Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (March 2023)
59 slides from Be Semiconductor Industries's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
INVESTOR PRESENTATION March 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 March 2023 3
Slide 4: I. Company Overview
I. COMPANY OVERVIEW March 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 900 Consistent focus on Advanced Packaging has created an industry leader 70% 800 •Focus on most rapidly growing segments of assembly market •Growth organically and via acquisitions € 722.9 •Expanded share of wallet with key industry leaders each cycle 700 •Expansion of customer base
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 (82% 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: $112.5B* Front end: $96.7B Assembly: $5.8B Test: $8.2B (87%) (5%) (8%) 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 Year ended December 31, 2022 • Development activ
Slide 12: Summary Financials
Summary Financials Year Ended December 31, 2020 2021 2022 (€ millions, ex share data) Revenue 433.6 749.3 722.9 Long-term, step function growth in cyclical business • Increased revenue, profitability and market share per cycle % seq. change +22% +73% -3.5% Orders 472.1 939.1 663.7 2022 Revenue -3.5%
Slide 13: Through Cycle Revenue and Gross Margin Trends
Through Cycle Revenue and Gross Margin Trends € millions Revenue Gross Margin Gross Margin 800 70% 61.3% 700 749 723 60% 58.0% 600 51.1% 50% 593 516 500 39.5% 40% 424 400 34.1% 379 30% 300 4 year 302 averages 351 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 2021/2022
End-User Market Trends 2021/2022 2021 Spares/ Industrial/ 2022 Mobile Computing Automotive Revenue Service Other Revenue March 2023 14
Slide 15: Performance Significantly Above Last Industry Downturn
Performance Significantly Above Last Industry Downturn Revenue (€MM) Orders (€MM) 1000 1,000 939 900 749 900 800 723 800 700 681 593 700 664 600 525 600 500 483 500 400 400 300 300 200 200 100 100 0 2017 2018 2021 2022 - 2017 2018 2021 2022 Operating Profit (€MM) Operating Margin 350 45% 42.4% 318 4
Slide 16: Capital Allocation Trends
Capital Allocation Trends 500 € 1.6 Billion Distributions Since 2011* 416.3 400 Dividends 146.8 • Record € 416.3 million distributed 2022 Share Repurchases • Up 132% vs. 2021 300 267.8 € millions 44.1 • New € 300 million buyback program: 209.5 • Started August 1, 2022 200 179.5 35.5 167.1 • Expected
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 Symbol/ • BESI Avg. Daily Volume and Liquidity Index • Euronext AEX Avg Vol * Avg Price (€ millions) 1,500 80 Market Volume (thousands) 60 1,000 Market • € 4.5 billion ($ 4.8 billion) 40 Cap* Profile
Slide 18: 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 March 2023 18
Slide 19: II. Market Overview
II. MARKET OVERVIEW March 2023 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 2023 20
Slide 21: Assembly Equipment Market Composition
Assembly Equipment Market Composition Assembly Equipment Market (2022) Besi Addressable Market (2022) Plating 1% Inspection, Wire Bonding Dicing,Other 24% 32% Packaging 35% $5.8 billion $2.1 billion Plating Die Attach 0% 64% Die Attach Packaging 24% 15% Other Bonding 5% Source: TechInsights, Decembe
Slide 22: Industry Downturn Commenced in Q2-22
Industry Downturn Commenced in Q2-22 TechInsights Global Chip Making Climate Trend Index 120 2/21: Intel, TSMC, 7/22: Memory 110 Samsung hike capex Inventory Correction 100 Temperature in Degrees F 90 2/20: COVID-19 outbreak 80 70 Growth Decline Line 60 5/19: U.S.- China trade war escalates 50 40 30
Slide 23: Assembly Downturn Expected to Continue in 2023
Assembly Downturn Expected to Continue in 2023 Rebound Forecast in 2024 8.0 68.0% 80% 6.9 7.0 6.5 Market Size YoY Growth Rate 5.8 60% 6.0 5.8 4.5 4.8 40% US$ billions 5.0 3.9 4.0 3.2 20.6% 17.8% 20% 21.2% 3.0 -2.2% 0% 2.0 -10.6% -16.8% -20% 1.0 -29.9% 0.0 -40% 2018 2019 2020 2021 2022E 2023E 2024E 2
Slide 24: 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 25: 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 26: Leader in Addressable Market, Die Attach 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 27: Growth Expected to Favor Besi's Product Portfolio
