Suss Microtec Se

Ladies and gentlemen, welcome to the conference call of SUS Microtec following the publication of the half-year figures of 2026. I would like to welcome the company's CEO Burkhardt Frick, the CFO Dr. Cornelia Ballwießer, the COO Dr. Thomas Rohe and the Vice President Investor Relations and Communications Sabrina Müller. who will guide us through the presentation in a moment, followed by a Q&A session via audio line and chat. And with that, I hand over to you, Ms. Müller.

Thank you and welcome to our conference call following the publication of our half-yearly financial report 2026. Before we start, please note that this call is being recorded and considered as copyrighted material. It cannot be recorded or rebroadcasted without permission and participating in this call implies your consent to this procedure. Please be also aware of the safe harbour statement on page 2 of this slide deck. It applies throughout the call. And with that, I'll now hand over to Burkhardt to guide you through our results for the first half year.

Thank you Sabrina and also very warm welcome from my end. Let's start with an overview of the key financials for 2026. Order intake of 410 million euros was very strong. Q2 alone contributed to 260 million euro. Distribution of demand was across all product lines but dominated by coders. More than 40 coders were booked in May and June alone. Biggest driver is a single order of 115 million for one customer who will significantly scale advanced packaging capacity. This customer also serves the biggest foundry in Taiwan. Revenue compared to the first half of 2025 is down 63.8 million euro. But first half 2025 was also the best first half a year performance of the company in its history. On profitability, the gross profit margin is well on track at 37.2%, slightly ahead of the guidance corridor of 35 to 37%. on EBIT margin, which is below strong achievements of 2025, but improved. Second quarter EBIT margin was at 9% up from 4.3% in Q1 and clearly demonstrates higher sales volume improved EBIT margin significantly. Now some key messages. I start with the market outlook and the demand situation. There are significant increased predictions for the semiconductor industry. Semi-raised outlook for the UEFA FAB equipment to 144 billion US dollars versus December estimates of 126 billion US dollars. Zeus also profited from achieving record order intake in second half as a Q2 and first half, our visibility for 2027 is improving quickly. We note strong orders for the current tool generations, which provides stability and does not cannibalize demand for next generation tools. Good investments building on existing process of record tools. On the segments, ABS collected orders from all product lines, imaging and bonding also contributing in absolute terms. However, with coating as the strongest product category. Podomas Solutions recorded lower sales after particularly slow order intake in the second half of 2025. A couple of key developments. Our new application center officially was communicated and Thomas will talk about it later. We also managed to launch our first panel level scanner, which is now at a customer site. that was achieved by a very strong effort of the team. Customer will use it to develop the co-poss process. On guidance, we confirmed the guidance this morning, gross profit margin already well within range, even margin improving with rising sales levels and acceleration of sales expected for the second half. Now the segment overview, and I spare you the tables which have been kind of publicized this morning, like just to highlight a few things on the two segments. On advanced backend solutions, our order intake improving strongly, with coding business as major driver. Segment sales, we show a solid performance, also compared to strong first half 2025 numbers. We launched the first, UV production scanner, which is a first panel level tool at the customer side. For Photomast solutions, our order book increased in the second quarter with continuing strong demand from China. Sales still shows the effects of a weak second half of order entry in 2025. Gross profit margin for Q1 is a major driver. Q2 is a lagging due to lower cost coverage. Now let's have a look at our order intake development. The bars shows the quarterly order intake per segment. And I'd like to highlight three points here. First, we achieved a major customer order from Taiwan in the second quarter. This represents 215 million for quarter for Taiwanese advanced packaging customer. And it's a strong validation of our market position and customer commitment to capacity extension. Our technology is well aligned with customer roadmaps. Even excluding this order, the second quarter is still at a very strong level. Second, we have a demand for existing solutions. So the momentum is driven by the existing portfolio. Raw demand across product lines is noted. Market environment supports repeat orders on proven solutions and provides strong starting position for portfolio refresh and new launches. Thirdly, in the first half of 2026, the order intake performance, we had a third consecutive quarter of sequential growth. We noted a Q1 momentum carried into Q2, the first half year order entry of 410 million. This is already above full year level of financial year 2025 and approaching full year financial year after only six months. This is a clear acceleration of customer investment activity. And your order book is enhancing our visibility, as you will see on the next page. Here, I like to dive into our order book development and the visibility of the order book, which we show here for the first time in such great detail. The offset point is the record high order book. The order book reached a new all-time high of about 476 million at the end of first half. A direct result of a strong order intake momentum over recent quarters. It equals a significant expansion compared to historic levels. And it reflects increasing customer commitment as well as long-term project visibility. Secondly, strong revenue coverage for financial year around 240 million of the current order book is expected to convert into sales in the second half of 2026. This provides a high degree of visibility for the rest of the year and our 2026 guidance confirmation and supports execution, confidence, plus planning reliability. Thirdly, we now have an improved visibility for the fiscal year 2027. I'd like to make an important note. Please be aware that the figure represented for 2027 is based on the current order book and currently scheduled delivery dates. It does not represent management guidance or revenue forecast for fiscal year 2027. Approximately 220 million already scheduled for delivery in the fiscal year 2027 out of this order book, which is an early increase of visibility for expected revenue conversion into 2027. This highlights long-term customer investment and is a strong starting position entering the next fiscal year. Finally, it creates greater predictability and supports sustainable growth. And with that, I'd like to hand over to Cornelia.

