Aixtron purpose of this thread

Note: This content is only for professional investors !!

This is the Barclays upgrade which I flagged a couple of days ago:

aIXTRON – LAGGING PEERS, BUT PIECES COMING TOGETHER FOR AN EXPECTED
STANDOUT 2021+, WITH LOTS OF UPSIDE POTENTIAL NOT REFLECTED IN NUMBERS.
UPGRADE TO ofi
UNLIKE ITS SEMI EQUIPMENT PEERS (+107$ VS. sofl⁄eURO tECH +60$⁄+25$), 2019 WAS A
DIFFICULT YEAR FOR aIXTRON WITH SHARES FLAT AS END-MARKETS REMAINED WEAK AND THE 2018 3d
SENSING OVERBUILD LIMITED CUSTOMER ORDERS. dESPITE SUCH CHALLENGES WE WOULD ARGUE THAT
2019 WAS STILL ROBUST, WITH aIXTRON EXPECTING TO REACH THE LOWER END OF ITS SALES GUIDANCE AT
€260m (vs. guide €260-290m) despite a c€30m PUSHOUT OF ITS PARTIAL aPeffa TOOL INTO 2020.
mORE IMPORTANTLY, AS WE LOOK FORWARD WE SEE A MULTITUDE OF GROWTH DRIVERS, MANY OF WHICH
COULD REPRESENT A TRUE STEP CHANGE FOR THE STOCK. fiE SEE THE LARGEST DRIVERS AS:
 oled (sAMSUNG) OPPORTUNITY: fiHILE THE QUALIFICATION PROCESS WITH sAMSUNG IS
TAKING LONGER THAN MANY EXPECTED, THE OPPORTUNITY STILL REMAINS. iMPORTANTLY
sAMSUng’s recent five-YEAR PLAN TO INVEST $11BN IN DISPLAY ILLUSTRATES ITS
COMMITMENT TO RE-enter OLED TV. The success of which will depend on Samsung’s
ABILITY TO INCREASE MANUFACTURING EFFICIENCY (E.G. REDUCE MATERIAL WASTAGE) WHICH IT
PLANS TO ACHIEVE WITH aixtron’s deposition technology. Given Samsung’s
COMMITMENT WE VIEW A HIGHER LIKELIHOOD OF SUCCESS FOR QUALIFICATION, BUT STILL
ACKNOWLEDGE THE TECHNICAL RISKS AROUND THE PROCESS. iF aIXTRON WERE ABLE TO SHIP A
FULL TOOL FOR HIGH VOLUME MANUFACTURING, WE WOuld expect around €100-200M OF
sales (vs. 2021 group sales of €330m). We would only expect this in 2021/22.
 sI¢: fiITH THE RECENT RUSH TO EXPAND sI¢ CAPACITY (E.G. ¢REE $1BN CAPEX PLAN, st
ACQUISITION OF nORSTEL), IT IS UNSURPRISING THAT THIS WILL BE A SIGNIFICANT GROWTH
OPPORTUNITY. tHE KEY QUESTION FOR INVESTORS WILL BE HOW MUCH SHARE aIXTRON WILL
