Be Semiconductor Industries N.v. · EURONEXT:BESI
Be Semiconductor Industries — Investor Presentation (June 2018)
68 slides from Be Semiconductor Industries's investor presentation, Jun 14, 2018
Slide 1: Analyst Presentation June 14, 2018
ANALYST PRESENTATION JUNE 14, 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements about management's future expectations, plans and prospects of our business that constitute forward-looking statements, which are found in various places throughout the press release, including, but not limited to, statements relating to ex
Slide 3: Agenda
Agenda I. Strategic Overview Richard Blickman II. Application End Markets & Drivers Ruurd Boomsma III. Product Development Strategy Ruurd Boomsma IV. Strategic Revenue Initiatives Richard Blickman V. Strategic Cost Initiatives Richard Blickman VI. Capital Allocation & Acquisition Strategy Richard Bl
Slide 4: I. Strategic Overview
I. STRATEGIC OVERVIEW June 2018 4
Slide 5: CEO Summary
CEO Summary • Disciplined strategic focus on most rapidly growing areas of advanced packaging space has created an industry leader • Assembly market ever more critical step in semi production and value chain, particularly for the emerging digital society • Successful Asian production and supply chai
Slide 6: Assembly Equipment Market Trends
Assembly Equipment Market Trends Assembly Equipment Market Market Size YoY Growth Rate 6.0 30% CAGR 4.6 4.9 5.0 3.9 20% 13-17 27.2% 11% US$ billions 3.7 23.9% 4.0 3.0 3.2 10% 14.0% 3.0 7.7% 0% 2.0 -10% 1.0 -16.1% -20% -22.0% 0.0 -30% 2013 2014 2015 2016 2017E* 2018E** Source: VLSI June 2018* / April
Slide 7: 2018 Market Update
2018 Market Update • Based on higher VLSI 2017 assembly market estimate, the 2018 growth rate forecast is reduced to 8% • Anticipates 2019 cyclical downturn followed by renewed upcycle in 2020 • Assembly growth to date in 2018 focused mostly on low-mid range equipment for LED and memory in still fav
Slide 8: Where Do We Go From Here?
Where Do We Go From Here? • Long term favorable secular trends intact: digital society, AI, big data, 5G, expansion of the cloud, increasing automotive electronics content • Assembly market ever more critical step in semi production and value chain, particularly for the emerging digital society. Adv
Slide 9: II. Application End Markets and Drivers
II. APPLICATION END MARKETS AND DRIVERS June 2018 9
Slide 10: Digital Society
Digital Society June 2018 10
Slide 11: New Era of Chip Growth and Applications
New Era of Chip Growth and Applications Digital society Driven by new technologies - 5G - AI – big data - Robotics - Transportation - Environment - Health care Will need continuous new solutions - 1zb = 1,000,000,000 tb - 1zb= 1,000 data centres - 1zb = 180,000,000 home energy Source: IMEC ITF 2018
Slide 12: Trend to Smaller and More Efficient Devices to Continue
Trend to Smaller and More Efficient Devices to Continue Source: IMEC ITF 2018 June 2018 12
Slide 13: Will Require Changes in Process and Equipment
Will Require Changes in Process and Equipment New Device Architecture Front End Equipment - Beyond FinFet - EUV (Reduced Mask Set) - Nanowire FET - New deposition / etching technologies - Vertical Fets - Vertical NAND New Assembly Structures Back End Equipment - 2D/2.5D/3D Structures - High Accuracy
Slide 14: Portfolio Positioning by Node Size and Accuracy
Portfolio Positioning by Node Size and Accuracy Estimated % of 2017 Revenue Typical Application Besi Equipment Accuracy Size 100% Micron NM 10+ 28+ Automotive, SiP Softsolder, Epoxy, MultiModule 90% Power Flip Chip Die Bonders 25% Packaging 80% Plating 10 28 70% IOT Softsolder, Epoxy, MultiModule 20
Slide 15: Besi Markets
Besi Markets 25% 15% 10% 2017 % of Revenue ‘Source: Company Estimates June 2018 11% / Motie internet devices, computing > and automotive are Besi’s three largest and most rapidly growing end user markets * New device introductions in 2017 boost mobile internet share to 35%. Above trend line * Comput
