Inficon Holding AG

SIX:IFCN

Earnings Call Transcript 2021-Q1

[Bernhard Schweizer]

Okay. Good morning, and welcome, everyone. My name is Bernhard Schweizer, Investor Relations contact from INFICON. I have the pleasure to host this Microsoft Teams session. Thank you for joining the INFICON web conference on its first quarter 2021 results.With us today are Lukas Winkler, CEO of INFICON; and Matthias Tröndle, CFO of INFICON. The management team will first present the results and then take questions.During the prepared remarks, participants are kindly asked to turn their microphones and cameras off.You should have received by now a press release on the Q1 results, together with the accompanying visuals for this web conference. All these documents are available for download in the Investors section of the INFICON website, www.inficon.com.As we are in an MS Teams session, you can post written questions during the presentation using the chat function. This should be the second icon in the top menu. Management will take these questions after the prepared remarks. You can also signal that you would like to ask a question over the microphone. We ask you to use the third icon function to raise your hand, and then you will be added to the queue of people who would like to ask questions.I would also like to inform you that we record this web conference to archive the audio file later on the INFICON website.The oral statements made by INFICON during this MS Teams session may contain forward-looking statements that do not relate solely to historical or current facts. These forward-looking statements are based on the current plans and expectations of our management and are subject to a number of uncertainties and risks that could significantly affect our current plans and expectations, as well as future results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.Having said all that, I would like to hand over now to Lukas Winkler. Lukas, please?

[Lukas Winkler, President & CEO]

