Shares of Electroglas, the San Jose maker of semiconductor manufacturing equipment, got a jolt Tuesday after the company announced an agreement it has struck with FormFactor, the Livermore maker of wafer probe cards used to make chips.
Electroglas will provide FormFactor with tools and related technologies worth as much as $5 million this year. That’s a sizable amount for a company that reported $6.4 million in total sales during its last quarter. FormFactor agreed to cut Electroglas a check for $300,000 within five days of the agreement on Feb. 5.
Electroglas cautioned, however, that there “can be no assurance that such deliverables will be made or that Electroglas will receive further payments.”
Under the terms of the agreement, FormFactors is entitled to an exclusive right to buy and use the tools is exclusive in certain fields of use for an initial period of five years, which may be extended if FormFactor makes minimum purchase requirements.
Shares of Electroglas, which have languished below a buck since October, rose 3 cents, or 23 percent, to 17 cents Tuesday after the news was released.