Nova at Citi’s 2025 Global TMT Conference: Strategic Growth Insights

On Thursday, 04 September 2025, Nova Measuring Instruments Ltd (NASDAQ:NVMI) presented at Citi’s 2025 Global TMT Conference. The company outlined its strategic plan to outpace the Wafer Fab Equipment (WFE) market growth and leverage emerging technologies. While Nova anticipates growth in advanced packaging and memory sectors, it also faces challenges in the Chinese market, with a projected slight revenue increase.

Key Takeaways

• Nova aims to surpass WFE market growth in 2025, driven by memory and advanced packaging.
• The company plans to achieve $1 billion in organic revenue by 2027, with additional inorganic growth.
• Nova’s unique X-ray technology and "lab-to-fab" approach are key competitive advantages.
• A $750 million convertible note offering will fund growth initiatives and acquisitions.
• Chinese market projections have been revised to show slight revenue growth despite initial concerns.

Financial Results

• Nova expects to outperform mid-single-digit WFE market growth in 2025.
• Memory growth, especially in DRAM, is anticipated to accelerate.
• Advanced packaging is projected to grow at double-digit rates.
• The company reaffirms its target of $1 billion in organic revenue by 2027.
• Nova plans to add $150 to $200 million in revenue through inorganic growth by 2027.
• A $750 million convertible note offering, including a $100 million green shoe, has been issued with a 0% coupon.

Operational Updates

• Market share increased from 20% in 2023 to 24.8% in 2024, now second only to KLA.
• Focus on leading-edge nodes like gate-all-around and advanced packaging.
• "Lab-to-fab" approach integrates advanced lab technologies for automated measurements.
• China operations revised from a projected decline to slight growth, accounting for 35% of first-half revenue.
• Syntronics acquisition is integrating well, contributing to growth and new platform launches.

Future Outlook

• Logic market growth expected, with leading-edge nodes outpacing mature logic.
• Investment in infrastructure supports new global fab locations.
• Proceeds from convertible note offering to fund corporate development and disruptive technologies.
• Nova targets $150 to $200 million in inorganic revenue growth by 2027.

Q&A Highlights

• Nova supports all major manufacturers in gate-all-around technology, expecting $500 million revenue by 2026.
• Leading in chemical metrology for advanced packaging, focusing on market share growth.
• Syntronics acquisition enhances capabilities in addressing asymmetric structures and wafer warpage.

The full transcript of Nova’s presentation at Citi’s 2025 Global TMT Conference is available for further insights.

Full transcript - Citi’s 2025 Global TMT Conference:

Atif Malik, Analyst, Citi: Good afternoon, everyone. Welcome to day two of Citi Global TMT Conference. My name is Atif Malik. I cover U.S. semiconductors, semiconductor equipment, and networking equipment names here at Citi. It’s my pleasure to welcome Gabi Weismann, President and CEO of Nova. We also have Miri in the audience from the Friendly Neighborhood IR Group. Welcome, guys. Thank you. I’m going to kick it off with my questions first. If you have a question, feel free to raise your hand, and a mic will come to you, and then you can ask your question. Gabi, let’s talk about kind of the state of the union on the equipment space. What’s your current market outlook for this year and next year? If you can just walk us through each end market: memory DRAM, NAND, leading and trailing logic.

Gabi Weismann, President and CEO, Nova: Sure. First of all, thank you very much for having me, and thank you all for joining. When we look at the market, we’re very pleased with the fact that we’re planning to outpace the market WFE growth in 2025. We have H1 numbers in, and we have a mid-guidance of $221 million in Q3. We’re definitely on track to outperform WFE, which is going to be a bit less than expected earlier this year or lower than expected earlier this year. We’re talking about mid-single digits, perhaps a bit less. We’re definitely outpacing the market growth. When we’re looking at next year, what we see is that logic as a whole is probably going to be a bit down, whereas gate-all-around and leading-edge nodes are still going to grow. We see memory growing at a faster pace than this year, which is mostly focused around DRAM.

We see double-digit growth for advanced packaging, which overall, if we summarize, what we see is still around mid-single digit growth, but it’s going to be higher than in 2025. Obviously, our target as always is to outpace the market.

