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  baggo-mh

 

Q3 insgesamt unter den Erwartungen, AE schwächer, Umsatz, EBIT schwach. Umsatz wegen Verschiebungen von Kunden auf Q4. Die guidance für 2024 unverändert, das ist der key positive Faktor hier.
IR sagt wohl Q4 AE stärker vs Q3, das wird wohl auch die Message im
call sein, ein klarer positiver Aspekt.
2025 guidance für flat/down sales.
Heute wieder viel vola im Kurs, mal sehen, wie er sich nach US Eröffnung verhält und wie die Aussagen im
call sind. Der kurs preist hier sicher viel ein, und je nachdem wie der AE in Q1/Q2 ist, kann der Umsatz 2025 ggf flat sein.. darin muss man jetzt Überzeugung gewinnen.

Viele Grüße,
Fel  

Q3 Zahlen klar enttäuschend. Vor allem bei AE hat sich das Management im Q2 Call zu weit aus dem Fenster gelehnt. Auch der Ausblick 2025 mau. Wenn ich nur aufgrund dessen meine Strategie beurteilen sollte, dann würde ich hier die Leine ziehen.
Jedoch mittel- bis langfristig hat Aixtron sehr viel Potenzial. Vor allem nach dem, was ich im Call gehört habe. Der Call gibt für mich sehr positives Bild ab 2026 / 27, wenn es denn markttechnisch wirklich so kommt, wie von Aix erwartetet.
Falls es zu Rebound die nächsten Wochen/Monate kommt, werde ich meine Position reduzieren. Wenn 2025 Ausblick schon mau ist, dann sehe ich nicht wir dich der Kurs dauerhaft erholen soll. Mir scheint, dass keiner die aktie haben will und die LV können beliebig tief den Kurs drücken.    

Hallo allerseits,
heute Infineon mit Q4 und 2025 Ausblick. Der Ausblick ist nicht gerade Sexy mit leicht rückläufigem Umsatz, vermutlich getrieben durch Automotive.
Interessant ist dagegen die Aussage zum Capex: € 2.5mrd, das ist m.E. nach flat yoy. Der Fokus des Programs ist auf die Werke in Dresden, Österreich und Kulim, insb. mit Fokus auf Ki und SIC & GAN.. das sollte nun wirklich Aixtron zu Gute kommen.. immerhin mal ein leicht positives Zeichen.

Ebenfalls sagt das Management zu den End-Märkten, dass die meisten sich "nahe des Bodens" befinden würden.. also auch da ist Upside - zumindest für das Sentiment im Chip Bereich.

Mal schauen, ob man zu SIC & GAN im Conference Call später noch mehr sagt.

Viele Grüße,
Fel

 

More nuance on the call on the 2025 capex plan, I hope I got it correctly:
€ 2.5bn in total spending, of this there is some capitalised R&D spending (or similar) and other accounting effects, so the "effective" capex spending is about € 1.5bn of those € 1.5bn roughly € 800m go towards the building (structure, cement etc) for the Dresden plant, leaving another € 700m for mainly SIC and GAN (called out as such during the call!) and some Ai investments (smart power / logic).

So in any case my take-away is that a) IFX continues to believe in the SIC and GAN market and puts money behind it ("strategic investments") and b) even though these numbers might not sound huge at first sight, SIC and GAN remain key investment areas in an overall weak Semi Capex environment. So Aixtron is relatively better positioned vs. other players.

Regards,
Fel  

Q: Ross Seymore

Hi, guys. Thanks for letting me ask a question. I guess the first one is on the silicon carbide business. I know it's not the hugest part of your total revenues, but strategically, it's incredibly important. When -- Hassane, you talked about that being up low to mid-single digits. Do you believe that is just evidence of a cyclical weakness? Or has something started to secularly change as people have gotten a little more concerned on not only the pace of EV growth, but competition coming in and commoditization and those sorts of dynamics?

A: Hassane El-Khoury

Yes, Ross. We do still believe it's cyclical. Therefore, that's why I made the comment that the long-term trend for electrification and EV in general, has not changed. And very important to note, the designs or the models that we expected to ramp did go into production, they just didn't ramp to the level that we expected, which says that it's a short-term demand, but back to the lumpiness of EV adoption and not a change in strategy or a megatrend type. Otherwise, those models will have been canceled or not even launched.

--> long term drivers in tact. However, the softness will probably persist through 2025. One crucial question is with what pace the investment win SiC capacities will continue. Will it remain flat?

