Aixtron purpose of this thread

Das ist ein herrlicher Anblick. Im TechDax ist alles rot, nur Aixtron sticht als einziger mit Grün hervor
 

Q4/21 orders indeed exceeded by ~20m (497m vs 480m).  I have adjusted the Q1/22 rev to 80m and Q2 100m.  

Zu den den Zahlen muss man mE nicht mehr viel schreiben - das war ein grandioses Komplett-Paket und hat mich in fast allen Aspekten überzeugt. Beim Lesen des Transcripts (Link siehe unten), denke ich auch nur, dass man eigentlich keine Aktie aus der Hand geben darf. Lediglich bei der EBIT-Marge gab es mE einen kleinen Wermutstropfen, da hätte ich mehr erwartet als die Guidance von 21-23%. Aber alleine der aktuelle EUR/USD Kurs von 1,12 verglichen mit dem 1,20 Budget-Kurs dürfte für ein Übertreffen dieser Guidance sorgen.

Was ich natürlich erneuere, ist meine Kritik an der Kommunikation bei den 3Q-Zahlen. War das wirklich nötig, dass man diese implizite unterirdische Guidance für den 4Q Auftragseingang damals gegeben hat?

1Q: 124,4 Mio
2Q: 139,0 Mio
3Q: 114,2 Mio
4Q Guidance: 63-103 Mio
4Q tatsächlich: 119,7 Mio

Transcript:
https://seekingalpha.com/article/...-results-earnings-call-transcript  

Danke, Joss - bin ich zumindest nicht alleine mit dem Gedanken. Ich will auch nicht zu lange darauf herumreiten - irgendwann ist auch gut - aber wie im Dezember bereits angerissen (siehe unten), hätte das für mich auch durchaus als adhocpflichtig gesehen werden können. Nehme ich gestern und heute zusammen, dann hat der Kurs vergleichbare Werte um rund 15-20% outperformed. Bleibt für mich insgesamt grenzwertig.

**************

„(Rechtliche) Frage in die Expertenrunde: die mit den Q-Zahlen „offizielle“ Guidance für den Auftragseingang im vierten Quartal liegt bei den bekannten 63 bis 103 Mio Euro bzw. 440 bis 480 Mio für das Gesamtjahr 2021. Wir wissen alle, dass danach im Call eher 100-120 Mio indiziert wurden und das dürfte auch der Level sein, den die Analysten erwarten.

Meine Frage: nehmen wir mal an, dass am Montag eine weitere Order in die Bücher kommt, die den AE im vierten Quartal zB auf 110 Mio Euro hievt. Was passiert dann, ist Aixtron adhocpflichtig weil 110 Mio AE oberhalb der „offiziellen“ Guidance lägen bzw. sogar signifikant über der Mitte der Guidance (über 30%)? Oder würde man den Abgleich mit dem Analystenkonsensus machen bzw. sich auf die mündlichen Aussagen im Call berufen, so dass keine Adhocpflicht angenommen wird?

Freue mich über Eure Einschätzungen dazu…wenn es nämlich eine Adhocpflicht gäbe, könnte man daraus schließen, dass man eben nicht bei den 110 Mio reinläuft. Und wenn diese Nachricht noch kommen sollte, dann sehen die Insider Dealings sehr sehr grenzwertig aus. Man muss also quasi hoffen, dass ein 110er AE nicht adhocpflichtig ist.„

https://www.ariva.de/forum/...-this-thread-567236?page=47#jumppos1183  

IIVI has had both the LPE and Aixtron SiC tools.  Which tool would it use?  Aixtron in the cc did talk about volume purchase of the second large SiC player after CREE/Wolfspped.  Is it IIVI or ROHM?

https://ii-vi.com/news/...tory-expansions-in-pennsylvania-and-sweden/

 

Hey CWL, another great spot, thank you! From memory (though I have no hard facts to support) I think Aix has no strong relationship with Rohm, so think IIVI is much more likely!
I am also very excited about microLED and hope demand for that comes in orders in H2-22!

