Asm International Nv

Yeah, I think, because I think last time already we mentioned that the pace of adoption, customer by customer, is different. There might be even a customer that might completely skip it. We don't know yet, but that's to be seen. And I think for us, based on what we see and think we know today, I think you should take into account 2018. as the first year where we start to see a positive contribution related to Foursquare. My time may be a little bit earlier, I don't know yet, but the timeline is still a little bit uncertain and very different from customer to customer, so I think the best color I can give right now is in 2018.

So, what Paul has mentioned here, you know, we see a strength in memory in 2026, also increasing for us in 2027 and beyond. The biggest increase for us will happen really in the movement to 4F squared, where you have more ALD data. layers and more also epi-intensity, but also we've seen some customers putting in perifemfet in their mode, in their roadmap, and with that we're working with them and we might And since, you know, we've been very prominent in our FinFET technology in logic, so we see some customers really pulling in that technology node. And with that, we probably will get some more layers as customers pull in their FinFET technology node. So the biggest increase would be 28 and beyond, but also we see some increase in 2027.

Understood. Frank, just ask a quick follow-up as well. You've mentioned a few times the sort of pickup in three to seven nanometer transition, and I don't know if you can give any color on whether that's at your largest customer or kind of more broad-based.

Which transition are you talking about, sorry?

Three to seven.

Yeah, I think it's really broad-based. That's really broad-based. It's not only one customer. It's very broad-based.

Understood. Thank you.

Next question is from Ruben Davos, Kepler Sugar.

Yeah, good afternoon. I just had one on AP in HBM. I believe you talked about significant AP engagements with another HBM customer and expected good news this year. So, of course, curious whether two months on has anything firmed up on that additional qualification? And would that be, let's say, fully incremental to your memory plan in 2016?

Okay, so to answer your question, yes, we talked about that, and we are engaging with other customers on Epitaxi. There's really nothing else to say right now, but we'll let you know if there's news from that point of view. It's really working with a couple of customers on Epitaxi, and hopefully we can share some good news with you in the next investor call meeting.

Okay, and then second one, we need to just get a feel of maybe the aftermarket sales, right? I mean, you've had a stretch of very good performance in the last few quarters. Again, 23% up the past quarter. Outcome-based is about 25% of the mix. So it looks like, I mean, the target you set at the investor day of 12% CAGR is becoming more of a floor. I was curious whether you could talk a bit about, yeah, the extended visibility you might have now in aftermarket sales and I can imagine a margin uplift to realize if you manage to make the transition more towards outcome-based. But also besides that, are you able to sort of have the customer pay more per tool for the servicing package in general?

I think that's for service market, okay? What I mentioned, the service market is really good as you transition in a newer technology node because of process complexity. It's very important to a customer need more support from us and for the more advanced node. And with the advanced node also we see a transition to much tighter specification on wafer-to-wafer and also repeatability on chamber-to-chamber matching and also on system-to-system matching. And with that, you know, we have to provide a new solution. the customer to improve the uptime and the availability. So we are very, really, we think that the Surface business is going to increase in the future as you transition to tighter and tighter technology node. And we see that happening in the area of automation, in the area of robotics, in the area of optics. And those are really the solution that we're providing our customer. So the growth is going to be good in that part of the market. You mentioned that 12% growth. To be honest with you, right now, every part of the market is growing a lot. This year, the market is growing over 20%. I mean, latest... You see Gartner talking about 25%. So everything is great. It's really just spending my time, okay, to make sure that we can execute on getting customers the tools in time and make sure that the availability and the execution is top-notch.

Thank you very much.

Next question is from Tim Schultz. Hi there, thanks very much for taking my question.

First one for Hisham please, just looking at the technology execution and just trying to scale maybe how much upside there is to that. If I look at your long-term revenue guide, the high-low range is kind of 20%, 25% between the low and the high. Obviously, part of that is the strength of the cycle. Maybe part of that is also conversion of existing valuations and layer wins. Maybe could you just share how much of that is upside potential from layer wins so we can just think about that in the context of your go-forward revenues and then how to follow up?

You said the percentage. I didn't hear you well on the percentage. Which percentage are you talking about, please?

Yeah, so if we look at your 3.8 to 4.7 billion euro revenue guide, so part of that's going to be cyclical. Part of that's going to be your execution in terms of technology wins. I'm just trying to think, is that half-half? But some kind of scale of that.