HAVE, WITH tOKYO eLECTRON CURRENTLY LEADING. aIXTRON IS CURRENTLY TARGETING 50$ SHARE
ON A MARKET OF 50-60 TOOLS ON A TOOL asP OF $3.5-4M REPRESENTING A SALES
Opportunity to Aixtron of €105-140M (VS. OUR 2021 POWER eLECTRONIC SALES OF €54M).
fiITH aIXTRON TAKING SHARE AT ¢REE AND GAINING SIGNIFICANT SHARE WITH OTHERS, WE
EXPECT TO SEE A SIGNIFICANT UPTICK IN 2021⁄22.
 mICROled: tHE OTHER AREA OF CONSIDERABLE UPSIDE POTENTIAL IS mICROled WHERE
aIXTRON IS A CLEAR MARKET LEADER WITH THE ONLY MULTI-WAFER TOOL CAPABLE OF HIGH
VOLUME PRODUCTION. ffEECO REMAINS CONSIDERABLY BEHIND AS THEY STRUGGLE WITH WAFER
UNIFORMITY. fiE ONLY EXPECT mICROled TO HAVE A MATERIAL IMPACT ON aIXTRON FROM
2021+ AND LOOK FOR ANY FORM OF PRODUCT ROAD MAP FROM MAJOR oemS (E.G. WHETHER
aPPLE DECIDES TO MOVE TO mICROled IN ITS NEXT GEN WATCH).
 rETURN OF 3d⁄oPTO: fiHILE 2019 3d SENSING DEMAND WAS LARGELY SUPPORTED BY PRIOR
CAPACITY BUILD OUT IN 2018, WE THINK CUSTOMERS WILL NEED TO RETURN TO EXPAND
CAPACITY IN 2020⁄21. oUR INDUSTRY WORK PREDICTS A SIGNIFICANT RAMP IN 3d SENSING
SMARTPHONE UNITS IN 2020⁄21 TO 277M⁄350M (VS. 170M IN 2019) DRIVEN BY GREATER
ADOPTION IN aNDROID. aDDING FURTHER UPSIDE WOULD BE THE POTENTIAL ADOPTION OF
WORLD-FACING 3d BY aPPLE WHICH WOULD INCREASE OUR 2020 3d MODULE UNIT ESTIMATE
TO C320M, ALMOST DOUBLING 2019 LEVELS. GIVEN THAT aIXTRON SUPPLIES BOTH THE LIKES OF
iQe (INTO lUMENTUM) AND ffPe¢ (INTO fiIN sEMI), IT IS LARGELY INSULATED FROM SUPPLY
CHAIN SHIFTS. (sEE OUR RECENTLY PUBLISHED NOTE ON AMS FOR FURTHER DETAIL ON OUR 3d
SENSING INDUSTRY FORECASTS: AMS: tHE oDD ¢OUPLE, PUBLISHED 17 dECEMBER 2019).
GIVEN THE LACK OF VISIBILITY WE DO NOT INCLUDE THE oled, sI¢ OR mICROled OPPORTUNITY IN
OUR NUMBERS, BUT WE DO EXPECT THESE TO GATHER PACE FROM 2H20 THROUGH 2021. iF EVEN
ONE OF THESE WERE TO MATERIALIZE TO THE UPSIDE, WE COULD SEE SALES POTENTIALLY C25$+
ABOVE OUR CURRENT FORECAST 2021⁄22 LEVELS. fiE THINK THE RETURN OF 3d ORDERS WILL BOOST

