Aixtron purpose of this thread

Kingsoon Optoelectronics plans A-share IPO and will build the country's largest quaternary LED production base

"with an estimated total investment of 800 million yuan"

http://www.25qingdao.com/baoxian/2022/0717/72619.html

Kingsoon is a customer of Aixtron:

https://www.aixtron.com/en/investors/...ems%2520from%2520AIXTRON_n226  

Hi all,

I think the share price moves are closely linked to Semi / Semicap and Tech sectors at the moment. Also I see some short-sellers building positions. I can also understand if people take profit after still a strong YTD Performance of +26% vs. S&P 500 -20% and German DAX in similar regions. So sell the outperformer.

Fundamentally I am obviously of different opinion. Aixtron remains in excellent shape. Strong orders, sales, new equipment with higher price per machine, so driving better margins. FX a massive tailwinds here at 1.00 vs. 1.20 budget rate!

But, look at the sector: US Semi Index SOX -13% since beginning of June, ASML the same over that period, Micron with weaker revenue guidance, Apple reducing some hiring and reducing spending, Infineon -20% since early June. Aixtron on the other hand only -8% (until 2 days ago) since beginning of June. So the stock is following the other names here I believe.

The market (generalist investors) are worried that we are/have overbuilt in Semi Capex and it doesnt differentiate by application. Stupid. Obviously Aixtron is not hit given SIC/GAN/Micro LED etc. But for us, that is great! It provides great re-entry points.. big technical support (200d MA) at ? 20.

Lets see where the down move ends, but we as specialists know that results will be good, balance sheet is strong and Management conservative/reliable.

Q2 results on 28.07...

have a nice summer all!
Fel
 

This potentially could lead to a stronger SiC EPI equipment competitor:

https://www.globenewswire.com/news-release/2022/...MENT-BUSINESS.html  

On May 5 when Aixtron reported Q1 sales of "only" 88.6 m the stock tanked about 8%.  Some investors seemed to be surprised by the number when estimates of ~85m had been well telegraphed before that day.

That Aixtron would have Q2 sales of "ONLY" 94.5m caused the stock to tank 5% Monday.  Some investors worried about the Deja Vu of Q1 earnings and got out.

The latest sale estimates by the analysts are 129M for Q3, 182M for Q4 and 124M for Q1/23.  The Q4 sales number implies Q2 orders of 135m.  The Q1/23 sales of 124m indicates a strong Q3 order of 148m.  If so, Aixtron would up its 2022 order guidance.  

I think the stock has priced in the modest Q2 94m sales and is beginning to reflect a stronger H2.  

warned about its Q3 earnings and cut 2022 capital expenditure from 400m to 267m yesterday.  This partly explains the weakness today.  

https://www.dgap.de/dgap/News/corporate/starke-auftragslage-hoechster-auftragseingang-seit-erster-volumenauftrag-micro-leds-gan-und-sic-groesste-treiber-umsatz-und-gewinn-erheblich-gesteigert-wachstumsprognose-fuer-bestaetigt/?newsID=1621843

A few comments.

Order backlog ?315 Million of which 30% are in USD valued at 1,20. Potentrial upside on 1/3 of the backlog approx. ?20 Million.

Shipping forecast againt this back-log ?150 Million which leaves ?165 M for 2023.

First volume order for MicroLED received.

Check out the IR Presentation for details. https://www.aixtron.com/investoren/publikationen/ir-praesentationen/2022/AIXA_Q2-2022_Investor-Presentation.pdf

Regards
baggo-mh

 

CC zum Q2 Ergebnis 28.07.2022

These are my personal notes from the call today.

Turnover        
 - Q3 will be larger than Q2
 - Q4 will be larger than Q3
spares & parts to be around 20ish % of total
36% of the revenue is invoiced in USD

Felix sees continuous strong momentum

Sales in Q2 by application by contribution
1.) red LED
2.) SiC
3.) Datacom Laser
4.) MicroLED (shipments are for trial and R&D tools) 10-20% of total

Price increases
Have been have been announced and are part of the order back-log. They become effective for all orders placed after the announcement.

Lead Time
Therefore the high inventory levels

GaN Power
Fast chargers replacing Si in chargers and have already a very, very high market share high
Data Centers
white goods (refrigerators etc)
most Laptops still  shipped with regulars GaN charges

SiC Power
Tool is fully automated (Batch production of 6 or 8? wafers) and 4 to 5 times more productive in terms of wafer output) than the tool of LPE.
 
LPE was acquired by ASM and there is an estimate for 100 Million sales of SiC tools in 2023. Aixtron does not want to comment on that number, but if would mean a huge ramp of one of the LPE customers. LPE is mostly China turnover, single wafer tool and much less automated (semi-automated according to Felix)           
China is building their own SiC supply chain. Local SiC wafer production, local SiC Epi tools, local MOFEST production.    

MicroLED
Order received is for red, green, and blue MicroLED systems and comprises of 2 handful of systems.

Shipment towards the end of the year 2022 and further orders for the ramp expected in H2/22 and H1/23.

