Aixtron SE

XETRA:AIXA

Earnings Call Analysis

Strong Q3 Performance, Positive Outlook

In Q3, the company saw a solid performance with order intake at EUR 180 million and a robust backlog of EUR 386 million, signaling a positive trajectory into Q4, where strong orders are expected. Revenue soared by 86% year-on-year to EUR 165 million, while gross profit jumped to EUR 76 million, an impressive 94% increase. EBIT surged by 180% reaching EUR 45 million, and net profit more than doubled to EUR 40 million. Inventories grew significantly to EUR 381 million in preparation for expected large shipments. However, free cash flow was negative EUR 82 million, mainly due to inventory buildups. The company reiterated guidance for 2023, expecting total orders between EUR 620-700 million, revenues of EUR 600-660 million, a gross margin of around 45%, and an EBIT margin of 25-27%.

A Strong Quarter with Solid Operational Highlights Leading to Achieving Annual Guidance

Q3 '23 proved to be a vibrant quarter for the company with operational highlights shining through. A significant order intake of EUR 180 million sets the stage for a robust Q4, keeping the company on track to realize its full-year guidance. This performance was underpinned by robust demand for wide-band-gap power electronics. The launch of the G10-GaN complements the existing G10 family, reflecting the strength and positive reception of the company's expanded product portfolio. The quarter's revenue surged by 86% year-over-year to EUR 165 million, which aligns with the annual revenue guidance trajectory.

Financial Strength with Improved Profitability and Planned Inventory Build-Up

The financial health of the company in Q3 '23 was marked by a substantial increase in gross profit, which climbed to EUR 76 million, marking a year-over-year increase of 94%. Notably, the company's EBIT soared by 180%, with net profit more than doubling from the previous year. Enhanced gross margins of 46%, up from last year's 44%, were driven by an improved product mix. While operating expenses rose to EUR 31 million due to higher R&D investment, this lays a foundation for future innovations. Inventories have also been strategically increased in anticipation of high shipment volumes in the coming quarters. The balance sheet remains strong despite a lower cash balance due to these planned inventory investments and earlier dividend payments.

Innovation and Customer Momentum Driving Growth

The company's innovation efforts, particularly with the new G10 family of products, have paid off by meeting strong market demand and elevating performance metrics. The G10-GaN's market debut, designed to aid the high-volume ramp of GaN power electronics, is expected to account for over half of the company's GaN-tool shipments by 2024. Repeat orders for the G10-SiC tool demonstrate strengthening market position and customer trust. These innovations are expected to continue bolstering revenue growth in future quarters.

Expanding Infrastructure and Unaffected by US-China Trade Tensions

Construction of a new innovation center at the Aachen facility is underway, representing future growth and innovation capabilities. The company has navigated the US-China trade waters well, not being impacted by the recent US export controls, thus maintaining unchanged business activities with China. Despite some administrative delays in export license processing within Germany, the company's outlook remains positive and confident heading into 2024. Moreover, with all business growth drivers intact, there is a qualitative strong indication of continued growth in 2024, though specific figures are not yet provided.

Reiterated Full-Year Guidance Signaling a Sustained Positive Outlook

Based on current performance and expected strong Q4 order intake, the company has reiterated its full-year guidance for 2023. It anticipates orders to be between EUR 620 million and EUR 700 million, with total revenues projected in the range of EUR 600 million to EUR 660 million. Gross margin is expected to hover around 45%, while an EBIT margin of 25% to 27% is forecasted. Even with some caution due to the unpredictability of export license timings and customer project completion rates, the company is on track to meet its robust guidance projections for the year.

Earnings Call Transcript 2023-Q3

[Operator]

Good afternoon, ladies and gentlemen, and welcome to AIXTRON's conference call regarding the Q3 2023. [Operator Instructions]

Now I hand the floor over to Guido Pickert, VP Investor Relations at AIXTRON for opening remarks and introduction.

