Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BE Semiconductor Industries NV (BESIY, Financial) reported second-quarter revenue of EUR 151.2 million and net income of EUR 41.9 million, representing increases of 3.3% and 23.2%, respectively, compared to the first quarter of 2024.
- Bookings for the second quarter were EUR 185.2 million, a 64.5% increase compared to the prior year period, indicating strong demand.
- Gross margins improved to 66.1% for the first half of 2024, up from 65% in the first half of 2023.
- The company has a healthy financial position with net cash of EUR 74.4 million at the end of the quarter.
- Significant order growth was realized for hybrid bonding and other AI-related applications, with approximately 50% of orders over the past 12 months being AI-related.
Negative Points
- The recovery of the assembly equipment market in 2024 is progressing slowly due to pockets of excess capacity in certain consumer markets, including automotive, industrial, and smartphones.
- Mainstream assembly markets in China, particularly for high-end smartphones, automotive, and industrial applications, are experiencing a slower recovery.
- Despite increased utilization rates, post-pandemic inventory levels at semiconductor producers remain elevated.
- Net margin for the first half of 2024 decreased to 25.5%, primarily due to a 24% increase in development spending and increased share-based compensation.
- Tech Insights has reduced its assembly market growth estimates for 2024 to 9% from 16% in March and 31% at the start of the year, indicating a more challenging market environment.
Q & A Highlights
Q: Can you provide an update on the traction of your TCB tools? Was the order this quarter from a memory or logic customer? Are you still seeing good traction for Korean memory players for HBM?
A: The order is for development in logic. In Korea and outside Korea, we see continuous development side-by-side of TC and hybrid bonding for stacked HBM devices. (Richard Blickman, CEO)
Q: TSMC might change the dielectric material used in bonding for the SOIC from silicon dioxide to silicon carbon nitride. Do you need a new configuration of hybrid bonding tool for this change?
A: There is a constant development of new materials. So far, the mainstream is using our current technology, and there is no imminent change to our knowledge. (Richard Blickman, CEO)
Q: How many hybrid bonding systems did you ship in Q2? Should we expect a material increase in Q4 on the back of your Q2 order intake?
A: We do not disclose the exact number shipped, but we shipped what was scheduled in Q2. Orders received in early May or end of April will be shipped in Q4 and Q1. We expect further orders in the second half of this year. (Richard Blickman, CEO)
Q: What is your confidence on H2 order intake for hybrid bonding? Should we expect an order intake consistent with Q2 levels?
A: It is hard to forecast, but we expect certain orders in Q3. The adoption at the first movers with this technology is increasing gradually and continuously. (Richard Blickman, CEO)
Q: Can you break down the remaining half of the 50% AI-related orders over the last 12 months?
A: Part of it is CoWoS, especially the OS part, and photonics. These trends add up to the 50% AI-related orders. (Richard Blickman, CEO)
Q: What is the outlook for your photonics business over the next 12 to 18 months?
A: Since early last year, photonics applications have gained significant traction, especially for high-end data center processors. This trend is expected to continue. (Richard Blickman, CEO)
Q: Can you provide an update on the new hybrid bonding system with 50 nanometer accuracy scheduled for the end of 2025?
A: The 50 nanometer system is in full development and should deliver a prototype by the end of 2025. It is required for design geometries moving into the two nanometer space. (Richard Blickman, CEO)
Q: When do you expect the industry to start mass adoption of TCB systems with bump sizes below 25 or 30 microns?
A: Our TC next system was developed for applications below 25, 20 micron bump pad pitch. The current generation can use 35 micron bump pad pitch. Significant activity is ongoing to make the system ready for below 20 micron applications. (Richard Blickman, CEO)
Q: Are your hybrid bonding systems qualified and being used in upcoming HVM production for HBM?
A: There is constant development for hybrid bonding stacked memory devices. At some point, there will be a mix of technologies used for different device applications. (Richard Blickman, CEO)
Q: Can you provide an update on your partnership with Applied Materials?
A: We work closely with Applied Materials in developing hybrid bonding technology. Their part involves the preparation of dies and cleaning. This partnership is crucial for the adoption of hybrid bonding. (Richard Blickman, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
