Private
Compart Systems, owned by Shanghai Vital MicrotechPriced against it: Listed abroad
Fluid delivery subsystems for chip equipment
On sale
Listed abroad
In-house
Applied Materials' and Lam Research's own manufacturingPriced against it: In-house
Fluid delivery subsystems for chip equipment
On sale
In-house
03
How big it could get
How big this could get
Nobody outside the companies publishes how much of a machine's cost is its gas system, so the market cannot be sized exactly. What can be measured is the spending it rides: the industry body SEMI expects chipmakers to spend $143.9B on wafer-making machines in 2026 and about $200B by 2028.
Ichor's 2025 sales were about 0.8% of that spending. Ichor and Ultra Clean together sold about $2.7B of these products.
The evidence under this - 4 claims
C16factmedium confidence
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
C13facthigh confidence
Ichor's 10-K says the fluid delivery market is concentrated and names Ultra Clean Technology as its competitor. Ultra Clean's own 10-K names Ichor Systems and Fujikin as its principal competitors for gas delivery systems; it had $2,054.0M of 2025 revenue, $1,799.3M from products, with Applied Materials and Lam Research 58.7% of the total.
In 2025 revenue was $947.7M, up 11.6%. GAAP gross margin was 9.3% and non-GAAP 12.2%; the GAAP operating loss was $39.3M and the net loss $52.8M, $1.54 a share, against non-GAAP net income of $7.9M, $0.23 a share. Cash from operations was $29.9M and capital spending $36.2M.
Ichor's 2025 revenue was about 0.8% of what the industry spent on wafer fab equipment that year.
derivedIchor's 2025 revenue of $947.7M (C02) over SEMI's $116.9B of 2025 wafer fab equipment sales (C16) is about 0.8%.
against this
SEMI's total includes lithography and inspection tools, where Ichor sells little, so its share of the tools it actually serves is higher.
historical · FY 2025written 2026-10-06
04
The results
The numbers
Is it growing?Steady
Sales grew 9.1% over the twelve months to Jun 2026, about the same pace as the 12% in the year to Dec 2025.
Is it profitable?Losing
Operating margin is −2.4%, about where it was (−1.3%) in the year to Dec 2023.
Does growth pay off?Pays off
Running costs take 13¢ of each sales dollar, up from 9¢ in the year to Dec 2021.
Does it earn good returns?Poor
Shareholders' money lost 5.2% a year, down from 16% in the year to Dec 2021.
How long can it keep going?Long runway
It used $25.6M of cash over the last twelve months, so the $256M it holds lasts about 10.0 years at that pace.
Is the balance sheet safe?Net cash
It holds $256M of cash against $121M of debt, $136M more cash than it owes.
Are shares being diluted?Diluting
The share count rose 25% in 4.5 years, and pay in shares costs 1.6% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-06. Fiscal years end in December.
Dec 2021
Dec 2022
Dec 2023
Dec 2024
Dec 2025
12 mo to Jun 2026
Size and growth
Sales
$1.10B
$1.28B
$811M
$849M
$948M
$1.01B
Sales growth
+20%
+17%
−37%
+4.7%
+12%
+9.1%
Profit
Gross margin
16%
17%
13%
12%
9.3%
10%
Operating margin
7.4%
6.7%
−1.3%
−0.9%
−4.1%
−2.4%
Net margin
6.5%
5.7%
−5.3%
−2.5%
−5.6%
−4.0%
What growth costs, per sales dollar
Research and development
1.4%
1.5%
2.5%
2.7%
2.4%
2.4%
Selling, general and admin
6.0%
6.9%
9.8%
9.3%
10%
9.5%
Pay in shares
1.0%
1.1%
2.1%
1.8%
1.8%
1.6%
Capital spending
1.9%
2.3%
1.9%
2.1%
3.8%
2.5%
Cash
Cash from operations
$15.3M
$31.5M
$57.6M
$27.9M
$29.9M
−$375K
Free cash flow
−$5.57M
$2.02M
$42.1M
$10.2M
−$6.28M
−$25.6M
Balance sheet
Cash and short-term investments
$75.5M
$86.5M
$80.0M
$109M
$98.3M
$256M
Debt
$293M
$301M
$249M
$129M
$124M
$121M
Net cash
−$217M
−$214M
−$169M
−$19.9M
−$25.2M
$136M
Returns and shares
Return on capital
11%
9.9%
-
-
-
-
Shares (diluted)
29.0M
29.0M
29.2M
32.8M
34.2M
36.3M
What growth costs
Right now growth is making the business more profitable: as quarterly sales rose 23% since September 2025, the share kept after production costs more than doubled, partly because one-off closure costs ended. The same fixed costs work in reverse in a downturn: in 2023 a 37% fall in sales cut that share by a quarter.