The GAN cycle is also very much intact with no slowdown as applications spread far beyond the initial consumer electronics (fast chargers). So this cycle certainly has legs.

Stock is incredibly attractive here for sustainable revenue growth, highly attractive margins, no impact from Russia/Ukraine or supply chains and USD strengths providing further support to margins for any unepxtected costs.. let’s see when investors wake up to this!

Regards,
Fel  

I think it’s fair to assume that this order from Wolfspeed has already been factored into Aixtron’s guidance and is not something that comes on top. Nevertheless, a very good news!

https://www.dgap.de/dgap/News/dgap_media/...lektronik/?newsID=1531709
 

In the Nov. 2021 investors day, Wolfspeed says it would establish the capacity of 167k sq. ft of SiC substrates in 2022 and grow to 242k sq. ft in 2024. Slide 102:

https://assets.wolfspeed.com/uploads/2021/11/...2021_presentation.pdf

If all the substrates calculated as 6" equivalent wafers are to be deposited by G5 for epitaxial layer, that would require 100-150 G5's in 2022 and 200-250 G5's in 2024.

In post #1223 I stated that the world might need ~500 G5-equivalent's for EV's by 2025.  Wolfspeed's production plan is consistent with that estimate.

That would mean a TAM (Total Addressable Market) of 1B euros just for the SiC epi tools.  

The tool sold to Wolfspeed can load 6x200mm.  So it is a next generation G6 tool with a 20% increase in capacity from the 5 x 200mm G5.  Likewise, the new G6 can load 10x150mm wafers from the "old" 8 x 150mm G5.  Aixtron would commend higher prices and leave the competitors further behind.

In the 2021 annual report letter to shareholders, Felix hinted the G6 and wrote:

In our core business of technologies for compound semiconductors, we continue to invest
significantly in research and development to completely renew our equipment portfolio. Prototypes of next-generation tools are already being tested by individual customers and are
achieving very good results which often also results in follow-up orders. Through significant
differentiation, we will maintain our strong market position in the future - and expand it even
further in some segments.  

Annual capacity of 750,000 GaAs epi wafers (4") translates to about 40 G4's.  Aixtron has had a dominating position at Sanan in terms of G4 for red LED.  Red microLED is 1/3 of the RGB microLED.  Assuming the GaAs wafers are all for microLED, if Aixtron's G5 or G6 wins the blue microLEDs, the total MOCVD's needed could be 3x40=120. For 2-2.5m Eur per machine, this would mean that the total cost of MOCVD would be 250-300m Eur or ~25% of the Sanan's 1.1 B Eur total investment which seems right.

https://www.digitimes.com/news/a20220325PD201.html?chid=13

Sanan to invest in mini/microLED
Staff reporter, Taipei; Adam Hwang, DIGITIMES
Friday 25 March

The largest China-based LED epitaxial wafer and chip maker Sanan Optoelectronics will invest up to CNY7.9 billion (US$1.24 billion) to set up production capacity for miniLED and microLED chips at its production base in central China, according to industry sources.

The annual production capacity to be set up consists of 1.61 million GaN-based mini/microLED epitaxial wafers, 750,000 GaAs-based epitaxial wafers and 84,000 miniLED backlight units (BLU) for 4K display, the sources said.

Sanan has become a supplier of miniLED backlighting applications for Apple, Samsung Electronics and TCL, the sources noted.

For microLED R&D, Sanan has established a joint venture with China-based OLED panel maker Visionox Technology and another with China-based LCD panel maker China Star Optoelectronics Technology (CSOT), the sources indicated.

China-based EMS provider Wingtech Technology, by virtue of manufacturing automotive semiconductor components for many years, has stepped into development and production of min LED-backlit LCD panels and microLED panels for automotive displays, the sources said.

 

WIM just warned that its Q1 capacity utilization rate is below expectation mainly due to weakness in PA (GaAs) for 5G phones.  