Slide 16: Mobile
Mobile Key developments in mobile world Smart phone market unit growth slowing, but introduction of advanced features increasing 2nd tier suppliers typically follow 1 to 3 cycles later Improved face recognition Improved fingerprint recognition Dual and triple cameras Artificial intelligence
Slide 17: Besi Addressable Market Share of Mobile Increasing
Besi Addressable Market Share of Mobile Increasing Source: Tech Insights WIDE RANGE OF BESI PLATFORMS USED June 2018 17
Slide 18: Computing
Computing Key developments computing High performance computing AI/deep learning Autonomous driving Big data Robotics Strong growth data storage Faster data communication/photonics Key area for continuing „Moore“ and advanced packaging Besi Revenue Computers / PC (million euro) CAGR
Slide 19: Besi Penetration of Computing Market Increasing
Besi Penetration of Computing Market Increasing June 2018 19
Slide 20: Automotive
Automotive Key developments automotive Hybridization/electrification Increased safety features and sensor content Ecall Autonomous driving Connectivity Energy efficiency Entertainment Car lighting Increased reliability Zero defect Besi Revenue Automotive (million euro) CAGR 2013-
Slide 21: Besi Penetration of Automotive Market Increasing
Besi Penetration of Automotive Market Increasing June 2018 21
Slide 22: Industrial
Industrial Key developments industrial Smarter and energy efficient Smart industry factory automation Smart homes and buildings Surveillance Lighting Power control/inverters higher voltages More efficient appliances Smarter more efficient machines Smarter and more efficient power too
Slide 23: Industrial Growth Opportunities
Industrial Growth Opportunities Industrial Technology Period CAGR % Full SiC based Pwr Modules 2017-2024 +31% Air Conditioning systems 2018-2022 +11% General Purpose Microcontrollers 2017-2020 +7% Secure Microcontrollers Automotive/IOT/Machine 2017-2020 +7% Infineon Digital Powercontroller Source: S
Slide 24: Technical Trends Drive Growth Opportunities: Low and Mid End Devices
Technical Trends Drive Growth Opportunities: Low and Mid End Devices Transition from mature package formats LOW END to wafer level packaging mems pmics codec, RF, DC-DC, WiFi Leadframes QFN Single Chip FOWLP Smaller form factors SOT Higher speed Waferlevel CSP TSOP Transition from first generation a
Slide 25: Technical Trends Drive Growth Opportunities: High Devices
Technical Trends Drive Growth Opportunities: High Devices From high end single die to more integrated HIGH END and stacked or horizontally connected dies Interposer or no interposer Flip Chip BGA Complex 2.5 D-3D structures Using fan out technologies Multi Die FC BGA Multi Die Fan Out BGA Substrate
Slide 26: Typical High End Fan Out Technology Amkor Swift
Typical High End Fan Out Technology Amkor Swift From Wire Bond on Substrate To Flip Chip on Substrate To Substrateless Solution with Fan Out June 2018 26
Slide 27: Example: ASE FoCoS
Example: ASE FoCos ASE FoCoS - Fan out Chip on Substrate - 2/2.5 um L/S - 4 metal layers Interposer No Interposer - 16 and 28 nm technology dies RDL using Fan Out Technology - 32 x 26 mm FO - 67 x 67 mm package June 2018 27
Slide 28: Many Formats Advanced Assembly Technology
Many Formats Advanced Assembly Technology June 2018 28
Slide 29: III. Product Development Strategy
III. PRODUCT DEVELOPMENT STRATEGY June 2018 29
Slide 30: Product/Development Strategy Objectives
Product/Development Strategy Objectives Focus on fastest growing segments of assembly equipment market • Expand presence in advanced packaging for next generation applications • Customer focused development strategy with largest players • Refresh existing products every one to two years to stay at l
Slide 31: Best in Class Product Portfolio