Thank you, Bernhard. Good morning, everyone, and thank you for joining us today to review the results of the first quarter of 2021. I do not really want to talk about COVID-19 anymore, but it still bothers us, much less, luckily, than a year ago. And the impact to our business became less cumbersome. Nevertheless, we still have many hygiene and behavior procedures in place, and home office is still quite common as well.Now let's talk about the first quarter results, where we presented in the press release this morning that we had growth in all markets, in all regions around the world, semiconductor, from a market point of view, and China, from a regional point of view, being the most prominent contributor to this growth. As Bernard already mentioned, you can download this information also from the homepage. And I will start with the current figure -- the current slide right now where you see where we had growth and what the result was out of it in total.We did grow more than 30% over the first quarter of 2020, sequentially to a very strong last quarter 2020, another 5%. And I think, looking forward, even more important, that also our book-to-bill ratio was above 1.With improved sales and the gross profit margin now again over 50%, increased OpEx primarily on the R&D side, we ended the first quarter with operating income of $24.6 million, which is about 20% of sales, after USD 14 million a year ago, which was 15.1% in the first quarter of 2020. The applicable tax rate was an average one. Matthias will talk about that later. So net income was close to $20 million or 16% of sales.Now let's go to the next slide, where you see the breakdown of our 4 target markets, with semiconductor record now reaching 50% of overall INFICON sales, semiconductor being the heavy contributor. The vacuum coating part was relatively flat from a growth perspective, comparing Q1 of 2020 with Q1 of 2021. Now the increase of the Semi and Vacuum contribution was basically at the expense of a little slower contribution from General Vacuum, Refrigeration, Air Conditioning and also a little less from our Security & Energy market, which still is by far the smallest market that we serve. Regional-wise, on the right side of this slide, you can clearly see that Asia again has been able or was able to keep this very high level that we already reached in the last quarter of 2020. And finally, now we see an improving tendency from Europe and also from Americas. Now Asia represents -- or Asia did represent in Q1 about 46% of overall revenue in the first quarter of 2021.Now let's go into the first market that we talk about, starting with the smallest one, on Slide #5. In the Security & Energy market, we did increase our revenue over a relatively weak quarter a year ago by 8.6%. But as you see on the graph, it's really a small -- it's a growth compared to a relatively low volume already a year ago. The major contributors in the first quarter was coming from energy application, not from security applications. So when those energy applications can be split into 2 elements, on one hand side, it's these alternative Bio-Methane market, preliminary (sic) [ primarily ] in Europe. On the other hand side, we had the landfill monitoring applications as well as gas pipeline monitoring for the last mile of the gas distribution network, again mostly from the U.S. And we had some environmental applications from China. That's also what we see, if I look ahead for the full year 2021. We expect some delay in the new program from the U.S. Department of Defense with the new website. So therefore, our expectation for 2021 are not very positive. We are very positive on the energy side, but we keep kind of a cautious outlook on the Security side because we know that there might be some delays on the introduction, not from our side, but from the U.S. Department of Defense. But we will know certainly more by the end of the fiscal year, which ends in September in the U.S. Having said that, for the smallest market, the expectation for 2021 are not quite optimistic overall.Now let's go to the second market, the Refrigeration, Air Conditioning & Automotive market, where we clearly had a nice first quarter at the record level, 23% above last year's first quarter and even more than 3% above the already strong last quarter in 2020. After the COVID crisis, which really had a big impact on this market during the second and third quarter as of last year, now we clearly see a recovery, a rebound. It's almost like some catch-up investments happened during the first quarter, especially from the automotive side, but also from the manufacturers of refrigerators and air conditioners that we see a nice rebound compared with the middle of the year 2020. On top of that, we see also a growing contribution from the e-car manufacturers, especially on the lithium-ion leak checking application side, which is by far the single growth market in this Refrigeration, Air Conditioning & Automotive market. There is certainly a shortage of high-tech lithium-ion battery for e-cars now in the market. And you probably have read in the newspapers how many new giga factories are planned around the world. So overall, we expect a very nice 2021, reaching new record levels in -- for this year. So having said that, let's go to the third market, which is by far our biggest, now reached a contribution of 50% of overall market, which is the Semiconductor and Vacuum Coating, which does include, besides the semi, also some solar applications as well as display and optics applications.The major contribution for this nice growth of 44% over the first quarter of 2020 was coming from increased CapEx spending in the semiconductor market, now not just from logic and foundry, but also from automotive chip manufacturers, from memory chip manufacturers and other industrial chips that are used in a growing environment to catch up for the loss of 2020. Looking ahead, what we see now in the semiconductor cycle is a way from different sites. With already known investments for high-tech applications such as 5G, Internet of Things, Big Data and so on, now combined with a memory market rebound, together with some subsidies from -- announced subsidies, let's say, from China as well as U.S. into semiconductor capacity created this, I would say, never-seen-before kind of huge growth rate in the semiconductor market. And we expect that we'll continue definitely throughout 2021, eventually going into 2022.Now having said that, on the other hand side, on the vacuum coating market, we remain less optimistic. We don't see huge investment going into OLED additional capacities, and we do not see a lot of capacities going into, let's say, old-fashioned optics application. But on the other hand side, we see some modest increase in spending for new solar equipment manufacturing, primarily in China.Having said that, let's go to the last market, which is the General Vacuum market, where we sell our products throughout indirect and direct sales channels to 100,000 of different customers, most of them are not served directly. We even sell a lot of our products private-labeled under the brand of our distribution partners, which are primarily vacuum pump manufacturers. So this diverse customer base that we serve did show a nice increase in Q1, which was 23% above last year's first quarter and another 3.5% sequentially compared with the last quarter 2020.Now what we see in this market for 2021 is an optimistic view that we have, driven by the Chinese recovery on one hand side, but also some nice rebound in Europe. And we also have some products in new markets such as the food packaging market. But also, we have introduced some products into the life science market, and we even get some tailwind from some COVID-19-related investments in the health market. Therefore, we remain positive throughout 2021 regarding the General Vacuum market.Now before I hand over to Matthias, I'd like to give you a summary of the outlook that we see for 2021, again heavily driven by a very strong semiconductor market on all levels. We don't see any weaknesses there. We might have some double bookings just to avoid some shortages, especially in chipset with the high demand. On the other hand side, I already mentioned that there are some subsidies planned in the U.S., Europe, and China continues to invest heavily in catching up on the semiconductor technology side. So those elements really lead to a very positive outlook for the semiconductor market for the full year, combined with these nice growth trends in the automotive market driven by the lithium-ion battery manufacturers, together with some recovery in the General Vacuum market. We remain very optimistic for the full year 2021. And therefore, we increased our previously guidance by an average of USD 30 million. Now we expect sales between USD 450 million and USD 480 million and an operating income of 18% to 20%.With that, I'd like to turn over to Matthias Tröndle, who will give you more details on the financial results of our first quarter. Matthias, please?