Atif Malik, Analyst, Citi: That’s very helpful and a lot more constructive than where most investors are. We agree with that outlook ourselves. Gabi, we had KLA, your elder cousin or brother, this morning in the inspection and market talk about it’s a good time to be in the inspection and metrology market. When you look at the end-demand drivers in terms of where AI is going, the complexity, the HBM chips, stacking, chiplets, and whatnot, can you just kind of parse it out within all your products? Like which end-demand drivers in terms of secular growth drivers, whether it’s gate-all-around, advanced packaging, you’re most excited about going to next year?

Gabi Weismann, President and CEO, Nova: First of all, it’s a fascinating time to be in metrology. There’s no doubt about it. What we see is that the growing complexity is driving the need to invest in more process control and gain insight in order to support a faster yield and obviously reaching the yield targets on high-volume manufacturing. I’m very excited about leading-edge nodes in general and advanced packaging. We were fortunate to have been able to position in time our dimensional tools to cater for advanced packaging requirements. There are some specific examples to attest to that in both being able to deliver on unique value as well as being very creative in positioning advanced node tools to address critical applications in advanced packaging and to displace other types of technologies in a better cost of ownership, which is always what the customers are looking for.

The sweet spot is obviously delivering better performance with a better cost of ownership. This is always what we are trying to do. We’re excited about the evolution of each and every technology in our space. When we’re looking at logic, for example, we see great gate-all-around coupled now with backside power delivery. Of course, having more advanced nodes getting up to CFET. We’re looking at in DRAM at 4F2 or 6F2, and then 3D DRAM. We’re looking at advanced packaging moving into hybrid bonding and all of those trends and complexity, complexity to dimensional, the complexity to material, complexity to chemical, which is obviously very supportive of our growth. Each inflection point technologically, which is coupled with the market demand that is driving additional investments in capital, is definitely supportive of our business fundamentals.

Such complexity is always for a company like Nova, which is in the cutting edge of technology and a very strong culture of innovation, giving us opportunities to disrupt, to gain share. This is exactly where we want to be.

Atif Malik, Analyst, Citi: Gabi, just to level set the knowledge of our audience here, I had a chance to visit your manufacturing facility in Fremont, and I was kind of blown away looking at the complexity of your tools. You guys are generating the X-rays and then using it to inspect the wafer and analyze it, sophistication software. It will be helpful for this audience to know what exactly are you doing in terms of your products and material characterization. Most investors are more focused on KLA or other optical inspection competitors. You do have those competitors in certain parts of the market, but your core market in the material side and the chemical side, you guys are almost monopolistic in terms of your IP. Just walk us through what is the secret sauce in the part of the market that you’re immensely successful.

Gabi Weismann, President and CEO, Nova: I’ll start with materials and metrology in which we’re, as you said, the sole source. We are tapping on a very unique X-ray technology capabilities, which very few companies possess, and very few companies, by the way, possess both optical and X-ray in general, and definitely in our space. What we’re doing with X-ray is that we’re focusing on material characteristics, on the composition of materials, on the in-depth profile of the materials deposited, on being able to do ultra-film thickness measurement, which, by the way, optical tools are finding it very challenging to do. This is done with state-of-the-art hardware, which is coupled with software, as you mentioned, in order to deliver an automated inline tool. The secret sauce, as you called it, is based on the fact that we’re taking technologies which were developed and designated for the lab, and we are taking it inline.

You may think that it requires automation, but it’s not the case. In order to get to the same performance you have with a manual tool in the lab, which takes minutes, hours in order to get to a measurement and not connected by any stretch to the fab automation or even to the host, you need to have a very sophisticated mechanism to allow for those measurements to be done in tens of wafers per hour rather than one wafer every few hours or even a few days. If we take the inline SIMS as an example, which is our new material characterization tool, the inline SIMS technology, when you’re using it today in the lab, you need to take a wafer out of your production process. You need to break it into coupons, send it to the lab.

There’s a very highly trained, educated person that measures it with a lab SIMS tool, and it takes about between days and weeks to get the measurement result back to the fab. Just imagine what happens if there was an excursion or a problem with a wafer. You had thousands of wafers going downstream without you even knowing that you had an issue with your material deposition process. You can certainly not do sampling or process such a measurement on more than one place on the wafer, which is critically important today when every die on the wafer becomes different.

