Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (July 2023)
57 slides from Be Semiconductor Industries's investor presentation, July 2023
Slide 1: Investor Presentation July 2023
INVESTOR PRESENTATION July 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 July 2023 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW July 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 advanced substrate and wafer level packaging • ~75% of systems used for advan
Slide 6: Company History
Company History 700 Consistent focus on Advanced Packaging has 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 € 555.5 •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 182% (3 year) advanced packaging 429% (5 year) € 1.7 billion of dividends Consistent TSR
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 New •
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: $111.4B* Front end: $97.7B Assembly: $5.5B Test: $8.2B (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 Vietnam Production Site Singapore Sales, Service and R&D Site LTM June 30, 2023 • Development activiti
Slide 12: Summary Financials
Summary Financials Year Ended December 31, 2020 2021 2022 H1-22 H1-23 (€ millions, ex share data) Revenue 433.6 749.3 722.9 416.4 295.9 Long-term, step function growth in cyclical business • Increased revenue, profitability and market share per cycle % seq. change +22% +73% -3.5% +13% -29% Orders 47
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 63.9% 700 60% 58.0% 600 51.1% 749 50% 500 516 593 556 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: Continued Outperformance vs. Last Industry Downturn
Continued Outperformance vs. Last Industry Downturn Revenue (€MM) Orders (€MM) 1,000 1,000 939 900 900 800 749 800 681 700 700 593 602 600 600 560 500 500 383 400 400 357 300 300 200 200 100 100 0 - 2017 LTM Q2-19 2021 LTM Q2-23 2017 LTM Q2-19 2021 LTM Q2-23 Operating Profit (€MM) Operating Margin 3
Slide 15: Capital Allocation Increasing
Capital Allocation Increasing 500 € 1.7 Billion Distributions Since 2011* 416.3 400 366.8 Dividends • € 367 million distributed YTD-23 Share Repurchases 146.8 including € 289 million in Q2-23 300 144.7 € millions • Current € 300 million share buyback program: 179.5 • ~3.7 million shares purchased th
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 1,400 100 1,200 80 Avg Vol * Avg Price (€ thousands) Market 1,000 Volume (thousands) 60 Market • € 7.7 billion 800 ($ 8.4 billion) 60
Slide 17: Business Model
Business Model Business Model Revenue € 1 billion+++ Addressable Market Share 40%+ Gross Margin 60-64% Operating Margin 30-45% Headcount Split 80% Asia/20% Europe/NA Scope 1 and 2 Emissions 62% reduction Global Energy Needs 75% from renewable sources July 2023 17
Slide 18: II. Market Overview
II. MARKET OVERVIEW July 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 July 2023 19
Slide 20: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2022) Besi Addressable Market (2022) Plating 2% Wire Bonding Inspection, 22% Dicing,Other Packaging 35% 33% $5.5 billion $2.0 billion Die Attach Plating Die Attach 65% 1% 23% Packaging 14% Other Bonding 5% Source: TechInsights, July 20
Slide 21: Industry Downturn Appears to Have Bottomed in Q2-23
Industry Downturn Appears to Have Bottomed in Q2-23 TechInsights Global Chip Making Climate Trend Index 120 7/22: Memory 110 Inventory 2/21: Intel, TSMC, Correction Samsung hike capex 100 Temperature in Degrees F 90 2/20: COVID-19 80 outbreak 70 Growth Decline Line 60 5/19: U.S.- China trade war esc
Slide 22: Assembly Market Rebound Forecast 2024-2025