[Guido Pickert, executive]

Thank you [ Fabuna ] Welcome to AIXTRON's presentation of our first 9 months of 2023 and third quarter '23 results. I'd like to welcome our CEO, Dr. Felix Grawert; and our CFO, Dr. Christian Danninger.

As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without permission. Your participation in this call implies your consent to this recording.

Please take note of our safe harbor statement, which can be found in our results presentation slide deck as it applies throughout the conference call. This call is not being immediately presented via webcast or any other medium. However, we will place an audio file of the recording or a transcript on our website at some point after the call.

I would now like to hand you over to our CEO, Felix for opening remarks. Felix?

[Felix Grawert, executive]

Thank you, Guido. Let me also welcome you all to our results presentation. I will start with an overview of the highlights of the quarter and then hand over to Christian for more details on our financial figures. Finally, I will give you an update on the development of our business and on our full year guidance.

Let me now give you an overview of our operational highlights, Q3 '23 on Slide 2. Order intake in Q3 was at EUR 180 million. Like in the past year, Q3 was lower than Q2. We expect, nevertheless, very strong orders in Q4, and so we are well on track to realize our full year guidance, all backed up by specific customer projects. The demand for wide-band-gap power electronics, again, drove our orders with GaN Power having been slightly stronger than SiC Power in Q3.

Our latest member of the G10 family, the G10-GaN, was launched in September and perfectly complements our G10 SiC as well as our G10-AsP. Our all new product portfolio is being greatly perceived by our customers. Our Q3 '23 revenues of EUR 165 million was up 86% year-on-year, reflecting the high demand for our systems. Revenue-wise, we are also well on track to achieve our annual guidance. The situation around export licenses is continuing to work. However, the process as such, generally takes a bit longer than in the past. Overall, we continue to see strong demand from our customers without any sign of structural weakness. Our equipment order backlog remains to be very solid at EUR 386 million.

Now I will hand over to our CFO, Christian Danninger. He will take you through the Q3 '23 financials. Christian?

[Christian Danninger, executive]

Thanks, Felix, and hello to everyone. Let me start with the financial highlights of our income statement on Slide 3. I Orders were lower this quarter. But as Felix mentioned, we remain well on track to achieve our annual guidance with a very strong Q4 ahead of us. This underpins our view on continuous strong demand from our customers.

Revenues at EUR 165 million were up 86% compared to EUR 89 million last year, and we are well on track to achieve our annual guidance here as well. Gross profit in Q3 2023 was at EUR 76 million, up 94% year-on-year. EBIT for the quarter was at EUR 45 million, up by 180% and net profit at EUR 40 million, more than doubled year-on-year. Gross margin was at 46% compared to 44% the year before, driven by an improved product mix. OpEx in the quarter went up to EUR 31 million, predominantly driven by higher R&D spending compared to the previous year.

Now to our balance sheet on Slide 4. Inventories at the end of September increased to EUR 381 million from EUR 224 million at the end of 2022 as we are preparing for very high expected shipments in the coming quarter. Trade receivables at the end of September were EUR 107 million compared to EUR 120 million at the end of 2022, mainly being a result of the recent business volumes in comparison to the very high business volumes at the very end of 2022. The advanced payments received from customers at quarter end were EUR 125 million, representing about 34% of our order backlog just like in the last quarter.

Our cash balance, including other current financial assets as of September 30 decreased to EUR 210 million from EUR 325 million end of last year. This was mainly due to the mentioned inventory buildup in combination, of course, with our dividend payment of EUR 35 million earlier this year. Out of our quarter end cash balance, EUR 133 million were invested into funds, where we continue to follow a very conservative diversification strategy.

Just a quick word on free cash flow. On the next slide, before I turn back to Felix. Free cash flow in the first 9 months was negative EUR 82 million compared to EUR 20 million last year, mainly due to the previously mentioned build-up of inventories to prepare for the very strong output in the quarters to come.

And with that, let me hand you back over to Felix.