The ability to take such a technology into the fab, do it in a completely automated way, connect it to the host, get the results in a matter of minutes or hours, and doing it across the wafer and being able to move this wafer downstream is nothing less than a revolution. That is why the technology has moved so far in order to be able to attract customers. We are very excited by the opportunity that these technologies possess. It has, even for the X-ray-based material characterization tools that have been adopted by many, many customers and proliferated across high-volume manufacturing, it is far from reaching and exhausting the potential.

The new generation of tools is definitely looking at additional application and additional capabilities to make this tool more attractive to customers and to add on proliferation across many of the segments that we look at in the market, even in the next year or two to advanced packaging.

Atif Malik, Analyst, Citi: Yep. You well said. It’s the kind of the lab-to-fab approach which differentiates most of your products. Just staying on the leading-edge investments, many large OEM peers are talking about some sort of seasonality in gate-all-around spending in the second half this year. What is Nova seeing? You can also talk about your position with the four leading-edge customers.

Gabi Weismann, President and CEO, Nova: Sure. We have made considerable strides into securing a very sound position across all four gate-all-around manufacturers. From moving from FinFET to gate-all-around, we were also able to improve our position and share across those four customers. What it gives us is the understanding that no matter what demand is flowing, the overarching demand for gate-all-around manufacturing, Nova can have the share of that production. Obviously, it’s critically important for the industry as well as for Nova to have all those four producing gate-all-around wafers and delivering. We are supporting and very fortunate and proud to support all of those four. Eventually, that gives us the confidence to see and stand behind the $500 million of accumulated revenues between 2024 and 2026 from gate-all-around so that we can deliver to all of those once they are producing and when they are producing at the volumes that they expect.

Atif Malik, Analyst, Citi: Okay. Some of your peers are seeing kind of divergence in this market where maybe the lithography-centric players are seeing weakness. Leading edge applied materials talked about gate-all-around spending being down by 10% in their forecast. What are you seeing? Also, if you can separate 3 nanometer versus 2 nanometer, some peers are saying that the demand could be stronger for 3 nanometer next year versus 2 nanometer. Is that what you see as well, or is it something different?

Gabi Weismann, President and CEO, Nova: I would first say that we are not counting 3 nanometers as part of the gate-all-around. This is part of the leading-edge logic foundry business that we’re counting. Obviously, the bulk of our business is leading edge. We definitely believe that there is some seasonality across those manufacturing, but we haven’t experienced the same trend that others are relating to. We’re definitely seeing a stable and steady demand from our customers on the leading-edge nodes. We believe that next year we’re going to see solid demand coming from both leading edge as well as gate-all-around, whereas there are additional gate-all-around customers that are starting production next year, which is adding to the mix. That’s part of the way we’ve described our cumulative revenue in which 2025 is significantly higher than 2024. We’re going to see continuous growth from gate-all-around in 2026 compared to 2025.

Atif Malik, Analyst, Citi: What are your expectations on the China revenue mix this year? If you can separate multinational versus domestic and how overall China should do this year and next year?

Gabi Weismann, President and CEO, Nova: It’s an interesting question. Thank you, Atif. I think that, you know, unlike many of the peers in the industry and some analysts that looked at about a 20% drop in the business in China this year, earlier this year or the end of last one, we’ve projected a flat to slight decline in our business from China, whereas in the last earning call, we have revised that to being slightly up. In revenue, Nova is actually growing in China compared to others. Obviously, because of the investment in advanced nodes, the share of business is going to be reduced from the 39% that we had in 2024, which is more or less equal to other peers in the industry, to a lower number in 2025. We don’t have the final number yet. We’ll see how it works. We’ve definitely seen around 35% in the first half.

We’re seeing that decline as a result of the higher investment in advanced nodes. In nominal values, we see growth in China. It’s a bit skewed towards H1, but overall, the business in China is solid.

Atif Malik, Analyst, Citi: Good to know. Gabi, there has been news that the international fabs, particularly the memory ones, will have to ask for licenses moving forward versus getting a waiver. Do you see any impact from that change in terms of your business? I mean, these fabs weren’t upgrading to leading edge in any manner before, but any sort of impact?

Gabi Weismann, President and CEO, Nova: Yes. We’re talking about TSMC, Samsung, Hynix, and Intel, whereas Intel has sold to Hynix. Their licenses are supposed to be revoked at the end of the year. I’m quite confident that there will be some negotiation process or appeals. As you said, the level of investments of those fabs recently has been depressed. Predominantly, most of our business in China is for the domestic players.