@fel: thank you for the Infineon update!!  

Classical valuation of a stock is based on the total cash to be earned by the company discounted to present day.  

The classical formula of FCF= EBIT x (1-tax rate) - Capex + Depreciation - change of noncash working capital (NCWC).

NCWC = Inventory+ Account Receivable-Account Payable

Here, I am excluding other exceptional items that Aixtron includes in its FCF reports.

Lets start by looking at how much free cash Aixtron would earn in Q4'24 and therefore the whole 2024. The lower bounds of the 2024 guidance are 620m sales and 22% EBIT margin.  So, the 2024 EBIT should be at least 620m x 22% =136.4m, which means the Q4'24 sales should be 214m and the EBIT should be 70m.  Those numbers are almost the same as those from the current analysts estimates.

The Q4 CAPEX will be 32m, which brings the total 2024 CAPEX to 114m.  The depreciation in Q4 will be 4m, which brings the 2024 depreciation to 14m.

So, excluding any NCWC change, the FCF for the Q4 quarter would be (10% tax rate): 70x0.9-32+6= 37m.

The biggest unknown is the NCWC especially the inventory.  The Q3 NCWC was 504m and that
was 81% of the trailing twelve month sales which were 620m.  Just picture this, 81% of the revenue was turned into and tied up in the noncash WC!!!.  Honestly, in any other company the CFO would have been fired.

The inventory draw from Q4's 214m sales would be 214m x 40%=86m.  The 40% is the cost of goods sold (COGS) and is the average number from Aixtron's 2023 annual report.

If there is no inventory addition in Q4 and the AP and AR stay the same as Q3, then the change of NCWC from at Q4's  would be - 86m .  As a result, the FCF generated in Q4 would be: 37m - (-86m)= 123m

Besides the inventory draw down from sales, Aixtron added inventories of 100m in Q4'23,  89m in Q1'24, 64m in Q2'24,  and 41m in Q3.  Based on that trend, I assume in Q4'24 Aixtron added 30m of inventory.  So the net inventory change would be -86m + 30m = -56m, and the FCF in Q4 would be 93m.  The inventory at the end of 2024 would become 371m.  The NCWC/sales ratio should improve to 0.72.

For 2025, current analysts estimates are 609m sales and 140m EBIT.  The capex is estimated to be 32m, and the deprecation should stay at about 14m. The  FCF excluding change of NCWC would be 140m x 0.9  -32m +14m = 108m.  The total inventory draw from the 609m sales would be 609m x 0.4= 244m.  How much Aixtron would/should replenish the inventory?  If we assume Aixtron adds back 120m inventory in 2025 (30m per Q) and no change in AP and AR, the change of of NCWC from 2024 would be -124m,and the FCF would be 108m-(-124m) = 232m.  With these assumptions, the inventory at the end of 2025 would be 247m, and the NCWC would be 324m, and and NCWC/sales ratio would further improve to 0.53.  I understand that this maybe too optimistic, but is that possible and doable?

Historically, Aixtron's NCWC/Sales ratios are 0.4-0.5 up until Q4'22.  So, asking the CFO to achieve that reasonable level is not too much.  

If Aixtron exits 2025 with a same backlog of today's 384m, the inventory/backlog ratio would be 247m/384m = 0.64.  Historically, this ratio was 0.4-0.6 up until Q4'22.  In a 2023 quarterly CC (Q2?), the CFO said a ratio of ~0.6 is the right one.  I am challenging the CFO to manage the NCWC aggressively in 2025 and keep his words.

I don't need to remind the CFO but just look at the stock price.  The only way for Aixtron's stock price to go back UP is to show a drastic improvement of FCF.

Adding the Q4'24's FCF of  93m and the hopefully doable projected 2025 FCF of 232m, Aixtron's cash position should add ~330m in addition to Q3'24's 78m.  After dividends there could be at least 350m cash.  Aixtron should use the excess cash to buy back the shares.  Don't put all of it back to WC again please.  If the customers want Aixtron to prepare for their "promised" ramp, ask them to pay the deposits first please.  I hope that there would be no same mistakes in 2025 and beyond.  

If not, the executive board should do something about the managers.
 

This chart shows that Aixtron continued to build excess inventories without customers putting down the deposits started from late 2022.  The ratio doubled in one year to > 3.5, and still rising till the last Q.





