Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (May 2023)
58 slides from Be Semiconductor Industries's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
INVESTOR PRESENTATION May 2023
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 May 2023 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW May 2023 4
Slide 5: Besi Overview
Besi Overview • Leading assembly equipment supplier with #1 and #2 positions in key markets • ~30%+ addressable market share • Broad portfolio: die attach, packaging and plating Corporate Profile • Strategic positioning in substrate and wafer level packaging • ~75% of systems used for advanced packa
Slide 6: Company History
Company History 700 Consistent focus on Advanced Packaging has € 653.9 created an industry leader 70% •Focus on most rapidly growing segments of assembly market 600 •Growth organically and via acquisitions •Expanded share of wallet with key industry leaders each cycle •Expansion of customer base, pa
Slide 7: History of Superior Long-Term Value Creation
History of Superior Long-Term Value Creation Capital Allocation Strategic/Financial Shareholder Return Disciplined execution has Superior Total Returns: Attractive capital created leader in allocation program 84% (3 year) advanced packaging 108% (5 year) € 1.6 billion of dividends Consistent TSR Bes
Slide 8: Industry Leading Equipment Portfolio
Industry Leading Equipment Portfolio Die Attach (79% of 2022 Revenue) Direct Lid Embedded Thermo Hybrid Multi-Module Attach Epoxy / Soft Solder Flip-chip Attach Bridge Attach Compression Bonding • 2200 evo • 2100 hS • 2009 SSI • 8800 CHAMEO advanced / PLP • 2200 evo plus • 2100 hS i • 2100 SSI Q2-22
Slide 9: Customer Ecosystem
Customer Ecosystem Customers OEMs End Products IDMs Subcontractors • Diversified, blue chip customer base, top 10 = ~54% of 2022 revenue • Leading IDMs and subcontractors. 55%/45% order split in 2022 • Also supply leading fabless companies: Qualcomm, AMD, Broadcom, MediaTek via subcontractors • Long
Slide 10: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Semiconductor Manufacturing Equipment 2022: $110.4B* Front end: $96.6B Assembly: $5.8B Test: $8.0B (88%) (5%) (7%) Assembly Process Dicing Die Attach Wire Bond Packaging Plating Leadframe Wire Bond Substrate Wire bond Substrate Flip chip/TCB Wafer Level Hybrid,
Slide 11: Current Operational Profile
Current Operational Profile (NL) Duiven and ‘s-Hertogenbosch Steinhausen, Radfeld, (AT) (CH) Chandler Suzhou Chengdu Korea Shanghai Leshan Taiwan Shenzhen Sales Office Thailand Philippines Malaysia Production Site Singapore Sales, Service and R&D Site LTM March 31, 2023 • Development activities in E
Slide 12: Summary Financials
Summary Financials Year Ended December 31, 2020 2021 2022 Q1-22 Q1-23 (€ millions, ex share data) Revenue 433.6 749.3 722.9 202.4 133.4 Long-term, step function growth in cyclical business • Increased revenue, profitability and market share per cycle % seq. change +22% +73% -3.5% +18% -3% Orders 472
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 62.9% 700 60% 58.0% 600 51.1% 749 50% 600 500 516 593 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 14: Performance Significantly Above Last Industry Downturn
Performance Significantly Above Last Industry Downturn Revenue (€MM) Orders (€MM) 1000 1,000 939 900 900 800 749 800 654 681 700 700 593 601 600 600 500 452 500 400 400 361 300 300 200 200 100 100 0 - 2017 LTM Q1-19 2021 LTM Q1-23 2017 LTM Q1-19 2021 LTM Q1-23 Operating Profit (€MM) Operating Margin
Slide 15: Capital Allocation Increasing
Capital Allocation Increasing 500 € 1.6 Billion Distributions Since 2011* 416.3 400 Dividends • ~ € 320 million distributed upon payment Share Repurchases 146.8 321.5 of dividend 300 € millions 99.4 • Current € 300 million share buyback program: 179.5 • ~ € 75 million per quarter 200 167.1 • ~3.2 mi
Slide 16: Besi Market Cap and Liquidity Has Expanded
Besi Market Cap and Liquidity Has Expanded Shareholdings Migrated from NL to US/UK over Past Years Avg. Daily Volume and Liquidity Symbol/ • BESI Index • Euronext AEX 1,400 80 1,200 Avg Vol * Avg Price (€ thousands) 60 Market 1,000 Volume (thousands) Market • € 6.2 billion 800 40 ($ 6.7 billion) 600
Slide 17: Key Business Objectives 2021-2025
Key Business Objectives 2021-2025 Business Model Objectives Revenue € 1 billion++ Addressable Market Share 40%+ Gross Margin 57-62% Net Margin 30-35% Headcount Split 80% Asia/20% Europe/NA Scope 1 and 2 Emissions 62% reduction Global Energy Needs 75% from renewable sources May 2023 17
Slide 18: II. Market Overview
II. MARKET OVERVIEW May 2023 18
Slide 19: What Drives Besi's Business?
