Qnity Electronics, Inc.

What they do

Qnity provides consumable materials and solutions used in semiconductor manufacturing and advanced electronics hardware. It operates in two segments: Semiconductor Technologies, offering CMP slurries, pads, and cleaning chemistries; and Interconnect Solutions, providing materials for signal integrity, thermal and power management, and advanced packaging. Over 90% of 2025 revenue came from consumable or unit-driven products.

Revenue drivers

• Semiconductor Technologies — Sells CMP slurries, pads, and specialty cleaning chemistries used in semiconductor manufacturing. Revenue in Q2 2026 was $744 million, up from $644 million in Q2 2025.
• Interconnect Solutions — Provides material solutions for printed circuit boards and advanced semiconductor packaging. Q2 2026 revenue was $685 million, up from $526 million in Q2 2025, showing strong growth.
• Volume growth — 2025 sales growth of 10% was primarily driven by an 11% increase in sales volume, with Interconnect Solutions volume up 14% and Semiconductor Technologies up 9%.

Recent performance

Q2 2026 net sales were $1.43 billion, up 22% year-over-year (organic). GAAP net income was $136 million, down 31% from $198 million in Q2 2025, while adjusted earnings were $250 million, up 53%. Adjusted operating EBITDA was $431 million, up 24% year-over-year. Full-year 2025 revenue was $4.75 billion, up from $4.33 billion in 2024.

Strategy

Management focuses on leveraging 'shrink and stack' trends—increasing process complexity and layer counts—to drive materials intensity. They aim to be an end-to-end solutions provider across the semiconductor stack, with deep alignment to customers' advanced technology roadmaps. They also emphasize local-for-local sourcing to mitigate tariff risks and maintain supply resilience.

Risks

• Trade and tariff uncertainty — U.S. and foreign policy changes, including tariffs, could reduce demand and competitiveness, particularly in China, despite local-for-local sourcing mitigating some risk.
• Geopolitical and macroeconomic disruptions — Conflicts like the Middle East situation could disrupt supply chains, energy prices, and global markets, potentially affecting financial results.
• Spin-off related historical financials — Historical financials were carved out using allocation methodologies and may not reflect standalone costs, making comparability limited.
• Debt and interest expense — The company took on significant debt in connection with the spin-off; higher interest costs could pressure profitability.

Outlook

Management raised full-year 2026 guidance: net sales of $5.55–5.65 billion, adjusted operating EBITDA of $1.675–1.725 billion, adjusted EPS of $4.40–4.60, and adjusted free cash flow of $600–700 million. The company cites strong customer engagement and momentum across end markets.