Goldman Sachs initiates Technoprobe with a Buy rating, bullish on structurally growing probe card demand driven by AI test complexity

Overview

This report represents Goldman Sachs' initial coverage of Technoprobe S.p.A. (TPRO.MI), with a Buy rating. The core view is that AI accelerators, advanced Logic, HBM and advanced packaging are significantly increasing semiconductor test intensity. As a key interface for wafer-level electrical testing, probe card demand is shifting from simply tracking WFE or wafer volume growth to being jointly driven by chip complexity, test-point density, the value of identifying defects before packaging and faster product iteration. Technoprobe holds a leading position in advanced Logic MEMS probe cards. Goldman Sachs estimates its market share at approximately 60% and believes the company has opportunities to enter the HBM Memory market and expand its back-end testing business.

Core views

Goldman Sachs' core views include: first, AI-driven advanced process nodes, chiplet architectures and higher interconnect density are raising probe card precision requirements and ASPs; second, HBM vertically stacks multiple DRAM dies, increasing the number of dies requiring pre-packaging testing and raising test complexity; third, advanced packaging means that a single defective die may cause an entire high-value package to fail, increasing the economic value of early wafer-level testing; fourth, Technoprobe's vertical integration, customer co-development, 12-18-month design-in cycle, ceramic probe-tip innovation and physical modeling capabilities form competitive barriers; fifth, operating leverage is expected to drive EBITDA margins from 32% in FY25 to approximately 50% in FY28E.

Analysis framework

The report supports its rating and target price through a combination of top-down probe card TAM and submarket growth forecasts, bottom-up company revenue and income statement forecasts, peer valuation comparisons, scenario analysis and comparisons with Visible Alpha Consensus Data. For valuation, Goldman Sachs uses a core 2028E P/E multiple of 45x, discounts it by 6 months based on the coverage time window, and calibrates it using average valuations for global semiconductor equipment peers, Technoprobe's faster sales CAGR and higher EBITDA margin.

Methodology notes

• Industry growth frameworkProbe card TAM and test-complexity-driven model

  Probe card demand is decomposed into wafer/chip unit volumes, probe card consumption characteristics, advanced-node migration, rising interconnect density, increasing HBM die counts and advanced-packaging yield sensitivity.

  This framework explains why probe card market growth can outpace traditional WFE or wafer volume growth and supports the view of approximately a 15% CAGR for the probe card market from 2024 to 2028E.

• Company competitiveness analysisVertical integration and customer stickiness analysis

  Competitive barriers are assessed based on the 12-18-month design-in cycle, customer switching risk, vertical integration from design to mass production, capacity ramp-up and proprietary technology accumulation.

  Based on this analysis, Goldman Sachs believes the advanced probe market is consolidating around a small number of scaled companies such as Technoprobe and FormFactor, and that Technoprobe can maintain or increase its Logic probe card share.

• Valuation frameworkPeer P/E multiple and growth calibration

  A 2028E P/E multiple of 45x is used as the core valuation multiple, calibrated against global semiconductor equipment peers and differences in sales growth and EBITDA margins.

  This approach produces a 12-month target price of €40.00 and is cross-validated against sales CAGR expansion and forward absolute multiple relationships within Goldman Sachs' coverage framework.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Technoprobe S.p.A. (TPRO.MI)

  Core covered company; Goldman Sachs initiates with a Buy rating.

  Strengths

  Leading position in advanced Logic MEMS probe cards, approximately 60% share, vertical integration, strong customer stickiness, rapidly increasing AI revenue exposure, HBM entry opportunity and significant operating leverage.

  Weaknesses

  The share price has risen substantially and headline valuation multiples are high; the Memory/HBM business remains in the expansion phase; back-end testing is growing more slowly than front-end probe cards.

  Comparison

  The report states that Technoprobe's FY26-28E sales CAGR is approximately 31%, above European peers ASML at 24% and ASMI at 19%, but below BESI at 40%; FY27E EV/EBITDA is broadly in line with the semiconductor equipment sector.

  Risks

  Capacity ramp-up issues, slower AI growth, incremental investment suppressing margin expansion and weaker-than-expected HBM market entry.

• FormFactor

  One of the major peers in advanced probe cards.

  Strengths

  Like Technoprobe, it is one of the main scaled companies following the consolidation of the advanced probe market.

  Weaknesses

  The report does not focus on FormFactor and does not provide a complete financial or ratings analysis.