5G PA foundry capacity utilization falls on sluggish China demand
Julian Ho, Taipei; Willis Ke, DIGITIMES
Wednesday 30 March 2022

Handset-use power amplifier (PA) inventory adjustments at Chinese vendors will last into the second quarter of the year with demand showing no signs of recovery, driving down GaAs-based PA capacity utilization rates at Taiwan foundries including Win Semiconductor...
-----------------------

This could be the reason that analysts have adjusted down Aixtron's Q3 rev. by ~ 10m.    

So after the US and China, European seems to be (slowly) entering the race to establish Semiconductor capacity. No doubt this should be positive for the equipment makers like Aixtron..

I cannot copy the Article from Bloomberg for some reason, but highlights are:
- Spain plans to invest € 11bn to develop microchips and semiconductors as part of strategic projects to overahaul its economy the Prime Minister said.
- The project will be approved by the cabinet soon.
- The EU aims to become a key semi manufacturer with goal of producing 20% of the worlds chip supply by 2030.
- The European comission also freed up public funding with a € 45bn Chip Act last month.
- Germany is looking to grant Intel € 5bn in public funding for its € 17bn semi plant.


 

Hi everybody,

AMS Osram held its capital market yesterday announcing weakish revenue growth over the next years (e.g. 6% p.a.) but strongly accelerating growth after 2025 or 2026 I think.
More importantly for us, they also announced a new € 800m capex program, amongst others in MicroLed in their plant in Kulim.

This should go directly into Aixtrons pockets, given their leading positions in MicroLed and supports the comments from Aixtron CEOs in the last conf call regarding microLed accelerating.

Here are the links to press release and detailed presentation:
https://ams-osram.com/news/press-releases/CMD_2022
https://ams-osram.com/documents/4390887/7083369/...07?t=1649169485602

Some Highlights from the press release:

Showcasing the group’s strong technology position in key growth applications including advanced dynamic automotive lighting, microLED display technology, optical solutions for AR/VR, automotive sensing, and horticulture LED lighting, among others;
Presenting the group’s future industrial footprint: Next to a range of footprint consolidation steps, ams OSRAM will build a new 8” LED front-end facility alongside its existing LED fab in Kulim, Malaysia, adding significant capacity to support expected growth in advanced LED technologies and MicroLED. The new facility investment is expected to amount to up to approx. EUR 800 million over the next 18-24 months.

Regards,
Fel  

Thanks for your post - wanted to post the same when I saw AMS‘ CMD slides.

Isn‘t Osram rather linked to Veeco or do I mix up things here?

https://www.veeco.com/company/news/...drive-next-generation-products/  

Hi DLG,

I think you are right, traditionally for MOVCD Equipment Osram also (or heavily)  relied on Veeco. However with regards to MicroLED I think Aixtron is lightyears ahead.. so if Osram wants to go for MicroLed, it has to go with Aixtron. Same goes for SiC by the way.

So I think good chances that we will see Aixtron equipment in Kulim!

Regards,
Fel
 

BNP shares the read-x from Osram to Aixtron it seems...

Aixtron shares gain as much as 6.5%. The stock is raised to
outperform from neutral at Exane BNP Paribas, with the broker
hiking its PT by 50% to EU30, on opportunity for the
semiconductor-equipment firm from the growth of MicroLED
displays.
* MicroLED “on the cusp of adoption” and is “intense user” of
Aixtron tools, analysts David O’Connor and Jerome Ramel write
** See production ramp-up of MicroLED from 4Q22, estimating
first smartwatch product in 2024
** Bullish view underpinned by strengthening positions in Power
unit, with demand in GaN wafer end-markets to remain strong
* NOTE: Aixtron now has 8 buy ratings, 3 holds and zero sells
among analysts tracked by Bloomberg
 

Hi all,

a very nice and strong rallye in Aixtron shares today. In my view driven by the upgrade from Jefferies lifting their target price to 35€ from 18€. Interestingly the analyst previously worked at another bank (I think Pareto or so) and moved to Jefferies in Q4-21. There she initially started coverage with a hold and now obviously turned much more bullish. In her previous role at Pareto she was always already a big Aixtron bull.

So great to see!

