B. Riley has singled out a quartet of semiconductor capital-equipment suppliers it views as well positioned to capture demand tied to artificial intelligence deployments and the ensuing capacity build-outs for advanced packaging technologies. The firm concentrated its coverage on back-end and outsourced semiconductor assembly and test - OSAT - subsectors, where inspection, handler and ball bonder systems are core to customers' expansion plans.
Sector drivers and backdrop
The analyst house points to several fundamental trends that underpin its constructive stance. Near-term AI demand appears to be firming, in part because agentic AI x86 server orchestration is supporting higher unit demand for traditional server chips. In addition, B. Riley highlights rising capital expenditures at major foundries and memory manufacturers aimed at 2.5D packaging and HBM technologies. Those investments are creating direct tailwinds for equipment used in inspection, handling and ball bonding operations at OSATs and related back-end suppliers.
Despite those tailwinds, B. Riley flags persistent risks. The firm notes potentially moderating unit outlooks for PCs and smartphones. Market performance reflects both the boom and a pullback: following robust first-half 2026 gains that averaged roughly twice the SOX index's 108% increase, the sector has experienced a 23% decline so far in the third quarter, which B. Riley views as increasing selective entry opportunities.
Company-level views
Cohu, Inc. (COHU)
B. Riley retains a Buy rating on Cohu and has lifted its price target from $60 to $65. The firm expects results and guidance to come in above consensus, driven by continued strength in AI high-performance compute (HPC) systems inspection for Neon HBM and demand for Eclipse handler systems. After outperforming peers and the SOX index in the first half of 2026, Cohu shares have fallen roughly 24% in the third quarter to date, according to B. Riley.
The analyst house values the stock at about 38 times forward two-year earnings on a near-term basis, compressing to roughly 21.5 times at the long-term target EPS mid-point. Cohu has reported order flow tied to AI-related power architectures, with orders totaling approximately $5 million for its testing platform aimed at AI data-center power designs. The company is scheduled to report earnings on July 30 after the market close.
Camtek Ltd. (CAMT)
B. Riley assigns Camtek a Buy rating with a $220 price target. The firm expects Camtek to deliver modestly above-consensus second-quarter 2026 results and to provide third-quarter guidance that reflects its multi-system wins, including a $105 million OSAT and HBM contract announced on June 2. B. Riley also cites revised capital expenditure expectations from large customers and visible OSAT capacity additions as supporting demand for Camtek's inspection and metrology systems.
Camtek's shares gained 53% in the first half of 2026, trailing the SOX and some peers, and have experienced a relatively small 4% decline in the third quarter to date. The stock trades at an approximate 35 times forward two-year earnings multiple. Camtek reported new orders exceeding $105 million from a tier-1 OSAT provider and a high-bandwidth memory manufacturer, and the company is set to report on August 10 before the market opens.
Amkor Technology, Inc. (AMKR)
B. Riley carries a Neutral rating on Amkor and has lowered its price target from $90 to $75. The firm expects Amkor's second-quarter results and third-quarter guidance to come slightly above consensus, with secular trends and new programs supporting Compute-related revenue. Amkor's shares have risen 69% year-to-date in calendar 2026 and the stock is trading at roughly 29 times forward two-year earnings.
Operationally, Amkor announced a 10-year partnership with Taiwan Semiconductor Manufacturing Company to expand advanced packaging capabilities in Arizona and noted collaboration with Advanced Micro Devices on packaging some of AMD's products. Amkor is scheduled to release quarterly results on July 27 after the market close.
Kulicke and Soffa Industries, Inc. (KLIC)
B. Riley retains a Neutral rating on Kulicke and Soffa with a $100 price target. The firm expects the company to deliver above-consensus results and guidance as General Semiconductor and Memory demand rises. Kulicke and Soffa's shares surged 193% in the first half of 2026. With the broader sector down about 20% in the third quarter to date, the stock sits near B. Riley's price target and trades at about 24.5 times forward two-year earnings.
Kulicke and Soffa reported second-quarter 2026 results that exceeded analyst expectations on both revenue and earnings per share. The company's board also approved a quarterly dividend of $0.205 per share. Kulicke and Soffa is due to report again on August 5 before the market opens.
Analyst reactions and market implications
Several sell-side firms updated their views following order announcements and quarterly results. For Cohu, follow-up analyst activity included price target increases from firms such as TD Cowen and Stifel in light of strengthening AI-related demand trends. For Camtek, Evercore ISI and Jefferies raised their targets after the June contract win and solid quarterly metrics.
B. Riley's coverage highlights how capacity additions for advanced packaging and HBM are creating end-market demand for inspection, handler and ball bonder equipment. That dynamic matters to OSATs, back-end suppliers, and ultimately to customers in the AI data-center, memory and foundry ecosystems. At the same time, potential softness in consumer electronics unit volumes - specifically PCs and smartphones - represents a countervailing risk to equipment demand.
Bottom line
B. Riley identifies four semiconductor equipment names that it views as exposed to AI-driven packaging demand, assigning two Buys and two Neutral ratings while adjusting price targets and forecasting above-consensus near-term results for several firms. The firm sees the recent sector pullback as creating selective buying opportunities, but it remains mindful of demand risks tied to traditional consumer electronics unit trends.