Soitec SA
PAR:SOI
US |
Fubotv Inc
NYSE:FUBO
|
Media
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
US |
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
|
CN |
NIO Inc
NYSE:NIO
|
Automobiles
|
|
US |
Fluor Corp
NYSE:FLR
|
Construction
|
|
US |
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
|
US |
TopBuild Corp
NYSE:BLD
|
Consumer products
|
|
US |
Abbott Laboratories
NYSE:ABT
|
Health Care
|
|
US |
Chevron Corp
NYSE:CVX
|
Energy
|
|
US |
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
|
US |
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
|
US |
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
|
US |
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
|
US |
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
70.1
169.5
|
Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
Fubotv Inc
NYSE:FUBO
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
C
|
C3.ai Inc
NYSE:AI
|
US |
Uber Technologies Inc
NYSE:UBER
|
US | |
NIO Inc
NYSE:NIO
|
CN | |
Fluor Corp
NYSE:FLR
|
US | |
Jacobs Engineering Group Inc
NYSE:J
|
US | |
TopBuild Corp
NYSE:BLD
|
US | |
Abbott Laboratories
NYSE:ABT
|
US | |
Chevron Corp
NYSE:CVX
|
US | |
Occidental Petroleum Corp
NYSE:OXY
|
US | |
Matrix Service Co
NASDAQ:MTRX
|
US | |
Automatic Data Processing Inc
NASDAQ:ADP
|
US | |
Qualcomm Inc
NASDAQ:QCOM
|
US | |
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Hello, and welcome to the FY '22 Q1 Sales Call. My name is Rosie, and I'll be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Paul Boudre, Soitec's CEO, to begin today's conference. Thank you.
Thank you, operator, and welcome to Soitec conference call dedicated to the publications of the first quarter revenue of our fiscal year '22. This is the quarter covering the period from the 1st of April to the end of June 21. I am Paul Boudre, Soitec's CEO. Together with me on this call are Lea Alzingre, our CFO; and Steve Babureck, our Investor Relations Officer. So as usual, we will briefly comment on our sales performance. And after that, we will open the floor to questions. So let's go straight to our Q1 '22 revenue performance. In line with our expectations, we had a very solid start of our fiscal year '22. As a reminder, we are targeting for around 40% organic growth in fiscal year '22 and around $ 950 million. Thanks to this strong Q1 '22 performance, we are fully on track to deliver our full year '22 guidance. Indeed, we achieved revenue of EUR 180 million in Q1 '22. Revenue was up 59% on a reported basis over Q1 '21, including a 10% negative currency impact. So this represents a 69% growth excluding currency impact. On a sequential basis, it represents a 1% growth, excluding currency impact over Q4 '21, which was our second highest quarter ever. Overall, Q1 '22 is our fourth consecutive quarter of sequential organic growth since the low point achieved in fiscal year Q1 '21 in the middle of the COVID crisis. So this strong performance shows how we benefit quarter after quarter from strong tractions across our three end markets, as we defined in our Capital Markets Day, last month. In Mobile Communications, sales were boosted by the ongoing adoptions of 5G and the increasing number of 5G smartphones. As you know, this is benefiting both our RF-SOI and our POI wafers. Performance was also driven by the further recovery experienced by the automotive market, which benefits, in particular, our Power-SOI products and FD-SOI. Last but not least, smart devices also continued to expand supporting our sales of Imager-SOI, FD-SOI and Photonics-SOI wafers. If we now comment our Q1 figures by wafer diameters, starting with 150, 200 millimeter, which recorded sales of EUR 79 million. If we compare to Q1 last year, this is an increase of 24%, excluding currency effects. This performance reflects higher volumes, especially from Bernin III in France as well as higher volumes outsourced to Simgui, our partner in China. This very strong rebound is explained by sales of Power-SOI's, were much higher than in Q1 '21, thanks to the rebound in the automotive market. We see here the confirmations of the ongoing recovery of the automotive industry that had already started in Q4 '21. In addition, we had another strong search in 150-millimeter POI wafers for RF filters. Thanks to the ongoing capacity increase at our Bernin III facility and a good ramp up in production. Quarter-after-quarter, we