Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (March 2024)
56 slides from Be Semiconductor Industries's investor presentation, March 2024
Slide 1: Investor Presentation March 2024
INVESTOR PRESENTATION March 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 March 2024 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW March 2024 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: Consistent focus on Advanced Packaging
Company History 700 Consistent focus on Advanced Packaging has created an industry leader •Focus on most rapidly growing segments of assembly market 70% 600 •Growth organically and via acquisitions € 578.9 •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 Superior Total Returns**: Disciplined execution has Attractive capital created leader in 150% (1 year) allocation program advanced packaging 210% (3 year) 812% (5 year) € 1.9 billion of dividends C
Slide 8: Industry Leading Equipment Portfolio
Industry Leading Equipment Portfolio Die Attach (77% of 2023 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 = ~52% of 2023 revenue • Leading IDMs and subcontractors. 52%/48% order split in 2023 • Also supply leading fabless companies: Qualcomm, AMD, Nvidia, Broadcom, MediaTek via subcontractor
Slide 10: From Processed Wafer to Assembled Chip
From Processed Wafer to Assembled Chip Semiconductor Manufacturing Equipment 2023E: $109.0B* Front end: $98.0B Assembly: $4.1B Test: $6.9B (90%) (4%) (6%) 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 India Thailand Philippines Vietnam • Malaysia R&D, Sales & Service site Singapore • Production site • Sales & Service office Year ended December
Slide 12: Summary Financials
Summary Financials Year Ended December 31, 2021 2022 2023 (€ millions, ex share data) Revenue 749.3 722.9 578.9 Long-term, step function growth in cyclical business • Increased revenue, profitability and market share per cycle % seq. change +73% -3.5% -19.9% Orders 939.1 663.7 548.3 2023 Revenue and
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 64.9% 700 60% 58.0% 600 51.1% 749 50% 516 579 500 593 39.5% 40% 424 400 34.1% 379 30% 300 4 year 302 351 averages 20% 200 164 191 10% 100 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 14: End-User Market Trends 2022/2023
End-User Market Trends 2022/2023 Other 11% Mobile Spares/ 30% Service 17% 2023 Revenue Automotive 18% Computing 24% March 2024 14
Slide 15: Performance Significantly Above Last Industry Downturn
Performance Significantly Above Last Industry Downturn € MM Revenue € MM Orders 600 578.9 600 548.3 500 500 400 356.2 400 348.7 300 300 200 200 100 100 0 0 2019 2023 2019 2023 € MM Operating Profit Operating Margin 250 40% 36.9% 213.4 35% 200 30% 25.8% 150 25% 20% 100 91.9 15% 10% 50 5% 0 0% 2019 20
Slide 16: Attractive Capital Allocation Policy Continues
Attractive Capital Allocation Policy Continues 500 Dividends € 1.9 Billion Distributions Since 2011* 435.5 Share Repurchases 416.3 400 • € 435.5 million distributed in 2023 146.8 213.4 300 • € 300 million buyback program € millions completed: • ~4.3 million shares purchased • Average price: € 69.87
Slide 17: Besi Market Cap and Liquidity Has Expanded
Besi Market Cap and Liquidity Has Expanded Shareholdings Migrated from NL to US/UK over Past 5 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 • € 10.5 billion 800 ($ 11.6 billio
Slide 18: 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 & 2 Emissions 62% reduction Global Energy Needs 75% from renewable sources March 2024 18
Slide 19: II. Market Overview
II. MARKET OVERVIEW March 2024 19
Slide 20: 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 March 2024 20
Slide 21: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2023) Besi Addressable Market (2023) Plating 2% Wire Bonding 18% Inspection, Dicing,Other Packaging 36% 34% $4.1 billion $1.5 billion Die Attach Die Attach 23% 64% Plating 1% Packaging Other Bonding 15% 7% Source: TechInsights, Decembe
