Release Date: October 24, 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 significant growth in revenue, orders, and net income in Q3 2024 compared to the same period last year, driven by strength in advanced packaging for AI applications.
- Revenue for Q3 2024 was EUR 156.6 million, a 27% increase from the previous year, primarily due to strong growth in computing end-user markets.
- Net income for Q3 2024 increased by 33.7% to EUR 46.8 million, supported by increased advanced packaging systems revenue and better-than-expected operating expense levels.
- The company's financial position improved with net cash increasing to EUR 110.7 million at the end of Q3 2024, despite increased share buyback activity.
- BESIY received substantial orders for hybrid bonding systems in Q3 2024 and anticipates additional orders in Q4, indicating strong market adoption and growth potential.
Negative Points
- BESIY continues to face headwinds in mainstream and Chinese assembly equipment markets, which partially offset growth in other areas.
- Weakness in automotive and Chinese end-user markets persisted, affecting overall performance.
- TechInsights reduced its 2024 growth forecast for the assembly equipment market to 2.9%, indicating a challenging market environment.
- Shipment delays for certain hybrid bonding systems are expected to impact Q4 2024 revenue, which is forecasted to be flat, plus or minus 10%, compared to Q3.
- Higher R&D spending and share-based compensation expenses offset the benefits of higher revenue and gross margins for the first nine months of 2024.
Q & A Highlights
Q: Could you provide more details on the hybrid bonding orders received in Q3? Were there new accounts, and how many units have been shipped this year?
A: In Q3, we received continued orders for hybrid bonders, primarily for volume production at a major customer. We added new customers to the hybrid bonding technology development. We have received over 100 orders for hybrid bonding systems, with a backlog affecting our revenue guidance for Q4. We expect continued orders in Q4, but do not disclose detailed customer specifics or machine numbers. - Richard Blickman, CEO
Q: How do Korean memory makers decide between TCB and hybrid bonding technologies?
A: The decision is based on performance. Hybrid bonded devices offer higher performance, faster circuitry, and less energy consumption. The three big memory manufacturers expect a side-by-side development of using hybrid bonding for HBM 4 and HBM 5, where hybrid bonding becomes more critical as dimensions decrease. We are involved in both TCB and hybrid bonding technologies. - Richard Blickman, CEO
Q: Can you provide an estimate of TCB capacity in terms of units per month?
A: The manufacturing technology for TCB is similar to hybrid bonding, allowing us to produce a similar number of systems per month, currently 15. With the expanded capacity in Malaysia coming online in the second half of next year, we intend to double that capacity. The number of TCB machines for HBM applications can be significantly higher than hybrid bonding for HBM. - Richard Blickman, CEO
Q: When will the Generation 3 hybrid bonding tool come to market, and what is its significance?
A: The Generation 1 plus tool, which is not called Generation 2, is already in use, with more than half of the over 100 systems on order being this version. The Generation 2 tool, with 50-nanometer accuracy, should be ready by mid-next year. It offers higher throughput and is important for the next round of technology. - Richard Blickman, CEO
Q: What triggered the decision for capacity expansion, and is it based on customer indications?
A: The decision is driven by customer demand and investment models. The adoption in logic is becoming clearer, and the HBM question could lead to more orders. We aim to be ready for increased demand by the second half of next year, based on customer programs. - Richard Blickman, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