Assembly Market Rebound Forecast 2024-2025 8.0 68.5% 80% Market Size YoY Growth Rate 7.0 6.6 6.6 5.5 6.1 60% 6.0 5.1 40% US$ billions 5.0 4.2 3.9 4.0 21.5% 18.3% 20% 3.2 22.5% 7.7% TechInsights forecasts 23.4% downturn 3.0 0% in 2023 2.0 • Unchanged versus last forecast -16.2% -20% 1.0 -29.7% -23.4%
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 • Estimates call for > $1 trillion in $ billion 2002 Quantum Era First Bl
Slide 24: Besi Addressable Market Share Increasing
Besi Addressable Market Share Increasing Particularly in Key Die Attach Markets 2016 2018 2020 2021 2022 ∆ ‘22/‘21 ∆ ‘22/’16 Assembly Market ($MM) 3,587 4,542 3,916 6,597 5,540 -16.0% +54.5% Besi Market Share 9.9% 11.2% 10.5% 11.7% 11.5% -0.2pts +1.6pts Addressable Market ($MM) 1,507 1,859 1,439 2,4
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 (79% of Revenue) Die Placement** Other 26% Besi 2022 Addressable Market* 40% $1.3 Billion $400 Other Million 60% Besi 74% Besi 32% $2.0 Billion Packaging & Plating (21% of Revenue) Other 68% Besi 18% $683
Slide 26: Growth Expected to Favor Besi's Product Portfolio, Particularly Die Attach
Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach CAGR (2020-2025) Die Attach 11.4% Packaging & Plating* 9.4% 6,598 7,000 Other Assembly 8.3% 6,090 5,531 6,000 Total 9.2% 1,646 5,148 1,629 1,283 5,000 799 4,236 1,295 3,917 $ millions 769 4,000 683 1,065 619 949 530 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 slowing • Split SoC into multiple, smaller chiplets • Cost per transistor increasing • Optimize scale per function • Some circuits don’t shrink as node sizes reduce • Connect chi
Slide 30: New 3D Chiplet Structures Use Variety of Assembly Processes
New 3D Chiplet Structures Use Variety of Assembly Processes 2 1 3 3D Chiplet 5 Chiplet 4 Hybrid Bond Chiplet Bridge Die Interposer 6 Bridge Die Package Substrate 1 2 3 4 5 6 Hybrid Bonding Chip to Wafer TCB High Bandwidth Embedded Bridge Wafer Level HD Interposer to Memory Stacking Die Attach Die Mo
Slide 31: And Will Increase Process Steps/Capital Intensity
And Will Increase Process Steps/Capital Intensity 2017 2019 2023 1st Gen EPYC 2nd Gen EPYC 4th Gen EPYC 4 flip-chip placement steps 9 flip-chip placement steps > 50 die placement steps including hybrid and flip-chip Besi Process Solution: 8800 FC Quantum 8800 Ultra Accurate C2W Hybrid Bonder: ASP: $
Slide 32: Hybrid Bonding Extends Moore's Law by Heterogeneous 3D
Hybrid Bonding Extends Moore’s Law by Heterogeneous 3D System Scaling Enables faster, more complex devices with submicron placement accuracy Direct Cu-Cu Interconnect in 3D Heterogeneous integration of chiplets 1000x increase in contact density More transistors per package Increased Performance Lowe
Slide 33: Applications Driving Hybrid Bonding Growth
Applications Driving Hybrid Bonding Growth High Performance Compute Advanced Memory Mobile Sensors & Photonics Unified Advanced Memory Application Processors Integrated Silicon Compute/Memory Stacking mmWave RF Photonics Core on Core AI HBM4 Smartphones Image Sensors Gaming DRAM AR/VR Display Datace
Slide 34: Hybrid Bonding Update
Hybrid Bonding Update Industry Adoption Besi Progress • Active development by leading • 37 units shipped since Q4-21 semiconductor producers • Backlog of 13 units at end of Q2-23 • H1-23 activity focused on process • Production yields increased significantly qualification and sampling • First orders
Slide 35: Hybrid Bonding Market Potential
Hybrid Bonding Market Potential Cumulative TAM of installed hybrid bonding systems Estimated 800 – 1,900 systems cumulative by 2030 2000 1800 Application High case 1600 Processors • Logic device production and adoption continues adopting Hybrid • Low case represents adoption in logic only 1400 Mid c
Slide 36: III. End-User Market Trends
