Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (August 2024)
51 slides from Be Semiconductor Industries's investor presentation, August 2024
Slide 1: Investor Presentation August 2024
INVESTOR PRESENTATION August 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the presentation, including, but not limited to, statements relating to exp
Slide 3: Agenda
Agenda I. Company Overview II. Market Overview III. End-User Market Trends IV. Strategy V. Financial Update and Summary VI. Appendix August 2024 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW August 2024 4
Slide 5: Besi at a Glance
Besi at a Glance LTM Key Performance Indicators € MM Corporate Profile Orders Revenue Gross Margin • Leading assembly equipment supplier with #1 and #2 positions in key markets € 607 MM € 580 MM 65% • ~35% addressable market share • Broad portfolio: die attach, packaging and plating EBITDA Margin Ca
Slide 6: Company History
Company History Consistent focus on Advanced Packaging has 700 created an industry leader • Focus on most rapidly growing segments of assembly market • Growth organically and via acquisitions 70% • Expanded share of wallet with key industry leaders each cycle € 580.4 600 • Expansion of customer base
Slide 7: Superior Long-Term Value Creation
Superior Long-Term Value Creation Capital Allocation Strategic/Financial Shareholder Return Superior Total Returns**: Disciplined execution has Attractive capital created leader in 150% (1 year) allocation program advanced packaging 210% (3 year) 812% (5 year) € 2.0 billion of dividends Consistent T
Slide 8: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Total Semiconductor Manufacturing Equipment 2023: $110 Bn Front end: $99 Bn Assembly: $4 Bn Test: $7 Bn (90%) (4%) (6%) Besi focus Assembly Process Dicing Die Attach Wire Bond Packaging Plating Leadframe Wire Bond Substrate Wire Bond Substrate Flip Chip / TCB W
Slide 9: Industry Leading Assembly Equipment Portfolio
Industry Leading Assembly Equipment Portfolio Die Attach (77% of 2023 Revenue) Multi-Module Epoxy / Soft Flip-chip Direct Lid Embedded Thermo Hybrid Attach Solder Attach Bridge Attach Compression Bonding Packaging and Plating (23% of 2023 Revenue) Leadframe Substrate Wafer and Panel Trim and Form Si
Slide 10: Serving Blue Chip Customers Across Key End-Markets
Serving Blue Chip Customers Across Key End-Markets Customers End-Products • Diversified, blue chip customer base Independent Device Manufacturers (IDMs) • Top 10 customers ~52% of 2023 revenue • No customer > 10% Mobile 30% • Supplying leading IDMs, fabless producers and subcontractors • Sell direct
Slide 11: Global Operations Supported by European Development Centers and Asian Production
Global Operations Supported by European Development Centers and Asian Production Footprint/Supply Chain Chandler Korea Suzhou Chengdu Shanghai Leshan LTM Q2-24 Taiwan Shenzhen Revenue (€ MM) India Europe/RoW Thailand Philippines 28% Duiven and ‘s-Hertogenbosch (NL) Vietnam Malaysia 580 Singapore Asi
Slide 12: Summary Financials
Summary Financials Long-term, step function growth in cyclical business Year Ended December 31, (€ MM) 2021 2022 2023 H1-24 H1-23 • Increased revenue, profitability and market share per cycle Orders 939.1 663.7 548.3 313.0 254.6 H1-24 revenue +0.5% and net income -12.9% vs. H1-23 • Contrasting growt
Slide 13: Besi Market Cap and Liquidity Have Expanded
Besi Market Cap and Liquidity Have Expanded Shareholdings Have Migrated to US/UK Avg. Daily Volume and Liquidity* Symbol/ • BESI Index • Euronext AEX 1,400 120 1,200 100 Avg Vol * Avg Price (€ thousands) Market 1,000 80 Volume (thousands) Market • € 12.4 billion 800 60 ($ 13.3 billion) 600 Cap* Prof
Slide 14: Business Model
Business Model Business Model Revenue € 1 billion+++ Addressable Market Share 40%+ Gross Margin 62-66% Operating Margin 35-50% Headcount Split 75% Asia/25% Europe/NA Scope 1 and 2 Emissions Net Zero GHG by 2030 Global Energy 100% from renewable Needs sources August 2024 14
Slide 15: II. Market Overview
II. MARKET OVERVIEW August 2024 15
Slide 16: Semiconductor Sales Expected to Reach $1 Trillion by 2030
Semiconductor Sales Expected to Reach $1 Trillion by 2030 Driven by Various Megatrends Annual Semiconductor Sales $ Bn 1,200 1,000 Tesla Model 3 Quantum Computing 800 1B Users AI Agents 600 AR / VR Generative AI 400 Vehicle Electrification 200 Social Media and Streaming Smartphone 0 2000 2005 2010 2
Slide 17: Government Funding Helps Drive New Fab Capacity Globally
Government Funding Helps Drive New Fab Capacity Globally EU Chips Act Silicon Box - Italy China Big Fund $3.6Bn South Korea Government Funding of Semiconductor Capacity $46.5 Bn Initiated 2024 $27 Bn (Phase 2) $19.7 Bn Status: Planned Key Front End Fab Projects Initiated 2023 Initiated 2019 New $47.
