X-fab Silicon Foundries Se · EURONEXT:XFAB
X-fab Silicon Foundries — Q3 2023 Earnings Presentation
49 slides from X-fab Silicon Foundries's earnings presentation, November 2023
Slide 1: The specialty foundry for the analog world
The SPECIALTY foundry for the analog world Investor presentation // Q3 2023
Slide 2: Disclaimer
Disclaimer Forward-looking information › This presentation may include forward-looking statements. regarding trends or current activities should not be taken as a Forward-looking statements are statements regarding or report that such trends or activities will continue in the future. based upon our
Slide 3: Content
Content 01 About X-FAB 02 Our growth strategy going forward 03 Company news 04 Financial update 3
Slide 4: Key investment highlights
Key investment highlights › Specialty foundry with a comprehensive set of markets with high growth and long lifecycles technologies across market segments › Providing strong design support & IP drives long-term › Expertise in analog/mixed-signal IC production, customer engagement with successful tec
Slide 5: X-FAB at a glance
X-FAB at a glance 6 six manufacturing sites Fabs/subsidiaries Sales offices 740 m$ revenue in 2022 >4,200 employees representing ~45 nationalities 5
Slide 6: Foundries and their role in the value chain
Foundries and their role in the value chain › Focus on complex technology, design support and › X-FAB does not have own products, as it does not want to manufacturing solutions compete with its customers Semiconductor IC (target) Process IP provision/ IC wafer (technology) IC assembly Marketing & va
Slide 7: Analog vs. digital – a clear differentiation
Analog vs. digital – a clear differentiation Analog/mixed-signal Digital › Low capacity and technology capex › High capacity and technology capex › Long product lifecycle › Short product lifecycle › High tech differentiation › Latest technology node differentiation › Large portfolio of process techn
Slide 8: Our comprehensive technology offering
Our comprehensive technology offering Large portfolio of process technologies & IP Strong expertise in Microsystems/MEMS Analog High High › Over 20 years track-record in MEMS offering Technology Digital NVM RF Opto SOI MEMS M/S Voltage Temp › Strong focus on developing differentiated node scalable t
Slide 9: Serving the strongest growing end markets
Serving the strongest growing end markets Automotive Industrial › Electrification › Smart manufacturing › Safety › Smart buildings and cities › Comfort & convenience › Sustainable energy Consumer, Communi- Medical cations, Computer › Personal medical devices › Smart home › Medical equipment › Connec
Slide 10: We are setting the benchmark in support
We are setting the benchmark in support X-FAB’s close relationships with customers create barriers to entry for competitors. Unique tools Robust for First-Time- design flow Right Long 24/7 PDKs lifetime expert with proven product hotline ESD support Largest IP Application Design offering experts rev
Slide 11: Continuously growing, diversified and global customers
Continuously growing, diversified and global customers We have a diverse base of 438 customers worldwide. 68 438 41 › About 2,040 unique products in production plus 331 193 more than 665 new products in prototyping stage <10 › Top 5 customers accounted for 52% of revenue in 170 217 2022 • Melexis ac
Slide 12: Diversified product range
Diversified product range Average revenue per customer per product in 2022 Revenue share per customer in 2022 › Low risk due to highly diversified portfolio of end products Top 1 39.6 % Top 2 3.9 % › About 2,040 unique products in production Top 3 3.4 % › X-FAB is #1 foundry supplier for 11 out of t
Slide 13: Clear future revenue visibility
Clear future revenue visibility Illustrative lifecycle for automotive product Technology Chip First Volume Volume 1st iteration Qualification Safe launch selection design prototype ramp-up production 3 6 5 6–8 9 12 ~ 18 > 66 Months › At least 12 months of finalizing chip design for mass-production ›
Slide 14: Sustainability at X-FAB
Sustainability at X-FAB Our environment. Our responsibility. Our ESG objectives. › X-FAB provides technologies helping to address today’s challenges, such as the need for greener energy to respond to the climate change as well as smart medical solutions for a growing population and aging Drive techn
Slide 15: Sustainability at X-FAB
Sustainability at X-FAB Environment Sustainable Supply Health & Safety › Constantly increasing environmental awareness › Global supplier selection process in place › Environmental, Health and Safety (EHS) policy and responsibility in place to ensure health and safety of our › Suppliers need to follo
Slide 16: Sustainability at X-FAB
Sustainability at X-FAB Human Rights & Ethics Social Commitment Governance › Strong set of corporate values that include › Global and local activities relating to social and › Strictly complying with insider trading rules and customer orientation and innovation educational topics in order to contrib
Slide 17: Content
Content 01 About X-FAB 02 Our growth strategy going forward 03 Company news 04 Financial update 17