The evidence under this - 4 claims
C26inferencehigh confidence
Growth is widening the margin now: a 23% rise in quarterly revenue since September 2025 came with GAAP gross margin up more than 9 points, partly as restructuring charges ended. The same fixed costs cut the other way in 2023, when a 37% fall in revenue took 4 points off gross margin.
derivedFrom the September 2025 quarter to June 2026 revenue rose from $239.3M to $294.8M and GAAP gross margin from 4.6% to 13.9% (C05); in 2023 a 36.6% revenue fall took gross margin from 16.6% to 12.7% (C06).
against this
Part of the rise is the end of 2025's restructuring charges and write-downs (C09) rather than leverage, and non-GAAP gross margin rose only from 12.1% to 14.1%.
historical · FY 2022 to Q2 2026written 2026-10-06
C05facthigh confidence
Revenue was $239.3M in the September 2025 quarter, $223.6M in December, $256.1M in March 2026 and $294.8M in June: $1,013.8M over four quarters. GAAP gross margin rose from 4.6% to 9.4%, 12.6% and 13.9%. Over the four quarters the operating loss was about $24M, the net loss $40.3M, cash from operations minus $0.4M and capital spending $25.2M.
The September 2025 quarter carried most of the restructuring charges and inventory write-downs (C09), so part of the margin rise is charges ending rather than the business improving.
historical · four quarters to 26 June 2026written 2026-10-06
C06facthigh confidence
Revenue was $914.2M in 2020, $1,096.9M in 2021 and $1,280.1M in 2022, fell 36.6% to $811.1M in 2023, then rose to $849.0M in 2024 and $947.7M in 2025. GAAP gross margin was 16.2% in 2021 and 16.6% in 2022 against 12.7% in 2023 and 9.3% in 2025; the GAAP operating margin was 7.4% and 6.7% in 2021 and 2022 and negative in every year since.
The 2025 Consolidation Restructuring Plan cost $26.6M, of which $19.8M was inventory impairment, plus $6.7M of facility shutdown costs. Ichor keeps a valuation allowance against its US deferred tax assets, and its Singapore tax holiday, worth $3.4M in 2025 and $7.1M in 2024, expires in 2026.
In Q2 2026, the three months to 26 June, sales rose 23% from a year earlier to $294.8M, and the share of each sales dollar kept after production costs rose to 13.9%, from 4.6% three quarters earlier. Ichor made a small profit.
Sales still fell short of the middle of the company's own forecast, because a supplier of flow controllers ran short at the end of the quarter. Cash went out the door as Ichor stocked up parts for the second half, which it expects to be at least 25% bigger than the first.
What it did to the thesisIt showed the recovery working: sales growing with the equipment cycle and margins improving each quarter. It also showed the limits, with a supplier shortage costing sales and margins still well below the level the price assumes, so the central question stays open.
The quarter in detail
-0.4%Q3 25
-6.6%Q4 25
14.5%Q1 26
15.1%Q2 26
Sales growth from the previous quarter, filed figures.
Earnings per share $0.34 against $0.31 expected; $0.03 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
C04facthigh confidence
In the June 2026 quarter revenue was $294.8M, up 15% from March and 22.7% from a year earlier, below the $300M midpoint of the $290M to $310M guide. GAAP gross margin was 13.9% and non-GAAP 14.1%; the GAAP operating margin 2.4% and non-GAAP 5.5%. GAAP net income was $1.0M, $0.03 a share, and non-GAAP EPS $0.34. Cash from operations was minus $15.9M after a $38.4M rise in inventory.
historical · Q2 2026 (quarter to 26 June 2026)written 2026-10-06
C05facthigh confidence
Revenue was $239.3M in the September 2025 quarter, $223.6M in December, $256.1M in March 2026 and $294.8M in June: $1,013.8M over four quarters. GAAP gross margin rose from 4.6% to 9.4%, 12.6% and 13.9%. Over the four quarters the operating loss was about $24M, the net loss $40.3M, cash from operations minus $0.4M and capital spending $25.2M.
