Soitec Aims To Triple Revenue By 2026
Soitec unveils its strategy for 2026 with estimates that the size of its addressable markets will increase 2.5-fold by fiscal year 2025-2026
Soitec, a Grenoble-based designer and manufacturer of semiconductor materials, is hosting a 2021 Capital Markets Day to talk about its vision of the likely future development of the semiconductor market and its roadmap for each of Soitec's three end markets (mobile communications, automotive and industry, and smart devices).
Paul Boudre, Soitec's CEO said:“As a recognised key technology player in the semiconductor industry, Soitec is ideally placed to capitalize on a new phase of unprecedented technological change that will continue to revolutionise applications, both home and industrial, personal and professional. Thanks to our early-stage involvement in roadmaps for the development of new electronic equipment and applications, Soitec is increasingly instrumental in the design of these products, which allows us to create whole ecosystems based on the use of our engineered substrates.
"This model obviously gives us a clear view of the growth outlook for our addressable markets, and especially of the decisive role that our substrates are playing in driving the burgeoning momentum in our end markets, whether it be mobile communications, automotive and industry, or smart devices. In light of the increasing number of applications and ever larger material foortprint for each product and application, we are confident in the ability of our organisation to scale up further over the next five years. We are targeting to triple our revenue over this period, while growing our EBITDA margin by more than four percentage points. Our solid financial position also gives us the means to expand our production capacities to keep pace with this growth push.
"Lastly, we are determined that this process of value creation will be part of our wider sustainability strategy at all levels of our organization. Thanks to products that offer ever greater energy efficiency, Soitec is directly supporting the transition to a more sustainable business model, which is increasingly demanded by our customers and by society as a whole. We are intent on creating an inclusive organization that is capable of attracting, developing and retaining top talent, and on nurturing long-lasting, mutually beneficial relations with all of our stakeholders.”
After having delivered a 2.5-fold increase in its revenue over the past five years, Soitec is looking ahead to the next five years from its position as a recognised leader in innovative semiconductor materials. With key roles in the widescale roll-out of 5G technology and the fast-paced adoption of technological megatrends such as electric vehicles and artificial intelligence, the group has laid the foundations for its future growth.
Since its 2019 Capital Markets Day, Soitec has made significant progress in many different areas, including signing new long-term procurement contracts with major customers, ramping up a new Piezoelectric-on-Insulator (POI) substrate production facility for RF filters used in smartphones, contributing to the adoption of FD-SOI substrates through Dolphin Design, and advancing with its R&D programs focused on new materials such as GaN epitaxial substrates and new-generation SiC substrates.
From an operational perspective, Soitec has continued to invest in its human capital and industrial capacity both at Bernin and in Singapore, in order to keep pace with its customers' needs and support the group's growth.
From a business perspective, the group has seen organic revenue growth of almost 30 percent over the past two years, despite the economic slowdown caused by the health crisis.
Soitec estimates that growth on its addressable markets over the next five years will continue to accelerate, from around three million substrates to over seven million substrates by 2026. In this bullish environment, Soitec will benefit from the main fabless and OEM manufacturers adopting its advanced technologies in the mobile communications, automotive and industry, and smart devices segments. By continuing to strengthen its foothold on these three end markets, which are expected to prove major drivers of the global economy over the next five years, Soitec is aiming to triple its revenue to around $2 billion by fiscal year 2025-2026.
The group also expects to see its EBITDA margin widen from 30.7 percent at the end of March 2021 to around 35 percent by 2026, driven by an operational leverage effect but also by products with higher added value. Thanks to its solid financial structure, the group will also increase its capital spending to support its growth and strategic priorities, with a five-year capital expenditure program worth some €1.1 billion.
For fiscal year 2025-2026, Soitec is targeting revenue of approximately $2 billion and an Electronics EBITDA margin of around 35 percent based on a EUR/USD exchange rate of 1.20.