Felix made one statement which gave it away: ?Depending on when we record the order?. For me that means Aixtron already knows the size of the ramp-order but has yet to add it to the order back-log. That would indicate further good news in the coming months.

2023 and 2024 the majority of the orders are expected to come from MicroLED as other customers are still in the qualification stage.

All in all a very convincing telecon.

Regards
 baggo-mh

 

Apple with a patent registration in July. https://www.lightreading.com/...cs-launches-hcsel-laser/d/d-id/602006
HSCEL: horizontal instead of vertical Laser, a combination of VCSEL and EEL https://www.lightreading.com/binoptics-launches-hcsel-laser/d/d-id/602006

Wer nutzt u.a. Aixtron reactors to produce VCSEL parts?
II-VI Inc.
If Apple will use this in future releases other manufacturrers will follow.

Regards
 baggo-mh

 

https://s29.q4cdn.com/278875087/files/...Q4_2022_Earnings_Release.pdf

Listening to the CC.  Very bullish in the CC.  The SiC ramp is much more rapidly than anticipated.  Even the non automotive applications are accelerating.  The recent silicon semiconductor slowdown does not affect Wolfspeed at all.

The ~$50B US chip act signed last week includes subsidy money for SiC and the CEO was there at the White House.  Wolfspeed plans to tap into that subsidy for new fabs and is also planning the expansion of its existing fabs capacity right now.  
 

from the CC yesterday.

"Since the opening, we've continued to run initial lots through the fab and remain on track to complete initial qualifications and ship products by the end of this fiscal year. We've also had several large customers visit the site prior to signing agreements with us, which is translating into stronger demand than we originally anticipated.

As a result, [b]we now have initiated work to tool out the remaining portion of the fab.[/b] We are also expanding the materials capacity to support the increased production planned in Mohawk Valley. We believe this is the best course of action to stay ahead of what we see as a steepening demand for silicon carbide."

"If you look across the market for silicon carbide, you see that market expanding and you also see the industry overall need more capacity. And certainly, we're going to need to participate in that. So when you look at that increase in capacity, [b]including we talked about potentially an additional fab after Mohawk Valley[/b], we talked about more materials -- a second materials facility that we might need as well,......."

So here we go. Aixtrons biggest SiC customer is talking about expansion of teh existing Mohawk fab and plans under discussion to build another one.

Just for info: materials means SiC wafer prodution which has nothing to do with Aixtron.

Regards
baggo-mh

https://seekingalpha.com/article/...g_alpha&utm_term=28765120.435

 

In its Materials business segment, Wolfspeed sells SiC substrate and SiC epi wafers.  The epi wafers use Aixtron's tools as we know:

https://www.wolfspeed.com/products/materials/

 

Cree sold its LED and lighting business a year or two ago.  Its remaining power semiconductor business, i.e. SiC and GaN, is now the company Wolfspeed.  So simply put Wolfspeed is the old CREE without LED and lighting.  

A must read article for those who want to understand the future of MicroLED:

https://www.digitimes.com/news/a20220817PD203/...led-playnitride.html

"Q: What is the capital expenditure plan in the future?

A: If PlayNitride continues capital investment on its own, the capital expenditure is estimated to exceed NT$10 billion (US$334 million) and return on investment will take a long time. Partnership with enterprises can reduce own capital expenditure a great deal and get return on investment in a short time. Therefore, PlayNitride will adopt the latter strategy to expand production capacity and boost the development of micro LED industry."

It is a fair assumption that ~50% of the capital investment or US$167 million would go to epitaxy, i.e., MOCVD, i.e., Aixtron.  

Thanks alot for posting the article @CWL, I will read it now.

A quick question to get a better picture: How big do you regard Playnitride within the potential MicroLED world - if we can judge that it provides a better picture of how big the potential for epitaxy spending could be. e.g. if Playnitride is a Top 5 player and "only" has to spend $ 167m to ensure a strong position this is not a lot in my view. So it would be great to hear your view who the big MicroLed Players could be and what your estimate for total epitaxy spend is - a very rough estimate of course.

On another note: Apple will present its next gen products on Sept 07., commentators assume that they will also present a new Apple Watch. The interesting question will be if that features MicroLed !

Regards,
Fel

 

In post #1298 I estimated that about 40 MOCVD is needed for 100M smart watches depending on the chip size.  $167m buys ~50 MOCVD's assuming $3m per unit which is in the ballpark.  PlayNitride also uses Epistar/Ennostar for epi wafers, hence the initial $23m order from Epistar/Ennostar to Aixtron.

This is just the start.  If microLED is used in 10% of the TV's, >10000 MOCVD's would be needed.  

CWL, again thanks a lot for the valuable input from you ? this is much appreciated and helps a lot!

May I kindly ask you for an educated guess from your side? The micro LED order booked in 2Q with delivery starting in H2-2022 (see CC excerpt below), what is in your view the most likely customer behind this order? Is it AMS Osram (though their new Kulim facility is planned to be ramped up by 2024 only; but might well be for a different existing AMS facility) or would you expect that this order has a different customer and if so, who might that be?