The September 2025 quarter carried most of the restructuring charges and inventory write-downs (C09), so part of the margin rise is charges ending rather than the business improving.
historical · four quarters to 26 June 2026written 2026-10-06
C07management claimmedium confidence
Ichor guides September-quarter revenue of $315M to $345M, gross margin of 14.5% to 15.5%, GAAP EPS of $0.25 to $0.35 and non-GAAP EPS of $0.40 to $0.50. Management expects second-half revenue at least 25% above the first half, and 2026 revenue at least 30% above 2025, at the high end of equipment spending growth.
Q2 revenue already came in below the guide's midpoint on a part shortage (C04, C27), and the guide rests on customers' forecasts rather than contracts (C12).
forwardwritten 2026-10-06
C27management claimmedium confidence
The chief executive said a flow controller supplier's shortage at the end of Q2 pushed revenue into the following week, called flow control one of the suppliers that keep him up at night, and said the lithography customer is burning through its inventory, with significant growth with that customer in 2027. Management said customers now place orders about six months out.
Orders six months out are still purchase orders without minimum volumes (C12), and a dependence on outside flow controllers is what the internal content plan (C08) is meant to cure.
current state · 2026-08-03written 2026-10-06
What management did with the money
Management sold $200M of new shares in mid-2026, at nearly three times the price of a year earlier, and closed higher-cost plants in 2025. The sale was well timed, but each new share shrinks existing holders' slice: the share count is up about 59% since 2020.
Insiders in 2026Q3: 0 purchases and 23 sales, from their Form 4 filings.
The evidence under this - 3 claims
C10facthigh confidence
At 26 June 2026 Ichor held $256.5M of cash against $120.6M of term loan debt. In the June quarter it sold 2.48M shares under a $200M at-the-market programme at an average $80.70, for $195.4M net. Shares outstanding were 37,383,592, against 34.4M at December. Inventory was $290.7M, goodwill $335.4M and equity $865.5M.
Diluted shares averaged 23.5M in 2020, 29.0M in 2021 and 2022, 29.2M in 2023, 32.8M in 2024 after a share sale and 34.2M in 2025; 37.4M were outstanding in June 2026. Revenue per diluted share was about $39 in 2020 and about $28 over the four quarters to June 2026. Pay in shares was $16.7M in 2025, 1.8% of revenue.
The 2025 Consolidation Restructuring Plan cost $26.6M, of which $19.8M was inventory impairment, plus $6.7M of facility shutdown costs. Ichor keeps a valuation allowance against its US deferred tax assets, and its Singapore tax holiday, worth $3.4M in 2025 and $7.1M in 2024, expires in 2026.
In short. Full. The price pays for sales growing about 60% and margins returning to their last peak, both of which have to happen.
Share price
$63.33
close,
Company value for each $1 of sales
2.1
its 6-year normal 1.0
The shares peaked on 30 June after a year-long run, fell by more than half to mid-September, recovered part of the fall and fell again in October. Almost all of the year's rise came from buyers paying more for each dollar of sales, not from more sales per share.
The next test is close. On 2 November Ichor reports a quarter it expects to bring $315M to $345M of sales and a margin of 14.5% to 15.5%, in a year the industry body expects machine spending to rise 23%.
The evidence under this - 4 claims
C19facthigh confidence
Ichor closed at $43.34 on 21 October 2026, a market value of about $1.62B on 37.38M shares and an enterprise value of about $1.52B. The 52-week range was $14.06 to $113.58, with the peak close of $112.28 on 30 June; the price is 31.6% below the $63.33 close of 5 October and 92% above its price a year earlier. Over the 252 trading days to 5 October the price had risen 208.8%: sales per share rose 2.7% and the price paid per dollar of sales 200.6%.