[Matthias Troendle, VP & CFO]

Thank you, Lukas. Good morning, everyone, and welcome also from my side to our first quarter conference call. I will cover our Q1 financials and briefly comment also our 2021 guidance.My commentary starts with Slide 11 of the PowerPoint. As you have already seen in our press release, we achieved revenue of $122.7 million in Q1. This compares to $92.6 million in Q1 last year. This represents an increase of 32.5%. Taking into account the positive currency impact, which is driven by the weakening U.S. dollar, of 5.2% or $4.8 million, we achieved an organic growth of 27.3%.Mr. Winkler has already gone into the details about the development in the individual markets. We can clearly highlight that sales in all markets did grow, most of them with a double-digit growth rate compared to Q1 previous year. In particular, sales in the Semi & Vacuum Coating market increased significantly by 44% or nearly $19 million. Also compared to the previous quarter, all markets, except Security & Energy, showed growth. With that, the first quarter of 2021 was, after Q4 last year, another new record sales quarter.Let us now turn to the regional distribution of sales. Compared to previous year, all 3 regions did grow. We had the highest growth in Asia with 65%, followed by Europe with 17%. Both Asia and Europe showed a strong growth in Semi & Vacuum Coating as well as in the General Vacuum market. North America showed also an increase in sales of 8%, driven by Semi and also the Security & Energy market.Let's go to the next slide, please. The gross profit margin reached 50% in Q1, up 89 basis points versus last year and improved by 280 basis points compared to previous year Q4. Higher volumes, good capacity utilization and the market and product mix could compensate rising material, transportation and still some COVID inefficiencies we had.What happened on the cost side? We spent $12.1 million on R&D in Q4, an increase of 32% or $2.9 million. As a percent of sales, expenses decreased slightly to 9.9% in the first quarter from 10% in the previous year. Focus on our development efforts with additional headcounts, higher R&D material costs, higher external costs plus some negative foreign currency impacts each drive this increase. In SG&A, selling, general and administrative, the expense level showed a $2.4 (sic) [ 2.3 ] million increase. Unfavorable foreign currency impact, which account approximately for 50% of that increase, headcount additions and performance-related costs did drive this increase. The operating profit for the fourth quarter was $24.6 million or 20% of sales after $14 million or 15.1% in Q1 last year. This corresponds to an increase of about 76%. The tax expense for the fourth quarter was at $5.3 million, which represents an average tax rate of 21.2%. Last year's $1.5 million tax, which represented a tax rate of around 12%, was impacted by some favorable impacts coming from our German subsidiary. The net profit, therefore, reached $19.6 million or 16% in Q1. This compares to $11.4 million or 12.3% in the prior year, a 72% increase in absolute numbers. Consequently, we see similar development in our earnings per share. This went up -- also up by 72% and stands at $8.01 in Q1.Let's move on to the balance sheet highlights on the next slide. Our net cash position reached $48.4 million, which is $7.5 million higher than end of last year. Operating cash flow, which you can see on the bottom right, for Q4 reached a good level of $13.4 million, representing about 10.9% of revenue. This was substantially higher than last year and improved by $9.6 million. The inventory turns reached 2.9 and with that have been slightly better than in the previous quarter. The working capital, which consists of accounts receivables, inventories, minus accounts payables, closed at $137.7 million, clearly higher than at the end of last year. The majority of that increase is contributed to a $9 million increase in accounts receivables due to the record high sales we had in the current quarter. The DSO, days sales outstanding ratio, is slightly higher and reached 51.8 days that quarter. The balance sheet shows a good solid structure, has a 75% equity ratio and no long-term debt. Those were my comments on the balance sheet in Q1. Finally, final words on the outlook. Mr. Winkler did already go into the detail on the assessment of our markets and how we see the situation. The business and the assessment of the development in our end markets looks quite positive for the started year. Also, there were some global uncertainties, INFICON assesses the outlook for the current year optimistic. We expect sales of around $450 million to $480 million, with an improved operating income margin of 18% to 20%.With that, I would like to close the presentation. We are now ready to take your questions.