Best in Class Product Portfolio Die Attach Die Bonding Multi Module Attach Flip Chip Die Sorting Die Lid Attach • 2100 xP plus / hS • 2009 SSI • 2200 evo • 8800 CHAMEO advanced New • WTT New • DLA New • 2100 sD plus / PPP plus • 2100 DS New • 2200 evo plus • 8800 TCB advanced New • TTR New • 2200 ev
Slide 32: Evo 2200 Series Multi Module Die Attach System
Evo 2200 Series Multi Module Die Attach System 2200 series Key competitive advantages High accuracy and speed Multi die multi wafer CAMERA Extreme wide application field Fast R&D to production SENSORS New developments 2018 AUTOMOTIE 3 um accuracy / photonics 6 axis bondhead 3D topology
Slide 33: 2100 Series Stacked Die Epoxy Die Bonder and HSFC Bonder
2100 Series i hS and SD Stacked Die Epoxy Die Bonder and HSFC Bonder 2100 series Key competitive advantages High accuracy and speed High system to system repeatability Very stable in 24/7 production New developments 2018 Dual dispenser Epoxy auto volume correction Uplooking camera Low
Slide 34: 8800 Series Quantum & Chameo FC/Fan Out/TCB Die Bonder
8800 Series Quantum & Chameo FC/Fan Out/TCB Die Bonder Fan 8800 Out series Key competitive advantages De facto fan out standard since 2008 TCB Highest accuracy and speed in industry Includes TCB version New developments 2018 High Accuracy Parallel Flip die handling => speed Ultra accuracy
Slide 35: Next Generation Fan Out Systems => High Speed
Next Generation Fan Out Systems => High Speed Fan out strongly growing in many applications We are developing next gen 8800 fan out system Parallel die processing Current gantry technology at speed limit To further increase speed use parallel die transfer For accuracy, place every die individually -
Slide 36: Ultra Accuracy Bonding System
Ultra Accuracy Bonding System TCB BASED HYBRID BONDING Upcoming technology hybrid bonding For the most advanced devices Accuracy need in 200 nm range Actively developing technology Based on advanced optical system Combined with local piezo actuators Super clean concept First pre-produc
Slide 37: Panel Size WLP System
Panel Size WLP System Large panel system For fan out and micro LED applications 720 x 650 mm working area Includes new high accurate gantry system Decoupled metrology 2 um global accuracy Target markets High end interposerless substrates High end micro LEDs General fan out June 2018
Slide 38: 2009 - 2100 Series Soft Solder Die Bonding Systems
2009 - 2100 Series Soft Solder Die Bonding Systems High 2009 - 2100 SSD Power series Key competitive advantages Best in class soldering systems Defacto industry ICs Power standard New developments 2018 High force bond headPower Standard (diffusion) Product traceability (automotive) Target ma
Slide 39: Next Generation AMS-W/LM Molding Systems
Next Generation AMS-W/LM Molding Systems AMS-W/LM Series Key competitive advantages Standard in molding ultra thin dies Exposed die molding Superior mold chase design Strong position in wafer level molding New developments 2018 Double side molding with exposed die in one step 120 ton mol
Slide 40: Next Generation FML
Next Generation FML Molding FML Series Key competitive advantages 30% cost reduction compared to compression mold Excellent narrow gap fill 50um Proven in advanced processor production New developments 2018 Double side molding with exposed die in one step 120 ton molding capabilities large
Slide 41: Trim & Form
Trim & Form Trim & Form Fico Compact Line (FCL) Key competitive advantages Handling complex frames Low conversion times Product tracability New developments 2018 Advanced vision system for zero defect output Laser marking system Target markets 2018 - 2020 Automotive Industrial June 201
Slide 42: Next Generation CD-EDF-EPL Plating Systems
Next Generation CD-EDF-EPL Plating Systems Semiconductor Plating Technology Key competitive advantages De facto plating standard for leadframes Very efficient chemical usage Very precise plating New developments 2018 Continuous Deflash Line CDL 800 Wettable flank plating Initiated R&D pr
Slide 43: Solar and Battery Plating Systems
