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  baggo-mh

 

SiC "pure play" Wolfspeed (shares down >70% YTD) is reporting quarterly figures after market close today. Seems that their Capex plans will be core focus of investores, not sure whether there will be any read-across for AIXA shares as a result:

"Capex and Funding Options Key Investor Focus. We believe Wolfspeed must further cut its 2025 capex plans of $1.5 billion to below $1 billion. This will provide much needed oxygen while allowing the company to focus on just building enough wafer capacity at Siler City to demonstrate the ramp and economics of Mohawk Valley."  

A 10 Years contract is good for WOLF and also potentialy good for Aixtron, opinions?
https://compoundsemiconductor.net/article/119635/...phorm_acquisition  

Martin Jungfleisch

I have two questions, please. First one, the silicon carbide order in the second quarter. Can you tell us how much will be delivered of that EUR105 million in 2024 and how much will be recorded in 2025? And then maybe if you can also comment how much of that order was coming out of China, please?

Felix Grawert

I don't have the data here. I have to do it out of my memory. So my message is a bit inaccurate, but qualitatively, I can give it to you. I would guess 25%, 30% gets shipped still in '24 from what I know, which customers are behind it. The rest goes into '25. Mostly, there is two existing customers behind of it and one new customer, which we got on board in the first quarter. In the first quarter, we announced the new customer is on board. Now in the second quarter, there was a very big volume order placed from that customer. So the majority goes into '25. And out of those orders, there was also a decent part coming out of China, I think there was multiple China customers amongst that. So yes, there was a certain China fraction but I'm not able to quantify how much of that it was.
-------------------------------------
My guess is that Hunan Sanan is the major new Chinese customer, and other Chinese customers might include TYSIC (Tianyu).  They are all expanding 8" SiC epi wafers capacity aggressively.

I posted previously that Sanan, including Hunan San and Sanan-STM JV were hiring engineers with Aixtron experience.  From a new press release:

"...Sanan Optoelectronics' financial report also revealed the equipment procurement of Hunan Sanan's silicon carbide project - Sanan Optoelectronics' Hunan Sanan letter of credit guarantee is 150.19 million yuan, mainly used to purchase silicon carbide equipment from companies such as Aixtron, LPE, Asher, and KLA..."
 

CWL1, since you have  a thorough overview of Asian (and not only) Aix SiC market: do you observe a trend of capex reduction? I cannot imagine Woolfspeed is the only major player with such plans.
I start thinking that the estimation given my Aix management this year about the next year is no longer valid. I tend to believe that a guideline of +0 % growth will be good news...keeping in mind the state of EV market.
Your view on this is highly appreciated. thanks!  

expected to be max 20% if we assume same distribution as Q1 and Q2 for the while year.
Some drop in the next year in SiC orders could be compensated by the other segments. Effectively maybe only by GaN.  

There is adaption of 800V SiC platform in almost all the new EV's in China that requires more SiC.  Tesla's EV's are still 400V based.  However, we probably won't see the effect in short term.  

Do you think Aixtron is behind the Infineon 300mm GaN?
But i see Veeco offering a Tool/Machine for 300mm GaN but not Aixtron.  

Aix has stated they have 300 mm tool for evaluation at customers side. Very likely Infineon as well.

Here something to read: https://research-hub.de/companies/AIXTRON%2520SE
 

HAMBURG (dpa-AFX Analyser) - Die Privatbank Berenberg hat die Aktien des Chipindustrie-Ausrüsters Aixtron mit einem Kursziel von 30 Euro auf "Buy" belassen. Auf einer Berenberg-Konferenz mit deutschen Unternehmen habe Finanzvorstand Christian Danninger signalisiert, dass er im derzeit verhaltenen Markt für Leistungshalbleiter auf Siliziumkarbid-Basis Licht am Ende des Tunnels sehe, schrieb Analyst Gustav Froberg in seinem am Dienstag vorliegenden Kommentar.

Hoffentlich gibt es dazu positive Kommentare zu Q3 Zahlen.

 

https://economictimes.indiatimes.com/news/defence/...049.cms?from=mdr


The Invest is worth roughly 15 Billions USD (source:
https://www.electronicsforyou.biz/industry-buzz/...dias-electronics/)
Just wondering how much of that will go for production equipement. Hopefully mainly by Aix.