2026-10-22editedre-struck at the 2026-10-21 close of $43.34 (from $63.33) on the daily review's maintenance route -- drift -31.6%, past the 12% trigger. Trailing sales, share count and 2027 consensus EPS held as struck on 5 October; no new print or filing since.
current state · 2026-10-22written 2026-10-06
C22facthigh confidence
The shares fell from $58.73 in April 2021 to $22.25 in July 2022, 62%, while 2022 revenue still grew 16.7%; 2023 revenue then fell 36.6%. In 2026 they rose from $20.41 in January to a $112.28 close on 30 June, fell from $95.85 on 21 July to $62.25 on 29 July, fell 11.2% after the Q2 print, from $80.23 to $71.27 on 4 August, and reached $51.09 on 15 September.
historical · April 2021 to October 2026written 2026-10-06
C07management claimmedium confidence
Ichor guides September-quarter revenue of $315M to $345M, gross margin of 14.5% to 15.5%, GAAP EPS of $0.25 to $0.35 and non-GAAP EPS of $0.40 to $0.50. Management expects second-half revenue at least 25% above the first half, and 2026 revenue at least 30% above 2025, at the high end of equipment spending growth.
Q2 revenue already came in below the guide's midpoint on a part shortage (C04, C27), and the guide rests on customers' forecasts rather than contracts (C12).
forwardwritten 2026-10-06
C16factmedium confidence
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
How we read the multiple
A buyer pays for the upcycle and the margin recovery together.
1. Analysts expect Ichor to earn $3.27 a share in 2027, about twice 2026's.
2. The shares cost about 13 times that.
3. That needs sales about 60% above the last four quarters'.
4. It also needs Ichor to keep about 17 cents of each sales dollar after production costs, about its best year.
On sales alone it costs half as much again as its usual price. If either the cycle or the margins fall short, little is left.
Against its own history. Buyers pay half as much again as their usual price for each dollar of Ichor's sales, while its margins are still below their last peak.
The evidence under this - 5 claims
C21inferencemedium confidence
At $43.34 the shares cost about 1.5 times trailing sales, half again their six-year median, and 13.3 times analysts' 2027 earnings. Those earnings need revenue about 60% above the trailing year and a gross margin near 17%, about the 2022 peak, so the price still pays for the upcycle and the margin recovery together, though with less to spare than at $63.33.
derivedEnterprise value of about $1.52B (C19) over $1,013.8M of trailing revenue (C05) is 1.5 times, against a six-year median of 1.04 (S14); at that median the enterprise value needs about $1.46B of revenue. $43.34 over 2027 EPS of $3.27 (C20, struck 5 October) is 13.3 times. $3.27 on 38.5M shares at a 22% tax rate is about $160M of pretax profit, about 10% of $1,629.6M, which with operating costs near $110M a year needs a gross margin near 17%, against 16.6% in 2022 (C06).
against this
Management targets 20% gross margin with more of its own components inside each panel (C08), which would make 2027 consensus conservative and the multiple lower.
2026-10-22editedre-struck at the 2026-10-21 close of $43.34 (from $63.33) on the daily review's maintenance route -- drift -31.6%, past the 12% trigger. Trailing sales, share count and 2027 consensus EPS held as struck on 5 October; no new print or filing since.
forward · 2026-10-22written 2026-10-06
C19facthigh confidence
Ichor closed at $43.34 on 21 October 2026, a market value of about $1.62B on 37.38M shares and an enterprise value of about $1.52B. The 52-week range was $14.06 to $113.58, with the peak close of $112.28 on 30 June; the price is 31.6% below the $63.33 close of 5 October and 92% above its price a year earlier. Over the 252 trading days to 5 October the price had risen 208.8%: sales per share rose 2.7% and the price paid per dollar of sales 200.6%.
2026-10-22editedre-struck at the 2026-10-21 close of $43.34 (from $63.33) on the daily review's maintenance route -- drift -31.6%, past the 12% trigger. Trailing sales, share count and 2027 consensus EPS held as struck on 5 October; no new print or filing since.
current state · 2026-10-22written 2026-10-06
C20facthigh confidence
Five analysts expect 2026 revenue of $1,239.6M and EPS of $1.57, 2027 revenue of $1,629.6M and EPS of $3.27, and 2028 EPS of $3.69, against the company's own guide of $315M to $345M for the September quarter. Twelve rate it a buy and two a hold; the rating series shows 85.7% positive among seven. Short interest was 2.79M shares, 8.2% of the float, at the 15 September settlement, up 13.3%.