Slide 18: Our growth strategy going forward
Our growth strategy going forward › Expand X-FAB’s leading position in analog/mixed-signal portfolio – Microsystems (MEMS), SiC › Maintain focus on resilient and growing end markets – › Grow economy of scale and optimize utilization to automotive, industrial, and medical further improve margins › Co
Slide 19: Semiconductors are key to resolving the challenges of our time
Semiconductors are key to resolving the challenges of our time › Enabling the development of sustainable and energy-efficient products across all sectors › Drives strong growth in X-FAB’s key end markets in the long term – automotive, industrial and medical Climate change Growing & aging populations
Slide 20: Business highlights – Automotive
Business highlights – Automotive › Electrification of mobility is driving strong demand for X-FAB’s high-voltage system-on-chip technologies › New automotive revenue record in Q3 2023, up 40% year-on-year › Transition of X-FAB France with the ramp of X-FAB’s automotive business keeps contributing st
Slide 21: Automotive applications supported by X-FAB
Automotive applications supported by X-FAB › Auto semiconductor market expected to grow at a CAGR of 13% (2021-2030)* In-vehicle network › EV models with chips made by X-FAB inside can CAN/LIN Transceiver count up to 170 CHIPS per unit Infotainment Ethernet Safe-by-wire Touchscreen In-car data bus G
Slide 22: The right technology mix for the electrification of cars
The right technology mix for the electrification of cars Silicon carbide High voltage + NVM CMOS On-chip HV isolation › Silicon carbide gaining momentum as technology › High voltage (up to 100 Volt) in combination with › Galvanic isolation technology required for electric of choice for power applica
Slide 23: Business highlights – Industrial
Business highlights – Industrial › Transition to renewable energy sources drives demand for X-FAB’s industrial SiC applications › Quantity of SiC wafers delivered in the third quarter was up 38% year-on-year › All-time high industrial revenues in Q3 2023, up 15% year-on-year Industrial revenue 60 50
Slide 24: Growth drivers industrial end market: green energy & automation
Growth drivers industrial end market: green energy & automation Sustainable energy Industry 4.0 Smart buildings Smart cities Meeting today’s energy demand Data-driven, AI-based and Centralized management of building Interaction and management of without venturing the livelihood of connected producti
Slide 25: Industrial end applications enabled by X-FAB
Industrial end applications enabled by X-FAB We are supporting four global trends: smart cities, smart buildings, smart manufacturing and sustainable energy. Thermal camera Robotics/cobots Machine to machine Smart home Transportation communication Industrial power Automated test Residential energy R
Slide 26: Ready for the silicon carbide era
Ready for the silicon carbide era X-FAB‘s position SiC benefits › World’s first and leading 6-inch silicon carbide pure-play foundry › Higher conversion efficiency – increases battery range by approx. 8% › Fully integrated high-volume manufacturing fab, automotive certified › Operates at higher temp
Slide 27: Business highlights – Medical
Business highlights – Medical › Growth driven by advances in healthcare that increasingly rely on semiconductor solutions › Medical revenues in Q3 2023 up 26% year-on-year › Third quarter growth mainly driven by DNA sequencing application Medical revenue 18 16 14 12 in $m 10 8 6 4 2 0 Q4 Q1 Q2 Q3 Q4
Slide 28: Three pillars for growth in medical
Three pillars for growth in medical Personal medical devices Medical equipment Lab-on-a-chip › Contactless thermometer, pacemaker, glucose › X-Ray detectors, ultrasound, CT scan, › DNA sequencing, cancer cell sorting, sepsis meter, hearing aid, cochlear implant, pain mammography, etc. detection, all
Slide 29: Connecting the two worlds of microelectronics and microfluidics
Connecting the two worlds of microelectronics and microfluidics Smart integrated microfluidic systems gaining ground X-FAB – at home in both worlds › Biological and pharmaceutical research is making significant progress assisted › X-FAB’s expertise and experience in microelectronics and microfluidic
Slide 30: Enabling next generation healthcare
Enabling next generation healthcare X-FAB’s medical business benefits from increasing demand for testing and point-of-care devices Digital transformation in medicine › Demand for digital healthcare keeps increasing „We are experiencing the digital • Point-of-care diagnostics transformation in medici
Slide 31: Business highlights – Consumer, Communications & Computer
Business highlights – Consumer, Communications & Computer › Peak in 2016 due to acquisition of X-FAB France and subcontracted fingerprint business › Focus on differentiating CCC* business with higher value add CCC revenue 90 80 70 60 in $m 50 40 30 20 10 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q
Slide 32: CCC applications supported by X-FAB
