AIXTRON SE Maintains Guidance Despite Market Challenges

image

AIXTRON SE Maintains Guidance Despite Market Challenges

AIXTRON SE (AIXG), a leading provider of coating equipment for the semiconductor industry, reported its Q3 2024 earnings with strong order and revenue figures, despite being slightly below guidance due to project delays. CEO Dr. Felix Grawert highlighted the company’s performance, combined with improving gross profit margins and strong order backlog.

The company confirmed its fiscal year 2024 guidance but anticipates flat or slightly lower revenues for fiscal year 2025. AIXTRON made significant advancements in silicon carbide (SiC) and gallium nitride (GaN) technologies, which are critical for the electric vehicle (EV) market and power electronics. The company also emphasized the expected increase in market share for SiC technology and the development of the new 300-millimeter GaN tool, Hyperion.

Key Points:

  • AIXTRON reported €144 million in orders and €156 million in revenue for Q3.
  • The gross profit margin increased to 43%, with an order backlog of €384 million.
  • Fiscal year 2024 guidance is confirmed; however, visibility for 2025 is low, expecting flat or slightly lower revenues.
  • Significant progress in SiC and GaN technologies, with strong positions in the 300-millimeter GaN market.
  • In the SiC sector, a substantial increase in market share is expected, particularly for the G10 SiC tool.
  • At the end of nine months, operating cash flow rose to €28 million, with further inventory reduction and improved cash flow expected in Q4.

Company Outlook:

  • Revenue for fiscal year 2024 is expected to be between €620 million and €660 million.
  • Gross profit margin is projected to be 43-45%, with an EBITDA margin of 22-25%.
  • Q4 revenue forecast is between €215 million and €255 million.
  • For 2025, revenues could potentially decline by 5-10% depending on market dynamics.

Negative Points:

  • A delay in a customer project impacted Q3 revenue, which was slightly below guidance.
  • Visibility for 2025 is low, with flat or slightly lower revenues expected.
  • The LED business is in an unpredictable state, with recent orders showing expansion, but specific numerical details were not provided.

Positive Points:

  • Strong position in the 300-millimeter GaN market and significant advancements in SiC technology.
  • The G10 SiC tool is recognized as the most productive, offering the lowest cost per wafer.
  • The new 300-millimeter GaN tool Hyperion is scheduled to commence series production in 2026-2027.

Shortcomings:

  • Q3 revenues of €156 million declined from €165 million in the same period last year.
  • Deliveries for a micro LED customer were delayed, with tools postponed from October to December.

Q&A Highlights:

  • There are no urgent plans to develop a single-wafer silicon carbide epi tool.
  • For Q4, the gross profit margin is expected to be around 50% due to a strong product mix and improved fixed cost efficiency.
  • Full-year guidance details will be provided in February 2025, with no expected increase in operating expenses.

AIXTRON SE’s Q3 earnings call demonstrated the company’s ability to leverage technological advancements in SiC and GaN while managing market uncertainties. The company is strategically positioned for future growth, particularly in the EV and power electronics markets, and remains focused on maintaining its competitive advantage. Despite challenges, AIXTRON management retains confidence in its operational strategy and financial outlook for the coming years.