Onto Innovation Inc. (ONTO)

A chip goes through hundreds of steps, and a defect arising at the twentieth destroys everything done afterwards. The wafer is therefore inspected between stages: the company's tools look for particles, dimensional deviations and stress in the material, while software ties what is found to a specific machine.

Demand grows with process complexity: the more layers and the tighter the features, the more inspection points. That is especially visible in advanced packaging, where several chips are combined into one package — a relatively new and fast-growing area. Risks: the fab capital spending cycle, export restrictions and customer concentration. The company pays no dividend.