Slide 22: Market Conditions Reached Trough in 2023. New Upcycle Underway
Market Conditions Reached Trough in 2023. New Upcycle Underway TechInsights Global Chip Making Climate Trend Index 120 7/22: Memory Inventory 110 Correction 2/21: Intel, TSMC, Samsung hike capex 100 Temperature in Degrees F 90 2/20: COVID-19 outbreak 80 70 Growth Decline Line 5/19: U.S.- China 60 tr
Slide 23: Assembly Equipment Market Trends 2019-2026E
Assembly Equipment Market Trends 2019-2026E 8.0 80% Market Size YoY Growth Rate 7.3 68.5% 7.0 6.4 6.6 60% 6.0 5.5 5.4 US$ billions 40% TechInsights now forecasts 26% downturn 5.0 31.3% 3.9 4.1 in 2023 22.5% 4.0 3.2 18.4% 14.7% 20% • Versus -23% last forecast 3.0 • ~40% decrease from 2021 peak 0% 2.0
Slide 24: Semiconductor Sales Expected to Reach $1 Trillion by 2030
Semiconductor Sales Expected to Reach $1 Trillion by 2030 1,200 1,000 Annual Semiconductor Sales ($B) Quantum Computing 800 Tesla Model 3 1B Users Edge Computing iPhone 600 AR / VR Generative AI 400 Vehicle Electrification 200 Social Media & Streaming Smartphone Data Source: TechInsights 0 2000 2005
Slide 25: 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 26: 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 27: Growth Expected to Favor Besi's Product Portfolio
Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach CAGR (2023-2026) Die Attach 26.4% 8,000 7,326 Packaging & Plating* 18.1% 7,000 Other Assembly 19.9% 6,388 1,938 Total 21.3% 6,000 5,395 1,644 896 5,000 1,253 $ millions 4,108 778 4,000 655 959 544 3,000 4,492 3,966 2,000 3,48
Slide 28: Advanced Packaging Solutions Critical to Next Generation Applications
Advanced Packaging Solutions Critical to 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 Lower Power Incre
Slide 29: Advanced Packaging Revenue Growing Rapidly
Advanced Packaging Revenue Growing Rapidly 2.5D/3D Fastest Growing Segment 90.0 Market Revenue CAGR 78.6 80.0 Advanced Packaging 10.0% 2.5D/3D 19.7% 72.9 Besi Portfolio Well Positioned by 70.0 64.4 Node Size and Accuracy 60.0 56.9 51.9 • 70% of Besi equipment revenue $ billions 50.0 44.3 46.8 define
Slide 30: Besi's Advanced Packaging Systems Critical for Next Generation Applications
Besi’s Advanced Packaging Systems Critical for Next Generation Applications • New generative AI engines • Edge/AI Enabled Phones • Advanced Cameras and 3D imaging Mobile • Under display biometric ID • New AR/VR devices • 5G advanced devices Solutions • New generative AI engines • Supercomputers • Hy
Slide 31: 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 March 2024 31
Slide 32: Hybrid Bonding Enables Faster, More Complex Devices
Hybrid Bonding Enables Faster, More Complex Devices With Submicron Placement Accuracy Direct Cu-Cu 3D Interconnect Heterogeneous Chiplet Integration Source: Intel Source: IMEC 1000x increase in contact density More transistors per package New Chip Architectures Increased Performance Lower Cost of Ow
Slide 33: 3D Chiplet Structures Use Variety of Assembly Processes
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 Moldin
Slide 34: 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 March 2024 34
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 March 2024 36
Slide 37: 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 Main Components Besi system Utilized RF Front End Processor 8800CHM, MMS-LM DRAM Memory 2100sD, FSL, 8800FCQ Antennas NAND Flash 2100sD, AMS-W/LM/8800FCQ GPS PM IC 2100sD, AMS-W
Slide 38: Key Mobile Market Drivers
Key Mobile Market Drivers Drivers Assembly solutions • New generative AI engines • Heterogeneous chiplet architectures • Edge/AI enabled phones • Co-packaged optics • Advanced cameras and 3D imaging • Periscope camera modules • Under display biometric ID • Integrated sensing/camera/display • New AR/
Slide 39: Key Computing Market Drivers