[Felix Grawert, executive]

Thank you, Christian. Before giving you some more details on our reiterated guidance for '23, I would like to share with you some highlights of our new tool generation. As stated at the very beginning, we continue to see very strong momentum for our products. This is also owed to the fact that we now have our new generation of tools out in the market and those tools are being very well received by our customers. The G10 family of products marked a very important milestone to our growth path. All members of the G10 family offer a significant step in terms of performance, both particle performance and uniformity performance. At the same time, these products offer a step forward in terms of productivity, that is in wafer output per month and in terms of wafer output per clean room area. This allows our customers to realize their volume ramp with the most efficient tools for high-volume manufacturing.

With that, our customers can address more and more market segments with compound semiconductor, be it in the area of power electronics or in the area of optoelectronics and display. In the past quarter, we have launched our G10-GaN as the successor of the market-leading G5+ tool. The G10-GaN has been designed to support the high-volume ramp of GaN Power Electronics. The G10-GaN allows the separation of the support infrastructure from the process relevant parts of the equipment, which means that the pumps and power supplies can be located in the gray room, whereas only the process critical component will have to be situated in the clean room. With this, 3 process modules can be attached to 1 wafer handler, such that the G10, G10-GaN can offer more than 2x the wafer output per clean room space.

In addition, the G10-GaN offers a big step forward in terms of uniformity and particle performance. We have further refined the carrier design and temperature control. And based on this, we can achieve a large improvement of uniformity in thickness and composition for the critical layers. Supported by these improvements, we get very strong demand from customers for the G10-GaN. Many of our existing high-volume customers have switched from the G5+ to the G10-GaN as soon as the new tool became available, such that in 2024, the year right after the launch, we already expect more than 50% of our GaN-tool shipments to be the G10 series.

With the G10-GaN, we are also convincing new customers that have not been producing on planetary technology to choose AIXTRON as their equipment vendor. Also for the G10-SiC, our new tool for the silicon carbide material system, which we have launched last year, we received a continuous strong flow of orders. From all our existing high-volume customers, we have received repeat orders in the past quarter, and we have strengthened our competitive position by making further progress in terms of uniformity performance.

We are now achieving uniformities on par with, and in some cases, better than single-wafer tool. In 200-millimeter, we had reached this already earlier. And in the past quarter, we have fully closed the uniformity gap also in 150-millimeter wafer size. Based on this, we can now fully focus on the advantages of our planetary reactor on productivity and cost. The batch offers inherent advantages in these 2 dimensions, and we continue to win new accounts for our technology. This will turn into revenue in the quarters to come.

Last but not least, with our G10-AsP, the last member of the G10 series, we win new customers, and we are seeing customers switching over from the proven G4 platform to our new G10. Here, our customers can produce the most sophisticated lasers in volume, be it for optical datacom or for upcoming LiDAR applications as well as high-quality micro LEDs for future display applications. The platform is the only fully automated MOCVD system for advanced gallium arsenide and indium phosphide based materials and comes with in situ cleaning and the Smith interface, which is common and highly automated production environment, both enabling ultra-load defect epi layers that are needed for the volume manufacturing of these new applications at lower cost.

We can say that overall, we are very happy with the market traction that our G10 series has experienced. We have invested into significant amounts of R&D, and as of today, we expect that the return of invest is coming even faster and even stronger than expected. This confirms our strong focus on technology and innovation, which we will also continue in the years to come.

In May of this year, we have announced that we will be expanding our facility in Aachen with a new innovation center. Last quarter, we have completed the planning for building and facilities and have received all permits and has signed up the contractors. Construction has started with groundwork ongoing.

In this place, I would like to comment briefly on the export situation. AIXTRON is not affected by the tightened export controls that the U.S. government has issued last week. With this, our business with China will continue unchanged. However, AIXTRON as well as other German equipment and industrial companies is still affected by the slow speed of export license processing within the BAFA. We hear that from BAFA itself and from many other exporting companies in Germany that a temporary staffing bottleneck is the root cause for this and we hear that BAFA is working on resolving this. Again, this is an operational topic completely unrelated to the China export restrictions of the U.S. just for clarification.

