Aixtron purpose of this thread
This Chinese company (BEST SEMICONDCTOR) signed a contract with Jiangsu province last week to invest 800m yuan ($120m) on GaN and SiC epi wafers; $60m on the equipment. Best Semi bought Aixtron's G5+ C in for GaN in 2020. However, it used Nuflare's CVD for its SiC epi wafers. Aixtron will probably get an order of ~10 G5+ C for the GaN in H2 2022. I am not sure about whether Aixtron could win the SiC equipment.
“For 2022, we plan to invest about $3.4 billion to $3.6 billion in CAPEX to further increase our production capacity and to support our strategic initiatives including the first industrialization line of our new 300mm wafer fab in Agrate, Italy.
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Transphorm had bought G5+C from Aixtron. However, it had also bought Veeco's single wafer MOCVD.
Infineon reported Q1 results yesterday. A key comment on the conf call was that a) they expect their SIC revenue to double this year to € 300m ; b) they said that they are supply constrained and could raise output across all end-markets if they had more capacity.
(I think the new capacity in Dresden and Villach will only start producing as of 2023 but dont know when exactly).
Also I think they plan to expand their plant in Kulim, but I am not sure if this could potential entail more orders for Aixtron.
Overall however this shows a strong demand environment for SIC and that are still moving into the direction of volume production.
Regards,
Fel
Toshiba Corp said on Friday it will invest about 125 billion yen ($1.09 billion) to more than double production of power management semiconductors, aiming to catch up with power chip giants such as Infineon Technologies AG.
The Japanese industrial conglomerate will build a cutting-edge 300-millimeter fabrication plant in central Japan for power management chips, which efficiently control electric power in cars, electronic devices and industry equipment.
Toshiba will invest around 100 billion yen in the new plant, on top of a 25 billon yen investment in a 300-millimeter fabrication line it is building at an existing chip plant, a Toshiba spokesperson said.
The new plant is set to start operating by March 2025. When the first phase is complete, Toshiba's power chip output capacity would be 2.5 times its current level. Depending on demand, the new plant could further expand with additional investment, the spokesperson said.
https://www.businesstoday.in/latest/world/story/...-321457-2022-02-04
The trend on SiC and GaN is accelerating as we speak. Globalwafer announced new investment ~$2B on wafer equipment including SiC and GaN last Friday after its failed Siltronic takeover. The plan is to start the manufacturing in 2023. On the GaN-on-Si front it will reply on Transphorm I think. I own Transphorm. I think it is positive for Aixtron since Siltronic which bought G5+C in 2020 now has to beef up its GaN-on-Si efforts to catch up with the world's trend. The GaN-on-Si fast charger market is still expanding rapidly thanks to Apple. G5 for GaN will continue to be AIxtron's big money maker in 2022. I don't see any slow down in my own opinion.
www.finanzen.net/nachricht/aktien/...um-abgelaufenen-quartal-11015328
Where do they sit in the supply chain @CWL and what are the implications for Aixtron or PVA Tepla (who supply crystal growing equipment)?
Overall it again confirms that demand for SIC products is clearly taking off which is positive for Aixtron. Regards, Fel
(Bloomberg) -- Sumco Corp., a key supplier of silicon
wafers for the semiconductor industry, said it has already sold
out its production capacity through 2026, a sign shortages in
the industry may not abate for years.
The Japanese company, one of a handful to provide the
specialized silicon slabs that chipmakers use to create their
designs, has orders to cover all output of its 300mm wafers for
the next five years, it said after reporting earnings on
Wednesday. It is not taking such long-term orders for 150mm and
200mm wafers, but demand is likely to keep surpassing supply for
years to come, the company said.
The price of wafers rose by 10% in 2021 over the previous
year and Sumco expects to see increases continue until at least
2024.
The company said it won’t be able to expand its production
this year at all, despite strong demand from customers desperate
for long-term supplies. The company has already done what it can
in terms of optimizing its existing production lines, and its
supply-demand imbalance is consistent across its full set of
products, including 200mm and 300mm wafers.
Taiwan’s GlobalWafers Co. recently failed in its bid for
regulatory approval of a $5 billion takeover of Germany’s
Siltronic AG, a move that would have brought consolidation to
this sector of the chip supply chain.
GlobalWafers to Reassess Strategy After Siltronic Deal
Demise
Sumco made the comments Wednesday after reporting revenue
and profit that beat analyst estimates. The company also
forecast sales and operating income for the first quarter ahead
of projections.
IIVI has been a customer of Aixtron mainly on G4's (GaAs) for laser-optic applications. It seems logical that IIVI will use Aixtron's G5+C for the GaN, and potentially G5 WW for SiC epi.
"For fiscal year '22, we now expect capex to be $325 million to $375 million, driven largely by our expansion of silicon carbide and indium phosphide to address the growth in power devices, communications and consumer applications."