I am very bullish on margins for this year given EUR/USD move, the lack of restructuring costs in H1 from APEVA and better machine mix. Lets see if we get a slight increase in guidance with Q1 already.

All the best!
Fel


https://www.finanznachrichten.de/...-buy-ziel-fast-verdoppelt-016.htm  

It is great to see the price jump. However, I am a bit concerned about the short term.  In post #1240 on 2/24, I adjusted down the Q1 rev. to 80m and the Q2 rev. to 100m.  At that time the analysts were predicting Q1 rev. of 91m and q2 110m. In the latest analysts forecast the Q1 rev. is now at 81.1m and Q2 to 98.8m  So the rev. forecasts by the analysts have come down as predicted.  

Short term, China is in trouble partly due to Covid.  I also mentioned the GaAs (PA, phones) side could be weak.  Aixtron may be affected.  I hope I am wrong.  Does the Jefferies analyst know something?  

Here is the write up from the Jefferies upgrade today

The main point to highlight from our note is that our new forecast of 30% revenue growth in 2023 is by far the highest across our coverage.

You’ll have heard our views that the wider semiconductor sector is heading into a downcycle which could result in steep cuts to orders and earnings over the next 12-18 months.  In light of all that, we expect an average revenue growth rate of 8% for 2023 across our coverage, with the risk clearly to the downside given the current environment of weakening demand and rising inventories - In that context, our 30% forecast for Aixtron makes this company a clear outperformer in the sector over the next couple of years.

And not only that, but we actually think our forecasts are conservative - That all put us significantly ahead of consensus: our 2023 and 2024 earnings estimates are 58% and 48% ahead



Why are we so confident on Aixtron?

We see three key pillars of growth for this company over the next few years: MicroLED, Silicon Carbide and Gallium Nitride:

MicroLED - we think this could go on to become the company’s largest revenue driver by far - Most important point to highlight here is that once it reaches commercialisation, MicroLED screens are going to be everywhere -  whether it’s in wearable devices, smartphones, laptops, TVs, AR/VR headsets

In other words this will be a huge market – and Aixtron are very well placed with a 100% share on the equipment side. Also important is the fact that we think Aixtron have got Apple as a customer here - who they’re going to start shipping to in commercial volumes from Q4 of this year - Ahead of what we think will be a microLED-based Apple Watch launched in H2 2024.



If that Apple Watch launch goes well, then clearly there’s a possibility that Apple release a MicroLED iPhone - And we think that could mean an order 10x the size of the one they’ve got for the Apple Watch. So adding it all together, we think MicroLED could be a EUR 2 billion opportunity for Aixtron from Apple alone, and that’s not accounting for iPads, Android smartphones and TVs.



On Silicon Carbide, we think this side of the business is finally inflecting.

Aixtron have said they’re now working with TWO major customers here – we think the second is On Semi in the US. They have said that they’re doubling their Silicon Carbide capacity both this year and next, to get to a run rate of $1bn revenues by 2023, which would put them on a par with STMicro

So if we’re right and Aixtron are supplying equipment to them, clearly they’re in a very good spot to grow their share of this market over the next 12-24 months as that customer ramps.



Finally, on Gallium Nitride – this is another high growth market, we think it’s growing at about 80%, where Aixtron again have a 100% share.

In other words every GaN chipmaker is their customer - To put that growth potential a different way – Infineon said that their GaN revenues in 2021 were EUR 5m. but their bookings are 1 billion – so clearly huge amount of demand for this technology



Why is this stock cheap?

Shares are trading on 24x 2023 EPS, which is about 15% below their long-term average. We think consensus will get upgraded through the year, particularly as and when management raise FY guidance which they typically start doing from around Q2, and that together with resilient multiples is where we think a good amount of share price upside could come from over the next 12 months.  Summary: we’re upgrading Aixtron today, we think the company will out-grow the rest of our coverage over the next 24 months, we’re significantly ahead of consensus, and we see upside to our forecasts.