 

they explore different scenarios in terms of market evolvement here:
https://www.mckinsey.com/industries/...e-silicon-carbide-wafer-market

Their bottom line:

The SiC industry is proactively addressing the new demand stemming from growth in EVs, even though uncertainty abounds about how it will evolve. No matter what scenario materializes, demand for SiC wafers will continue to grow and remain robust. Simultaneously, competition will intensify for technology, quality, and price leadership, with wafer suppliers continuing to make massive investments in improvements. Incumbents face competition from emerging companies and will benefit from ensuring that the shift to 200-mm technology delivers the expected cost advantages to maintain their technology leadership. Meanwhile, emerging suppliers must focus on iterative learning to close the technology leadership gap against incumbents. For all industry stakeholders, the next few years will be a challenging but exciting time to capture opportunities.  

Read-across for Aixtron..
https://seekingalpha.com/news/...ium=referral&feed_item_type=news  

So this is big news, see below from Bloomberg. Wolfspeed stock +17% pre-market, Aixtron moved from -2% to +2% intraday today. Lets see what the US market makes out of this for Aixtron. Obviously a first glimmer of hope for more SIC business at Aixtron, given we know that WOLF is an established large customer.

Regards,
Fel

Wolfspeed Wins $1.5 Billion Financing From Chips Act, Apollo (1)
2024-10-15 09:31:20.573 GMT


By Mackenzie Hawkins and Ian King
(Bloomberg) -- Wolfspeed Inc., a manufacturer of chips used
primarily in electric vehicles, is in line to win $750 million
in US government grants as well as $750 million in financing led
by Apollo Global Management Inc. to support its factory
expansion plans.
The grant from the 2022 Chips and Science Act will cover a
portion of the company?s more than $6 billion in planned
spending for factories in North Carolina and New York. The
projects are anticipated to create more than 2,000 manufacturing
jobs and 3,000 construction jobs, the Biden administration said
Tuesday in a statement. The grant spurred the financing from
Apollo, The Baupost Group, Fidelity Management & Research Co.
and Capital Group, according to the statement.
Wolfspeed also plans to tap 25% tax credits for the
facilities, and expects to receive more than $1 billion in total
refunds, Chief Executive Officer Gregg Lowe said during an
earnings presentation in August. It has already accrued around
$640 million in refunds, Lowe said.
Wolfspeed?s shares rose 17% in premarket trading on Tuesday
before New York exchanges opened. Its stock had declined 74%
this year to $11.38 at Monday?s close.
The Chips Act, a landmark bipartisan law championed by
President Joe Biden, is designed to bring semiconductor
manufacturing back to American soil after decades of production
shifting to Asia. Officials have allocated the lion?s share of
$39 billion in grant funding from the program, and they?ve
signed a final agreement on one of nearly 20 awards announced so
far.
Read More: With US Chips Act Money Mostly Divvied Up, the
Real Test Begins
The others ? including massive grants to companies like
Intel Corp. and smaller ones like Wolfspeed?s ? are preliminary,
subject to due diligence and additional negotiation. After
signing final agreements, companies have to meet project-
specific benchmarks to receive funding as a reimbursement.
The government and private backing may provide a welcome
shot in the arm for Wolfspeed, as the company tries to generate
new production that executives promise will provide it a better
future. The beleaguered chipmaker last posted annual profit a
decade ago and its most recent quarter of positive net income
came in 2018.
Read More: Worst Performing Chip Stock Faces More Gloom in
2024
Wolfspeed?s problems stem from production snarls at a plant
that is one of the largest makers of silicon carbide wafers, on
which its chips are built. Inadequate supply of those wafers is
stifling manufacturing at its chip plant in Mohawk Valley, New
York, forcing the company to rely on an older factory that
carries higher costs.
Wolfspeed now plans to close that facility and shift
production to the newer one, which is one of the two facilities
the Chips Act grant would support. The chipmaker is also in an
area of growing demand ? semiconductors that control power in
EVs and other devices ? where the use of new materials and
techniques promises rewards for leaders.
?As the world?s largest producer of silicon carbide
material, we believe we have a compelling proposition for a
Chips grant because silicon carbide is considered a matter of
national security, is designated a critical material by the US
Department of Energy, and is essential to the electric vehicle
ecosystem,? Lowe said on the August earnings call.

 

 

here in the thread ahead of upcoming Q3 24?
Everybody given up on Aix already or just waiting for better days?
I am cautiously optimistic that we should have reached the bottom line regarding the stock performance.
My hope is that Q3 will deliver OI > 170 m with clear statement for similar OI in the next 1 to 2 Qs as mentioned with Q2. Plus a hint for better 2025 expectations albeit the latter not quite sure.
Personally, I am not so optimistic for 2025 anymore as the management was with Q1. Neither they are I guess. But at least + in the lower one digit percentage for 2025 should be in.  

https://www.prnewswire.com/news-releases/...g-capacity-302284901.html  

i guess AIX is very likely involved in the 300 mm pilot line. Let's see if they give some hint in the Q3 call:

"In addition, TI's expanded investment includes a successful pilot earlier this year for development of GaN manufacturing processes on 300mm wafers. Further, TI's expanded GaN manufacturing processes are fully transferable to 300mm technology, positioning the company to readily scale to customer needs and move to 300mm in the future."  