Solar and Battery Plating Systems Solar and Battery Plating Technology Key competitive advantages Best in class cost of ownership Small ecological footprint New developments 2018 Backside contact cells with etch back Hit solar cells Double sided active solar cells Target markets 2018 - 202
Slide 44: Technology Summary
Technology Summary • Semiconductor assembly plays an increasingly important role in the development of next generation devices • Slowing of Moore‘s law requires greater advancements in packaging technology • Advanced packaging demand continues to expand driven by ever smaller form factors; increased
Slide 45: IV. Strategic Revenue Initiatives
IV. STRATEGIC REVENUE INITIATIVES June 2018 45
Slide 46: Summary Initiatives
Summary Initiatives Grow in excess of underlying addressable market rates • Besi grew by 23% CAGR in 2013-2017 versus an addressable market growth of 11% Increase market presence and share in addressable markets • Leverage technology leadership to increase market share to 40-45% in next five years •
Slide 47: Besi Addressable Market Growth
Besi Addressable Market Growth USD millions Addressable Market Besi % of Addressable Market 2,500 60.0% CAGR 2013-2017 11.4% 1,939 50.0% 2,000 1,844 1,622 40.0% 1,500 1,453 36.0% 1,200 1,233 30.5% 29.8% 30.0% 26.4% 31.3% 1,000 20.0% 500 10.0% - 0.0% 2013 2014 2015 2016 2017 2018E Annual growth 35% -
Slide 48: Besi Has Gained Share In Its Addressable Markets
Besi Has Gained Share In Its Addressable Markets Source: VLSI June 2018 and Besi estimates 2016 2017E Besi Addressable Market 28.6% 36.0% Total Die Attach 35.4% 44.2% Die Bonding 35.3% 48.4% Flip Chip 33.0% 28.9% Die Sorting 44.6% 39.9% Total Packaging 14.9% 17.1% Molding 14.1% 16.0% Lead Trim & For
Slide 49: Potential Customer Market Share Growth Opportunities
Potential Customer Market Share Growth Opportunities • Increase Share of Wallet of existing customers with new product introductions • Reduce unit cost to expand mainstream system sales and gain share vs. competitors • Sell next generation equipment to increase SoW in the Memory/Logic space, in part
Slide 50: Expand Chinese Market Presence Via Increased Local Production
Revenue Initiative: Expand Chinese Market Presence Via Increased Local Production China Customer Revenue and Units Shipped Chinese Revenue China Units Shipped 130 122.6 350 120 114.0 110 300 289 100 90 250 80.2 73.9 euro millions 80 200 70 60 150 50 139 40 100 30 20 50 10 33 0 0 0 2014 2015 2016 201
Slide 51: Invest in Chinese Process and Technical Capabilities
Revenue Initiative: Invest in Chinese Process and Technical Capabilities to Support Future Growth Growth of Service and Technical Support Personnel in China 250 197 200 150 150 143 81 100 39 40 50 0 2015 2016 2017 Taiwan Other Asia Singapore Korea China Malaysia • Service, engineering and technical
Slide 52: V. Strategic Cost Initiatives
V. STRATEGIC COST INITIATIVES June 2018 52
Slide 53: Summary Initiatives
Summary Initiatives Achieve a more scalable, flexible and lower cost business model • Expand production capacity to meet € 800 million run rate • Further develop European owned Asian suppliers Target 53-57% through cycle gross margin • Optimize production between MY and CH to reduce cost and better
Slide 54: Cost Initiatives: Potential Cost Reduction Over Next Five Years
Cost Initiatives ~€ 15 Million Potential Cost Reduction Over Next Five Years Supply Chain (~40%) Headcount (~35%) Product Design (~25%) • Increased outsourcing • West – East Transfer • With each new product • Vendor consolidation and • Certain SG&A and R&D generation: volume discounts functions • Re
Slide 55: Supply Chain Initiatives
Supply Chain Initiatives Material costs are largest single cost = ~40% of revenue Supply Chain Actions • Increased outsourcing • Vendor consolidation and volume discounts • Increased common parts • Increased Asian sourcing/selected products • Management reviews progress weekly component by component