[Bernhard Schweizer]

Thank you, Lukas. Thank you, Matthias. We have a series of questions. Marta Bruska was the first one to raise her hand. I would just like to ask Marta to go ahead switching on her microphone and camera, and ask her question. Marta, please.

[Marta Kinga Bruska, Analyst]

Congratulations on the fantastic performance. So I have a couple. I will take them one by one since it's more than 3. So firstly, could you please tell us a little bit more about the Security & Energy end market in particular, with regarding the environmental type of applications, growth profile into 2021. What sort of growth we are seeing there? And with regards to the Security part, what level -- at what level the Security sales are in Q1 2021 versus where they were in 2019, so 2 years ago. So I just would like to get a bit better understanding of what sort of recovery potential you may see in 2022, please?

[Lukas Winkler, President & CEO]

Good morning, Marta. I certainly can take that question and go into a little bit more details to maybe give you a little bit more flavor about what happened. As I mentioned already, this -- the majority of revenue in the first quarter went -- went to the Energy market, not the Security market. I do not have all the details, and we usually do not disclose it, but it's clearly around the 2/3 of the revenue that is now Energy and not Security anymore. It used to be more like the opposite for quite long of time, but now it's clearly above the 2/3 level that is now going into energy and environmental applications.The -- if you talk about the environmental, as I mentioned, that they have 2 elements there. One is in the U.S., monitoring the landfills. And the second application goes into China, doing air monitoring for the big cities to -- so we are a part of the program to get the pollution down in the big cities, together with a partner in China. We don't do it ourselves. We use an integrator, which is also our major distributor in China, to get access to the Chinese government. Because, as you know, it became quite tough to ship American-made products into China if there is a Chinese alternative. Therefore, we are using an integrator, a Chinese integrator, so that the final package is not seen as an American product. It's seen in the eyes of the government as a Chinese solution.Now we are a little bit more cautious about the outlook in 2021 based on the fact that we learned from the U.S. Department of Defense that eventually a larger project might get delayed. Not canceled, but delayed. They do the test already with the new product, but it's not clear yet when they are going to start the program itself, which is quite the big one. We are talking about a double-digit million dollar figure just for this program. And therefore, it might get postponed into 2022. Therefore, for the full year guidance on the Security & Energy market, I would not expect being -- to see a huge growth at the end of the year. It might be at about the same level as 2020.

[Marta Kinga Bruska, Analyst]

And what about in the civil application, when you had the new optic devices for [ some ] civil applications, how is it going?

[Lukas Winkler, President & CEO]

I didn't understand the question properly. I'm sorry.

[Marta Kinga Bruska, Analyst]

Sorry. For the civil application, so I understood that you had the sniffing device now launched also for the departments -- for the police department and for civil applications. So how the launch is going?

[Lukas Winkler, President & CEO]

That's for more security application outside of the Department of Defense. We are still in the test phase, because this will only happen with the new product, not with the old one. And the new product has not been officially launched. So we are still in the test phase to detect some drugs that could be detected. But this will be a small contribution anyway in 2021. If it will really work out, we might get a better visibility for 2022.

[Marta Kinga Bruska, Analyst]

If I may just, please, very quickly on OLED. If that market shall start to recover in the second half of the year, what sort of upside would you foresee for INFICON?

