Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (November 2024)
50 slides from Be Semiconductor Industries's investor presentation, November 2024
Slide 1: Investor Presentation November 2024
INVESTOR PRESENTATION November 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 November 2024 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW November 2024 4
Slide 5: 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 € 613.7 70% • Expanded share of wallet with key industry leaders each cycle 600 • Expansion of customer base
Slide 6: 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 85% (3 year) allocation program advanced packaging 367% (5 year) 2,447% (10 year) € 2.0 billion of dividends Consistent
Slide 7: 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: $7 Bn (90%) (4%) (6%) Besi focus Assembly Process Dicing Die Attach Wire Bond Packaging Plating Leadframe Wire Bond Substrate Wire Bond Substrate Flip Chip / TCB W
Slide 8: Industry Leading Assembly Equipment Portfolio
Industry Leading Assembly Equipment Portfolio Die Attach (77% of 2023 Revenue) Multi-Module Epoxy / Soft Flip-chip Direct Lid Embedded Thermo Hybrid Attach Solder Attach Bridge Attach Compression Bonding Packaging and Plating (23% of 2023 Revenue) Leadframe Substrate Wafer and Panel Trim and Form Si
Slide 9: Serving Blue Chip Customers Across Key End-Markets
Serving Blue Chip Customers Across Key End-Markets Customers End-User Markets • Diversified, blue chip customer base Independent Device Manufacturers (IDMs) • Top 10 customers ~52% of 2023 revenue • No customer > 10% Mobile 30% • Supplying leading IDMs, fabless producers and subcontractors • Sell di
Slide 10: Global Operations Supported by European Development Centers and Asian Production Footprint
Global Operations Supported by European Development Centers and Asian Production Footprint/Supply Chain Chandler Korea Suzhou Chengdu Shanghai Leshan LTM Q3-24 Taiwan Shenzhen Revenue (€ MM) India Europe/RoW Thailand Philippines 30% Duiven and ‘s-Hertogenbosch (NL) Vietnam Malaysia 614 Singapore Asi
Slide 11: Summary Financials
Summary Financials Long-term, step function growth in cyclical business Year Ended December 31, (€ MM) 2021 2022 2023 YTD Q3-24 YTD Q3-23 • Increased revenue, profitability and market share per cycle Orders 939.1 663.7 548.3 464.8 381.9 YTD-24 revenue +8.3% and net income +0.4% vs. YTD-23 • Contrast
Slide 12: Besi Market Cap and Liquidity Have Expanded
Besi Market Cap and Liquidity Have Expanded Shareholdings Have Migrated to US/UK Avg. Daily Volume and Liquidity* Symbol/ • BESI Index • Euronext AEX 1,400 120 1,200 100 Avg Vol * Avg Price (€ thousands) Market 1,000 80 Volume (thousands) Market • € 9.0 billion 800 60 ($ 10.1 billion) 600 Cap* Profi
Slide 13: 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 November 2024 13
Slide 14: II. Market Overview
II. MARKET OVERVIEW November 2024 14
Slide 15: 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 16: 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 $47.
Slide 17: AI Drives Significant Growth in Advanced Logic and Memory Markets
AI Drives Significant Growth: Particularly in Advanced Logic and Memory Markets Data Center AI Devices AI Chip Market Revenue 2023 - 2033 Annual Revenue ($ 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 18: Assembly Equipment Market Rebound Pushed Out to 2025
Assembly Equipment Market Rebound Pushed Out to 2025 Assembly Market ($B) 7.4 6.6 Downward revisions to 2024 estimates reflect slow 5.7 mainstream recovery 5.6 • Techinsights now forecasts 2.9% increase • Reduction from last forecast of 9.3% 4.1 4.3 3.9 Market expected to recover strongly in 2025/20
Slide 19: 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 ~13% Packaging and Plating ~13% Advanced Die
Slide 20: Increasing Market Share in Key Market Segments
Increasing Market Share in Key Market Segments Besi Market Share 35% 22% 31% 32% 17% 18% 15% 16% 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 21: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2023) Besi Addressable Market (2023) Wire Plating Inspection, Bonding 3% Dicing,Other 15% 42% Packaging 33% $4.1Bn $1.5Bn Die Attach Die 64% Attach 23% Other Plating Bonding 1% Packaging 5% 14% Source: TechInsights, September 2024 Nove
Slide 22: III. End-User Market Trends
III. END-USER MARKET TRENDS November 2024 22
Slide 23: Principal Growth Drivers in Besi's End-User Markets
Principal Growth Drivers in Besi’s End-User Markets Mobile Computing Automotive Industrial / Other Generated by ImageFX On Device AI Generative AI Autonomous Driving Automation Foldable Phones Datacenter Vehicle Electrification Smart Grid Camera Technology Gaming Connectivity Industrial IoT 5G Advan
Slide 24: Mobile – Key Market Drivers