 

This chart shows that started in early 2023 Aixtron adds inventories without firm orders (=backlogs) from its customers.  This ratio should go back to ~0.6 by the end of 2025.
 

This ratio hopefully could go back to <0.5.


 

From the Q2'24 CC:

Michael Kuhn

... you mentioned some measures only taking effect into '25, maybe also a rough outlook on '25 and what level of inventories you would feel comfortable with over the upcoming quarters? ...

Felix Grawert

...So by the middle of '25, we want to be back to normal. So when we talk in 12 months from now, we want to be back to a normal level... And you will see a gradual digression by the Q3, not too much, don't over expect. And then you will see a digression of the inventories Q4, Q1, Q2 and by the middle of next year, we should be back to normal . It really follows from our strategy.

Michael Kuhn

And could you quantify it back to normal?

Christian Danninger

I would consider normal levels of 60%, 70% of order backlog with some further optimization of our internal processes, maybe we can get down even further but that would be my best guess right now.

.............................

From the horse's month, back to 60-70% of inventory/backlog ratio by the middle of 2025. My post in #1855 on 2025 FCF assumes the ratio would drop to 0.64 by the end of 2025

 

What you list as inventory is machines ready built plus also materials on stock for building machines, correct? I think Aixtron management has clearly missed to anticipate the dip in silicon carbide market in time. They hired aggressively and bought a new factory... probably both an over-investment from ex-post perspective. But what do you do now, that you have lots of new people on board? If you trust in the market mid-term, you will keep them. While I believe initially they were mainly stockpiling materials with alle the supply chain issues during/after covid (which they did in a brilliant way, as they never reported significant supply chain problems), today I think it is mainly keeping all those people busy by letting them build machines for delivery in better times. But I agree with you, that inventory needs to come down, not only to save money on storage/depreciation/captial cost, but also I had the feeling, that net cash got a little low recently. And I want a nice dividend! Q4 with super revenue announced will be an opportunity to reduce inventory, but thereafter it might be slower.  

On December 18, Innoscience announced a global offering notice on its official website, planning to offer 45.364 million H shares globally, with an offering price range of HK$30.86 to HK$33.66 per share, and a maximum fundraising of approximately HK$1.53 billion ( approximately RMB 1.377 billion ). The IPO period is from December 18 to December 23, 2024, and is expected to be officially listed on December 30 .

Innoscience disclosed that the net proceeds from the fundraising will be used to expand production capacity, product portfolio and other purposes. Specifically:

60% of the funds will be used to expand the production capacity of 8-inch gallium nitride wafers from 12,500 wafers per month as of June 30, 2024 to 70,000 wafers per month in the next five years . It is also planned to purchase and upgrade equipment and machines to expand the production line of the production base...  

The GaN factory has been completed and will mass produce 8-inch 1200V products

On December 16, according to local news from North Gyeongsang Province, South Korea's Apro Semicon has completed construction of a new gallium nitride factory in the High-Tech Valley National Industrial Zone in Gumi City .

According to data, Apro Semicon was established in July 2020 and has been committed to the development of GaN since its establishment. In December last year, Apro Semicon signed a memorandum of understanding for an investment of 60 billion won ( about 305 million yuan ) to invest in the construction of a GaN power semiconductor factory in the Gumi High-Tech Valley National Industrial Park, mainly producing GaN epitaxial wafers; the epitaxial wafers produced in the factory will cooperate with foundries such as DB HiTek to manufacture GaN chips.

------------------------
Apro is a customer of Aixtron  

https://compoundsemiconductor.net/article/120810/...for_GlobalWafers_

Globitech is a subsidiary of GlobalWafers and a SiC customer of Aixtron.  

they ordered from Veeco.
They used to be Aixtron customers.
Or are that two different tools?


 

The investigation will look into China’s “acts, policies, and practices on the production of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication.”

https://www.cnbc.com/2024/12/23/...obe-into-legacy-chinese-chips.html  

On January 2, according to the official WeChat account of Tianxing Capital, Epiworld completed its Pre-IPO round of financing on December 31, 2024. This financing will help Epiworld accelerate the investment and construction of an 8-inch silicon carbide epitaxial wafer production line in Xiamen .