What Drives Besi’s Business? Selection of Timing of Macro GDP IDM and supply customer trends chain partners roadmaps Meeting Performance in Competitive demanding 24/7 production cycle times and technical specs environments scalability May 2023 19
Slide 20: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2022) Besi Addressable Market (2022) Plating 1% Inspection, Wire Bonding Dicing,Other 24% 31% Packaging 35% $5.8 billion $2.1 billion Plating Die Attach 0% 64% Die Attach Packaging 25% 15% Other Bonding 5% Source: TechInsights, March 2
Slide 21: Industry Downturn Continues in 2023
Industry Downturn Continues in 2023 TechInsights Global Chip Making Climate Trend Index 120 2/21: Intel, TSMC, 7/22: Memory 110 Samsung hike capex Inventory Correction 100 Temperature in Degrees F 90 2/20: COVID-19 outbreak 80 70 Growth Decline Line 60 5/19: U.S.- China trade war escalates 50 40 30
Slide 22: Assembly Market Estimates Reduced
Assembly Market Estimates Reduced Rebound Forecast 2024-2025 8.0 68.0% 80% Market Size YoY Growth Rate 7.0 6.5 6.1 5.8 60% 6.0 TechInsights now forecasts 23.2% 5.2 40% downturn in 2023 US$ billions 5.0 4.4 3.9 • Versus -16.8% prior forecast 4.0 3.2 21.2% 17.0% 18.1% 20% • Market decreases to $4.4 bi
Slide 23: Long-Term Semiconductor Demand Growth Continues
Long-Term Semiconductor Demand Growth Continues 1,400 2030 1,200 Semi revenue > $1T 2018 1,000 Machine generated data > • Market required 50 years to human generated data reach $500 billion in sales Semi revenue = $469 bn 800 • 10 years estimated to reach $ billion 2002 Quantum Era First Blackberry
Slide 24: Besi Addressable Market Share Increasing
Besi Addressable Market Share Increasing Particularly in Key Die Attach Markets 2016 2017 2018 2019 2020 2021 ∆ ‘21/‘20 ∆ ‘21/’16 Assembly Market ($MM) 3,587 4,648 4,546 3,186 3,863 6,490 +68.0% +80.9% Besi Market Share 9.9% 12.7% 11.2% 10.1% 11.2% 11.6% +0.4pts +1.7pts Addressable Market ($MM) 1,50
Slide 25: Leader in Addressable Market, Die Attach Market and Advanced Die Placement
Leader in Addressable Market, Die Attach Market and Advanced Die Placement Die Attach Advanced (82% of Revenue) Die Placement** Other 27% Besi 2021 Addressable Market* $1.6 Billion 41% $400 Other Million 59% Besi 73% Besi 32% $2.4 Billion Packaging & Plating (18% of Revenue) Other Besi 68% 16% $800