Revenue was $914.2M in 2020, $1,096.9M in 2021 and $1,280.1M in 2022, fell 36.6% to $811.1M in 2023, then rose to $849.0M in 2024 and $947.7M in 2025. GAAP gross margin was 16.2% in 2021 and 16.6% in 2022 against 12.7% in 2023 and 9.3% in 2025; the GAAP operating margin was 7.4% and 6.7% in 2021 and 2022 and negative in every year since.
Revenue was $239.3M in the September 2025 quarter, $223.6M in December, $256.1M in March 2026 and $294.8M in June: $1,013.8M over four quarters. GAAP gross margin rose from 4.6% to 9.4%, 12.6% and 13.9%. Over the four quarters the operating loss was about $24M, the net loss $40.3M, cash from operations minus $0.4M and capital spending $25.2M.
The September 2025 quarter carried most of the restructuring charges and inventory write-downs (C09), so part of the margin rise is charges ending rather than the business improving.
historical · four quarters to 26 June 2026written 2026-10-06
Priced against its rivals
Only Ultra Clean Holdings sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: Fujikin Incorporated, Compart Systems.
Where we disagree with the market
The market believes
An AI-driven equipment boom with margins recovering: nearly every analyst rates it a buy and expects earnings to double in 2027.
We believe
The boom is real, but two customers who own the designs set Ichor's margins, so they may stop short of management's 20%.
In the last boom Ichor's margin peaked at 16.6% on $1.28B of sales, and a 2023 pay goal on margins paid nothing. Management now counts on making more of the parts inside each panel itself.
Against us: management says demand and capacity no longer hold it back, customers order about six months ahead, and the industry body expects spending to rise 21.8% again in 2027.
What analysts say, and the evidence
Analysts positive
86%
of 7, 1 Oct
Four months earlier
86%
of 7, 1 Jun
The evidence under this - 7 claims
C20facthigh confidence
Five analysts expect 2026 revenue of $1,239.6M and EPS of $1.57, 2027 revenue of $1,629.6M and EPS of $3.27, and 2028 EPS of $3.69, against the company's own guide of $315M to $345M for the September quarter. Twelve rate it a buy and two a hold; the rating series shows 85.7% positive among seven. Short interest was 2.79M shares, 8.2% of the float, at the 15 September settlement, up 13.3%.
Management plans about 100 basis points of gross margin gain in each remaining quarter of 2026 and says it sees more than one path to 20%, no longer requiring its flow controller. Its own components were about 25% of content in Q2 and should be about 30% exiting Q3 and 35% exiting Q4. It says current plants can support $500M of quarterly revenue and upwards of $3B a year with targeted spending.
Gross margin has never been above 16.6% in a year (C06), and the 2023 performance shares paid nothing on their gross margin goal (C25).
forwardwritten 2026-10-06
C06facthigh confidence
Revenue was $914.2M in 2020, $1,096.9M in 2021 and $1,280.1M in 2022, fell 36.6% to $811.1M in 2023, then rose to $849.0M in 2024 and $947.7M in 2025. GAAP gross margin was 16.2% in 2021 and 16.6% in 2022 against 12.7% in 2023 and 9.3% in 2025; the GAAP operating margin was 7.4% and 6.7% in 2021 and 2022 and negative in every year since.
The bargaining power sits with the customers: Ichor is about 3% of Lam's cost of goods, builds to Lam's and Applied's designs and can be partly replaced by Ultra Clean, so its margin is what its two customers allow, about a quarter of Lam's own.
derivedTwo customers bought 76% of 2025 sales (C03), own the designs and order without minimum volumes (C12), and keep a second qualified supplier (C13). Lam's gross margin is 50.5% (C15) against Ichor's 13.9% (C04), and Ichor's $351.4M of 2025 sales to Lam is about 3% of Lam's $11.5B cost of goods (C03, C15).
against this
Ichor's own components raise the share of each panel it designs and owns (C08), and a tool cannot ship without its panel, which gives a supplier leverage in a shortage.
current state · 2026-08-07written 2026-10-06
C25facthigh confidence
Barros earns a $700,000 salary with a 70% bonus target and received a $3.5M grant, half restricted and half performance shares, priced at $16.54. The bonus pays on revenue, non-GAAP gross and operating margin and non-GAAP free cash flow. The 2025 performance shares pay 50% on shareholder return against a semiconductor index, 30% on 2027 non-GAAP gross margin and 20% on 2027 free cash flow; a 2024 tranche needs non-GAAP gross margin of 20% for two quarters by 2028. The 2023 grant paid nothing on its gross margin goal.