According to reports, this financing was jointly promoted by Xiamen Industrial Investment and two ICBC AIC funds, and received guidance and support from the Xiamen Municipal Government and the Municipal Finance Bureau. The fund investors include Xiamen Industrial Investment, Fujian Provincial Industrial Fund, Xiamen Industrial Guidance Fund, and Free Trade and Haicang District Guidance Fund, realizing the linkage of funds from central enterprises, provinces, cities, and districts. The target scale has reached 10 billion yuan , and the initial scale is 3 billion yuan .
-----------------------------
Note:
Epiworld bought a G5WWC a few years ago for 6" SiC epi wafers.  However, I believe Epiworld did not go with the G5 but instead went with single wafer tools (LPE?).  This time, perhaps Epiwrold would go with the G10-SiC for its superior performance for this 8" SiC ep wafers project.  

News today says the STM-Sanan Joint Venture in Chongqing is planning its first production run in February and volume ramp in July which is ahead of schedule.  The total investment is 30B yuan with planned annual production of 480,000 8" SiC wafers.

The JV has been hiring engineers with Aixtron experience.  

This Chinese LED company bought the majority of Aixtron's 2024 G4 tools as shown in the photo.  Focus Lightings used to be a blue LED only company and is now a new customer of Aixtron by moving in to ROY LEDs for the  RGB mini-micro LED production.   The article says that this  1.01B investment is for the first-phase.

https://finance.sina.com.cn/tech/digi/2025-01-14/...wwwc1343931.shtml  

Is the tide turning?

MACOM unveils five-year, $345m plan to expand 100mm GaN and GaAs production and introduce 150mm GaN

https://www.semiconductor-today.com/news_items/.../macom-140125.shtml

North Carolina fab investment:
expansion of cleanrooms within existing building footprint;
installation of 150mm wafer-size production capabilities to support RF GaN-on-SiC processes;
installation of advanced metal-organic chemical vapor deposition (MOCVD) epitaxial growth capabilities;
infrastructure upgrades (HVAC, water, power systems)

 

https://www.manufacturing.net/operations/news/...79m-in-chips-funding

"The investment could increase the substrate capacity by over 750,000 substrates per year and more than double the output of epitaxial wafers annually."  

ST Micro Q4 cc: Schlechte Zahlen, schlechter Ausblick, fallender Aktienkurs. ABER:
Die Umstellung der SiC-Produktion in Catania soll beschleunigt werden, as fast as possible von 6 auf 8 inch umgestellt werden. Damit will man schon ab H2 2025 produzieren für die westlichen Kunden. Das neue JV mit Saan'an in China soll direkt in 8 inch ab H1 2026 für die chinesischen Kunden produzieren (leichte Verspätung zur Ankündigung für Q4 2025 aus Mitte 2023). Ich würde behaupten, dass das SiC-Aufträge in 2025 für Aixtron bedeutet, was beim letzten Aixtron cc so nicht eingeplant schien. (Letzte Frage, letzte Antwort im Webcast, wer reinhören will)  

At the end of Q3, Aixtron had a  -58m Free Cash Flow (FCF) and 78m net cash. Average analysts based on Marketscreemer  project a 2024 FCF of 36m.   So Aixtron should have a Q4 FCF of 36m+58m = 94m and end the 2024 with 78m+94m= 172m cash.

Analysts now project 2025 sales of 566m and FCF of 182m. Assuming Aixtron pays out 45m dividend in 2025, then Aixtron COULD end the 2025 with 172m + 182m-45m=309m net cash.  

The Finanzen.net site says 24.5 FCF in 2024 and 162.3m FCF with 575m sales in 2025. That would mean 279m net cash at the end of 2025.

Either way, Axitron should end the 2025 with significant cash.

 

Infineon Technologies publishes forecast report, supporting GaN multi-industry applications have reached a turning point

Author: Atkinson | Published on February 26, 2025 at 17:30

Infineon Technologies publishes forecast report, supporting GaN multi-industry applications have reached a turning point

Infineon published the "GaN Power Semiconductor Forecast Report 2025", which emphasized that GaN will become a game-changing semiconductor material that will significantly change the way the public improves energy efficiency and promotes low carbonization in areas such as consumption, transportation, residential solar energy, telecommunications and AI data centers.

Infineon pointed out that GaN can bring significant advantages to end-customer applications, including improved energy efficiency, reduced size, reduced weight and lower overall cost. Today, USB-C chargers and adapters are the leaders in GaN applications, and more industries are about to reach a critical turning point in GaN applications, which will greatly promote the development of the GaN power semiconductor market. Johannes Schoiswohl, head of Infineon's GaN business line, said that Infineon is committed to promoting low-carbon and digital transformation through innovations based on all semiconductor materials including Si, SiC and GaN. With advantages in efficiency, density, and size, GaN will play an increasingly important role in comprehensive power systems. And given that the cost gap between GaN and Si is narrowing, we foresee GaN adoption continuing to grow this year and beyond.