have been able to respond to the increasing demand for POI. As you know, this is driven by the need for 4G and 5G smartphones to cope with an increased number of frequency bands, which translates into a higher number of filters and the requirement for enhanced performance. Finally, sales of RF-SOI 200-millimeter were stable compared to Q1 last year. If we now look at our 300-millimeter business, which recorded sales of EUR 96 million in Q1 '22. This is 2.5x higher than in Q1 '21, excluding currency effects. This is mainly due to a sharp volume increase. All our product lines for 300 millimeters grew strongly in Q1. The level of RF-SOI 300-millimeter sales has been booming. Tractions for more RF-SOI content comes from the need for more switches, more antenna tuners and more low-noise amplifiers in new generations of 5G smartphones. We also achieved another strong quarter in FD-SOI at a much higher level than in Q1 '21. This confirms the rebound that we started to experience in Q3. Fabless companies continue to strengthen their FD-SOI based offering for applications dedicated to as computing, automotive and 5G. So regarding the Imager-SOI for 3D sensing applications sales were also much higher than in Q1 '21 at a level pretty close to Q4 '21. Finally, sales of Photonics-SOI for data centers were higher than in Q1 '21 as well as than in Q4 '21. Finally, our other revenues went up from EUR 5 million in Q1 '21 to EUR 5.4 million in Q1 '22. This represents a 12% growth at constant exchange rate, which was essentially due to another good performance achieved by Dolphin Design. So to conclude this opening remarks, I would like to reconfirm our guidance for fiscal year '22 as well as the medium-term outlook that we outlined last month during our CMD. Regarding fiscal '22, we confirm -- we continue to expect fiscal year '22 sales to reach around $ 950 million, around 40% growth at constant exchange rate. And we also confirmed that our EBITDA margin will reach around 32% in fiscal year '22. Regarding our 5 years outlook, we expect that our innovative wafers will efficiently support the advance of 5G, the development of artificial intelligence and a stronger focus on energy efficiency, which will be the three driving factors of the electronics market in the years to come. Market growth will be driven by multiple waves of technological change that will shape the more connected, energy-efficient and smart world. This will translate into a 2.5-fold increase of our addressable markets by fiscal year '25, '26, meaning that we see our addressable markets moving from around 3 million wafers today to more than 7 million in 5 years. We expect growth to materialize in each one of our three end markets: mobile communications, automotive and industry and smart devices, involving further growth in our existing SOI and POI products, but also the development of new SiC product and to a lesser extent GaN products. To fully capture this growth potential, we aim to double our annual capacity to more than 4 million wafers past fiscal year '26. This involves the ramping up of our Singapore facility further, expansions of our other existing capacity, mainly Bernin II, Bernin III and Simgui. And finally, the building up of a new 150, 200-millimeter SiC facility as well, another 300-millimeter SOI facility. All these investments will require a CapEx spend worth EUR 1.1 billion over the next 5 years. Our fiscal year '26 targets includes to triple our revenue to reach approximately $2 billion and to increase our EBITDA margins to around 35% based on the euro-dollar rate of 1.2. So this ends our opening remarks, and we are now ready to take your questions.
[Operator Instructions] And the first question comes from the line of Aleksander Peterc from Societe Generale.
First one, we just generally, if you could comment where was the growth strongest across your business lines or across end markets versus your original expectations going into the quarter. So where did you see the biggest delta or jump in demand versus what you saw the things that would shape up? Second, if you could comment a little bit on the two rate of your Singapore fab, where we are now in terms of the fab ramping up? And if you could give us any progress report on silicon carbide. Is there anything new there? And maybe could comment on the new management appointments for this business line?