III. END-USER MARKET TRENDS July 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 July 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: What's Next in Mobile? New Features/Functionality in High-End
What’s Next in Mobile? New Features/Functionality in High-End Smartphones and Wearables Drive Long-Term Growth Mobile Data Traffic Growing Rapidly. Continued Deployment Of 5G And Development Of 5G Advanced Drives Need For Advanced Assembly Technologies Advanced Camera Technology On Device AI AR / VR
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: Growth of EV and Autonomous Driving Will Increase Semiconductor Content
Automotive: Growth of EV and Autonomous Driving Will Increase Semiconductor Content and Cost per Car Electric Vehicle Adoption Forecast to Accelerate Semiconductor Content per Car Increasing Source: Power Electronics News, January 2023 ~12% CAGR in automotive semi sales (2021 – 2030)* Positive growt
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 119.5 120.0 113.3 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 July 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 at high profitability levels • Overhead aligned with market conditions Business • 47% and 12% reduction in temps and total HC vs. Q2-22 • 2023 Strategic Review completed • Preparing for next industry upturn • Continued R&D investment in futu
Slide 47: Flexible Asian Workforce Has Enhanced Scalability
Flexible Asian Workforce Has Enhanced Scalability Fixed Headcount 1,800 1,692 1,645 1,675 1,682 1,689 100% 1,534 1,523 1,600 90% 1,400 80% 1,200 Headcount 73% 70% 70% 70% 69% 69% 69% 70% 1,000 60% 800 50% 600 400 40% • Reducing temporary Asian production HC 200 27% 30% 30% 30% 31% 31% 31% 30% • In a
Slide 48: 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 En
Slide 49: 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 50: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY July 2023 50
Slide 51: H1-23 Affected by Broad Based Weakness in Computing Applications
H1-23 Affected by Broad Based Weakness in Computing Applications Q1-23/Q2-23 H1-22/H1-23 Revenue Net Income Revenue Net Income 200 € 416.4 € 162.5 - 28.9% + 21.8% 400 € 133.4 160 Gross Margin Gross Margin € 295.9 64.2% + 1.4 points 65.6% 60.5% + 4.5 points 65.0 % OPEX 300 OPEX € 44.0 MM - 0.7% € 43.
Slide 52: Revenue/Order Trends
Revenue/Order Trends 350 Quarterly Trends Revenue Orders Q2-23 vs. Q1-23 300 • Revenue: +€ 29.1 million (+21.8%) • Above mid point of prior guidance 250 202 205 214 • Primarily increased mobile for high-end & 200 169 181 mainstream applications € millions 153 163 150 125 138 133 142 113 • Orders: -€
Slide 53: Through Cycle Gross Margin Resilience
Through Cycle Gross Margin Resilience Revenue Gross Margin Gross Margin adjusted 250 80% Industry Downturn 208.3 214.0 202.4 75% 200 171.7 168.8 162.5 70% Gross Margin % € millions 150 137.7 133.4 65.6% 121.9 65% 64.2% 63.0% 100 62.3% 62.3% 61.0% 61.0% 60.4% 60.1% 60% 56.7% 50 55% 0 50% Q3-21 Q4-21*
Slide 54: 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 55: Strong Liquidity Position Maintained
Strong Liquidity Position Maintained 800 Q2-23 vs. Q1-23 Cash and Deposits Net Cash • Cash and deposits of € 378.3 million 700 672.2 671.7 • -€ 266.6 million primarily due to: 644.9 • + € 28.7 million cash flow from operations 598.7 • - € 289.1 million capital allocation 600 • - € 5.3 million capita
Slide 56: Guidance Q3-23
Guidance Q3-23 € in millions Q2-23 Q3-23 Seasonal Revenue Trends Q3E/Q2Δ -20% Average decline 2018-2022 (-14.5%) Revenue € 162.5 - -30% -25.0% 2023E* -21.1% 2022 -7.9% 2021 -12.9% 2020 Gross Margin 65.6% 62% - 64% -3.2% 2019 -27.6% 2018 • Q2/Q3-23E decrease comparable to 2018 -10% - downturn Operati
Slide 57: 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 — Investor Presentation (July 2023) on 6ix