In addition, GaN technology is critical to the power supply needs of AI. As computing power and energy requirements of AI data centers grow rapidly, the market increasingly needs advanced solutions that can handle the huge loads associated with AI servers. In the past, the output power of power supplies was 3.3 kW, but it is now developing towards 5.5 kW and is expected to reach 12 kW or more in the future. The use of GaN can improve the power density of AI data centers, which will have a direct impact on the computing power that can be provided within limited rack space. Except GaN has clear advantages. On the other hand, using it in combination with Si and SiC is an ideal choice to meet the requirements of AI data centers and achieve a comprehensive trade-off between efficiency, power density and system cost.

As for the home appliance market, Infineon expects GaN to achieve rapid development as applications such as washing machines, dryers, refrigerators and water pumps/heat pumps require higher energy efficiency levels. For example: In an 800 W application, GaN can improve efficiency by 2%, helping manufacturers achieve Class A efficiency. According to Infineon, GaN-based EV onboard chargers and DC-DC converters will contribute to higher charging efficiency, power density and material sustainability, and are transitioning to systems above 20 kW. GaN will also enable more efficient 400 V and 800 V traction inverters for electric vehicle systems together with advanced SiC solutions, increasing the driving range of electric vehicles.

Infineon Technologies said that because GaN materials can improve the compactness of volume, the robotics industry will widely adopt GaN from 2025, which will promote the development of delivery drones, nursing robots and humanoid robots. And as robotics converges with advanced AI technologies such as natural language processing and computer vision, GaN will provide the efficiency needed to enable streamlined, high-performance designs. For example, integrating the inverter into the motor main housing eliminates the need for an inverter heat sink, reduces the number of cables per joint/axis, and simplifies EMC design.

Infineon further emphasized that in order to address the challenges in cost and scalability, Infineon is further increasing its investment in GaN research and development. With the richest product and IP portfolio, strict quality standards, and cutting-edge innovative technologies such as 12-inch GaN wafer manufacturing and bidirectional switch (BDS) transistors, Infineon is consolidating its leading position in promoting low carbonization and digitalization based on all relevant semiconductor materials including GaN.  

European electric vehicle sales increased by 37% in January, while Tesla's sales dropped by more than 40%

MoneyDJ News 2025-02-26 06:29:42 Reporter Cai Chengqi reported

New car sales in Europe fell again in January, with electric vehicle (EV) sales increasing by nearly 40%, while sales of US electric car giant Tesla dropped by more than 40%.

According to Japanese media reports, the European Automobile Manufacturers Association (ACEA) released statistics on the 25th, pointing out that although the sales of electric vehicles and hybrid electric vehicles (HV) have increased significantly, the sales of gasoline vehicles have plummeted, dragging down the sales of new cars (passenger cars) in the 31 major European countries in January 2025. The sales volume fell by 2% to 995,000 units compared with the same month last year.


In terms of sales by vehicle type, electric vehicle sales in Europe increased by 37% to 166,000 units in January compared with the same month last year. Among them, Germany's electric vehicle sales reached 34,000 units in January, 1.5 times the level of the same month last year. The UK increased by 42% to 29,000 units, Belgium increased by 37% to 13,000 units, the Netherlands increased by 28% to 11,000 units, and France decreased by 1% to 19,000 units.


In January, HV sales in Europe increased by 17% to 347,000 units, PHV (plug-in hybrid vehicle) sales decreased by 6% to 75,000 units, gasoline vehicle sales decreased by 20% to 290,000 units, and diesel vehicle sales decreased by 27% to 88,000 units.


In January, Tesla's electric vehicle sales in the European market were only 9,945 units, a 45% drop from the same month last year (18,161 units). In January, Tesla's sales in Germany were only 1,277 units, the lowest since July 2021. Its sales in the French market plummeted by 63%, and its sales in the British market decreased by 8%, losing to China's BYD for the first time in history.


According to the MoneyDJ XQ Global Winner System quotation, Tesla fell 8.48% on the 25th and closed at US$302.50, setting a new closing low in about three and a half months (since November 7, 2024).