Thank you for the question. So maybe going back to the first question, which is about where do we see the most aggressive growth. First of all, I would say that it came as no surprise that it is across all products for us. So we were expecting this and it's really happening. Now if we want to dig one level down, I mean growth has been driven #1 mobile, that's for sure and then automotive and smart devices. So -- this is clearly the -- that exactly what we were expecting. And so no surprise, and we were exactly preparing our capacity to be able to respond to this. In terms of the Singapore ramp, I mean, you are absolutely correct. This is very important for us to execute well this ramp, and it's moving ahead. I mean, clearly, we are -- every week tools coming in, and you understand that our growth here is really supported by our capacity expansions that we are materializing every day in Bernin III, in Bernin II and in Singapore. So the CapEx, I just maybe want to remember the CapEx that we have engaged this year. We are talking about an overall number of EUR 240 million, 50% of the CapEx is dedicated to Singapore. So this is a strong commitment, Bernin III 25% of this number and 25% for the others. Regarding your questions on silicon carbide. I mean the project is moving ahead. I mean we continue to monitor the progress. And yes, we have been extremely pleased to celebrate the arrival of Emmanuel Sabonnadière, who joined the Soitec executive team management to really drive this project. This -- Emmanuel is obviously a perfect fit for Soitec to drive our market -- silicon carbide project and conquer new markets. Emmanuel has the intimacy with our local ecosystem and our customers worldwide to lead this development. And I think we are -- we will get more information, as I said, during the -- by the end of our fiscal year on this project.
The next question comes from the line of David O'Connor from Exane BNP Paribas.
Congratulations on the quite strong results. Maybe, Paul, firstly, I'm going back to the $950 million revenue target for this year. Can you give us any color on how much of that is already booked? And then secondly, in terms of the visibility, has the visibility improved in terms of duration of contracts within customers?
Yes. So to answer your first question regarding the $950 million, I mean, it's all booked. I mean we have no room for surprises here. The -- now when it comes to visibility, what is very important is that we have now extended visibility, I will say, compared to what happened over the last 5 years. I mean, now our customers are engaging discussions for multi-years contract. They want to basically secure their capacity and I used to say that we are very pleased with that. We are obviously making sure that we have all the commitments because attached to that, our capacity increase. So we are very, very serious, but very pleased to see that visibility is coming for the next 2 to 3 years. And for some customers, we are even talking about longer term.
Excellent. That's quite helpful. And maybe if I could squeeze in one more follow-on. Just on inventories, how would you characterize your current inventory levels within the supply chain?
Yes, it's very difficult to answer these questions in a precise manner, but across the board, it's very tight. And the inventory, I mean, it's very, very healthy; very, very helpful.
The next question comes from the line of Varun Rajwanshi from JPMorgan.
I have a couple of questions, Paul. The first one is on your fiscal year '22 guidance. So you've guided for 40% constant currency revenue growth for this year. But if I look at the end market unit growth assumptions over the past couple of months, they have been coming down. So smartphone growth assumptions have come down from 10% to mid-single digit or auto unit growth assumptions have come down from mid-teens to low teens. So how does that stock up versus your fiscal year '22 guidance? Are you still comfortable on delivering the 40% guidance. Do you think this will be driven by restocking demand, even if end demand is not as strong. My second question is on FD-SOI. So you've been talking about a recovery in FD-SOI sales over the past few quarters. Can you provide more color on how much recovery have you seen? Any quantitative color? And do you still expect a significant step-up in growth going into the second half of this year? And then finally, on the POI business, can you give us the status of the capacity ramp at the Bernin III fab?