SALES IN 2020⁄21, AND HELP MITIGATE ANY LINGERING CYCLE CONCERNS (OUR INDUSTRY RESEARCH
LEADS US TO CONCLUDE THAT ffPe¢ COULD INCREASE ORDERS IN 2020). tHE PUSHOUT OF THE
aPeffa ORDER INTO 2020 SKEWS GROWTH RATES, BUT ONCE EXCLUDED WE NOW FORECAST 2020
GROWING MODESTLY AT 5$, INCREASING RAPIDLY TO 21$ IN 2021.

Given Aixtron’s more nascent business profile we had historically relied on P/BV as our
PRIMARY VALUATION MULTIPLE, WITH OTHER PROFITABILITY-BASED METRICS (E.G. eff⁄ebit & Pe) BEING
LESS USEFUL. fiE BELIEVE THIS HAS STARTED TO CHANGE, WITH 2021 PROFIT MULTIPLES NOW LOOKING
MORE REASONABLE TO US, AS aIXTRON RETURNS TO MORE MEANINGFUL PROFITABILITY. iMPORTANTLY WE
think that given Aixtron’s growth potential, ALONG WITH THE HIGH BARRIERS TO ENTRY IN THE
COMPOUND SEMIS INDUSTRY, IT REMAINS ATTRACTIVE ON A VALUATION BASIS VS. SEMI CAP PEERS (SEE
FIGURE 13⁄14). fiE ACKNOWLEDGE THAT IT MAY TAKE TIME AND PATIENCE FOR THESE OPPORTUNITIES
TO COME TO FRUITION WITH SOME CYCLE DRAG IN THE NEAR-TERM, BUT SEE THIS AS AN OPPORTUNITY FOR
INVESTORS TO GET IN EARLY AT AN ATTRACTIVE VALUATION. fiE NOW BASE OUR PRICE TARGET ON A 19X
2021E EV/EBIT, implying a €12 price TARGET, LEADING US TO UPGRADE OUR RATING TO oVERWEIGHT  

Lässt sich vielleicht besser lesen! ;-)

Aixtron – lagging peers, but pieces coming together for an expected
standout 2021+, with lots of upside potential not reflected in numbers.
upgrade to OFI
unlike its semi equipment peers (+107$ vs. SOFL⁄Euro Tech +60$⁄+25$), 2019 was a
difficult year for Aixtron with shares flat as end-markets remained weak and the 2018 3D
sensing overbuild limited customer orders. Despite such challenges we would argue that
2019 was still robust, with Aixtron expecting to reach the lower end of its sales guidance at
€260M (VS. GUIDE €260-290M) DESPITE A C€30M pushout of its partial ApEFFA tool into 2020.
More importantly, as we look forward we see a multitude of growth drivers, many of which
could represent a true step change for the stock. FIe see the largest drivers as:
 OLED (Samsung) opportunity: FIhile the qualification process with Samsung is
taking longer than many expected, the opportunity still remains. Importantly
SamsuNG’S RECENT FIVE-year plan to invest $11bn in display illustrates its
commitment to re-ENTER oled tv. tHE SUCCESS OF WHICH WILL DEPEND ON sAMSUNG’S
ability to increase manufacturing efficiency (e.g. reduce material wastage) which it
plans to achieve with AIXTRON’S DEPOSITION TECHNOLOGY. gIVEN sAMSUNG’S
commitment we view a higher likelihood of success for qualification, but still
acknowledge the technical risks around the process. If Aixtron were able to ship a
full tool for high volume manufacturing, we woULD EXPECT AROUND €100-200m of
SALES (VS. 2021 GROUP SALES OF €330M). wE WOULD ONLY EXPECT THIS IN 2021/22.
 Si¢: FIith the recent rush to expand Si¢ capacity (e.g. ¢ree $1bn capex plan, ST
acquisition of Norstel), it is unsurprising that this will be a significant growth
opportunity. The key question for investors will be how much share Aixtron will
have, with Tokyo Electron currently leading. Aixtron is currently targeting 50$ share
on a market of 50-60 tools on a tool ASp of $3.5-4m representing a sales
oPPORTUNITY TO aIXTRON OF €105-140m (vs. our 2021 power Electronic sales of €54m).
FIith Aixtron taking share at ¢ree and gaining significant share with others, we
expect to see a significant uptick in 2021⁄22.
 MicroLED: The other area of considerable upside potential is MicroLED where
Aixtron is a clear market leader with the only multi-wafer tool capable of high
volume production. FFeeco remains considerably behind as they struggle with wafer
uniformity. FIe only expect MicroLED to have a material impact on Aixtron from
2021+ and look for any form of product road map from major OEMs (e.g. whether
Apple decides to move to MicroLED in its next gen watch).
 Return of 3D⁄Opto: FIhile 2019 3D sensing demand was largely supported by prior
capacity build out in 2018, we think customers will need to return to expand
capacity in 2020⁄21. Our industry work predicts a significant ramp in 3D sensing
smartphone units in 2020⁄21 to 277m⁄350m (vs. 170m in 2019) driven by greater
adoption in Android. Adding further upside would be the potential adoption of
world-facing 3D by Apple which would increase our 2020 3D module unit estimate
to c320m, almost doubling 2019 levels. given that Aixtron supplies both the likes of
IqE (into Lumentum) and FFpE¢ (into FIin Semi), it is largely insulated from supply
chain shifts. (See our recently published note on ams for further detail on our 3D
sensing industry forecasts: ams: The Odd ¢ouple, published 17 December 2019).
given the lack of visibility we do not include the OLED, Si¢ or MicroLED opportunity in
our numbers, but we do expect these to gather pace from 2h20 through 2021. If even
one of these were to materialize to the upside, we could see sales potentially c25$+
above our current forecast 2021⁄22 levels. FIe think the return of 3D orders will boost