[Lukas Winkler, President & CEO]

As I mentioned before, I'm not so optimistic about OLED. But if it would come back surprisingly, of course we'd take it. We will contribute in 2 ways. We will ship our products that are used at -- by the equipment manufacturers, the guys who make the tools, but we also have access to the end users. And if they surprisingly will come back, we would, of course, be happy to take the orders. And it could be an upswing of $5 million, if it actually would happen. But I doubt that it will happen.

[Marta Kinga Bruska, Analyst]

And just a quick one on solar. That's the last one. Could you please give us an update on how much solar is at the moment? And just to clarify, the $5 million would be on the full year basis, right, for OLED?

[Lukas Winkler, President & CEO]

The -- yes, it's just OLED. On the solar side, we experienced an uptick in investments in new equipment to make a so-called silicon wafer-based solar panels, not thin-film solar panels, but silicon wafer-based solar panels, primarily in China. And it looks like that the huge installations that have been made in 2012 throughout 2014 now are used up, because the demand for solar panel is still going up, but there was enough capacity in the market. And now it looks like the capacity is running out, so they have to replace some of the equipments. And then so we see a nice kind of a rebound in the equipment manufacturer for solar on the ingot side to make the silicon ingots on -- but also on some edge tools to make those solar panels more efficient, if you apply certain edge applications at the end of the day. And as well as some coating applications to better -- to get the higher efficiency out of every single solar panel that are made. So those are the 3 applications where vacuum is actually used. And the majority of those equipments are now made in China, so the market is in China.

[Marta Kinga Bruska, Analyst]

I really appreciate, it was super helpful.

[Bernhard Schweizer]

Thank you, Marta, for your questions. The next questions come from Michael Foeth. Michael, please.

[Michael Foeth]

Yes. Three questions. The first one on the Semiconductor market, I was wondering how the demand for yield-enhancement products is developing, given the shortage of chips in the market and how much that makes up of your sales, I guess, that's Semiconductor end users. The second question is regarding your guidance change. I was wondering what has changed so much in the last 6 weeks only, that triggered that $30 million increase in guidance?And the last question is the -- any -- if you are seeing any impact on INFICON from various component shortages in the market that you would experience?

[Lukas Winkler, President & CEO]

Thank you, Michael. Yes, let's go to the list of questions. The first one, yield-enhancement programs, which are usually based on 2 kind of product. The ranges that we sell are a combination of them, it's usually sensors together with software, but we also have some stand-alone software applications in the meantime. So this semi growth was -- let me say it that way -- less prominent than the growth in the equipment spending. Overall, we had a huge increase, as you have seen. But the bigger part is coming from the growth for equipment manufacturers and a little less to the end users. But it's very typical because there's usually a certain delay between when we see an increase on orders for equipment manufacturers compared with orders coming from the end users. Nevertheless, there are at least 2 elements that we see very positive. As you know, we acquired a software company about 3 years ago. That is primarily approaching with yield-enhancement programs to the so-called Tier 2 manufacturers. And many of those Tier 2 manufacturers are chip manufacturers for the car industry. And there we see a nice growth, of course still on a relatively low level, but it's a growing software business. And it carries, of course, a very high gross profit margin as with all the software businesses. And this is also the part of the business where we have in the meantime, I would say, the majority of revenue coming from so-called Software-as-a-Service with recurring revenue. So a lot of those Tier 2 manufacturers, they prefer a subscription-based kind of model for their software applications for the yield enhancements. And so we clearly see [ get ] a positive kind of boost from those shortages.On the guidance change, I think there are many elements, not just one single one standing out. First of all, we got more promising outlooks forecast from our equipment manufacturer. They even ask us now to increase our capacity. That's the one element. The second element is the announcement of investments around the world for new fabs, including some government-sponsored projects, especially from the U.S., that triggered our, let's say more optimistic view, with even a higher number of new fabs that will be built over the next 12 to 18 months. Last but not least, also the CapEx outlook of some larger end users that have been disclosed, which we really appreciate. And I think the last element is also that we are more optimistic about the growth even outside of Semiconductor market. Meaning what we see now in the General Vacuum applications as well as in the Automotive and Air Conditioning and Refrigeration market with increased spending on automated tools, more kind of labor-independent kind of investments. And that triggered our change of now being more optimistic, not just on the Semi side, but also on the non-Semi side, with one element I mentioned already before that we are a little bit more worried about, is the development in the Security market because we expect some delay there. But that's a very small contribution. So overall, we became much more optimistic, driven by the latest increase of forecasts from our largest customers.Now unfortunately, there is also a negative impact on the shortage side. Yes, we are affected as well. We now go to the gray market. We are still able to ship the majority of our products, luckily. I have to knock on wood. But we pay much more because we have to go through the gray markets. And we have to spend some expediting fees just to get the electronic components. And it's really a shortage on the -- mostly on the electronics side, not on the metal and material side. So yes, we suffer. But so far, we have been able to still get the majority of the products, just with a higher price.