Atif Malik, Analyst, Citi: All right. Gartner data showed a nice, I believe it was more than 4% something in market share gain for you guys. Can you walk us through where the share gains came from last year, how sustainable they are?

Gabi Weismann, President and CEO, Nova: Gartner reported in their latest publication earlier this year the fact that we have grown our market share from around 20% in 2023 to 24.8% in 2024, making us the second player after KLA, which has approximately 50% of the market. We are very pleased. It’s a dramatic leap in our market share that demonstrates the trust that customers have in the value of our technology and the relationships that we’ve built across the semi industry. This share is coming from the two other players, of course. It’s a result of higher value, which is in turn because of disrupted technologies that offer superior performance or capabilities that other players don’t have. We have unique capabilities such as spectral interferometry for the standalone OCD. We’ve added unique capabilities to be able to address advanced packaging challenges on both integrated metrology as well as the standalone OCD.

We were able to provide better chemical metrology tools such as adding direct metal replenishment to our ankylizer, which is our chemical tool for backend in order to defend and increase the market share while gaining share on the frontend. All of that was instrumental in driving our business and obviously our share. We believe that we have the capability to improve our share position in years to come. There’s still a lot of room to grow. We’re looking at additional segments and additional application spaces in which our tools can deliver. We are very bullish and very excited by the opportunities in the market.

Atif Malik, Analyst, Citi: Great. Let’s spend some time on just this, on the chemical kind of metrology area. Particularly with respect to the advanced packaging, where are you finding incremental opportunities for that chemical opportunity within advanced packaging? How do you kind of take your frontend technology portfolio and kind of take it to the backend, where there are incumbents with kind of far inferior technology to yours? How do you kind of transport that know-how into the backend market?

Gabi Weismann, President and CEO, Nova: When you’re looking at Nova versus our competitor in the chemical metrology space, KLA, we are a market leader on the packaging, and our effort was to defend that position while increasing our share on the frontend. In order to defend and increase our share on the backend side, we’ve added value to our tools by unique capabilities such as the direct metal replenishment. This is a unique metal powder-based tool which is replenishing the electroplating bath, thus saving waste, increasing the ability of the electroplating bath to maintain the performance over time, and definitely providing cost of ownership advantages to the customers. This is a unique capability that Nova has. On the frontend side, we’ve gained the trust of quite a few customers and penetrated with our frontend tools to increase our market share over there. We are continuing to invest in identifying additional opportunities and capturing additional share.

On the dimensional metrology, it’s a very exciting story because we were fortunate to identify the inflection point at which advanced packaging required metrology tools and capabilities such as the likes of Nova. We started about three years ago, understanding that the complexity of advanced packaging, both in logic and in memory, is such that yield would become extremely important. The cost of lower yield would become very, very high because you’re now putting a few dies side by side, which already finish production, and those are advanced nodes dies. You need to provide the same type of metrology capabilities that we have on the frontend. What we’ve done is we’ve taken, as an example, our integrated metrology tool, and we have repurposed it in order to cater for the advanced packaging requirements that are different in nature, not in terms of metrology, but in terms of engineering.

We were able to move very fast in order to position those tools and capture the lion’s share of the market over there. On the standalone OCD, it’s even more remarkable because we’ve taken the latest and greatest technology, which is basically a gate-all-around (GAA) technology or the most advanced technology for memory on standalone OCD, and we have figured out a way to use that in order to provide a solution to applications that were only being able to be addressed with different types of technologies that are much worse in cost of ownership. Taking an optical technology, which is known for its cost of ownership, being sure that it can address, in terms of performance, those types of applications and displace those other types of technologies with our most advanced tools, which is kind of an oxymoron, right?

That enabled us to penetrate with our standalone OCD to that space of advanced applications in the packaging space. On top of it, of course, we coupled it with the latest acquisition that we made that we can further discuss in order to add more applications and address a broader type of spectrum for our customers, adding value as a result of being able to look at a broader number of applications within the production process.

Atif Malik, Analyst, Citi: Yeah, let’s talk about Syntronics and integration, how they’re going.