Slide 18: AI Drives Significant Growth in Advanced Logic and Memory Markets
AI Drives Significant Growth: Particularly in Advanced Logic and Memory Markets Data Center AI Devices AI Chip Market Revenue 2023 - 2033 Annual Revenue ($ Bn) GPU / Accelerator HBM CPU 350 300 250 200 Source: Intel, SK Hynix, AMD 150 Edge AI Devices Mobile PC Automotive 100 50 0 2023 2024 2025 2026
Slide 19: Assembly Equipment Market Expected to Rebound Post 2023 Trough
Assembly Equipment Market Expected to Rebound Post 2023 Trough 7.4 Assembly Market ($B) 2024 growth revised downwards reflecting slow 6.6 mainstream recovery 6.1 • 2024 forecast expects 9.3% increase 5.6 • Down from original forecast of 31% • Driven by AI 4.5 4.1 3.9 Market expected to recover stron
Slide 20: Strategic Focus on Highest Growth Segments of Assembly Market
Strategic Focus on Highest Growth Segments of Assembly Market Assembly Equipment Market (~18% share) Besi Addressable Market (~35% share) Advanced Die Placement (~67% share) $MM $MM $MM CAGR (2023-2028E) CAGR (2023-2028E) CAGR (2023-2028E) Assembly Market ~12% Packaging and Plating ~12% Advanced Die
Slide 21: Increasing Market Share in Key Market Segments
Increasing Market Share in Key Market Segments Besi Market Share 35% 22% 31% 32% 18% 17% 16% 15% Addressable 28% Packaging & Market* 26% +9p.p. Plating +5p.p. 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 43% 39% 39% 67% 69% 68% 67% 35% Advanced Die 54% Die Attach 31% +12p.p. Placement** +13p.p.
Slide 22: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2023) Besi Addressable Market (2023) Wire Plating Bonding 2% Inspection, 15% Dicing,Other 42% Packaging 36% $4.1Bn $1.5Bn Die Attach 62% Die Attach 23% Other Plating Bonding 1% Packaging 5% 14% Source: TechInsights, June 2024 August 20
Slide 23: III. End-User Market Trends
III. END-USER MARKET TRENDS August 2024 23
Slide 24: Principal Growth Drivers in Besi's End-User Markets
Principal Growth Drivers in Besi’s End-User Markets Mobile Computing Automotive Industrial / Other Generated by ImageFX On Device AI Generative AI Autonomous Driving Automation Foldable Phones Datacenter Vehicle Electrification Smart Grid Camera Technology Gaming Connectivity Industrial IoT 5G Advan
Slide 25: Mobile – Key Market Drivers
Mobile – Key Market Drivers Fast Growing Market for Premium Smartphones, Wearables Driven by Key Megatrends and Other Mobile Devices Premium Smartphone Market Share Growing Rapidly (% of Total Smartphone Market) New generative AI engines 3X volume growth in 2023 compared to 2016 24 21 19 13 15 15 Ed
Slide 26: Computing – Key Market Drivers
Computing – Key Market Drivers Data Volumes Growing Exponentially Driven by Key Megatrends Zetabytes Data volumes growing exponentially 181 147 New generative AI engines 120 Supercomputers 97 79 64 Datacenters Edge AI tablets, PCs, laptops 2020 2021 2022 2023 2024 2025 Gaming and infotainment Inform
Slide 27: Automotive / Industrial and Other – Key Market Drivers
Automotive / Industrial and Other – Key Market Drivers Favorable Automotive Market Outlook Driven by Key Megatrends Global Vehicle Production (MM Units) Avg. Semiconductor Content per Vehicle ($ / Unit) EV Adoption 1,395 101 91 709 x Edge AI enhanced features SiC and GaN power devices 2023 2030 2023
Slide 28: Advanced Packaging Solutions Critical to Next Generation Applications
Advanced Packaging Solutions Critical to Development of Next Generation Applications Greater Miniaturization Higher Greater Accuracy Performance Solutions • Hybrid bonding • TCB chip to wafer • Embedded bridge die attach • EVO multi module die attach • Advanced flip chip • Wafer/substrate molding Lo
Slide 29: New Wafer Level Assembly Technologies Extend Moore's Law