[Michael Foeth]

Very helpful.

[Bernhard Schweizer]

Thank you, Michael, for your questions. Michael seems to be a popular first name. The next question comes from Michael Inauen.

[Lukas Winkler, President & CEO]

Need to unmute first, I believe.

[Bernhard Schweizer]

Right. We don't hear you, Michael. He cannot unmute. Can you then please write your question into the chat function? All right.

[Lukas Winkler, President & CEO]

Okay. So I see the question, and more details on inventory buildup. That's not so easy to answer question because we do not have the details on how much of, let's say, the additional CapEx spend went into the orders that have been based on some buildup of inventory or even some double-ordering just to be on the safe side. We have not a clear picture on that. So therefore, I cannot really answer the question. Is it $5 million? Is it $10 million? We simply don't know. And if I told you that we expect some buildup of inventory and we expect -- or we -- on some double ordering, but that's a message that is based on rumors and on hearsay and not based on facts. And even some information from our salespeople, especially regarding the ongoing dispute between the U.S. and China about what can be shipped to China and what should not be shipped. So how much of those orders are based on fear that they might not get the product anymore, we simply don't know all the details. But you can assume that there has been some buildup of safety inventory around the world. How much? I'm sorry I cannot answer that question.

[Bernhard Schweizer]

There is another.

[Lukas Winkler, President & CEO]

Yes. I see a question regarding -- is the Q1 the strongest? If I have to make a best guess, I would say we will most likely have a little weaker second and third quarter, and again a very strong last quarter. Typically, we have some seasonality during this spring and summer season. And so therefore, it might be a little weaker or flat and then having a stronger Q4 again. That's what we usually see as a pattern.

[Bernhard Schweizer]

Thank you, Michael. Lukas and Matthias, you've probably seen that Marta Bruska had another written question. Would you like to answer that? Marta asks about more details about the health application in General Vacuum that you just have mentioned, the applications that see some tailwind from the pandemic.

[Lukas Winkler, President & CEO]

This is a very small business that we do not sell directly, but we sell to companies that are in the life science instrument manufacturer world. And there, we get some additional gauge products that we sell to those instrument and laboratory manufacturers around the world. I would not put too much emphasis into that, but it's just a nice addition that we see so far, but we are not talking about more than a single digit, small single-digit figure for the full year.

[Bernhard Schweizer]

Thank you, Lukas. I see that Serge Rotzer has another question.

[Serge Rotzer, Research Analyst]

Only a quick one. You mentioned already, this was basically my question, about the seasonality. But is this related to sales or also to EBIT? Because you already had a good start in 2017, 2018. With the changed sales mix mainly with Semi, can we expect that this margin level will remain on that high level? Or do you see also there weakness in Q2, Q3 because you started already weak with the shortage and [ position with ] the negative impact. So this will disappear over the year? Yes or no?