OnSemi Q3 CC:

https://seekingalpha.com/article/...-q3-2024-earnings-call-transcript

short summary from SiC perspective:
- BEV Market still soft with L-recovery expected but nevertheless growing: China, Japan strong. Europe, America soft.
- China driving innovation with transition to 800V systems where SiC plays crucial role
- long term strategy unchanged, commitment and trust in the SiC market
- biggest portion of CapEx completed.
- further capacity expansion planned mainly through transition from 6 inch to 8 inch.
This will involve only tool conversion and not new orders.

Note: this is my take away by skim reading.
 

Hey Rosskata,

I think you asked the right questions.. I think Sentiment is very very low for Aixtron at current. The EV market is weak and so are all the related stocks in that theme, look at Wolfspeed, ON etc. SIC accounts for ca. 30% of Aixtron revenue and is probably -30% to -40% yoy in 2024. ON Semi and Wolf are both investing less, both are known large Aixtron customers. But structurally, both will likely invest again, e.g. ON for their Czech plant, will it already be some investments in 2025, we dont know.

GAN probably too small in terms of mass applications to make a difference yet. This is also ca. 30% of Aixtron sales and had 1-2 strong years so far.

MicroLED remains a wildcard, 70m sales in 2024, maybe 30-40m in 2025. So some headwind from this as well into 2025 but the option for a mass production line. If that arrives at some point, it should easily add 150m to revenue (my guess).

Another wildcard is SIC investment in China.. where Aixtron had not been active with the G10 so far, first orders received in Q2 only. There is material investment and capacity buildup going on.

The valuation captures a lot of that at these levels I think.. the stock trades at 10x EV/EBIT compared to ASMi at 30x, BE Semi at 40x, Suess at 17x and ASML at 30x. For a company that is debt free and should be beyond the capex & WC peak.. e.g. FCF should be solid in 2025, at least a little treat.

Are 2025 expectations de-risked yet? Consensus is looking for 637m in sales after 627m in 2024. I think as we started 2024 some analysts expected 700m in sales in 2025. Q2 orders were at 176m, Q3 likely around 150-160m (vs guidance "similar level"). If we assume 155m and 176m and annualise that we get 662m, so it would indeed cover the 2025 expectation. If we take 155m*4 we arrive at 620m. So current expectations have improved alot; particularly against that valuation..

Lets hope that Q3 brings decent orders and indication for continued order activity... maybe even GAN moving into some volume for Datacenters..

That are my rough thoughts. Lets hope the current stabilisation phase in the stock price continues and we dont move below ? 14...

Do you agree / disagree? Thursday will bring more insight.

Regards,
Fel
 

Aixtron beeindruckt mit starkem Q3 Ergebnis trotz Marktunsicherheiten

AIXTRON navigiert durch ein dynamisches drittes Quartal 2024: Während verschobene Großprojekte die Umsätze dämpfen, glänzt das Unternehmen mit einem beeindruckenden Auftragseingang und technologischen Innovationen

- AIXTRON erzielte im dritten Quartal 2024 Umsatzerlöse von EUR 156,3 Mio., was in der unteren Hälfte der Prognose lag, da die Auslieferung eines Großprojekts verschoben wurde.
- Der Auftragseingang im dritten Quartal 2024 lag mit EUR 143,5 Mio. um 21% über dem Vorjahresquartal, und der Auftragsbestand stieg auf EUR 384,5 Mio.
- AIXTRON präsentierte technologische Fortschritte bei der 200mm G10-SiC Anlage, die nun die Spitzenposition im Markt erreicht hat.
- Im Bereich GaN wird die Einführung der 300mm-Wafer-Technologie vorbereitet, und die erste 300mm Anlage ist im neuen Innovationszentrum eingezogen.
- Die Bruttomarge sank auf 39% in den ersten neun Monaten 2024, hauptsächlich aufgrund eines margenschwächeren Produktmixes.
- Die Prognose für das Gesamtjahr 2024 wurde bestätigt, mit erwarteten Umsatzerlösen zwischen EUR 620 Mio. und EUR 660 Mio. und einer Bruttomarge von etwa 43% bis 45%.  