Growth Expected to Favor Besi’s Product Portfolio, Particularly Die Attach CAGR (2020-2024) Die Attach 13.4% 7,000 Packaging & Plating 10.8% 6,490 6,000 Other Assembly 9.7% 5,793 5,816 Total 10.8% 1,566 Besi 5,000 1,351 4,823 1,507 Addressable 798.6 Market 3,863 1,232 $ millions 4,000 768.2 741.7 91
Slide 28: 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 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 March 2023 34
Slide 35: 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 36: 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 37: III. End-User Market Trends
III. END-USER MARKET TRENDS March 2023 37
Slide 38: 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 March 2023 38
Slide 39: 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 40: 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 41: Mobile Growth Also Aided by 5G Network Expansion
Mobile Growth Also Aided by 5G Network Expansion Source: Ericsson Mobility Report Nov 2022 March 2023 41
Slide 42: 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 43: 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 44: Spares/Service Activities Represent Important Area of Growth
Spares/Service Activities Represent Important Area of Growth Spares & Service % of Revenue 140.0 35% 119.5 • Increased to 15-20% of revenue since 2017 120.0 30% • Diverse customer base • Less cyclical part of business • Highly profitable 100.0 95.0 25% • Revenue will increase as installed base 80.1
Slide 45: IV. Strategy
IV. STRATEGY March 2023 45
Slide 46: 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 47: Strategy Update
Strategy Update • Responded effectively to industry downturn • Expanded R&D investment for next generation applications Business • Significant progress on wafer level assembly portfolio • Key ESG targets exceeded • Capital allocation to shareholders increased • Gross R&D spending increased 23% in 20
Slide 48: 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 49: Flexible Asian Workforce Has Enhanced Scalability
Flexible Asian Workforce Has Enhanced Scalability Fixed Headcount 1,800 1,692 1,645 1,675 100% 1,534 1,523 1,600 90% 1,400 80% 1,200 Headcount 73% 70% 70% 70% 69% 70% 1,000 60% 800 50% 600 400 40% • Reducing temporary Asian production HC 200 27% 30% 30% 30% 31% 30% • In alignment with market conditi
Slide 50: 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 51: 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 52: V. Financial Update and Summary
V. FINANCIAL UPDATE AND SUMMARY March 2023 52
Slide 53: FY-22 Revenue Down 3.5%. Gross & Net Margins Achieved
FY-22 Revenue Down 3.5%. Gross & Net Margins of 61.3% and 33.3% Achieved in Challenging Environment Q3-22/Q4-22 FY-21/FY-22 Revenue Net Income Revenue Net Income 200 900 € 168.8 - 3.5% 800 € 749.3 - 18.4% € 137.7 € 722.9 160 Gross Margin 700 Gross Margin 62.3% + 0.0 points 62.3% 59.6% + 1.7 points 6
Slide 54: Revenue/Order Trends
Revenue/Order Trends 350 327 Quarterly Trends Revenue Orders Q4-22 vs. Q3-22 300 • Revenue: -€ 31.1 million (-18.4%) 250 226 • -Lower computing and mainstream electronics 208 209 202 205 214 200 203 181 • -Ongoing weakness in mobile 200 172 169 • +Partial offset automotive € millions 143 153 150 125
Slide 55: Through Cycle Gross Margin Resilience
Through Cycle Gross Margin Resilience Revenue Gross Margin Gross Margin adjusted 250 80% 226.1 208.3 214.0 Industry Downturn 202.4 75% 200 171.7 168.8 70% Gross Margin % 143.2 € millions 150 137.7 130.8 65% 100 62.1% 62.3% 62.3% 62.0% 61.0% 61.0% 60.4% 60.1% 60% 58.2% 56.7% 50 55% 0 50% Q1-21 Q2-21
Slide 56: 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 exceeded direct peers through cycles: Besi 51.0% 61.3% +10.3 40.0 ASM PT Besi • Investment in business model has 43.4% 44.6% +1.2 yielded high returns
Slide 57: Strong Cash Flow Generation Continues
Strong Cash Flow Generation Continues € 269.5 million Q4-22 vs. Q3-22 800 Cash and Deposits Net Cash dividend • Cash and deposits of € 671.7 million up € 9.9 696.6 million primarily due to: 700 672.2 661.8 671.7 • + € 86.6 million cash flow from operations • - € 65.0 million share repurchases 598.7
Slide 58: Guidance Q1-23
Guidance Q1-23 Revenue Gross Margin Baseline Operating Expenses 0% 0% € 137.7 - 62.3% 61%-63% € 34.3 - -10% -5% Q4-22 Q1-23 Q4-22 Q1-23 Q4-22 Q1-23 € in millions Total Operating Expenses +15 € 37.1 - 20% Q4-22 Q1-23 March 2023 58
Slide 59: 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 (March 2023) on 6ix