The Short Answer
FormFactor stock (FORM) is qualitatively halal and its known financial ratios pass, but the overall result is incomplete. The March 28, 2026 filing does not provide a universal prohibited-revenue numerator.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-28; calculated 2026-07-15.
11.927 / 1,255.85
303.281 / 1,255.85
255.694 / 1,255.85
2.174 / 226.144
- Financial
- Pass
- Overall
- Incomplete
Debt/assets is 0.95%, liquidity/assets is 24.15%, receivables-plus-cash/assets is 20.36% and interest income is 0.96%; known financial ratios pass but activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known debt, liquidity and receivables-plus-cash ratios pass the examined MSCI total-assets limits; activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known debt, liquidity and income ratios pass the examined Malaysia limits; activity remains incomplete and this is not an official classification.
- Financial
- Not calculated
- Overall
- Incomplete
A licensed historical market-cap series is not stored and business classification remains incomplete.
Business-activity disclosure
FormFactor supplies semiconductor-test and wafer-probe equipment and related services. The industrial technology activity is generally permissible, while customer products and end uses are not reduced to a universal prohibited-revenue numerator.
Limitation: The filing does not classify every customer, test system or end use by a universal Sharia category; activity remains qualitative.
Purification
FormFactor discloses $2.174 million of net interest income, but ZakatInvest does not prescribe a scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from FormFactor's March 28, 2026 Form 10-Q.
- Debt includes $1.145 million current and $10.782 million non-current long-term debt; operating leases are excluded.
- Cash is $123.539 million and marketable securities are $179.742 million.
- Net accounts receivable is $132.155 million and first-quarter revenue is $226.144 million.
- The filing discloses $2.174 million of net interest income, or 0.96% of quarterly revenue; no fixed purification percentage is prescribed.
- Semiconductor-test and probe-card equipment is generally permissible, but customer and end-use revenue remains qualitative.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Designing and selling semiconductor test equipment is generally permissible. The filing shows low debt and known asset-based ratios within the examined limits; net interest income is 0.96% of quarterly revenue. Activity and prohibited-revenue classification remain qualitative.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
FormFactor's Business Activity
FormFactor makes the equipment that tests chips during and after manufacturing. Its products include:
- Probe cards: Interfaces that test wafers during fabrication
- Analytical probers: Systems to characterize advanced devices
- Test & measurement: Metrology and engineering test systems
Designing and selling this equipment is permissible at the activity level — it is general-purpose technology infrastructure for chip manufacturing.
Concerns to Be Aware Of
1. Interest Income on Cash
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 returns.
2. Debt Ratio
FormFactor typically operates with low leverage and a net-cash position, so it comfortably passes the debt screen. Still, confirm the debt-to-market-cap ratio against the 33% threshold at the time of investment.
3. Cyclicality
As a semiconductor test-equipment company, revenue and margins are cyclical and tied to chip-industry demand. This is a business and valuation consideration rather than a Sharia screen concern.
Filing-Based Ratios (March 28, 2026)
Based on FormFactor's Form 10-Q:
- Debt / Assets: 0.95%
- Cash + interest-bearing securities / Assets: 24.15%
- Receivables + cash / Assets: 20.36%
- Net interest income / Revenue: 0.96%
Methodology Interpretation
The known FTSE, MSCI and Malaysia financial ratios pass. The business-activity and prohibited-revenue checks remain incomplete because the filing does not disclose a universal prohibited-revenue numerator. This is not a universal certification.
Bottom Line
FormFactor (FORM) has a generally permissible core business and passes the known financial ratios in this filing, but the overall result remains incomplete because activity and prohibited-revenue classification are not universal quantitative measures. Investors should apply their chosen methodology and purification policy.
For Muslim investors seeking semiconductor-equipment exposure, FORM sits alongside other halal-screened names like Kulicke and Soffa (KLIC) and Axcelis (ACLS).
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