Key Computing Market Drivers Drivers Assembly solutions • Data volumes growing exponentially • New generative AI engines • 2.5D/3D chiplet architectures • Supercomputers • HBM memory stacking • Datacenters • Co-packaged optics • Edge AI tablets, PCs, laptops • Optical transceivers Computing • Gaming
Slide 40: Edge AI Computing Drives Next Generation Consumer Applications
Edge AI Computing Drives Next Generation Consumer Applications Edge AI Use Cases Mobile Phones Text Generation Audio and Video Creation XR Laptops Image and Video Enhancement Glasses Edge AI Code Generation Medical Diagnostics IoT Auto Auto Self-Driving Environmental Monitoring March 2024 40
Slide 41: Key Automotive & Industrial Market Drivers
Key Automotive & Industrial Market Drivers Drivers Assembly solutions • Sinter bonding • EV adoption • Soft solder die attach • Edge AI enhanced features • Diffusion bonding • SiC and GaN power devices • Multi module die attach • Advanced camera modules and sensors • Power module molding • Autonomou
Slide 42: Favorable Automotive Semiconductor Market Outlook
Favorable Automotive Semiconductor Market Outlook Source: Renesas, May 2023 March 2024 42
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 30% • Diverse customer base • Less cyclical part of business • Highly profitable 100.0 95.0 96.7 25% • Revenue will increase as installed base
Slide 44: IV. Strategy
Besi comm IV. STRATEGY March 2024 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 Exceed Enhance c
Slide 46: Key Highlights: Strategic Initiatives Successfully Achieved 2023
Strategic Initiatives Successfully Achieved 2023 Key Highlights ✓ Navigated industry downturn at high profitability levels ✓ Increased orders for next generation AI, HBM and photonics applications ✓ Well positioned for next upturn with leading advanced packaging portfolio ✓ Progress continued on hyb
Slide 47: 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 48: 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 49: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY March 2024 49
Slide 50: Revenue/Order Trends
Revenue/Order Trends 350 Quarterly Trends Revenue Orders 300 Q4-23 vs. Q3-23 • Revenue: +€ 36.3 million (+29.4%) 250 202 205 214 • Increased shipments for hybrid bonding, photonics 200 169 181 and other AI-related computing applications 160 166 € millions 153 163 150 125 138 133 142 123 127 113 • Or
Slide 51: Through Cycle Gross Margin Resilience
Through Cycle Gross Margin Resilience Revenue Gross Margin Gross Margin adjusted 250 80% Industry Downturn 214.0 202.4 200 75% 168.8 162.5 159.6 Gross Margin % 143.6 € millions 150 137.7 70% 133.4 123.3 65.6% 100 64.6% 65.1% 65.0% 65% 64.2% 62.3% 62.3% 61.0% 50 60.1% 60% 0 55% Q1-22 Q2-22 Q3-22 Q4-2
Slide 52: Significant Expansion of R&D Spending
Significant Expansion of R&D Spending 80 Gross R&D* % of Revenue 20% 70 60 63.9 +66% 15% 50 52.1 € millions 40 10.8% 11.0% 38.4 10% 30 7.0% 20 5% 10 0 0% 2019 2021 2023 * Gross R&D spending excludes impact from capitalization/amortization of R&D costs March 2024 52
Slide 53: Headcount Trends
Headcount Trends 2,500 30.0% 2,141 1,994 1,968 1,973 25.0% 2,000 1,870 496 1,819 312 279 248 • Headcount aligned with market 134 1,596 1,618 144 20.0% conditions: 62 95 • Temporary headcount down 73% 1,500 vs. last industry peak • Total headcount down by 12.7% Headcount 15.0% 1,162 1,163 1,169 1,193
Slide 54: Strong Liquidity Position Maintained
Strong Liquidity Position Maintained 800 Q4-23 vs. Q4-22 Cash and Deposits Net Cash • Cash and deposits down € 258.2 million due to 700 672.2 671.7 capital allocation of € 435 million 644.9 598.7 • Net cash of € 113.0 million at year end 600 Dividend • Equals 20% of LTM revenue € 222MM 500 Q4-23 vs.
Slide 55: Guidance Q1-24
Guidance Q1-24 Revenue Gross Margin Baseline Operating Expenses -5% +5% €159.6 - 65.1% 64% - 66% € 35.6 - -15% 0% Q4-23 Q1-24 Q4-23 Q1-24 Q4-23 Q1-24 € in millions Total Operating Expenses + 55% € 37.8 - + 50% Q4-23 Q1-24 March 2024 55
Slide 56: 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 (March 2024) on 6ix