Q3 insgesamt unter den Erwartungen, AE schwächer, Umsatz, EBIT schwach. Umsatz wegen Verschiebungen von Kunden auf Q4. Die guidance für 2024 unverändert, das ist der key positive Faktor hier.
IR sagt wohl Q4 AE stärker vs Q3, das wird wohl auch die Message im
call sein, ein klarer positiver Aspekt.
2025 guidance für flat/down sales.
Heute wieder viel vola im Kurs, mal sehen, wie er sich nach US Eröffnung verhält und wie die Aussagen im
call sind. Der kurs preist hier sicher viel ein, und je nachdem wie der AE in Q1/Q2 ist, kann der Umsatz 2025 ggf flat sein.. darin muss man jetzt Überzeugung gewinnen.

Viele Grüße,
Fel  

Q3 Zahlen klar enttäuschend. Vor allem bei AE hat sich das Management im Q2 Call zu weit aus dem Fenster gelehnt. Auch der Ausblick 2025 mau. Wenn ich nur aufgrund dessen meine Strategie beurteilen sollte, dann würde ich hier die Leine ziehen.
Jedoch mittel- bis langfristig hat Aixtron sehr viel Potenzial. Vor allem nach dem, was ich im Call gehört habe. Der Call gibt für mich sehr positives Bild ab 2026 / 27, wenn es denn markttechnisch wirklich so kommt, wie von Aix erwartetet.
Falls es zu Rebound die nächsten Wochen/Monate kommt, werde ich meine Position reduzieren. Wenn 2025 Ausblick schon mau ist, dann sehe ich nicht wir dich der Kurs dauerhaft erholen soll. Mir scheint, dass keiner die aktie haben will und die LV können beliebig tief den Kurs drücken.    

Hallo allerseits,
heute Infineon mit Q4 und 2025 Ausblick. Der Ausblick ist nicht gerade Sexy mit leicht rückläufigem Umsatz, vermutlich getrieben durch Automotive.
Interessant ist dagegen die Aussage zum Capex: ? 2.5mrd, das ist m.E. nach flat yoy. Der Fokus des Programs ist auf die Werke in Dresden, Österreich und Kulim, insb. mit Fokus auf Ki und SIC & GAN.. das sollte nun wirklich Aixtron zu Gute kommen.. immerhin mal ein leicht positives Zeichen.

Ebenfalls sagt das Management zu den End-Märkten, dass die meisten sich "nahe des Bodens" befinden würden.. also auch da ist Upside - zumindest für das Sentiment im Chip Bereich.

Mal schauen, ob man zu SIC & GAN im Conference Call später noch mehr sagt.

Viele Grüße,
Fel

 

More nuance on the call on the 2025 capex plan, I hope I got it correctly:
? 2.5bn in total spending, of this there is some capitalised R&D spending (or similar) and other accounting effects, so the "effective" capex spending is about ? 1.5bn of those ? 1.5bn roughly ? 800m go towards the building (structure, cement etc) for the Dresden plant, leaving another ? 700m for mainly SIC and GAN (called out as such during the call!) and some Ai investments (smart power / logic).

So in any case my take-away is that a) IFX continues to believe in the SIC and GAN market and puts money behind it ("strategic investments") and b) even though these numbers might not sound huge at first sight, SIC and GAN remain key investment areas in an overall weak Semi Capex environment. So Aixtron is relatively better positioned vs. other players.

Regards,
Fel  

Q: Ross Seymore

Hi, guys. Thanks for letting me ask a question. I guess the first one is on the silicon carbide business. I know it's not the hugest part of your total revenues, but strategically, it's incredibly important. When -- Hassane, you talked about that being up low to mid-single digits. Do you believe that is just evidence of a cyclical weakness? Or has something started to secularly change as people have gotten a little more concerned on not only the pace of EV growth, but competition coming in and commoditization and those sorts of dynamics?

A: Hassane El-Khoury

Yes, Ross. We do still believe it's cyclical. Therefore, that's why I made the comment that the long-term trend for electrification and EV in general, has not changed. And very important to note, the designs or the models that we expected to ramp did go into production, they just didn't ramp to the level that we expected, which says that it's a short-term demand, but back to the lumpiness of EV adoption and not a change in strategy or a megatrend type. Otherwise, those models will have been canceled or not even launched.

--> long term drivers in tact. However, the softness will probably persist through 2025. One crucial question is with what pace the investment win SiC capacities will continue. Will it remain flat?

@fel: thank you for the Infineon update!!