sales in 2020⁄21, and help mitigate any lingering cycle concerns (our industry research
leads us to conclude that FFpE¢ could increase orders in 2020). The pushout of the
ApEFFA order into 2020 skews growth rates, but once excluded we now forecast 2020
growing modestly at 5$, increasing rapidly to 21$ in 2021.

gIVEN aIXTRON’S MORE NASCENT BUSINESS PROFILE WE HAD HISTORICALLY RELIED ON p/bv AS OUR
primary valuation multiple, with other profitability-based metrics (e.g. EFF⁄EBIT & pE) being
less useful. FIe believe this has started to change, with 2021 profit multiples now looking
more reasonable to us, as Aixtron returns to more meaningful profitability. Importantly we
THINK THAT GIVEN aIXTRON’S GROWTH POTENTIAL, along with the high barriers to entry in the
compound semis industry, it remains attractive on a valuation basis vs. semi cap peers (see
figure 13⁄14). FIe acknowledge that it may take time and patience for these opportunities
to come to fruition with some cycle drag in the near-term, but see this as an opportunity for
investors to get in early at an attractive valuation. FIe now base our price target on a 19x
2021e ev/ebit, IMPLYING A €12 PRICE target, leading us to upgrade our rating to Overweight

 

Hi all, I am looking at Ericsson Q4 results to check the trend on global 5G roll-out which benefits Aixtron in base station chip demand today and in the future via 5G in Smartphones (but this is still some years to go).
In any case it seems that the roll-out is continuing on a global basis (with Asia clearly leading). One highlight from the Ericsson release is the following "Large 5G deployments in China expected to commence in 2020 – investments to increase market share. "
This should mean that the 5G demand Aixtron experienced in 2019 should continue, albeit these are no big numbers for Aix I believe.

From Ericsson: A leader in 5G with 78 commercial 5G agreements with unique operators and 24 live 5G networks across four continents

https://www.ericsson.com/assets/local/investors/...h19-ceo-slides.pdf  

Interesting to notice that several dutch names have shown up including the new managing director of Apeva and several inventor names in the new OVPD patent applications.  Their background seem to be traced back to NL solar industry and consulting firms specialized in mechanical designs.  Understandably that glass handling expertise in automated production is what Apeva needs.    

könnte jemand in kurzform erklären welchen vor oder nachtteile ovpd and FMM hat ?!  

what is your question?  

OVPD and FMM was beutet das für aixtrons OVPD technologie?  

FMM is used for patterning to form pixels in the display.  It is basically a screen with many tiny holes. Samsung's QD-OLED TV (Gen 8 and above) does not use FMM, but Samsung's Smartphone OLED displays (Gen 6 and below) use FMM for patterning.  FMM employed in the OVPD technology should be much easier than in the VTE technology.  Fundamentally it is because in VTE the FMM is hanging by its edge and the weight causes the FMM to deform, whereas in OVPD the whole FMM is resting on the substrate so it would not deform.

The hope is that Samsung's smartphone manufacturing would also use OVPD someday because of the benefit of using OVPD+FMM besides all the other OVPD advantages we have already been talking about.  

all these technical background details I  would sell my house and buy Aixtron stocks...if only I had one ;)
Though, I understand all this is quite speculative and it might turn the other way around at the end...as you always point out.  

ok und super lieben dank für die erklärung.  gibt es von samsung schon irgendwelche aussagen, gerüchte das die ovpd + FMM technologie zum zuge kommt?
ovpd + fmm kommt ja nicht umsonst gerade ins spiel oder?  