New Wafer Level Assembly Technologies Extend Moore’s Law Moore’s Law Scaling Is Slowing Cost Per Transistor Is Increasing Traditional transistor scaling Traditional transistor scaling 3D Chiplets with hybrid bonding Source: Qualcomm and Besi August 2024 29
Slide 30: Chiplet Usage Increasing Rapidly Due to Favourable Economics
Chiplet Usage Increasing Rapidly Due to Favourable Economics for Advanced Applications Wafer Foundry Addressable Market Examples of chiplets $ Bn 300 30% 26% 25% 70 225 23% 20% 55 15% 37 150 11 15% 1 24 Marvell Data Center Amazon Data Center Switch 17 chiplets CPU 7 active chiplets 197 8% 168 75 149
Slide 31: Chiplet Adoption Drives Higher Capital Intensity
Chiplet Adoption Drives Higher Capital Intensity Single Chip Design Multi Chip Module Multi Chiplet System Monolithic: Integrated SoC Multiple Dies: process optimized Individual IPs: process optimized Source: Intel 1 Step More die attach steps Dozens 10µm Higher accuracy 100nm August 2024 31
Slide 32: Chiplet Packages Use a Variety of 2.5D/3D Assembly Processes
Chiplet Packages Use a Variety of 2.5D/3D Assembly Processes Including Hybrid Bonding and Thermo Compression Bonding (TCB) High Performance Computing High Bandwidth Memory Hybrid dominant Hybrid and TCB interconnect complementary technology for High technologies – Both Performance needed for next ge
Slide 33: Hybrid Bonding Enables Faster, More Complex Devices
Hybrid Bonding Enables Faster, More Complex Devices With Submicron Placement Accuracy and Less Heat/Power Generation Direct Cu-Cu 3D Interconnect Heterogeneous Chiplet Integration Source: Intel Source: IMEC 1,000x increase in contact density More transistors per package New Chip Architectures Increa
Slide 34: Moore's Law Helps Drive Growth of Wafer Level Assembly
Moore’s Law Helps Drive Growth of Wafer Level Assembly Wire Bond Flip Chip TCB Bonding HD Fan Out Hybrid Bonding (1975) (1995) (2012) (2015) (2018) Heat compression force Architecture Contact Type Solder ball or copper Wire pillar Copper pillar RDL or copper pillar Copper to copper Contact Density 5
Slide 35: Important Process Step for Future Product Roadmaps
Important Process Step for Future Product Roadmaps SoC Split Die Chiplets and Hybrid Bonding Opteron Server CPUs 1st Gen EPYC CPU (2017) 2nd Gen EPYC (2019) 3rd Gen EPYC (2022) with Hybrid Bonding Sapphire Rapids CPU (2023) Clearwater Forest CPU w/ Hybrid Bonding (2025) H100 GPU B100 GPU (2024) Futu
Slide 36: Hybrid Bonding Market Potential – Logic and Memory Cases Confirmed
Hybrid Bonding Market Potential – Logic and Memory Cases Confirmed Total # of installed back-end machines for hybrid Estimated 900 – 2,000 systems by 2030 bonding Application High case 2000 Changes vs. Prior Forecast Processors 1800 • Market potential for each case increased 6% adopting 1600 Hybrid
Slide 37: IV. Strategy
Besi comm IV. STRATEGY August 2024 37
Slide 38: Summary Strategy
Summary Strategy Maintain best in class technology leadership Reward Expand shareholders presence in via capital wafer level allocation assembly policy Strategic Acquire Objectives Increase companies market with presence in complementary addressable technologies markets and products Exceed Enhance c
Slide 39: Strategy Update
Strategy Update • Contrasting assembly market order trends past 12 months • Accelerating AI demand driven by 2.5/3D and photonics applications • AI-related advanced packaging orders ~50% of total for past 12 months Business • Slow recovery for mainstream assembly markets: • Smartphones and automotiv
Slide 40: Progress Continues on Besi's ESG Agenda