Slide 26: Growth Expected to Favor Besi's Product Portfolio
Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach CAGR (2020-2025) Die Attach 12.2% Packaging & Plating* 9.8% 7,000 6,490 6,145 Other Assembly 8.7% 5,785 6,000 Total 9.7% 1,566 5,202 1,621 1,349 5,000 4,445 799 1,353 3,863 $ millions 767 784 4,000 1,139 911 663 566 3,000 491
Slide 27: Advanced Packaging Critical to Next Generation Applications
Advanced Packaging Critical to Next Generation Applications Growth Drivers Enablers Greater Mobile Revolution Miniaturization • Mobile internet • Messaging • Social media Higher Greater • Shared economy Accuracy Complexity • Gaming • Geo-location • Audio/video Die Bonding and • Auto electronics Pack
Slide 28: Besi Portfolio Well Positioned by Node Size and Accuracy
Besi Portfolio Well Positioned by Node Size and Accuracy Estimated % of 2022 Revenue Typical Application Besi Equipment Accuracy Size 100% Micron NM Die Attach 90% 10+ 28+ Automotive, SiP 25% Packaging Power 80% Plating 70% Die Attach 20% IOT 60% 10 28 Packaging General ICs Plating 50% 40% Computer,
Slide 29: Slowing of Moore's Law Drives Adoption of Chiplet Architectures
Slowing of Moore’s Law Drives Adoption of Chiplet Architectures and New Assembly Solutions Problem Solution • Moore’s Law is slowing • Split the SoC into multiple, smaller chiplets • Some functions don’t shrink as node sizes reduce • Optimize scale per function • Connect chiplets within the package
Slide 30: 3D Chiplet Structures Use Variety of Advanced Assembly Processes
3D Chiplet Structures Use Variety of Advanced Assembly Processes 1 2 3 3D Chiplet 5 Chiplet 4 Hybrid Bond Chiplet Bridge Die Interposer 6 Bridge Die Package Substrate 1 2 3 4 5 6 Chip to Wafer TCB Hybrid Bonding High Bandwidth Embedded Bridge Wafer Level HD Interposer to Memory Stacking Die Attach D
Slide 31: And Increase Process Steps/Capital Intensity
And Increase Process Steps/Capital Intensity 2017 2019 2022 1st Gen EPYC 2nd Gen EPYC 3rd Gen EPYC 4 flip-chip placement steps 9 flip-chip placement steps > 30 die placement steps including hybrid and flip-chip Besi Process Solution: Source: AMD 8800 FC Quantum 8800 Ultra Accurate C2W Hybrid Bonder:
Slide 32: Why is Hybrid Bonding Important?