 

Interesting, the Japanese Investment Bank (comparable to Deutsche Bank from Japan) initiated coverage of Aixtron today with € 34 price target. The interesting part is that a) they care about a German small/midcap name - the analyst would only do that if the thinks the stock is "worth it"; b) shows that international interest in Aixtron is rising. He says that Aixtron is the key beneficiary of the SiC/Gan Trend and sees order intake for the next quarters in a range of 100-150m per quarter - implying solid demand!

So after Jefferies with € 34 or 35 price target, this is the next broker applying this target. He uses a price/sales multiple as valuation metric, applying 6x to his ca. € 600m in sales in 2023 (or 2024).

While the stock may remain volatile, we will still have a lot of fun with it over the next 2-3 years, and the fundamental story remains well in tact!

Regards!
Fel  

Hi all,

I am surprised we have no comment on the Q1 results yet? Numbers were very strong in my view, with strong orders, solid sales and resulting EBIT Margin. Guidance unchanged. Conf call today at 3pm CET.
Stock is a bit weaker (despite strength in Nasdaq yesterday) which I attribute to profit taking after a strong YTD Outperformance with the stock ca. +30% (incl. todays move).

From a top-down view I think they will likely narrow guidance with Q2 and maybe upgrade with Q3 but lets see.. at least that is the pattern we have seen over the last years. Meaning that Q2 results should be another positive catalyst.

I think the conf call will confirm that demand is coming from all end-markets with more details on SIC/GAN and maybe MicroLED, lets see. I will clearly listen to margin comments given supply chain difficulties overall and the benefit from EUR/USD at 1.06 vs. guidance based on 1.20 (!!), should be a clear margin tailwind.

Looking at the Q1 presentation actually shows quite obviously that revenue guidance needs to be upgraded soon: They guide for sales of 450-500m, mid-point 475m. Q1 sales 88m, they estimate Q2-4 service sales of 62m and already have a backlog to be delivered in 2022 of 200m. In Sum 350m. So to reach the mid-point of the guidance they only need 125m in orders shippable in 2022, with 3-6 months lead-time these 125m in orders can also come until early/mid Q3, if they speed up in the production.
Supports my optimism that Q2 will see a narrowing of the range (towards upper half) for sales and consequently a bit of an upgrade for EBIT margins as well.

Regards!
Fel  

Fel

ganz so überschwänglich habe ich die Zahlen jetzt nicht aufgenommen.
Namentlich den Auftragseingang!  

Just from the conf call right now...

        a.§We expect a very clear acceleration of the orders throughout the year.
        b.§Expect a stronger Q2 in terms of order intake vs. Q1.

I think this is very bullish, in particular if you compare this to the broader industrial sector in Europe/Germany. No issues here from supply chains, no cost hickups, no delays etc.
But that is just my view..  

Hi all,
I only had time to listen into the call recording today.

let me start with a general observation. Management seems very confident about reaching guidance and none of the questions actually seemed to surprise them - except the one on depreciation.

A few notes from my side:
1.) “All manufacturing is outsourced” that goes imho for the parts and the personnel
2.) 30 to 40% of the revenue is generated in USD. Budget rate is 1,2 resulting in a Tailwind in Q1 of 2 to 3 % gross margin.
3.) Lead time now 9 – 12 months

GAN Power
-Spans from 100V to 600V, incl. white goods and server farms
-market penetration is 5% remainder is still silicon
-biggest order intake in Q1
-GAN and SiC Power account for > 50% of Order intake

SiC Power
Wolfspeed discussing build of a second factory
“couple of big customers but also well financially equipped start-ups that order”
Management is convinced to gain more customers

MicroLED
The tools will cover all 3 colors which essentially means 3 products. Red, yellow and blue.
orders for the 2023/2024 ramp expected in 2022 and 2023.
one customer with concrete plans
others wanting to make reservations

New tools under development for all major applications that will result in advantageous for the customer in terms of productivity & uniformity and a better margin for Aixtron.

Ich gebe kein Stück aus der Hand, den ich kann mir €30 zum Jahresende durchaus gut vorstellen.

Gruß
 baggo-mh