  Comparison

  Goldman Sachs believes the advanced probe market is concentrated around Technoprobe and FormFactor as the two major participants, with Technoprobe holding a strong position in Logic devices.

  Risks

  Heightened competition could affect Technoprobe's market share and pricing.

• Advantest and Teradyne

  Technoprobe's probes work in conjunction with their ATE equipment.

  Strengths

  ATE suppliers occupy a critical position in the semiconductor testing value chain.

  Weaknesses

  The report does not provide investment ratings or detailed valuations for these assets.

  Comparison

  Technoprobe provides test interfaces such as probe cards and DIBs, while Advantest and Teradyne provide automated test equipment, representing adjacent segments.

  Risks

  Testing-equipment cycles, customer capital expenditure and fluctuations in semiconductor demand could affect the broader testing ecosystem.

Key data

• Rating and target priceBUY; 12-month target price €40.00; current price €31.50; upside 27.0%Based on the closing price on 2026-07-21.
• Market capitalization and enterprise valueMarket cap €20.2bn / $23.0bn; Enterprise value €19.5bn / $22.2bnReport Key Data.
• AI revenue exposureApproximately 30% in FY25; 52% in FY26E; 60% in FY27E; 63% in FY28EGoldman Sachs estimates that Technoprobe's revenue mix will rapidly shift toward AI and data centers.
• Probe card market size2028E $4.3bn; approximately 15% CAGR from 2024 to 2028EGoldman Sachs estimate, higher than the earlier TAM framework disclosed in the company's 2025 CMD.
• Logic probe card marketApproximately $3.2bn in 2028E; GSe CAGR approximately 17.9%-18%Growth is primarily driven by demand for advanced Logic and MEMS probes associated with AI workloads.
• Technoprobe Logic market shareApproximately 60%Goldman Sachs estimates that the company holds a leading position in advanced Logic probe cards.
• Revenue forecastFY25 €628.4mn; FY26E €1,033.7mn; FY27E €1,447.2mn; FY28E €1,765.5mnGoldman Sachs forecasts a sales CAGR of approximately 31% from 2026 to 2028E.
• EBIT forecastFY25 €136.3mn; FY26E €386.2mn; FY27E €590.6mn; FY28E €766.7mnGoldman Sachs states that FY27/FY28E EBIT are each 7% above Visible Alpha Consensus Data.
• EPS forecastFY25 €0.15; FY26E €0.47; FY27E €0.72; FY28E €0.93The report forecasts a CY26-28E EPS CAGR of 41%.
• EBITDA margin32% in FY25; approximately 50% in FY28EOperating leverage is the core assumption behind margin expansion.
• ValuationFY27E EV/EBITDA approximately 26x; target price based on 2028E P/E of 45xGoldman Sachs believes the current valuation remains attractive given relatively faster growth and higher margins.

Impact & implications

If Goldman Sachs' view proves correct, Technoprobe will benefit in multiple ways from the expansion of AI infrastructure: higher advanced Logic test content and ASPs, incremental growth opportunities from entering the HBM Memory market, stronger back-end testing touchpoints through the DIB business and margin expansion driven by operating leverage. For investors, the report positions Technoprobe as one of the fastest-growing names in European semiconductor equipment and hardware coverage, although the investment thesis depends on continued AI accelerator demand, successful capacity expansion and delivery of margin expansion.

Risks

• Further capacity expansion or an unsuccessful ramp-up could constrain revenue realization.
• A slowdown in AI accelerator or AI server demand could weaken probe card volumes and ASP upside.
• Higher-than-expected incremental investment needs could suppress EBITDA margin expansion.
• Slower-than-expected entry into the HBM Memory market or customer qualification progress could weaken the incremental growth thesis.
• The share price has risen significantly and valuation multiples are high; if earnings expectations or industry sentiment are revised downward, valuation downside risk could be substantial.

What to watch

• Whether the AI and data center revenue share increases along the path of 52% in FY26E and 60% in FY27E.
• Progress in HBM-related probe card orders, customer qualifications and revenue contribution.
• The impact of capacity expansion, delivery cycles and supply constraints on revenue recognition.
• Whether EBITDA margins expand toward approximately 50% in FY28E.
• Changes in Logic MEMS probe card ASPs, market share and competition with peers such as FormFactor.
• The extent to which penetration of advanced packaging and chiplet architectures drives front-end wafer-level testing demand.