Why is Hybrid Bonding Important? Extends Moore’s Law <7nm node size Enables faster, more complex devices with submicron placement accuracy Direct Cu-Cu Interconnect Eliminates need for solder balls and interposer Increase contact density by Heterogeneous integration of factor of 1,000x chiplet-based
Slide 33: Applications Driving Hybrid Bonding Growth
Applications Driving Hybrid Bonding Growth HPC Advanced Memory Mobile Sensors and Photonics Unified Compute/Memory Advanced Memory Stacking Application Processors Integrated Silicon Photonics Core on Core mmWave RF AI HBM4 Smartphones Image Sensors Gaming DRAM AR/VR Display Datacenters May 2023 33
Slide 34: Hybrid Bonding Update
Hybrid Bonding Update Industry Adoption Besi Progress • Active development by leading • 35 units shipped since Q4-21 semiconductor producers • 28 units shipped in 2022 • Full scale commercial production for • 14 new orders post Q3-22 high performance CPUs • 3 to date in Q1-23 • Memory applications i
Slide 35: Hybrid Bonding Market Potential
Hybrid Bonding Market Potential Total # of installed hybrid bonding systems 2000 1800 High case OSATS likely Cumulative Total: € 3.0B 1600 to follow when technology Mid case • Hybrid now on radar of all major semi 1400 matures Cumulative Total: € 2.4B producers Hybrid bonding 1200 adopted for 1000 m
Slide 36: III. End-User Market Trends
III. END-USER MARKET TRENDS May 2023 36
Slide 37: Besi End-User Market Composition
Besi End-User Market Composition Other Other 12% 9% Mobile 28% Spares/Svce. Spares/Svce 13% 17% Mobile 43% 2021 Revenue 2022 Revenue Automotive 13% Automotive 16% Computing Computing 30% 19% Source: Company estimates May 2023 37
Slide 38: Long Term Secular Growth Drivers
Long Term Secular Growth Drivers Mobile: 5G Wearables 3D sensors Advanced cameras New Features Technology: Well Computing: New chiplet & 3D Positioned for AI goes Next mainstream architectures, Generation Big data High bandwidth Edge computing memory Opportunities Silicon photonics Automotive: Auton
Slide 39: Mobile: Besi's Largest End-User Market
Mobile: Besi’s Largest End-User Market Features/Functionality Key Drivers of Growth Besi Involved in Almost All Components RF Front End Antennas GPS RF Transceiver Modem Local Connectivity WiFi/NFC Microphone Cameras Application Sensors Processor Display TouchScreen Power Lidar Battery Memory Source
Slide 40: Mobile Growth Also Aided by 5G Network Expansion
Mobile Growth Also Aided by 5G Network Expansion Source: Ericsson Mobility Report Nov 2022 May 2023 40
Slide 41: Computing Demand Expanding Rapidly
Computing Demand Expanding Rapidly Data Volumes Growing Advanced Computing Expanding To Many Commercial Applications Exponentially Information Created, Captured, Copied and Consumed 200 AI/Vision/Recognition Industry 4.0 Zetabytes 181 150 Autonomous 147 Medical Driving 120 100 97 Super Computers Dat
Slide 42: Automotive Semiconductor Market Continues to Expand
Automotive Semiconductor Market Continues to Expand Cost Content Increasing Auto Semi Market Size Increasing 120 116 104 100 93 83 80 75 67 $ billions 60 60 54 49 44 39 40 20 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: Power Electronics News, January 2023 Source: Precedence Rese
Slide 43: 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 119.5 119.0 120.0 30% • Diverse customer base • Less cyclical part of business • Highly profitable 100.0 95.0 25% • Revenue will increase as installed base
Slide 44: IV. Strategy
IV. STRATEGY May 2023 44
Slide 45: 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 ESG Integration
Slide 46: Strategy Update
Strategy Update • Effectively navigating industry downturn Business • Expanded R&D investment continues for next generation applications • Significant progress on wafer level assembly adoption • Gross R&D spending increased 18.8% vs. Q1-22 • 3 hybrid bonding orders received in Q1-23 Development • Fo
