Onto Innovation targets 350bp of gross margin expansion and expects advanced packaging demand from Intel ($INTC) EMIB-T architectures to become material in 2028, according to Goldman Sachs. Management projects that margin gains can be achieved entirely through favorable product mix and internal factory efficiencies. In chip-on-wafer-on-substrate packaging, tool demand is increasingly driven by outsourced assembly and test partners rather than TSMC alone. Meanwhile, high-bandwidth memory inspection faces minimal risk from processor de-specing because equipment needs track unit volumes rather than stack height. Onto Innovation does not see itself as capacity constrained, creating substantial room to scale revenue as demand accelerates into 2027. Management maintains high confidence in its inspection market share at leading foundries, seeing no imminent threat from competing product launches. Goldman Sachs reiterates a Buy rating with a 12-month price target of $400, based on a 32X multiple applied to normalized EPS of $12.50, reflecting premium multiples driven by high-performance computing momentum. Key variables that could alter this trajectory include customer adoption speeds for Dragonfly G5 inspection systems, market share shifts toward domestic Chinese manufacturers, and potential rival tool introductions. Investors should watch outsourced packaging order volumes and advanced packaging node milestones across foundries to verify whether gross margin targets materialize as projected. #Semiconductors #Tech Report date: 2026-10-14 · GS