Progress Continues on Besi’s ESG Agenda 2023 Highlights ✓ Progress continues versus Besi’s 2024 ESG targets ✓ Completed 76% of ESG initiatives developed since 2020 ✓ Energy from renewable sources increased to 71% versus 20% in 2021 ✓ Scope 1 & 2 emissions intensity declined by 38% versus 2021 ✓ Set
Slide 41: Enhanced ESG Targets
Enhanced ESG Targets 2024 2030 75% renewable sources for global 100% renewable sources for global energy needs energy needs 62% reduction in Scope 1 & 2 Carbon neutral for Scope 1 & 2 emissions* emissions* 12% reduction in Scope 3 emissions* 20% reduction in Scope 3 emissions* Above-benchmark employ
Slide 42: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY August 2024 42
Slide 43: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 65.6% 700 60% 58.0% 600 51.1% 749 50% 608 500 516 593 39.5% 40% 424 400 34.1% 379 30% 300 302 4 year 351 averages 20% 200 164 191 10% 100 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 44: Revenue/Order Trends
Revenue/Order Trends 250 Quarterly Trends Revenue Orders Q2-24 vs. Q1-24 • Revenue: +€ 4.9 million (+3.3%) 200 185 • Above mid point of guidance 163 160 166 151 • Higher shipments for photonics and 2.5D assembly 146 150 133 142 128 123 127 € millions 113 • Orders: +€ 57.5 million (+45.0%) 100 • Hybr
Slide 45: Significant Expansion of R&D Spending in Support of New Product Introductions
Significant Expansion of R&D Spending in Support of New Product Introductions 80 Gross R&D* % of Revenue 20% 70 69.7 60 63.9 +82% 15% 50 52.1 € millions 12.0% 40 10.8% 11.0% 38.4 10% 30 7.0% 20 5% 10 0 0% 2019 2021 2023 LTM Q2-24 * Gross R&D spending excludes impact from capitalization/amortization
Slide 46: Headcount Trends
Headcount Trends 2,500 30.0% 2,141 2,062 1,996 25.0% 2,000 1,819 1,870 496 236 279 134 1,618 144 20.0% 95 • Increasing European and Asian 1,500 fixed headcount to support wafer Headcount 15.0% level assembly expansion 1,193 1,211 1,233 1,154 1,162 1,000 1,060 • Temp Asian HC increase to support 10.0
Slide 47: Spares/Service Activities Represent Important Area of Growth
Spares/Service Activities Represent Important Area of Growth Spares & Service % of Revenue 140.0 35% • Increased to 15-20% of revenue since 2017 119.5 120.0 30% • Diverse customer base • Less cyclical part of business • Highly profitable 100.0 96.7 98.1 25% 95.0 • Revenue will increase as installed
Slide 48: Strong Liquidity Position Maintained. Senior Note Offering
Strong Liquidity Position Maintained. Senior Note Offering Provides Funds for Next Decade of Growth Q2-24 vs. Q1-24 Cash and Deposits, as adjusted* • Cash and deposits of € 257.2 million 800 Cash and Deposits • - € 189.9 million primarily due to: Net Cash • - € 186.3 million capital allocation 700 6
Slide 49: Attractive Capital Allocation Policy Continues
Attractive Capital Allocation Policy Continues 500 Dividends 435.5 Share Repurchases 416.3 400 146.8 213.4 300 • € 2.0 billion distributions since 2011 • ~€ 200 million distributed in 2024 through July 31, 2024 including 2023 dividend € millions 206.5 200 179.5 35.0 • Current € 60 million share repu
Slide 50: Guidance Q3-24
Guidance Q3-24 € in millions Q2-24 Q3-24 Seasonal Revenue Trends +5 Q3E/Q2Δ Revenue € 151.2 to Average change 2019-2023 (-13.8%) -5% Flat (+/-5%) 0.0% 2024E -24.1% 2023 -21.1% 2022 -7.9% 2021 Gross Margin 65.0% 64% - 66% -12.9% 2020 -3.2% 2019 -13.8% 0 - Operating Expenses € 49.0 -5% -15% August 202
Slide 51: Investment Considerations
Investment Considerations Assembly market Long term secular Disciplined strategic Wafer level assembly ever more critical in trends favor focus has created an new growth semiconductor value advanced packaging industry leader opportunity chain growth Market presence has Tech leadership and Commitment
Be Semiconductor Industries N.V. (Besi) — Investor Presentation (August 2024) on 6ix