[Lukas Winkler, President & CEO]

There are 2 big impacts on the gross profit margin. One is clearly the product mix. And so far, we don't expect a huge change in the product mix, at least for the next 3 to 6 months. And there is the second big impact coming more from the price side, either material, but also on the sales price side. As you know, we had last year some negative impact from auction-based pricing shipments in China. And there might be less impact from that side, at least what we see so far. So we expect that we should be able to keep the gross product margin at, at least a higher level than in the previous year. And we keep the 50% throughout the full year, remains to be seen. We've certainly work on that, because we also invest in new automation and calibration tools, which would help then to keep our nice gross profit margin. And last but not least, we expect the pure software revenue to go up and the more direct software or the pure software that we sell, that's usually good for our gross profit margin. So I -- certainly, I would like to see the 50% throughout the year. Can we really keep that? As I said, it's not always that easy, but we do our most best to keep it.And last, maybe there's at least 2 elements that we really do not really like. One is the -- we still pay quite high price to customs. Details, Matthias would know, but I believe it's more than $0.5 million just in one single quarter. And we still pay a premium now for transportation and cost as well as getting those products, which are kind of short in the market. So on the material and freight cost and customs costs, we will not get the release compared with 2020.

[Serge Rotzer, Research Analyst]

Okay. This was super helpful.

[Bernhard Schweizer]

I see that Michael Foeth has still his electronic hand up. Would you like to ask a follow-on question, Michael?

[Michael Foeth]

Yes. I was just wondering, you mentioned that the vacuum part in Semi & Vacuum Coating is expected to be more or less flat for the year. I was wondering, how much does the Vacuum Coating part now account for at all in that mix, just roughly?And then the second one, on -- the Americas region grew much less than Asia and Europe, and I was wondering what explains that relative weakness, if we can call it like that.

[Lukas Winkler, President & CEO]

Okay. Maybe to the first question, as you probably know from the past, that it was usually 1/3, 2/3 Vacuum Coating to Semi. Now it's less than 20% going into the coating application and 80%-plus is now Semiconductor-related. So clearly the bigger part is now Semi, by far.Now weakness, or if we call it, less strong, I think it's twofolded, may be best guess. First of all, in Asia, we clearly see a huge growth rate in China. So China is the main driver in Asia, now being the single biggest sales territory for INFICON overall. And that's not just for Semi. That's for all industries. And therefore, I think that's, really the locomotive on the Asian side is coming from China. In Korea and Taiwan, it's more semi-related, but we are all aware of those large accounts. But in China, we -- it's not just a few accounts. There are many accounts, even some accounts that have not been known 5 years ago, new equipment manufacturer are popping up, new lithium-ion battery manufacturer are popping up, new chip makers, new device makers. So all levels, we clearly see a growth rate that we have never seen before, just China.Now if you compare that with Europe and Americas, I think in Europe, it's nice that we see a growth coming after a weaker 2020 recovery from COVID impacts. And there, it's across all markets. It's not related to one or 2. It's really across all markets. Whereas in Americas, it's just still behind, I would say. They had -- they did suffer also pretty heavy on COVID-19 issues. Then as you know, there were these debates, the political debates in the U.S. that was not always positive, at least not for INFICON. And so -- and last but not least, the largest -- so we call them private-label partners that we have. They are in Europe. And so we ship to Europe. The products might then end up still in the U.S. or in Asia, but our direct ship-to partner is a European partner. So therefore, it's not 100% true if the products are actually used in Europe or not. But our larger private-label partners are all in Europe. And therefore, that represents more growth -- kind of worldwide-based growth and not just European-based growth.

[Bernhard Schweizer]

Do you still have a follow-on question, Serge? I see your electronic hand is up.

[Serge Rotzer, Research Analyst]

No, sorry. I missed to take it down. I apologize.

[Bernhard Schweizer]

No problem at all. Any further questions from the audience, please? [ Laurent Picard ], yes?

[Unknown Analyst]

I have a question regarding your comments on Asia. I mean most of the growth has been driven by China, as you just explained. But in Asia, Taiwan foundries have announced huge CapEx plan for the -- I mean, for the current year, but also for the next years. This has not been seen yet, I mean, by you? Are you -- how do you expect this to be -- to impact your own business? It remains to be seen, or it has already been seen in your numbers in the past?

