Aixtron benefits from power electronics growth
Efficient power electronics based on GaN and SiC remain drivers of success
Deposition equipment company Aixtron says it has seen continued strong demand from the compound semiconductor industry in the first quarter of 2023, in particular, systems for the production of power electronics based on GaN and SiC.
The order momentum for GaN continues to grow with orders accounting for more than a third of equipment order intake in Q1/2023: One reason for this was that customers are using the material for new, additional applications e.g., in medium voltage or solar applications. In addition, several major customers are systematically proceeding to set up high-volume manufacturing capacities, relying here on Aixtron as a core supplier.
SiC also continues its strong growth path, driven by the ongoing expansion of electromobility. Aixtron says several of its customers continue to build up their high volume manufacturing capacities based on Aixtron equipment such as the new G10-SiC system, which was introduced in Q3/2022.
Aixtron says that orders for Micro LED and optoelectronics equipment as well as the after sales business contributed to the high overall demand.
In the first quarter of 2023, the company's order intake increased by 7 percent to €139.9 million (Q1/2022: €130.2 million). Driven by this positive order development, Aixtron's equipment order backlog in the quarter increased accordingly, reaching €417.9 million as of March 31, 2023, which is an increase year-on-year by 60 percent (Q1/2022: €260.4 million)
Revenues
In the first three months of 2023, revenues reached €77.2 million, and were 13 percent lower than in same quarter of the previous year (€88.6 million). This is mainly due to the fact that export licenses for tools ready for delivery in Q1/2023 were not yet issued as of the reporting date, according to the company.
The executive board expects an increased growth with rising order intake and margins for the full year. In line with the revenues, gross profit in the first quarter of 2023 was at €31.1 million (Q1/2022: €35.9 million) and gross margin was at 40 percent (Q1/2022: 41 percent).
In the first three months of 2023, operating expenses reached €27.6 million and were slightly higher than in the same period 2022 (Q1/2022: €21.7 million). This was mainly due to higher expenses in the area of research and development. With an operating result (EBIT) of €3.5 million and an EBIT margin of 5 percent (Q1/2022: €14.2 million, 16 percent), the profit for the period in Q1/2023 was €3.5 million (Q1/2022: €13.8 million).
In the first quarter 2023, Aixtron's free cash flow was €1.9 million (Q1/2022: €22.4 million). The difference year-on-year is mainly due to the quarter's lower profit for the period and a further increase in inventories.
Guidance
For the year 2023, the executive board expects the high demand for MOCVD systems to further increase and has therefore confirms the 2023 full-year growth guidance that was given in February 2023.
Accordingly, management expects the total order intake in the group to range between €600 million and €680 million for the full year 2023. At revenues between €580 million and €640 million, the Executive Board expects to achieve a gross margin of around 45 percent and an EBIT margin of around 25 percent27 percent.
Felix Grawert, CEO and president of Aixtron SE said: "SiC and GaN for efficient power electronics offer an enormous growth potential which is further driven by the overall trend towards energy efficiency in general and specifically by the acceleration of the e-mobility expansion.
"For Aixtron, this is reinforced by the fact that several major customers are moving into volume production and are relying on Aixtron's innovative technology solutions and systems for this important and necessary step. This is yet another evidence for the success of our strategy and our development from a niche supplier to a reliable partner enabling industrial scale production in the semiconductor industry."