CCC applications supported by X-FAB Sensors Power management Radio frequency (RF) › Optical ambient light › Touch controller › Micro LED drivers › AC/DC chargers › RF switch › PLL sensor › Low noise amplifier › MIPI interface › Gas sensor › Micro OLED displays › Galvanic isolation › Proximity sensor
Slide 33: Well positioned for future growth
Well positioned for future growth Mobility Healthcare Energy Strengthening our #1 position as Becoming the foundry of Supporting the transition to automotive pure-play foundry choice for medical green energy 33
Slide 34: Content
Content 01 About X-FAB 02 Our growth strategy going forward 03 Company news 04 Financial update 34
Slide 35: Company news
Company news › 30 Aug-01 Sep: X-FAB held its first Global Leadership Conference in Leipzig, Germany, with 80 X-FAB leaders attending › Sep: X-FAB was nominated by CCI FRANCE BELGIQUE for The Best Belgian Investor in France Award in the "Prix Structurant" category › Sep: X-FAB donated EUR 10,000 to U
Slide 36: Content
Content 01 About X-FAB 02 Our growth strategy going forward 03 Company news 04 Financial update 36
Slide 37: Q3 2023 at a glance
Q3 2023 at a glance Revenue & bookings by quarter Key takeaways 300 › Q3 total revenue at USD 233.8 million including revenues CMOS Microsystems/MEMS recognized over time, up 24% year-on-year SiC 250 › Record revenue* in X-FAB’s key end markets auto, Revenue recognized over time Bookings industrial,
Slide 38: Quarterly overview
Quarterly overview in millions of USD, growth vs. growth vs. Q3 2023 Q3 2022 Q2 2023 except otherwise stated Q3 2022 Q2 2023 Revenue 233.8 188.3 227.1 24% 3% Gross profit 69.7 45.9 67.6 52% 3% % margin 29.8% 24.4% 29.8% EBIT 43.9 (9.9) 40.8 +53.8m 8% % margin 18.8% -5.3% 18.0% Net profit 41.7 (15.0)
Slide 39: Quarterly revenue by market segment and technology
Quarterly revenue* by market segment and technology Q3 y-o-y in millions of USD Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 growth by market segment 83.8 89.7 98.3 96.9 104.4 120.9 131.1 135.3 40% Automotive Industrial 39.7 41.4 42.5 46.7 42.3 46.9 51.3 53.7 15% Medical 14.5 13.7
Slide 40: Successful business portfolio transformation
Successful business portfolio transformation Business mix Q4 2016 Business mix Q3 2023 Industrial 8% Medical Automotive 2% 61% Automotive 37% Industrial Share of core business 24% CCC 52% with long lifecycles and higher value-add has grown systematically CCC Medical 8% 8% 48% 92% Core business Core
Slide 41: Prototyping revenue development
Prototyping revenue development Prototyping revenue per quarter Prototyping revenue by market segment (full year 2022) › Q3 2023 prototyping revenues at USD 27.4 million, up 20% year-on-year and nearly flat quarter-on-quarter 30 IP sale* Others NRE Revenue 3% 25 CCC Automotive Moving 4Q average 21%
Slide 42: Natural hedging of the business
Natural hedging of the business Revenue by currency Costs by currency (full year 2022) › Euro share of sales in Q3 2023 at 43% › No FX impact on EBITDA thanks to natural hedging of the business 800 MYR SGD 700 5% 1% 58% 600 63% 500 84% 81% EUR in $m 400 34% 87% 75% 68% 300 USD 42% 60% 200 79% 37% 10
Slide 43: Cash position
Cash position Net debt development Solid cash position in millions of USD 30 Sep 2023 30 Sep 2022 30 Jun 2023 › Solid cash position to sustain strong growth – reinvesting cash into capacity expansions Cash & cash equivalents 391.3 327.5 441.8 › Major capacity expansion program across all sites • exp
Slide 44: Profitability
Profitability › Q3 2023 EBITDA margin at 28.1%, slightly above the guided 24-28%, excluding effect from revenue recognized over time EBITDA margin would have been at 26.8% › Earnings were mainly driven by economies of scale, a favorable product mix and good cost control Gross profit EBITDA 70 40% 70
Slide 45: Outlook
Outlook Bookings & backlog Guidance › Quarterly bookings down 4% year-on-year and down 6% quarter- › Q4 2023 revenues in the range of USD 230-245 million on-quarter › Q4 2023 EBITDA margin in the range of 25-29% › Bookings do not fully reflect demand due to high backlog and LTA › Based on an average
Slide 46: Appendix
Appendix Further financial numbers and business information 46
Slide 47: Financial key figures 2017-2022
Financial key figures 2017-2022 in millions of USD, CAGR 2017 2018 2019 2020 2021 2022 except otherwise stated 2017-20221 Revenue 581.7 587.9 506.4 477.6 657.8 739.5 5% % growth 13.4% 1.1% -13.9% -5.7% 37.7% 12.4% Gross profit 115.7 104.0 27.3 43.7 150.0 176.0 9% % margin 19.9% 17.7% 5.4% 9.2% 22.8%
Slide 48: Annual revenue by market segment and technology
Annual revenue by market segment and technology CAGR in millions of USD 2017 2018 2019 2020 2021 2022 Growth 2017-2022 by market segment Automotive 256.1 284.0 243.8 236.0 331.7 389.3 17% 9% Industrial 73.6 96.2 91.9 97.1 145.6 172.9 19% 19% Medical 22.7 24.0 28.2 33.5 47.9 55.8 16% 20% Subtotal cor
Slide 49: X-FAB shareholder structure
X-FAB shareholder structure* 25.0 39.4 Elex NV Sensinnovat BV Sarawak Technology Holdings Sdn. Bhd. Public 24.2 11.4 * Updated on November 14, 2023, see press release “Changes to the shareholding structure” 49
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