Yes. So regarding the fiscal year '22, yes, we stick with our guidance, and we have no reason to change this today. I mean clearly the market to us is very, very healthy. And here and there, you see a little bit of probably change, but the high single digit that we -- the global rebound in 2021 including 5 million to 550 million unit 5G phones. This is still what we are driving, and there is no change in this. But automotive is also coming extremely strong with double-digit global rebound forecast in 2021. And we have to obviously address this and respond to that. So no change in our fiscal year '22 guidance, as I said. I mean, we have clearly a strong commitment from our customers on our activities. Regarding the FD-SOI recovery, yes, I told you exactly that we were -- last year that we were expecting to see this rebound coming in this current fiscal year. It started a little bit earlier, and we continue to see a quarter-after-quarter improvement. And we will continue to see quarter-after-quarter improvement in FD-SOI. I mean, clearly, the end market is driving -- is using and driving the growth of this technology. It happens in the automotive. I mean, clearly, this is today one of the #1 market for FD-SOI. And we see IoT going into edge computing. The other part of the growth will come probably towards the end of this fiscal year for us, beginning of next fiscal year in a more aggressive way for the edge computing. Finally, on POI, I mean, we do not really give a number. The ramp up is exactly as expected. And we have the target to reach 750,000 wafers at full capacity. So we are really working on our plan and executing our plan.
The next question comes from the line of Sebastian Sztabowicz from Kepler Cheuvreux.
You mentioned a strong increase on POI in Q1. Can you help us understand a little bit the size of the business -- the POI business today? And also have you made any progress during the quarter regarding the qualification of other RF players on top of Qualcomm that is ramping up right now? That would be the first question. The second one is regarding the speculation in the market that Intel could be looking to acquire GlobalFoundries going forward? Do you see any potential implication to your business or your relationship with GlobalFoundries, any positive or negative?
The first question is, I mean, clearly, you know that POI wafers have been designed with -- to low thermal stability larger bandwidth to integrate multiplexes. So obviously, the adoptions for 5G smartphone filters is really driving the ramp in Bernin IIII. So Qualcomm is our #1 lead customers. But as I told you, I mean, we have now multiple customers at different phases in manufacturing and in qualifications. So what I said during the previous talk is that by the end of this calendar year, we will have multiple customers and ramping on this product. Regarding Intel and GlobalFoundries, I mean, clearly, no comments on this at this time being, you just consider that this is reversed, and we do not want to talk about reverse. And both are our Soitec customers and both are using SOI. So this is all good news.
And just one last, if I may, on silicon carbide, you have all your milestones. Have you passed certain milestones already? Or this is more back-end loaded in this year and you will have only, I would say, an answer on your ability to serve this market at the very end of the fiscal year, just to understand the projection?
It's really throughout the year. And clearly, the news we have got this quarter is clearly in line with our expectations. We have new samples being shipped to our customers to evaluate some of the progress we are making. And clearly, the process is in line with our plan right now. As I said, we are structuring also this project and with the arrival of Emmanuel Sabonnadière, it will also take another dimension.
The next question comes from the line of from Bank of America.
Most good questions have already been asked and answered. I just wondered if you could maybe just give us your sense of what's going on in the supply chain in Asia, most particularly the lockdowns in Malaysia or any other parts of Southeast Asia, if that's having any impact? Or you're worried about contraction of supply chains or anything like that? And I'll get a quick follow-up.
So no, I mean, yes, I think that what you see happening is exactly what we have seen happening over the last 18 months. So I think that our supply chain is now basically I won't say totally used to, but we have built many capabilities to work through this type of situations. Clearly, what is important to us is to secure our capacity ramp. We are working with all the equipment manufacturers to make sure that we are slotting our equipments properly. I mean, over the next 2 years, we are also giving them a lot of visibility because this is important same for our supply chain in terms of materials. So it's clearly, I mean, a lot of work that is being pushed to our procurement team, but this is exactly what we have to do to secure the growth and to secure the ramp.
Got it. Medium-term question perhaps on the CapEx funding, I mean would you consider taking sort of external sort of money maybe from customers or anything like that that would help you accelerate the ramp-up of your capacity?