The chief executive said a flow controller supplier's shortage at the end of Q2 pushed revenue into the following week, called flow control one of the suppliers that keep him up at night, and said the lithography customer is burning through its inventory, with significant growth with that customer in 2027. Management said customers now place orders about six months out.
Orders six months out are still purchase orders without minimum volumes (C12), and a dependence on outside flow controllers is what the internal content plan (C08) is meant to cure.
current state · 2026-08-03written 2026-10-06
C16factmedium confidence
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
06
What could go wrong, and how we would know
The risks
Two customers Applied Materials and Lam Research bought 76% of 2025 sales on purchase orders and can move work to Ultra Clean or their own plants.
The cycle turns In 2023 sales fell 37% when chipmakers paused, and the shares fell 62% before it, while sales were still growing.
Margins stall The price assumes margins near the last peak; if they stall near 15%, 2027 profit falls about a fifth short.
More shares The share count is up about 59% since 2020, and new shares have been sold in each recovery.
Parts shortages A flow controller supplier's shortage already cost sales in Q2 2026, and the chief executive named it a worry.
Tax holiday ends Ichor's Singapore tax break expires in 2026, so more of each dollar of profit goes in tax.
The evidence under this - 7 claims
C03facthigh confidence
Applied Materials bought $371.7M, 39.2% of 2025 revenue, and Lam Research $351.4M, 37.1%: 76% together, against 73% in 2024 and 82% in 2023, when they bought $295.1M and $286.8M. ASML bought $85.6M in 2023 and under 10% since.
Revenue was $914.2M in 2020, $1,096.9M in 2021 and $1,280.1M in 2022, fell 36.6% to $811.1M in 2023, then rose to $849.0M in 2024 and $947.7M in 2025. GAAP gross margin was 16.2% in 2021 and 16.6% in 2022 against 12.7% in 2023 and 9.3% in 2025; the GAAP operating margin was 7.4% and 6.7% in 2021 and 2022 and negative in every year since.
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
C13facthigh confidence
Ichor's 10-K says the fluid delivery market is concentrated and names Ultra Clean Technology as its competitor. Ultra Clean's own 10-K names Ichor Systems and Fujikin as its principal competitors for gas delivery systems; it had $2,054.0M of 2025 revenue, $1,799.3M from products, with Applied Materials and Lam Research 58.7% of the total.
Diluted shares averaged 23.5M in 2020, 29.0M in 2021 and 2022, 29.2M in 2023, 32.8M in 2024 after a share sale and 34.2M in 2025; 37.4M were outstanding in June 2026. Revenue per diluted share was about $39 in 2020 and about $28 over the four quarters to June 2026. Pay in shares was $16.7M in 2025, 1.8% of revenue.
The chief executive said a flow controller supplier's shortage at the end of Q2 pushed revenue into the following week, called flow control one of the suppliers that keep him up at night, and said the lithography customer is burning through its inventory, with significant growth with that customer in 2027. Management said customers now place orders about six months out.
Orders six months out are still purchase orders without minimum volumes (C12), and a dependence on outside flow controllers is what the internal content plan (C08) is meant to cure.
current state · 2026-08-03written 2026-10-06
C09facthigh confidence
The 2025 Consolidation Restructuring Plan cost $26.6M, of which $19.8M was inventory impairment, plus $6.7M of facility shutdown costs. Ichor keeps a valuation allowance against its US deferred tax assets, and its Singapore tax holiday, worth $3.4M in 2025 and $7.1M in 2024, expires in 2026.
How much of a chip-making machine's cost is its gas system; no one outside the companies publishes it.
How Applied and Lam split their orders between Ichor, Ultra Clean and their own plants.
Whether Fujikin or Compart has won business from Ichor at Applied or Lam since 2023.