Mobile – Key Market Drivers Fast Growing Market for Premium Smartphones, Wearables Driven by Key Megatrends and Other Mobile Devices Premium Smartphone Market Share Growing Rapidly (% of Total Smartphone Market) New generative AI engines 3X volume growth in 2023 compared to 2016 24 21 19 13 15 15 Ed
Slide 25: Computing – Key Market Drivers
Computing – Key Market Drivers Data Volumes Growing Exponentially Driven by Key Megatrends Zetabytes Data volumes growing exponentially 181 147 New generative AI engines 120 Supercomputers 97 79 64 Datacenters Edge AI tablets, PCs, laptops 2020 2021 2022 2023 2024 2025 Gaming and infotainment Inform
Slide 26: Automotive / Industrial and Other – Key Market Drivers
Automotive / Industrial and Other – Key Market Drivers Favorable Automotive Market Outlook Driven by Key Megatrends Global Vehicle Production (MM Units) Avg. Semiconductor Content per Vehicle ($ / Unit) EV Adoption 1,395 101 91 709 x Edge AI enhanced features SiC and GaN power devices 2023 2030 2023
Slide 27: 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 28: 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 November 2024 28
Slide 29: 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 30: 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 November 2024 30
Slide 31: 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 32: 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 33: 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 34: 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 35: Hybrid Bonding Market Potential – Logic and Memory Cases Confirmed
Hybrid Bonding Market Potential – Logic and Memory Cases Confirmed Total # of installed hybrid bonding systems Estimated 900 – 2,000 systems by 2030 2000 Application High case 1800 Changes vs. Prior Forecast Processors • Market potential for each case increased 6% 1600 adopting Hybrid because of HB
Slide 36: IV. Strategy
IV. STRATEGY November 2024 36
Slide 37: 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 38: Strategy Update
Strategy Update • Contrasting assembly market trends continue • Accelerating AI demand driven by 2.5/3D and photonics applications • AI-related advanced packaging orders ~50% of Besi’s total for past 12 months Business • Slow recovery for mainstream assembly markets: • Smartphones, automotive and Ch
Slide 39: 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 40: 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 41: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY November 2024 41
Slide 42: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 65.2% 700 60% 58.0% 600 51.1% 749 50% 611 500 516 593 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 43: Revenue/Order Trends
Revenue/Order Trends 250 Quarterly Trends Revenue Orders Q3-24 vs. Q2-24 • Revenue: +€ 5.4 million (+3.6%) 200 185 • Above mid point of guidance 163 160 166 151 157 152 • Higher computing including hybrid bonding and photonics 146 150 133 142 128 • Orders: -€ 33.4 million (-18.0%) 123 127 € millions
Slide 44: Significant Expansion of R&D Spending
Significant Expansion of R&D Spending in Support of New Product Introductions 80 Gross R&D* % of Revenue 20% 70 74.1 60 63.9 +82% 15% 50 52.1 € millions 12.1% 40 10.8% 11.0% 38.4 10% 30 7.0% 20 5% 10 0 0% 2019 2021 2023 LTM Q3-24 * Gross R&D spending excludes impact from capitalization/amortization
Slide 45: Headcount Trends
Headcount Trends 2,500 30.0% 2,141 2,078 2,062 1,996 25.0% 2,000 1,819 1,870 271 496 236 279 134 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 1,244 1,154 1,162 1,000 1,060 • Increasing temporary A
Slide 46: 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 98.9 • Highly profitable 100.0 95.0 96.7 25% • Revenue will increase as installed
Slide 47: Strong Liquidity Position Maintained
Strong Liquidity Position Maintained. Net Cash Increased Both Sequentially and Year Over Year 800 Q3-24 vs. Q2-24 • Cash and deposits of € 637.4 million Cash and Deposits Net Cash • + € 380.2 million primarily due to: 700 672.2 671.7 • + € 350.0 million Senior Note issuance 637.4 • + € 72.0 million
Slide 48: 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 228.9 • ~€ 200 million distributed in 2024 € millions through Q3 200 179.5 57.4 • New € 100 million share repurchase 50.1 269.5 program: 100 91.3 22
Slide 49: Guidance Q4-24 and FY 2024
Guidance Q4-24 and FY 2024 € in millions Q3-24 Q4-24 FY 2024E* vs. FY 2023 +10% Revenue € 156.6 to € 610.7 +5.5% -10% Gross Margin 64.7% 63% - 65% 65.2% +0.3 pts +5% Operating Expenses € 46.2 to 0% € 200.1 +23.2% * Assumes midpoint of guidance for Q4-24 November 2024 49
Slide 50: 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
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