There has been no sign from Samsung at all on FMM.  Like Rosskata said, this is purely my imagination and SPECULATION.

However, why is Aixtron spending money developing OVPD+FMM?  Why has Aixtron been filling patents (3) on OVPD+FMM?  I recommend you all download the PDF of these patents, look at their figures and get some sense of the German ingenuity.  I am glad that I only need to buy stocks.  The engineers are doing the hard work.

Read the 2018 AGM statement by Felix.  In there, he said the customer (now we know has always been Samsung) might decide either Gen 6 or Gen 8.5 for the OVPD tool.  So we know during that time Samsung was at least evaluating OVPD for smartphone (Gen 6).  Can we rule out the possibility that Samsung has been working on both QD-OLED and OLED for smartphone?  

Keep in mind also that OVPD for smartphones would need customers like Apple's qualification.  That would not be an easy or quick thing. QD-OLED TV is a clean sheet of paper, no need of approval from anyone.  

24 January 2020

Epitaxy equipment market to grow from $940m to over $6bn by 2025, driven by VCSEL and disruptive LED devices

The epitaxy growth equipment market for ‘More than Moore’ devices was worth nearly $940m in 2019, and is expected to exceed $6bn by 2025 (in an aggressive scenario), according to Yole Développement’s technology & market report ‘Epitaxy Growth Equipment for More Than Moore Devices’.

http://www.semiconductor-today.com/news_items/...an/yole-240120.shtml  

Dreifache Durchbruchfeldstärke
SweGaN entdeckt neues Epitaxie-Verfahren für GaN auf SiC

100% sure what it mean, but I am 100% certain they used Aixtron MOCVD.

https://www.elektroniknet.de/design-elektronik/...auf-sic-172646.html

 

Yole predicts 21.3M 6" wafers in 2025 growing from 2019's 7.9M.   If G5 produces about 6000 6 inch wafers annually if it makes two runs a day nonstop, the world would need ~3000-4000 G5-equivalent reactors in 2025.  Yole predicts the EPI equipment market to grow from $940M 2019 to $6 2025.  $6B for 3000 G5-equivalent amounts to $2M per unit is not far off.

Power segment used 3.2M wafers in 2019.  Most of them were probably related to Silicon-based semiconductors.  It needs 8.3M wafers in 2025 and if all for compound semiconductors,  that would need ~1500 G5-equivalent.  The combined opto market (LED+ MINI +MICRO + VCSEL) is still the largest, and it would need about 2000 reactors 2025.

Very good growth opportunity for Aixtron.  Lets hope we see that sign next month.  Many people here probably remember what happened in 2009 when the LED backlight suddenly took off.

http://www.mems.me/mems/equipment_material_202001/9292.html  

Good research and fantastic analysis!!

I remember 2009-2012 as I participated after 5 years of waiting and  acuumulating.
What I ride that was!! Suppported by a 5 year plan and fuelled by subsidies in China.

Kind regards
baggo-mh

 

Hi CWL,

thanks ALOT for sharing the research. However, I am always a bit sceptic of these strong growth assumptions.. have we got past forecasts by Yole so that we can compare what they predicted for example for the 2017-19 development vs. what actually happened? My guess would be that actual development was below forecast.

Nevermind the actual numbers, what matters is the trend over time. And I agree that with electrification (e.g. 5G, EUVs etc), we should see strong growth for wafers etc. What I partly find confusing is that this demand already benefits ASML (for example) over the past couple of years, while Aixtron does not yet benefit. Obviously Aix is very niche focussed and will only benefit once its end-markets accelerate and this is what we are waiting for. I hope Aixtron is the better investment in the end.