Slide 56: Continue West-East Headcount Transfer to Reduce SG&A Costs
Continue West-East Headcount Transfer to Reduce SG&A Costs Fixed Headcount 2,000 1,724 1,754 75% 1,800 1,549 71% 71% 1,489 1,489 67% 1,600 1,434 64% 65% 1,400 60% Headcount 56% 1,200 55% 1,000 800 44% 45% 600 40% 400 36% 35% 33% 200 29% 29% 0 25% 2013 2014 2015 2016 2017 Q1-18 • Transfer 130 more po
Slide 57: Chinese Production Transfer Offers Cost Reduction Opportunities
Chinese Production Transfer Offers Cost Reduction Opportunities Units Shipped Asian Production Trends 100% 50% 90% 80% • Shift production from Malaysia to Leshan for 70% China market specific systems to better balance 82% production/sales representation 60% 83% 95% • Significant cost savings availab
Slide 58: Common Platform Development Update
Common Platform Development Update Development Actions • Redesign products for common parts, platforms • Increase standardization • Lower unit cost, design and maintenance hours • Shorten cycle times June 2018 58
Slide 59: Base Line Operating Expense Trends
Base Line Operating Expense Trends 140 129.2 116.3 15.6 120 112.5 19.6 100 19.0 euro in millions 80 60 113.6 96.7 • Strategic initiatives have limited 93.5 40 baseline opex growth relative to revenue development 20 • Significant operating leverage 0 2015 2016 2017 in business model Base Opex Other O
Slide 60: VI. Capital Allocation and Acquisition Strategy
VI. CAPITAL ALLOCATION AND ACQUISITION STRATEGY June 2018 60
Slide 61: Besi Has Shared Its Progress with Shareholders
Besi Has Shared Its Progress with Shareholders euro millions 200 Cumulative Distributions: € 457.5 MM Since 2011* 183.4 180 9.4 160 140 120 100 88.1 174.0 80 22.8 67.8 60.9 60 4.0 22.4 40 65.3 56.9 20 14.0 12.4 45.4 2.7 11.3 12.4 0 2013 2014 2015 2016 2017 2018* Dividends Share Repurchases * Dividen
Slide 62: Highest Dividend Yield vs. Peers
Highest Dividend Yield vs. Peers 9.0% 8.1% 8.0% 7.0% 6.0% 5.0% Dividend Yield* 4.0% 3.0% 2.4% 2.2% 1.9% 2.0% 1.6% 1.2% 1.0% 1.0% 0.0% 0.0% 0.0% 0.0% * Source: Morningstar as of June 12, 2018 June 2018 62
Slide 63: Significant Liquidity Available to Fund Growth Opportunities
Significant Liquidity Available to Fund Growth Opportunities Cash and Deposits Net Cash 600 571.0 527.8 500 Cash flow generation has significantly improved over past five years: • Total cash reached € 571.0 million in Q1-18 400 • Net cash grew to € 290.1 million • Reflects € 243.3 million of dividen
Slide 64: Assembly Equipment Market is Consolidating
Assembly Equipment Market is Consolidating 100% 90% 80% Top 4 Suppliers 70% 55.3% 61.4% (Besi, ASM PT, Disco, K&S) 60% 50% 40% 30% 44.7% Other Assembly Suppliers 20% 38.6% 10% 0% 2016 2017 • Ever more demanding technological capabilities, scale and cycle times driving consolidation • Increases oppor
Slide 65: VII. Outlook and Summary
VII. OUTLOOK AND SUMMARY June 2018 65
Slide 66: What Drives Besi's Business?
What Drives Besi’s Business? • GDP trends • Customer road maps and capital spending programs • Pick the right IDM customers with greatest mind share • Deliver on technical specs - node size, accuracy, throughput • Reliable performance in 24/7 production environment • Competitive cycle times • Produc
Slide 67: Q2-18 and H1-18 Guidance
Q2-18 and H1-18 Guidance Q2-18/Q1-18 HY1-18/HY1-17 Revenue Revenue € 154.9 € 280.2 +10% +16% - - +15% +19% Q1-18 Q2-18 HY1-17 HY1-18 Gross Margin Gross Margin 56.5% 56.7% 55% 56% - - 57% 57% Q1-18 Q2-18 HY1-17 HY1-18 Operating Expenses Operating Expenses € 39.1 € 64.7 5% +15% - - 10% +18% Q1-18 Q2-1
Slide 68: Summary
Summary Leading assembly equipment supplier Best in class Gaining market with #1 or #2 advanced packaging share positions in fastest portfolio growing segments Upside potential Scalability and from next generation profitability greatly Attractive capital and <20 nano enhanced in cyclical allocation
Be Semiconductor Industries — Investor Presentation (June 2018) on 6ix