With that, let me now give you the update on our reiterated full year guidance for 2023 on Slide 6. As I said before, we continue to see strong momentum for our products, giving us the confidence of being able to fully reach our upgraded annual guidance in all metrics. On all metrics, we are fully on track, which is why we have reiterated our guidance as follows: We expect total orders for the year in a range between EUR 620 million and EUR 700 million. Our total revenues are expected to range between EUR 600 million and EUR 660 million. We have not narrowed the ranges of orders or revenues due to the unpredictable factor of the exact timing of export licenses and also some customer projects, as we have explained earlier in this call. We continue to expect a gross margin of around 45% and an EBIT margin in a range of 25% to 27%.

With that, I'll pass it back to Guido before we take questions.

[Guido Pickert, executive]

Thank you, Felix. Thank you, Christian. Operator, we will now take questions, please. [ Fabuna ] we would now like to take questions, please.

[Operator]

We are now starting with the Q&A session. [Operator Instructions]

We start with Gianmarco Bonacina from Equita.

[Gianmarco Bonacina, analyst]

I have a couple. The first one is on the guidance, especially in the order. So you reported EUR 120 million in Q3 and the midpoint of your guidance is indicated -- indicating a EUR 220 million order intake in Q4. So we are at the end of October. I understand there is a lot of uncertainty, but can we expect that you will be able to reach the midpoint of the guidance in terms of order intake?

The second question is on 2024. Clearly, is early, you will provide a more quantitative guidance probably in early next year, but just given the interaction with your customers, can you indicate if you expect to grow in 2024? And let's say, on a qualitative basis, if you expect single-digit or double-digit growth.

And the last one on the new tools you are introducing. So just to understand, do you expect these to be margin accretive for 2024?

[Felix Grawert, executive]

Thank you very much for your 3 questions. So let me just start with the first one. We definitely expect to reach our order intake guidance. This implies a very strong fourth quarter. And we expect you can do the math to achieve revenues in the fourth quarter such that it equals up to the full year range of EUR 620 million to EUR 700 million, as we have indicated. For 2024, meaning for the next year, at this point in time, it's our policy to never give an outlook or like a quantitative number, as you've been asking for. We've never done that in the last years and also we are not planning to. However, I can confirm to you that the growth drivers that drive our business are all intact, both in terms of the market, the application as well as our market share. And with that, we look very confident into 2024, just to give you a qualitative strong indication forward already.

Last but not least, you are asking for the margins realized with our new tools. Yes, of course, our new tools and support the margins. That's why also we've been invested into R&D for these new tools. And let's see how it develops in the overall mix. Again, we are not giving a guidance for 2024. At some point in our February earnings call, we will give the guidance, and let's see how it plays out for the total margin. But I can tell you, the new tools, given that they are differentiated, given that there's new features, new benefits, new customer benefit, meaning new customer value for our customers, of course, that's also reflected in the commercial.

[Operator]

And next up is Michael Kuhn from Deutsche Bank.

[Michael Kuhn, analyst]

Firstly, I'll ask one by one. On client wins, that one is for Mr. Grawert. In the Q1 call, you said give me another 2 quarters to give you a more comprehensive update on client wins in silicon carbide. So the 2 quarters have passed. And I think it would be highly appreciated if you could give us an update on that topic now.

[Felix Grawert, executive]

Very happy to do so. Yes. We are continuing to gain traction. As I mentioned in the call, we have received repeat orders from all our large customers in this quarter. We have been winning new customers. We continue to see new entrants in the market. And with that, we are on a very, very good path to further expand our market share in silicon carbide.

[Michael Kuhn, analyst]

And on, let's say, big names, anything to mention here? Or maybe an update over the next few months.

[Felix Grawert, executive]

Well, we only speak about names when we have the press releases together with the customer. So let's see whether within the next quarter, we will be able to issue one of those.