In terms of expectations for 2020: Excluding QD-OLED I think most analysts expect 3-5% revenue growth (see Barclays report above). So please, don't raise expectations for guidance too much going into the Q4 release in February. I think the revenue growth assumption is realistic but we should really see a significant pick-up in order intake (especially in H2) if the end-markets of SIC, MicroLED, VCSEL start to pickup/recover in 2021. Pushing growth expectations beyond 2021 for these end-markets would not allow the stock to work during 2020 is my personal belief.. so we have to hope for order intake!

Regards,
Fel  

Hi Joss, jetzt auch Teil der Gruppe? Freut mich sehr, ich hoffe Dir gehts wieder besser und die Exports tun nach wie vor Ihren Job?!

Mit diesem Post möchte ich gerne alle Mitglieder ermutigen auch Ihre Views/Inputs/Meinungen/Bedenken zu posten, solange Sie zu Aixtron als Investment oder den End-Märkten passen. Glaubt bitte nicht, dass dies hier ein rein technisches, langweiliges Forum sein soll. Ich persönlich freue mich immer auch über Kommentare zu Exports und sonstigem, weniger über LV und Verschwörungstheorien.

Viele Grüße!
Fel  

Also ich fand das alte Forum ganz in Ordnung.
Eine gute Mischung - unterhaltsam und informativ zu gleich. Ok, zum Schluss ist es vielleicht etwas eskaliert.

Jetzt fehlt irgendwie beiden Foren der" Charme " ... ;-)  

Yole research says that the projection is based on the "aggressive" scenario.  I doubt it is that accurate too.  The trend is more important.  The green curve area of the second figure in the report shows the growth of MOCVD equipment only.   The market roughly grows from $1B in 2019 to $1.5B in 2023.  The compounded annual growth rate (CAGR) would be 10% in the first 4 years, then taks off.  If we use that growth rate on Aixtron, the revenue would be 265m in 2019, 292m in 2020, 321m in 2021, etc,.  The current average analyst projections on Aixtron is 265m in 2019, 283m for 2020 and 317m for 2021.

Aixtron's revenue is equipment + service + parts.  The equipment sales in 2019 is roughly 220m, or about 100 MOCVD's.  A difference of 10m is 4-5 MOCVD.  So Aixtron just needs to sell 1 MOCVD extra per quarter to reach Yole's "aggressive" scenario.
 

für #114 von ,thanks an CWL1 !

https://...th-Equipment-for-More-Than-Moore-Devices_Jan2020_Flyer.pdf  

wenn du auf Deutsch schreibst. Das ist hier eher das Naheliegende. Ich schreibe auf Englisch nur wenn ich CWL adressiere. Er meinte ja selber, dass für ihn DE ok wäre, da er sowieso das Ganze  hier durch den translater jage.  

Heute Abend können wir schauen, ob Cree ähnlich positiv von SiC spricht wie STM das letzte Woche gemacht hat. Preview findet sich hier:

https://seekingalpha.com/news/3535256-cree-q2-2020-earnings-preview  

Any reason for the share price move today? I like it, but whats the driver?  

Would have thought this is mainly Apple/Tech driven...and Siltronic (+12%) shows that even mediocre results/comments are taken positively by the market. Aixtron was also mentioned in the Käseblätter Börse Online and Aktionär + DB‘s Germany Stock Ideas list.  

Soeben die Meldung, das der große Irländische Long-Only und sehr langfristige Investor Baillie Gifford seinen Anteil an Aix von 4.86% auf 6.91% erhöht hat. Deren Investment Ansatz ist sehr langfristig und sie scheinen viel in Tech zu machen (siehe HB Artikel unten). Insofern scheint hier jemand gut informiertes unsere Meinung zu teilen...

https://www.handelsblatt.com/finanzen/...131-ezHcMvYoiy3IbGvokJ7Y-ap3

Hier die Meldung:
https://www.dgap.de/dgap/News/pvr/...iten-verbreitung/?newsID=1266425