The evidence under this - 3 claims
C16factmedium confidence
SEMI's mid-year forecast puts wafer fab equipment sales at a record $116.9B in 2025, rising 23.1% to $143.9B in 2026, 21.8% in 2027 and 14.1% in 2028 to about $200B. It forecasts DRAM equipment up 39.0% to $38.8B in 2026, NAND up 30.7% to $13.9B and foundry and logic up 18.9% to $78.0B.
SEMI's forecasts are revised with the cycle: this one was a large upward revision from its 2025 year-end forecast, and equipment spending fell sharply in 2023, when Ichor's revenue fell 36.6% (C06).
forwardwritten 2026-10-06
C13facthigh confidence
Ichor's 10-K says the fluid delivery market is concentrated and names Ultra Clean Technology as its competitor. Ultra Clean's own 10-K names Ichor Systems and Fujikin as its principal competitors for gas delivery systems; it had $2,054.0M of 2025 revenue, $1,799.3M from products, with Applied Materials and Lam Research 58.7% of the total.
Shanghai Wanye bought Compart Systems, a Singapore maker of gas delivery components and assemblies with plants in China and Malaysia, for $398M in 2020; DC Advisory advised the buyer.
Neutral→AttractiveA cheaper price on today's sales
It needs:
○The shares fall to about 1.3 times the last four quarters' sales, from about 1.5 today.about ≈$36.82 today, 42% below the last close
Neutral→AttractiveMargins pass the last peak
It needs all of:
○The adjusted gross margin, the share of each dollar kept after production costs, passes 18% for two quarters in a row.checked at the next results, due by 2 Nov
○Quarterly sales pass $350M while Applied and Lam stay below 80% of sales.checked at the next results, due by 2 Nov
Neutral→UnattractiveThe cycle turns before margins arrive
It needs any of:
○Ichor forecasts lower sales for the next quarter than it just reported.checked at the next results, due by 2 Nov
○The adjusted gross margin falls back below 13% in any quarter.checked at the next results, due by 2 Nov
We would also be wrong if
Sales to Applied or Lam fall in a year when that customer is growing.
The margin stops rising and stays below 15% through June 2027.
Ichor sells more shares before its margin passes 17%.
What is coming
31 October 2026 Lam Research September-quarter results: Whether Ichor's second-largest customer still expects tool demand to rise into 2027.
Every dated event ahead
31 October 2026 Lam Research September-quarter results: Whether Ichor's second-largest customer still expects tool demand to rise into 2027.
2 November 2026 Q3 2026 results: Whether revenue reaches the $330M midpoint, gross margin lands inside 14.5% to 15.5%, and the Q4 guide keeps rising.
31 December 2026 SEMI year-end equipment forecast: Whether the industry body holds its 21.8% growth forecast for 2027 equipment spending.
15 February 2027 Q4 2026 results: Whether 2026 revenue grew at least 30%, gross margin reached about 16%, and the lithography customer returned.
Since we wrote this
Written
6 Oct
Price the thesis read
$63.33
5 Oct
22 OctPrice movePrice re-struck, -31.6%; view heldNo print or news since 5 October. The shares cost about 1.5 times sales rather than 2.2, but the 2027 profit behind 13 times still needs peak margins.
6 OctThesis writtenNeutral, medium convictionWritten with the shares up threefold in a year, almost all on a higher multiple, a month before the Q3 print.
Also checked 2 times with nothing new to act on.
Sources 17
Where this came from
Sources - 17
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
products, plants, employees, customer concentration, design rights and purchase orders, the named competitor, restructuring, tax holiday and the FY2025 statements
Ichor Q2 2026 earnings call transcript (FMP), held 3 August 2026
the second-half and full-year outlook, the margin plan and the 20% path, internal content, capacity, the flow controller shortage, order visibility and the lithography customer
We have the capacity today to support $500 million in quarterly revenue.
the industry standard for flow controller footprints in surface-mount gas panels
This Standard establishes the properties and physical dimensions of mass flow controllers and mass flow meters for 1.125 inch type surface mount gas distribution systems.
DC Advisory (DC) acted as financial advisor to Shanghai Wanye on its acquisition of Compart Systems for USD 398 Mn.
backsC17
S14secondaryvendor data2026-10-05
Research pack (FMP market data, FINRA, SEC filed figures), frozen as research-pack.json
price, range and the price move split, the multiples against their own six-year medians, analyst estimates, ratings and the rating series, short interest and insider trades