[Michael Kuhn, analyst]

Okay. And then -- it's again on '24, not really asking for early update here, but just to confirm, but the thinking is right here. If you deliver on your guidance, your equipment order backlog should be close to EUR 400 million by the end of the year. I think it's realistic to assume like EUR 100 million services, sales at least into next year. But when would you have to receive orders next year to still be able to deliver them next year? So should we still think about lead times of 9 to 12 months, i.e. order intake latest in Q1 to still get the deliveries out in the same year.

[Felix Grawert, executive]

That's a very good question. We do see the supply chain situation relaxing a bit. If you recall, we were all -- the whole industry was coming out of COVID. Post COVID, there was a global supply chain shortage in all dimensions, there lots of fab construction has started, overall shortage of components, which was also the reason for us to build a big amount of inventory. Luckily, we did because we could ship, we could satisfy all customer needs, all customer wishes on time. That was very good. However, we now see that the supply chain worldwide are relaxing. And with that, we are expecting to see 2 effects. The one effect is that the lead times will be shortening a bit. It would be for me too early to give now a quantitative indication. It's more like a trend that I give you qualitative, yes.

And secondly, with that gradually, we expect also to reduce the inventories. They are sometimes throughout 2024. Again, it's a bit too early to quantify when exactly that's going to happen just to give you a trend indication. So in short throughout 2024, the lead time should go down.

[Michael Kuhn, analyst]

Okay. Excellent. And then one more on the micro LED/LED sales, relatively small numbers throughout the quarters of this year. My understanding was you didn't ship micro LED tools this year. So I guess that is mostly LED legacy tools. How do you see both the LED and the micro LED market currently and into next year?

[Felix Grawert, executive]

No, we did ship micro LED tools this year. It's about 10% of revenue. I'm just looking here at my numbers, yes. So it's something, but it's not big. And we expect that to pick up next year again.

[Michael Kuhn, analyst]

All right. And then last question, promised on R&D spending, surpassed EUR 20 million in the quarter for the first time. Is that like a temporary high? Or should we think about north of EUR 20 million at a run rate now?

[Felix Grawert, executive]

I think north of EUR 20 million is a good indication.

[Operator]

And the next question comes from Olivia Honychurch from Jefferies.

[Olivia Honychurch, analyst]

On the Q3 order number, I know you've said not necessarily in your comments on the call, but in other conversations that may have been because you saw some customers delaying shipments temporarily in the quarter and that you'd expect a lot of those to come back in Q4. I just want to get a bit more color on what gives you that confidence that those orders will come back and drop in the Q4? And linking to that, have you actually seen some of them dropping through into Q4, in the 25 or so days you've already had over the quarter so far?

[Felix Grawert, executive]

Exactly. That's what we are observing, yes. Some customer topics have been shifted from Q3 into Q4. And this is a funny effect, yes? Because I mentioned that earlier when I was speaking about the G10 Series, everybody, all our customers are currently looking at the G10 series. So we had the funny effect that the launch of the G10 series actually has been depressing the Q3 order intake a bit, yes, because we had many, many repeat customers coming, but instead of just placing the next G4 order or G5+ order, where they have, whatever, a bunch of tools already and they know what they're getting. They said, "Oh, yes, this new thing. I really want to experience that. I don't want to get like it sounds so great. I don't want to just get another one of the old ones. Can I please come to the extra lab? Can I do a demo? Can I do a test of this one? Because maybe then I take the next one just as a new one. "

So the launch of the new product has been pushing some orders from Q3 into Q4. So there is a bit of a backlog, yes. On the other hand, that supports the confidence we have for the Q4, yes, because these customers need new units for the production ramp and launch. We spoke about the lead times just earlier when Michael was asking that question. So they do need to place the order, and that's also what supports our strong confidence in the Q4 order intake.

[Olivia Honychurch, analyst]

And just to clarify, have you already received some of those delayed Q3 orders in Q4 in the month of October?

[Felix Grawert, executive]

Some are coming, yes.