I mean, if you look into the business and where we are, you know, one thing I can tell you, I'm really very excited about our technology roadmap. I think that things are going in our direction. If you look into logic, you see more and more layers coming in with 2 nanometer and also with 1.4 nanometer. ALD intensity is increasing and EPI intensity is increasing, and we're in chair in that part of the market. If you look into memory, memory is moving more and more into FinFET, more and more in 4F squared, which needs more EPI, needs more ALD. So we're going to have more layers, and we feel very confident about it. And if you look into power wafer analog, the power part of the market is the only part of the power wafer analog that's strong right now. And that's being driven by data centers, power devices for data centers. If the wafer part and the analog part goes up, it's going to be even accredited to us. So the service business is also good. In the service business, we're doing more and more automation, and we're getting into even robotics and that customers and leading customers, we're even sending them some robots and to improve the system availability, and so on. If you look into advanced packaging, that's an area that we mentioned that we have entered last year. It's a new area for us. I can tell you that we have so many, believe me, so many interactions with customers, and we have to prioritize which one to do, and some customers tell them, guys, we cannot really help you there. But with the customers that we're really engaging right now, I can see that they really like to work with us as a company because we're looking into the advanced packaging to a different option. We're looking into that as, okay, what can we do to disrupt the technology? What can we do to to provide a solution that's better than what it is right now? How can we put a solution to make sure that we reduce the thermal mass on advanced packages? Coming with new material that improves thermal conductivity. Working with customers to make sure that we can seal the devices much better so there is no moisture going into the packages. We're working with customers to actually improve the speed of connection between one chip to the other one, working with them on some innovative photonic layers. I'm sure that with all of this, really, I feel very confident where things are going to go from that point of view. And depending where the market is going to go, I'm very confident that we're going to at least – match the WFE market growth or actually have a higher growth than WFE. It's a great time for ASM right now and I see customers really want to work with us. I think our execution has improved. I think our competitiveness is getting even better than before. And what can I tell you? It's the best time to be in semiconductors right now.

Very, very impressive runway. Maybe just a quick follow up for Paul. Just some housekeeping, actually. You talked about rising utilization rates, but actually Q1 aftermarket sales were down sequentially. And on your guide, I think last quarter, your guidance range was plus minus four. This time you've widened that range to plus minus five, which doesn't maybe sit that well with a sort of improving visibility. Just wondered if there's any color you could share in terms of what you're seeing. Thank you.

Yes, so actually the range is the system I think I already referred to is related to supply chain challenges. So far we've been able to manage it, but at the same time we have to be on top of it to make sure that we get what we need to deliver what we need as per our customer preferred COD, customer request date. So that's a little bit where the range comes from, Tim. It's not so much demand, it's more what can we deliver on time, given the supply chain constraints that so far are manageable again, but we have to be on top of it and nothing can go wrong here.

So that's what was in the aftermarket in Q1 and maybe there's some catch-up in Q2?

I don't know if there's catch-up in Q2. I mean, I think we had a good Q1. I think we delivered more or less what we wanted to deliver, and we will probably do the same in Q2. Great. Many thanks.

Thank you, Tim. We still have a number of participants in the queue, but we are running out of time, so let's take one final question. Operator, can we have the last caller?

Final question is from Javier Coronero. Morningstar Equity Research.

Hi, good afternoon. Thanks for taking my question. In the interest of time, I will just ask one. So your access acquisition a few months ago, it's small, but I think there is a lot to unpack there when you think longer term. So access is specialized in silicon carbide processing. So I was wondering if you could explain a little bit more what's the rationale of the acquisition here. Is it like more silicon carbide content as we move into the 800 volt data center? Or is the TSMC potentially adopting silicon carbide interposures in the next few years? or both. And of course, it is very early and it is a small acquisition, but do you have an estimate of what serviceable, addressable market this acquisition could open once it is properly integrated with ASM's other editions? Thank you.

Okay, so thank you very much for the question. So, yeah, we have acquired this company called Access Technology, which is very excited about the acquisition in CMP. They have a very great CMP technology and very innovative, to be honest with you. And like we mentioned, we have acquired this for the advanced packaging market. Because advanced packaging needs more and more CMP layer, many, many, many more CMP layer. So there's room for another player. Also, it's a technology that's all about interfaces. And I think that we do have some knowledge in interface engineering so that we will be able to to really put our print there. It also, CMP, helps us with our new materials that we're developing for advanced packaging that I just talked about a few minutes ago, because we need to deposit the film, but also we need to CMP it, so we want to understand what's the interaction about the material that we're depositing, the new material that we're depositing, and the CMP, because CMP also has a slurry, has a new, with a slurry, that means we're talking about new chemicals and so on and so forth. So it would help us also develop better materials in ALD, but at the same time also do prioritization, which is extremely important for advanced packaging. So that's really why we made that acquisition. And we're working right now on developing the product for advanced packaging, and it's going to increase our SAM. Yeah, absolutely. It's going to increase our SAM, and we're in the process of doing R&D and so on in this part of the market.

Thank you.

Okay, that concludes the Q&A. Thank you all for attending our call today, also on behalf of Hesham and Paul. Thank you. Goodbye.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.