Yes. So maybe I can answer the first question and Lea, if you want to take a little bit more on these questions. What I want to say is that when we see a deal with our customers today, we are obviously looking at these long-term agreement contracts and it takes with a firm purchase order, take-or-pay type of purchase orders. It takes also sometimes upfront deposit when we have to do specific, I would say, capacity increase for given customers. So we are using all the tools to secure the long-term agreement that we have to sign with our customers. Lea, do you want to take more on this?
Yes. And maybe more generally, we are able to finance our CapEx plan, thanks to our cash position, thanks to the cash we generate through operating cash flows in the next few years.
The next question comes from the line of Robert Sanders from Deutsche Bank.
I have two, the first one is just can you talk a bit about the fab expansions at your key customers, such as in Singapore, U.S., Germany as well as the government-led expansions by the EU, Japan, China, U.S. I mean, for example, there's a discussion about a new 12 FDX line in Europe with involvement from SDMicro (sic) [MicroSD] and you just met Thierry Breton. Could these plans be incremental to the tripling of sales outlined at the CMD? And the second question, Paul, just ahead of this AGM next week. Can I just check what's the process and when we should hear about the extension of your term as CEO because I think your term expires next year, but I think it's just a formality. But I just wanted to check when that -- when we would likely to hear about that?
Okay. So let me comment on the first one. Yes, the semiconductor actuality is very -- is on the front line right now. And you have heard about the alliance that Thierry Breton is pushing to Europe. You have heard about this morning about the communications between France and Germany on semiconductor. So it is very important that everybody understand today that there is -- it's an inflection point for Europe in semiconductor. And the good news is that there is a process that is being put in place right now for the industry to share what we see and what we would like to see. If you look at the ambitions that Europe is claiming today, there is an ambition in technology. There is an ambition in industrial capacity. And there is an ambitions to -- for -- to support financially this journey in Europe. If you think about Soitec, we have an ambition in technology. We want to support and drive the growth in digital and power applications and also telecommunications and communications. So FD-SOI, as you know, is one of critical point for us in terms of supporting a road map that goes from 22-nanometer in Europe today to 18, then 12 and 10 and below 10 nanometers. So I think it's important to drive this inflection points to set the vision and to do it with our partners, customers and suppliers in Europe makes a lot of sense. And I think this is good directions. Regarding my -- basically your second question regarding my renewal. I mean nothing to report, as you said, at the moment, we have just announced a 5-year strategic plan with the Board, and I am personally committed to ensure that we will be implementing and adjusting this strategic plan, but it's on.
[Operator Instructions] And the next question comes from the line of Emmanuel Matot from ODDO.
Hello, everyone. I joined late the conference call, maybe you already talked about that. But have you given any color about volumes and pricing contributions to your Q1 sales growth? That's my first question. And second, is Soitec part of the transform consortium for silicon carbide in Europe? If yes, can you come back on it?
Okay. So on the first questions, the growth and the revenue growth comes from volumes, okay? We have not seen yet any other impact, okay? So that's very clear for us, it's driven by volumes. And regarding your second question on transform, yes, we are obviously a key part of this project and program in Europe. It's obviously silicon carbide driven with all our partners, and we are a key element of this program.
Is that an exclusive relation with transform or not?
No, it's for us, I mean, it's a platform, right? I mean -- so we are opening up with the multiple partners for this -- on these platforms, and it's a development platform, okay? So we obviously will be exposed to many partners in this project, which is great.
We have no further questions coming through. So I will now hand back to Paul for any closing remarks.
Thank you, operator, and thank you all for your questions. So my -- I would like to add maybe that the next date in our agenda will be our AGM on the 28th of July and the publications of our Q2 '22 revenue on the 20th of October after market closed. So this ends our call for today, and thank you for your attention. And I'm looking forward to talking to you again soon. Thank you all. Thank you.
Thank you, everyone, for joining today's conference. You may now disconnect, if you can please stay connected for a moment. Thank you.