Slide 47: Asian Production Transfer Has Improved Profitability and Cash Flow
Asian Production Transfer Has Improved Profitability and Cash Flow Leading to Lower And Reduced Break Asian Production Has Fixed European and Even Revenue And Improved Cash Significantly Expanded NA Headcount Levels Generation Shipments € millions € millions 1,500 98% 2,000 300 300 270 272 1,675 -7%
Slide 48: Flexible Asian Workforce Has Enhanced Scalability
Flexible Asian Workforce Has Enhanced Scalability Fixed Headcount 1,800 1,692 1,645 1,675 1,682 100% 1,534 1,523 1,600 90% 1,400 80% 1,200 Headcount 73% 70% 70% 70% 69% 69% 70% 1,000 60% 800 50% 600 400 40% • Reducing temporary Asian production HC 200 27% 30% 30% 30% 31% 31% 30% • In alignment with
Slide 49: Significant ESG Progress. Key Targets Met or Exceeded in 2022
Significant ESG Progress. Key Targets Met or Exceeded in 2022 Process Pillar 2022 Target 2022 Progress 15% Reduction in Scope 1 & 2 64% Reduction in Scope 1 & 2 emissions intensity vs 2021 emissions vs. 2019 index 5% reduction in hazardous waste Relative and absolute reduction in hazardous waste Env
Slide 50: Enhanced ESG Targets
Enhanced ESG Targets 2024 2030 75% renewable sources for 90% renewable sources for global energy needs global energy needs 62% reduction in Scope 1 and 2 58% reduction in Scope 1 and 2 carbon emissions* carbon emissions* 12% reduction in Scope 3 58% reduction in Scope 3 carbon emissions* carbon emis
Slide 51: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY May 2023 51
Slide 52: Profit Efficiency Maintained in Challenging Industry Environment
Profit Efficiency Maintained in Challenging Industry Environment Q1-22/Q1-23 Q4-22/Q1-23 Revenue Net Income Revenue Net Income 240 160 € 202.4 - 34.1% € 137.7 - 3.1% € 133.4 200 Gross Margin € 133.4 Gross Margin 120 60.1% + 4.1 points 64.2% 62.3% + 1.9 points 64.2 % 160 OPEX OPEX € 39.9 MM + 10.3% €
Slide 53: Revenue/Order Trends
Revenue/Order Trends Quarterly Trends 350 Revenue Orders Q1-23 vs. Q4-22 • Revenue: -€ 4.3 million (-3.1%) 300 • -Lower computing and automotive IDMs and Asian subcons • Partial offset: +Increased shipments high-end 250 smartphones 214 202 205 200 • Orders: -€ 38.5 million (-21.3%) € millions 181 16
Slide 54: Through Cycle Gross Margin Resilience
Through Cycle Gross Margin Resilience Revenue Gross Margin Gross Margin adjusted 250 80% 226.1 Industry Downturn 208.3 214.0 202.4 75% 200 171.7 168.8 160.1 70% Gross Margin % 143.2 € millions 150 137.7 133.4 65% 64.2% 63.0% 100 62.1% 62.3% 62.3% 61.0% 61.0% 60.4% 60.1% 60% 58.2% 56.7% 50 55% 0 50%
Slide 55: Structural, Through Cycle Outperformance vs. Peers
Structural, Through Cycle Outperformance vs. Peers Return on Average Equity 60.0 Gross Margin Δ 2016 2022 2016/ 50.0 2022 Besi’s margins and ROE have Besi 51.0% 61.3% +10.3 40.0 exceeded direct peers through cycles: Besi ASM PT 43.4% 44.6% +1.2 (Back end) • Investment in business model has ROE (%) 3
Slide 56: Strong Liquidity Position Maintained
Strong Liquidity Position Maintained 800 Cash and Deposits Net Cash Q1-23 vs. Q4-22 • Cash and deposits of € 644.9 million 700 672.2 671.7 644.9 • -€ 26.8 million primarily due to: 598.7 • + € 61.4 million cash flow from operations 600 • - € 77.8 million share repurchases • - € 5.4 million capitaliz
Slide 57: Guidance Q2-23 & H1-23
Guidance Q2-23 & H1-23 € in millions Revenue Gross Margin Total Operating Expenses Flat Q2-23 € 133.4 +15% - 64.2% 62%-64% € 44.0 - -5% +25% Q1-23 Q2-23 Q1-23 Q2-23 Q1-23 Q2-23 Flat +/- 5% Revenue Gross Margin Total Operating Expenses HY1-23 € 416.4 -30% 60.5% ~63.5% € 77.9 +12% HY1-22 HY1-23* HY1-2
Slide 58: Investment Considerations
Investment Considerations Assembly market Long term secular Disciplined strategic Wafer level assembly ever more critical in trends drive 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 (May 2023) on 6ix