FORM

FormFactor, Inc.

HALAL

Score: 88/100

stock

Is FORM Halal?

Maker of probe cards and test systems used to test semiconductors during manufacturing — a permissible technology-equipment business with a strong, low-leverage balance sheet.

What You Should Know

FormFactor, Inc. is a publicly-traded company that designs and manufactures probe cards, analytical probers, and test-and-measurement systems used by semiconductor makers to test integrated circuits during wafer fabrication and to characterize advanced devices. Designing and selling semiconductor test equipment is a general-purpose technology activity that is unambiguously permissible at the activity level under standard Sharia methodology; FormFactor earns product and service revenue rather than interest. The company maintains a strong, low-leverage balance sheet with a net-cash position, so it comfortably passes the debt-to-market-cap screen; the primary financial-screen consideration is the interest income generated by its cash and investments, a small portion of which should be purified. Subject to verifying ratios at the time of investment, most major Sharia advisory boards classify FormFactor as permissible with purification of small interest-income components.

⚠️ Concerns

•FormFactor holds a cash and investments balance that generates interest income — verify the interest-income-to-revenue ratio against the 5% threshold and purify the corresponding portion of any returns
•Debt-to-market-cap ratio should be confirmed against the 33% Sharia threshold at the time of investment, though FormFactor typically operates with low leverage and a net-cash position
•As a semiconductor test-equipment company, FormFactor's revenue and margins are cyclical and tied to chip-industry demand — this is a business and valuation consideration rather than a Sharia screen concern
•Receivables-to-assets ratio should be checked against the preferred board's threshold at the time of investment