Gabi Weismann, President and CEO, Nova: We concluded the acquisition of Syntronics at the end of January this year. We’ve been focusing on moving from a distribution model that they had to direct sales and service by our own team. We’ve already concluded that across all key regions. We’ve launched a new platform, which is a very exciting one, already adopted by a leading memory customer that has superior capabilities, being able to address asymmetric structures, different warpage, surface uniformity capabilities, and definitely a very impressive engineering while looking at different wafer sizes and shapes. This is giving us a great advantage in this particular market. We’ve invested in additional capacity, already seeing the growth of the business of Syntronics. We’re very excited by the fact that we are identifying a lot of synergies between the company, between Syntronics and Nova, now Syntronics being part of it. We also found a great cultural fit.

They have a great team, and it’s working phenomenally.

Atif Malik, Analyst, Citi: Yeah, you’ve had good success with the acquisitions in the last few years. Let me pause here and see if there are any questions in the audience. If you have a question, please raise your hand. All right, let’s keep moving. Gabi, services is a nice growth driver for most equipment suppliers. Your services growth, double digit, is higher than some of the process equipment peers. KLA has some similar trends. Should we expect this level of growth to sustain going forward, regardless of the WFE levels, unless it’s a very bad year?

Gabi Weismann, President and CEO, Nova: We definitely look at double-digit growth for our service business. It’s different in nature and very interesting because we are catering to an installed base of more than 6,400 tools today, and it’s growing. We’re offering our customers a service which is built upon either contracts or time and material or value-added services. The value-added services are actually focused on offering productivity improvements to that installed base. Some of the growth of our business is a result of the fact that those tools that are exiting their warranty periods are getting into either contracts or time and material, adding to the growth of the service business. We had 10 consecutive quarters of growth in our service business, and we definitely foresee a double-digit growth going forward.

Atif Malik, Analyst, Citi: Great. What prompted your recent convertible deal, and how will you use the proceeds from the $650 million convertible note offered to support your future growth?

Gabi Weismann, President and CEO, Nova: The day before yesterday, we concluded the issuance of a private convertible note offer upsized to $650 million with a green shoe of $100 million, so a total of $750 million with a 0% coupon. We’re looking at being able to invest in corporate development activities, infrastructure, disruptive technologies, and definitely inorganic growth with these proceeds. We believe that since we have ambitious growth targets, and we’ve indicated the fact that beyond the $1 billion of organic growth mark by 2027, we would like to add at least $150 to $200 million of inorganic component. We need to have the right war chest, especially looking at the fact that this market has been undergoing consolidation. We would like to make sure that within our toolkit, we have the means to execute in a very focused and very swift manner once we have actionable targets.

It’s coupled with the fact that we have very stringent criteria of being accretive within a year, of having unique and sustainable, unique technology with a sustainable business growth, a cultural fit. All of that has to be identified. Once it does, we need to be able to execute in the best and in the best possible manner. I think the convertible offer was with very attractive terms. We are very pleased with the outcome, and we’re definitely very excited about the fact that we now have the right war chest to accommodate opportunities once they present themselves.

Atif Malik, Analyst, Citi: Great. Going back to your comment that the logic market overall could be flat or down, the leading edge would be strong next year. Some of your peers have talked about some green shoots outside China in terms of mature logic demand picking up. I was curious if you’re seeing that as well, or is China the main reason why the mature logic will be down?

Gabi Weismann, President and CEO, Nova: First of all, logic is not going to be down. It’s going to be perhaps a bit of a slower growth.

Atif Malik, Analyst, Citi: A slower growth.

Gabi Weismann, President and CEO, Nova: It’s still going to grow. It’s not going to go down, whereas gate-all-around will have a leading edge, will have a higher growth than mature. Logic, and I apologize if that was misunderstood, is still going to grow. There are definitely quite a few opportunities across the board with mature nodes, with logic, which are not necessarily centered around China or other territories. There are other places in which there are investments in building capacity and building fabs. We are definitely very interested in being able to pursue such opportunities with having the infrastructure close to every such infrastructure which is being built. This is part of our capital plan to make sure that we have the infrastructure in each and every location such as that. We are definitely tracking today all of those opportunities.

We’re exposed to frontend packaging up to specialty with our products and a presence and global business team. We have an ability to service customers in different locations, whether it’s within a specific geography or across geographies.

Atif Malik, Analyst, Citi: Great. With that, we’re almost out of time. Thank you, Gabi, for coming to the Citi Conference.

Gabi Weismann, President and CEO, Nova: Thank you. Thank you very much.

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