[Olivia Honychurch, analyst]

Okay. That's great. On silicon carbide, you said today and I know that you said it at Silicon Carbide conference last month or a month before that you're now achieving in some cases, market-leading yields with your G10, which should help you grow your share materially. Can you talk about how exactly you've achieved that? I know in the past, you've mentioned that it was due to a design tweak. And if there's any way we can, I guess, validate that statement given that we are in a market where everyone seems to be saying that the tool is the best and that their share is growing significantly.

[Felix Grawert, executive]

So how to explain that. I would say it's another modification to the tool, let's put it this way. So some new ideas played out experience in our lab, tried out, verified, a first rollout going on at 1 or 2 pilot customers also confirming that one. So another technical twist, so to say, to the reactors, let's put it like this.

Now how can you verify that? I think the best is, at some point, you ask some customers who have it in real life, and the customer confirms it to you. You probably talk also to customers of ours. At some point, there will be, again, a silicon carbide conference where we publish results, I think then it will also be visible or you come to our lab and see yourself, be invited.

[Olivia Honychurch, analyst]

That's great. And then finally, one more if that's okay. Just on the micro LED, you said earlier in response to your question that, that should grow again in 2024. What's going to drive that given that I was under the impression that shipments to your major customer have -- will have almost completed by the end of this year.

[Felix Grawert, executive]

Yes. I mean the good thing is that there's more than one customer, right? And we know that the research and the work has been going on throughout the industry. And we hear and probably you also here and we, of course, see it much more concretely that now some customers are planning, so to say, for certain products, the first launch in a decent size that we will see as a percentage of revenue, and that's what's giving us this confidence.

[Operator]

And the next question comes from Andrew Gardiner from Citi.

[Andrew Gardiner, analyst]

I have a couple as well, please. Firstly, another one on silicon carbide. You've expressed your confidence in terms of the performance of the tool and the customer feedback that you're getting Felix. I'm just wondering or I suppose, trying to sort of square the circle if it were the fact that competitors are also standing very positive. And Olivia just mentioned that in her question as well. How can we sort of square that? Are you seeing this as a win to take all in terms of the customers? Or are some customers actually saying, well, we've got enough of a ramp happening here that we'll take some AIXTRON tools and we'll take some other tools. Even though the architectures might be significantly different, while your approaches are different in terms of multi-wafer, single wafer. Is there a dual sourcing happening on that front? And then I've got one on the export licensing, too.

[Felix Grawert, executive]

I would say that there's 2 topics ongoing right now. I think the one topic is that we see that the generation of tools to secure the revenues in the next 2 to 3 markets is going to be different companies than the ones who have realized the revenues in the last 2 to 3 years. yes. I think that's the one trend which we are observing, yes. So there is a change on, so to say, who's receiving the new orders versus who has the lion's share of the installed base. I think that's the first one, which is ongoing.

The second one, which is ongoing, given that now there is 2 fundamentally different principles out in terms of tool on the market. And both these 2 different principles are achieving excellent results, yes, and competing with each other on who is the best. The customers are trying out both of these. They do sort of say what Olivia was asking for, but they don't only want to get like some data or some power points, but they rather want to see it on their shop floor in production. So they have a look. And I think based on that look, we will then see how it comes out, which is then an overall decision based on the relevant competitive metrics, yield throughput, cost, the usual topics, but it's a technical competition, so to say. And as you heard, we feel very confident in taking on this competition.

[Andrew Gardiner, analyst]

Okay. That's clear. And then just a clarification on the export licenses. You mentioned other German companies facing this. There's another one last night sort of warning on it. But from your point of view, nothing has changed in terms of the technical scrutiny of the tool. It's purely a paperwork issue, is that still the case?

[Felix Grawert, executive]

Exactly. It's purely a topic around operational execution. We hear that the team currently responsible for all of Germany is very small. So it's an operational issue apparently inside of the authorities. They lost the members. They have staffing issues. So they have a big backlog of stuff that needs to work down. We hear that from a large number of other equipment companies. Of course, we have reached out and consulted, and discussed with our peers. And on the other hand, we also know and hear that it's being addressed and after some time, it will be resolved. So we expect that at some point, we will be completely back to normal.