[Lukas Winkler, President & CEO]

Given the size of Taiwan, I think if you would do the business that we do in Taiwan per capita, I believe Taiwan has the highest INFICON revenue per capita. So having said that, Taiwan is, of course, relatively small, but very, very concentrated on a few large accounts. And I can assure you that our Taiwan business is doing very well. And on top of that, we will probably see the majority of growth coming out of those investments announcements a little later, once the tools are installed. Taiwan is a typical market where chips are made, not necessarily equipments are made. Equipments are made outside of Taiwan, most of them, then imported into Taiwan. And then usually 3 to 6 months later, we see also the impact then on the end user side. So Taiwan will certainly contribute to the growth overall as a percent -- from a percentage growth point of view, still double-digit. But in absolute terms, far behind the big China. Therefore, I did not mention that specifically. And a similar pattern we see in Korea. Korea, heavily dominated by large memory and chip makers and also some display makers. We clearly expect a nice growth in Korea as well, relatively spoken. But in absolute term, again, they are much smaller than in China.

[Bernhard Schweizer]

Any more questions? If not, then maybe I can draw your attention again to the upcoming events of INFICON, and would like to invite Lukas or Matthias for a closing remark.

[Lukas Winkler, President & CEO]

Thank you, Bernard. I, first of all like to thank all of you for this kind of new way of communicating with each other, even seeing us from time to time, which is better than just using the phone call. And second of all, it's a little bit more likely, if you do it over video conferencing, and you have seen the next announcements, I'm looking forward to eventually see you physically face by face, sooner than later. And if not, you might see us again on the next retail conference when we disclose our half year figures and Q2 figures. Thank you very much. Have a nice day and a good rest of the week.

[Bernhard Schweizer]

Give us another minute, Lukas. Rolf Renders has another question.

[Lukas Winkler, President & CEO]

Oh, okay.

[Bernhard Schweizer]

Rolf, please. Can you switch your microphone on?

[Rolf Renders, Research Analyst]

Yes, it should be on.

[Lukas Winkler, President & CEO]

I can hear you.

[Rolf Renders, Research Analyst]

Yes. Sorry for that late entry, I was -- well, what came up to me is that, of course you mentioned after the full year presentation that you wanted to start the year with the guidance cautious because it was early in the year. And then given the industry and even country information we got and you refer to, you've now given an upgrade to that. Do you -- I mean, they have now -- most of these players have now given their guidance. Is there another wave expected? So is there -- for the half year, do you, CEO actually -- it's coming -- are you still conservative, basically, compared to your previous thoughts? That's kind of the question.

[Lukas Winkler, President & CEO]

Okay. First of all, you owe me a beer because you have asked your questions after we closed the call. Secondly, you know us. We usually try to stay, let's call it a little bit more on the cautious side than being too optimistic. Having said that, and you're absolutely right, now we have already almost 4 months of bookings.And that was one of the reasons why we said now we really have to increase our guidance. But we still remain, I would call it, on the cautious side. A little less than maybe 2 months ago, but still a little less on cautious side unless there are -- if we see that the dynamics in the market will continue like it did for the last 2 quarters, we eventually have to adjust again by the middle of the year. But it's too early to talk about that. That's why -- but I would not consider this current outlook more optimistic or less cautious than 2 months ago. I would consider it about the same level of cautiousness, just with a little bit more certainty because we have already 4 months of orders in our books.

[Rolf Renders, Research Analyst]

Yes. Okay. Well, that's great to know. And I look forward to paying my debt.

[Lukas Winkler, President & CEO]

Thank you very much.

[Bernhard Schweizer]

Is anyone else inviting Lukas for another beer? More questions?

[Lukas Winkler, President & CEO]

No more beer.

[Bernhard Schweizer]

Would you like to close the presentation of this conference now again, Lukas?

[Lukas Winkler, President & CEO]

Okay. Finally close it. Looking forward for the beer, of course. The weather gets warmer anyway. So it's time to have a beer outside, and have a very good weekend and a good day. Thank you, and bye-bye.

[Bernhard Schweizer]

Bye-bye.