Sidney Ho -- Deutsche Bank -- Analyst
" just a follow-up on the silicon carbide question earlier. I understand it takes time to just fully design-in and production RAM and whatnot. What is the realistic revenue target we should be thinking about over the next two to three years"
Chuck Mattera -- Chairman and Chief Executive Officer
"I would just add, Sidney, that as it relates to our FY '23 capital investments in this business, they are 80% or more focused on increasing our capacity for substrate growth and fabrication. And then right on the heels of that, for facilities to allow us in the next fiscal year to be adding in MOCVD capability so that we can begin adding to the portfolio epitaxial wafers in addition to our power electronic devices."
https://www.fool.com/earnings/call-transcripts/...gs-call-transcript/
And the time schedule seems (ii-vi)to be more for the 2023/24/25 timeline.
But e.g Cree should be more a shortterm Ordering candidate, am i‘m right ?…
https://www.elektroniknet.de/halbleiter/...ab-in-new-york.169496.html
Regarding this plan the selling time should be in 2022
Does anybody knows about delivering time of such Aixtron machines ? (is it 1 year)
2 points of interest today:
1. Infineon last night announced that they plan to invest € 2bn into a new factory in Kulim. This should significantly expand their GaN and SIC output. Should be positive for Aixtron and supports our thesis. "The fab will be ready for equipment in summer 2024". That means large orders for Aixtron equipment in H2-23 i suspect. I cannot identify from the press release the potential magnitude for Aixtron equipment orders.
https://www.infineon.com/cms/en/about-infineon/...NFXX202202-053.html
2. Jefferies initiates coverage on Aixtron with 16€ target and Hold rating.
This is interesting, the analyst is ex Liberum where he was always an Aixtron bull. He starts his Semi coverage with a cautious view and some sell ratings (among others for Infineon). He talks about some cool-off in the industry in 2022/23 after strong growth in previous years. I think that is the main concern for the market at the moment, "peak semi capex" and resulting slower growth in the next years. That is why the stock is back at 16 in my opinion and no longer at 20-25 range. Obviously the negative sentiment in the Tech sector and rising US rates are not helping either.
And I can see his point, against those perceived risks, talking about potential 10% sales growth in 2022 will not really excite potential new buyers after strong growth in 2020/21. I think he also wanted to take a different position (and rating) than most other analysts who rate Aixtron Buy.
So in essence I think we might see the stock lingering a bit at current levels with good Q4 results and solid 2022 guidance (8-10% sales growth and slightly increasing margins?) against the headwinds named above.
I remain fundamentally very bullish, given the business opportunity and low valuation, but I am personally a bit concerend about a potential further sell-off in US stocks, in particular tech against rising US interest rates and a potential policy mistake by the FED... lets see. I may be wrong, but certainly issues to keep focus on.
Regards!
Fel
https://compoundsemiconductor.net/article/114205/...C_chip_production
https://www.aixtron.com/en/investors/...0new%2520SiC%2520system_n1596
I have just seen consensus expectations for the results due next Thursday.
Q4: Sales € 178m, EBIT 51. Unfortunately no order intake.
2022: Sales € 456m, EBIT 101m. This implies +6.5% revenue growth and 22% EBIT margins (after 21.5% expected for 2021).
I personally think they will again guide with a range, maybe 6-10% growth, meaning current consensus is realistic/ a touch conservative. I think the 22% margin forecast is realistic but the absolute number might be a bit too low given that 2021 included Apeva restructuring costs in H1 (I think about 5m?) that will not recurr in 2022. Given the good order backlog and these non-recurring costs, Q1 and Q2 results should be strong and after weaker results in H1-21 should show strong growth rates.
But as always, a lot of focus on orders, order pipeline and market environment.
Lets hope next thursday will not again be a -10%/+10% day.. but rather create new interest in the a) high margin and b) sustainability of attractive growth rates.
Regards!
Fel
Just one additional thought on the margin / FX impact: average EUR/USD in 2021 was maybe 1.18-1.19. So far in 2022 we have been some five big figures below that level. Thus 2022 should not only see the positive impact from the Apeva restructuring cost dropping out, but also from a positive FX development – on top of a (hopefully) higher leverage due to the elevated revenue level.
Thus, a mere 50bps EBIT margin increase would be rather disappointing for me and I do expect a higher number for 2022. However, we are talking about the guidance and we know how conservative Aixtron has guided in the past. I.e. even if a higher margin than the 22% seems plausible, we might become a victim of the management’s conservatism as was the case with the Q3 numbers. I do hope – following the share price reaction after the Q3 numbers/guidance – there has been a learning on their side…
I also do hope to get some qualitative statements from the management to debunk the “peak semi capex” story, e.g. in terms of GaN and SiC over the next years. Maybe even 3D Sensing (AMS Osram alluded to potential design wins for AR/VR products coming in 2023).
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Fel,
The analysts also up the Q1 rev to 90.8m which is the same as my model. Previously it was 71m. The Q2 rev. projections is 107m. This implies 2021 total order should be 20m higher than 480m, the high end of Aixtron's guidance, unless they bring down the Q2 rev from 107m.
Regarding this i cannot believe that Aixtron will have not much much more than „only“ 20 % growing rate in this year. OK deposition ist something of the last process-steps in the „sand to silicon/components“ process, but most of the plannings are for the year 2023,2024 and i think that this companies are ordering one or two years before the fabs are finalized. This must not been sales but ordering income.
This could be GaN or SiC, but i don‘t know it exactly, bit it seems to be perfect for analog chips.
https://news.ti.com/...-300-mm-semiconductor-wafer-fabrication-plants