[Operator]

So the next question comes from Gustav Froberg from Berenberg.

[Gustav Froberg, analyst]

I just have 2, please. The first is around Q4 and I guess, the start of 2024 as well. You mentioned that you're seeing strong order intake or at least expect strong orders in Q4 and that all of this is backed by specific customer projects. And could you share some light on what these customer projects are and perhaps give us some examples? Just to back that up a little bit? And then I have a question on export licenses, which follows from the last question really because, again, reading from other companies in Germany, elsewhere in the semiconductor supply chain saying that the authorities have increased their scrutiny and work starting from August this year. Is that something that you are seeing as well? Or does this go hand-in-hand with the labor issue that you have outlined previously?

[Felix Grawert, executive]

So the first question about what composition I took it, what is the composition of orders in Q4. I would call very simply more of the same, kind of a bit like we have seen in the first quarter of the year. So we see the current trends are continuing, and I would not see -- we were not expecting a significant change in the mix and the composition of the orders, yes. More of the same, however, much more if we just add up the numbers, yes, to the full year numbers, of course.

Now to the second question, I think you're referring to the press release that this was giving out, right? I think we all have read it. Yes, otherwise, you can find it on the website under the Investor Relations section. And this had a statement out there about what you were just referring to, I just assume that this is what you mean. So I explicitly refer to that document, which is in public space, yes, which is -- Christian maybe you can hand it over to me, I have printed out here, which is they were saying that the authorities, the German authorities have intensified certain things for their tools. That situation is different for us. We have not experienced that the authorities have intensified the scrutiny. In our case, it is simply that whatever has been done already before now is taking longer. And on that one, we have investigated, and we have also found that with other companies, equipment companies, which are in the same situation like AIXTRON, so to say that it's the staffing issue with this bottleneck issue in personnel in the relevant department of the authorities that I was referring to.

So yes, in terms of the delay, it's similar. However, in the root cause, the situation is a bit different from ours and that of many other equipment makers.

[Gustav Froberg, analyst]

Super. Thank you for clarifying. It was exactly the passage I was referring to.

[Operator]

The next question comes from Malte Schaumann from Warburg Research.

[Malte Schaumann, analyst]

First question also on silicon carbide. Do you see larger customers, major accounts potentially moving to dual source technology platform going forward? Or if not, until when, I mean, we are not that far away from when really technology decisions for a certain platforms have to be made given the expected strong ramp from '25 onwards or so. So until when would then be the time frame until customers could potentially take or have to make the decision to finally go with one vendor.

[Felix Grawert, executive]

So I think silicon carbide is going to be, as we all are aware, a very high-volume business because in the end, we all are working to replace all combustion engines on this planet with electric energy preferably out of renewable sources, yes. So this is a big endeavor, meaning many, many fabs, many, many tools and many, many hundreds of millions of wafers being produced. So I think this is going to be a continuum of fab ramp-up capacity build out over many years to come over the next year, I think, to put that upfront. So based on that, they will not -- we are not expecting that at the point in time.

And on this one, it's like a bit flip left or right, yes, or between 3 or 4 vendors. We rather expect this is a multiyear opportunity and customers will allot their volumes, whomever they be most productive or maybe there's also topics around supply chain risk mitigation. I think we just come from the COVID crisis, and we saw how difficult it can be if you're stuck with one vendor and that vendor can't ship and so on. I think it's just a very normal process, but I would not expect that it's the left or right, one winner gets all in this big silicon carbide market.

And with that silicon carbide is very clearly different to highlight that also from other segments in the compound industry because the silicon carbide layer is a relatively simple layer. So you can qualify 2 different vendors or 3 or 4 or 5, I don't know, yes, compared to other parts of the compound industry, where you speak a very, very complex, very delicate vendor and just from the complexity also of your product portfolio, it's just not efficient to qualify multiple vendors.

