Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aixtron SE (AIXXF, Financial) reported a robust Q3 2024 with solid orders amounting to EUR144 million and revenues of EUR156 million.
- The company achieved a gross margin of 43%, showing strong improvement due to a better product mix.
- Aixtron SE (AIXXF) has a high equipment order backlog of EUR384 million, indicating strong future demand.
- The company has made significant technical progress in silicon carbide and gallium nitride technologies, strengthening its market position.
- Aixtron SE (AIXXF) is well-prepared for the transition to 300-millimeter wafer technology, which is expected to drive future growth in AI and other large volume applications.
Negative Points
- Aixtron SE (AIXXF) ended Q3 2024 in the lower half of its guided revenue range due to a customer pushing a large project delivery to Q4.
- The company anticipates flat or slightly lower revenue for fiscal 2025 compared to 2024, indicating potential market challenges.
- Gross margin for the first nine months of 2024 was down 4 percentage points year-over-year, primarily due to a less favorable product mix.
- Operating expenses increased to EUR30 million in Q3, driven by higher R&D spending.
- The global silicon carbide market has built more capacity than demand, posing a challenge for future growth.
Q & A Highlights
Q: How is the transition from batch to single-wafer GaN tools progressing, and what feedback have you received from customers?
A: The transition is going very well, with the tool providing positive surprises. We've integrated elements from our 200-millimeter technology into the 300-millimeter tool, achieving excellent results in film uniformity and crystalline quality. Customer feedback has been positive, with some results surpassing those of our 200-millimeter tools.
Q: Are you considering developing a single-wafer silicon carbide epi tool for the future?
A: We are satisfied with our current batch tool for silicon carbide, which has shown superior productivity and performance compared to single-wafer tools in the market. There is no current rationale to develop a new tool.
Q: What is the outlook for 2025 sales, and what factors could influence whether they are flat or slightly lower?
A: Sales could be flat or slightly down by 5% to 10%. The outcome depends on market dynamics and the duration of the current downturn. If the downturn persists through 2025, orders may only increase in 2026.
Q: Can you provide more details on the Q3 delivery pushout and its impact?
A: A customer in the micro LED space requested their tools be delivered in December instead of October. This was a revenue pushout, not an order pushout, and the tools are scheduled for delivery in Q4.
Q: What drove the silicon carbide order intake in Q3, and are there new customers involved?
A: The order intake was driven by a mix of existing and new customers. The customer landscape is diverse, with some customers fully utilizing their capacity and others running at reduced capacity. AIXTRON tools are favored for their productivity and cost-effectiveness.
Q: How is the LED business performing, and what is the outlook?
A: The LED business is typically lumpy, with recent orders from large customers expanding into red LED capacity. While there is more to come, the timing and distribution of orders are uncertain.
Q: Are there opportunities for diversification outside your traditional core markets?
A: While there are always potential opportunities, we focus on our core markets. We anticipate growth in silicon carbide, micro LED, and GaN markets in 2026 and 2027.
Q: What is the status of the Italy site acquisition and its production ramp-up?
A: The Italy site was acquired as a brownfield site for a single-digit million amount. We plan to have first shipments in Q4 2024 and gradually ramp up production in 2025, with investments made step-by-step to avoid idle costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
