FormFactor announced the acquisition of Keystone Photonics, a company that specializes in optical probing for silicon photonics and co‑packaged optics wafer testing. The deal expands FormFactor’s test‑and‑measurement portfolio into the silicon photonics market, which is projected to grow nearly 30% annually through 2029.
Keystone’s advanced optical coupling and probing automation will integrate with FormFactor’s SmartMatrix probe‑card architecture and cryogenic systems, enabling higher test speeds and greater data accuracy for next‑generation data‑center chips that power AI and high‑performance computing. The acquisition positions FormFactor to capture the production ramp of silicon photonics and co‑packaged optics as manufacturers move from concept to high‑volume production.
FormFactor’s Q3 2025 earnings showed an EPS of $0.33 and revenue of $202.7 million, beating estimates by $0.08 and $2.73 million respectively. The strong results were driven by robust demand in its high‑bandwidth memory and advanced packaging segments, offsetting headwinds from export controls and tariff impacts. The acquisition is expected to support the company’s margin‑recovery program by opening new high‑margin test‑system opportunities in a high‑growth market.
Silicon photonics is projected to grow at nearly 30% annually through 2029, driven by AI infrastructure demand. By adding Keystone’s technology, FormFactor can offer a more comprehensive lab‑to‑fab test solution, improving its competitive moat in advanced packaging and chiplet testing. The move also diversifies revenue beyond the HBM focus, aligning with the company’s goal of achieving a 47% non‑GAAP gross margin.
CEO Mike Slessor said the acquisition will accelerate the industry’s ramp to high‑volume SiPh and CPO production, while Keystone CEO Philipp Dietrich highlighted the synergy of combining cutting‑edge optical test technology with FormFactor’s global test‑system platform. The company did not disclose the financial terms of the deal, and synergy projections remain unspecified.
While the financial terms are undisclosed, the acquisition is expected to enhance FormFactor’s product portfolio and market positioning, reinforcing its strategy to capture growth in AI and advanced packaging markets. The company continues to invest in manufacturing capacity and strategic partnerships to support its expansion.
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