Thanks in advance for your assessment! And, of course, if anybody else has a strong view, please feel free to add as well.

CC on micro LED:
"The overall size of the line to be installed 2023 is much larger and the step-by-step the orders will trickle in over the second half of the year and first half of ?23, as I have indicated. Now I think the second part of your second question is also very interesting, how advanced the discussions or the qualifications are with other customers. And the answer to that is it varies a lot. I observed some of our Micro LED customers to be still in an early stage or a mid-level stage of maturity in their development. Other customers ? with other customers, we are discussing very concrete plans for a ramp." (https://seekingalpha.com/article/...e%7Clock_status%3ANo%7Cline%3A1))
 

Hi, my guess  is that the 1st microLED volume order came from Epistar/Ennostar, post #1303.    

As usual a BIG thank you!!  

Hi all,

today will be the launch of the new Apple watch. Lets see if it finally comes with the Micro LED Display.. if so, this could be a small positive for Aixtron given that Micro LED finally turns into a real revenue driver!

Lets see!
Regards,
Fel  

Today's 6% movement obviously is due to Oddo's upgrade and comments on Q4 and 2023.  I am surprised that the investors did not see this coming.

Q2's order intake is 152.6m, so the total trailing 4q's order intake at the end of q2 is 516.6m.  That mean's there is no way Aixtron's 2022 revenue could be less than 500m. If Q3 and Q4 have exchange rates staying at 1.02, the average 2022 exchange rate would be 1.06. That means there is an additional 4.6% currency tailwind with 35% of the sales $ based.

The 2022  total sales should be ~520m, way above the 475m guidance, and the Q4 sales should be 199m-206m.  Current analysts' estimates are 177m.  

The total 2022 Order intake should be ~580m, or  at the high end of Aixtron's 520-580m guidance guidance.  Keep in mind that the 2022 H1 order intake is already 283m.  So H2 order intake is assumed to  grow 5% from H1. The current 2023 Q1 rev is estimated to be 124m by the analysts, that implies Q3 order intake of ~150m.  If Q4 has orders > Q3, then the total 2022 order intake would exceed 580m, leading into a very positive 2023 sales which is what reportedly Aixtron told Oddo.  

We shall see.  

interestingly, the stock price increase coinsides with the Apple new products presentation. surely, it doesnt have to mean anything. It is maybe just the 22.x eur support.
Really remarkable how strong Aixtron stock performs relativ to the overall market.  

I have seen it only after I posted. And I actually missed Oddo's upgrade. All this looks quite positive. And the uLED story has not even begun yet. Maybe for the first time in Aix history the company is on the road of a long super cycle...Lets see. There is no certainties, only probabilities.  

Wolfspeed Selects North Carolina for World?s Largest Silicon Carbide Materials Facility
Sep 09, 2022
News

Wolfspeed Selects North Carolina For World?s Largest Silicon Carbide Materials Facility
Wolfspeed to increase Materials capacity by more than 10x

Silicon Carbide Materials manufacturing facility to be located in Chatham County, strategically located near existing Durham Materials factory

Company expands partnership with NC A&T to foster next generation of Silicon Carbide experts

DURHAM, N.C. -- Wolfspeed, Inc. (NYSE: WOLF), the global leader in Silicon Carbide technology, today announced it will build a new, state-of-the-art, multi-billion-dollar Materials manufacturing facility in Chatham County, North Carolina. The investment is targeted to generate a more than 10 fold increase from Wolfspeed?s current Silicon Carbide production capacity on its Durham campus, supporting the company?s long-term growth strategy, accelerating the adoption of Silicon Carbide semiconductors across a wide array of end-markets and unlocking a new era of energy efficiency.

https://www.wolfspeed.com/company/news-events/...-materials-facility/
--------------------------------------------

Note that the Wolfspeed Materials business includes SiC epi wafers made from the new G10-SiC CVD tool.
 

Hi all,

I just saw that ABB acquired a small Rail electrification player from Germany (60m ? sales) and followed up given that the press released mentioned SIC.
It seems that PTC is a pioneer in innovative electrification equipment for Rail etc and is among others pioneering in the Silicon Carbide application for RAIL, see link below.
It is a nice example how SIC is really expanding in other end-markets outside Electric Vehicles. In my view it shows that there is much more runway in terms of growth here.

https://powertech-converter.com/de/Rail-Standard-Produkte-PowerBriX/

Regards!
Fel  

This company (HANHUA) just financed several hundred millions YUAN for creating up to 60 MOCVD (300,000 epi wafers) capacity:

https://finance.sina.com.cn/tech/roll/2022-09-21/...l?finpagefr=p_114

HANHUA is a customer of Aixtron and recruiting:

"Gallium Nitride RF Epitaxial Wafers for 5G Communication

...Suzhou Hanhua Semiconductor Co., Ltd. was established in November 2017. At present, the company has built a complete set of gallium nitride radio frequency epitaxy growth and testing platforms represented by the internationally leading German AIXTRON ultra-high temperature MOCVD system..."