[Malte Schaumann, analyst]

Right. Okay. And then on the order intake range you provided for the second quarter, I mean, this is pretty large. Is that reflecting a great number of -- high number of projects or is that dedicated to maybe just a few customers 1 or 2 then make a decision for larger orders. So what will drive the order intake to the lower end or to the high end of the guidance?

[Felix Grawert, executive]

So first of all, for the large range. Well, our numbers have grown -- our total number has grown. And we traditionally have towards the end of the year about the range is about 10% of the upper part. So if you look for all the last years, right, we typically had a 10% of the upper range. So if you do the math this year, 10% from 700, that's the upper range, which we have out there would be 630. Now given that we left for those export stuff temporary topic, timing topics, we left the revenue unchanged. We said, well, let's not change from 620 to 630, just a single number, but let's leave the range where it is, yes? So just on that one, yes. So it's just a larger number that you are used from us, which is the growth path that we are on and that we also -- we are planning to continue.

Now for your question on the composition, this is not a single customer or a large order or a volume order, yes, kind of the one which makes it or breaks it, it's in fact, a broad split of customers, a broad set of orders, multiple geographies quite well all over the place, which is also giving us the confidence that you hear from us on this call today.

[Malte Schaumann, analyst]

Okay. Got a quick one on the order backlog. I think a year ago, you had about EUR 50 million orders that were dedicated for '24. Do you expect more or less a similar number at year-end going then into '25 or so that come down to the easing supply chain situation?

[Felix Grawert, executive]

Sorry, I think I'm not sure we fully got your question.

[Malte Schaumann, analyst]

I think last year, you said from the EUR 350 million in order backlog, you expect EUR 300 million to be delivered in '23. So EUR 50 million was scheduled for '24. So will there be kind of a similar number than at the end of this year, scheduled for '25? Or is that going to come down to shorter lead times?

[Felix Grawert, executive]

Honestly, I have to pass on your question. We would need to drill a bit into the numbers. And also I'm not sure, Christian, can you help?

[Christian Danninger, executive]

Yes. No. I mean that will be too difficult to predict now, yes, because, I mean, it depends then on what will the order backup at the end of the year, yes, in having the big ranges. And then on top of that, we have the -- as you explained the change in delivery times potentially next year, just too much [ difficult ] to predict it.

[Operator]

And the next question comes from Simon Coles from Barclays.

[Simon Coles, analyst]

I was just wondering on geographic mix, if we're seeing more of a shift to more either Western markets or a change as China has been coming down over the last couple of years, whether we can continue to think that comes down because we've seen some press articles suggesting some other countries could be able to spend a lot of money on silicon carbide and even gallium nitride. So I was just wondering if you have any thoughts on that?

[Felix Grawert, executive]

I think the product -- the geographic mix that you see, and I think you're referring to the fact that the composition of the share of Europe and U.S. has been going up quite a bit. That's driven by our application mix. You have seen that I think year-to-date, we are around 80% from power electronics, GaN and silicon carbide; traditionally, historically, GaN and silicon carbide. So the power electronics is a domain of companies producing in Europe and the U.S., yes, that's what we have seen -- what we've seen continuing.

At the same time, we now see, and I think everybody sees in the market that also there is companies, new entrants in other regions of the world and entering the domain for silicon carbide chip making, for gallium nitride chip making. So I think when those projects get realized, we'll also get for power electronics a more diversified global distribution. I think that will drive just from the power electronics.

And then I mentioned before, we're expecting a rebound, both of the Optoelectronics but especially also micro LEDs. And traditionally, the Optoelectronics, the optics, the LED industry, of course, had a strong footprint in Asia, in Taiwan, in Korea and China, not to forget. But I think there will be clearly a rebound of those countries and the geographic mix over the quarters to come. When exactly? Where exactly? Too early to predict. But I would not extrapolate from the effect that you see right now.

Okay. Thank you all. With this, we will close today's call. I hope to see many of you on one of the upcoming conferences or events over the coming weeks and bye-bye.