Thank you, Burkhardt. And also a warm welcome from my side to all of you. I will focus on a few key financial and operational messages for the first half year in 2026. The sales development. Overall sales of 202.8 million euros for the first half of 2026 were the results we expected. Q1 was a weaker quarter in terms of sales and Q2 already showed the expected improvement with a level of 160.2 million euros. On gross profit, gross profit was 25.5% lower than in the previous year and in line with the lower revenue level. The gross profit margin was 37.2% slightly below the prior year level. This is of course also influenced by product and customer mix effects. In addition, profitability was affected by a one-time charge of 2.1 million euros related to the withdrawal of a product. This product had been already discontinued as a part of our portfolio optimization. Therefore, it is no longer utilized or resold and consequently worst expense can fall through the income statement. Operating expenses, that means selling expenses, general administration expenses and R&D expenses. This OPEX increased only slightly overall by 0.3 million euros. Because of a lower business volume, selling expenses were lower due to lower freight costs R&D expenses, on the other hand, were higher in order to support our launches. And for the first half of the year, R&D expenses increased by 1.6 million euros to a total of 24.9 million. GMA expenses were at the prior year level. EBIT and consequently EBIT margin was clearly below prior year due to less business volume and consequently less gross profit and quite unchanged OPEX levels. In addition, a negative foreign currency impact of 1.5 million euros is reflected in this figure. Free cash flow was positive with 16.4 million euros and profited from a positive operating cash flow thanks to the working capital reduction and a lower capex level compared to last year with investment in our Taiwan side in Zubei. That represents was a very strong improvement compared to last year. The free cash flow was negative after the first six months. CapEx remained low following substantially higher spendings in the previous year for our facility in Zubai. This year, we had only minor items for Taiwan. Most of the spending this year was related to German sites for infrastructure and for demotube. And now let's move to the development of our main financial KPIs for the second quarter. In Q1, we indicated that the order level for Q2 could be above the first quarter. This expectation clearly materialized, with SUS achieving the highest order intake per quarter in its history. We already highlighted the high quarter order in Q2, but even without this order, We would have booked a significant order intake only slightly below the first quarter level. This shows that the overall demand was still very high. In terms of sales, Q1, as we expected, was the turning point. Sales level in Q2 has been higher and with the rising level of sales, the fixed cost coverage improved. 2.8 million euros of sales of the first half of the year. We are well on track to meet the guidance corridor. This implies that the second half of the year will have higher sales level. Gross profit margin. With this higher sales level in the second quarter, gross profit margin improved. For the first six months of the year, we achieved a gross margin of 37.2% slightly above our full year guidance corridor of 35% to 37%. But as already mentioned, also the product and customer mix will have an impact on this expected margin. On EBIT level, we also see the expected development with a higher EBIT margin in the second quarter. Higher sales levels report the cost coverage, though the EBIT margin in Q2 was already at 9% after 4.3% in the first quarter. All in all, the EBIT margin is not yet within the guidance corridor after the first six months. Based on the information currently available, including our expectations for sales in the product and customer mix in the second half of the year, we continue to expect an EBIT margin in the range of eight to 10% in line with our guidance. And now let's have a quick look at the segments. The momentum of the two segments differed in the second quarter. ABS had very strong order intake, sales and gross profit profitability. Photomask solutions still showed good gross profit profitability, while cost coverage of OPEX was not as good as in the first quarter. In advanced backend solutions, sales came back strongly. We already explained one-off effect of 2.1 million is fully attributable to the segment. Overall, the product mix still benefited from a strong sales contribution of the bonding solutions product line. Also, the higher sales level improved the cost coverage, which led to an EBIT margin of 12.1% in the second quarter and to an EBIT of 8.3 million euros and EBIT margin of 5.6% in the first half of 2026. This clearly indicates the jam around in the ABS segment after two quarters with a negative result. Turning to photomask solutions. Order intake in the second quarter slowed down. Sales were below prior year levels. Please keep in mind that due to the high unit price and comparatively low equipment volume, timing shifts in projects can lead to no physical impact on short-term trends in sales and profitability. Gross profit margin came in at 39.5% in Q2, by lower than the strong 43% reported in the first quarter. Margins remain robust and continue to reflect the strong profitability profile of the FODMAP solution segment. And compared to the slightly higher sales level of Q3 last year, we achieved a higher gross profit margin in the Q2 this year. EBIT margins in Q2 amounted to 12.4%, reflecting lower fixed cost coverage compared to prior year quarters. Importantly, our R&D activities and other strategic projects are progressing according to plan and are reflected in OPEX and consequently in EBIT and EBIT margins. And now let's have a look on the regional split of order intake and sales. As you can see, the increase in order intake in the first half of 2026 was particularly strong in the Americas and APAC. But EMEA was strong too. In America and EMEA, the push for localized production is now starting to translate into tool orders. And now in terms of order intake. America was the region with the strongest growth in order intake. The order intake of the first half from America was 14.1% of total order intake. That compares against 9.5% of total order intake in the first half 2025. In EMEA, order intake also increased, but not as strongly as in the other regions. In our most important region, Asia Pacific or APEC, we also had a significantly higher order intake. The share of the total order intake for the first half of 2026 was 75.5%. In 2025, the share was 76.7%. So the share of APEC in relative terms was almost stable. Within APEC, The relative share of the order intake from China decreased. In H1 2025, it was 30.2%. In the first half year of 2026, it came down to 22.4%. However, the order intake from China in absolute terms increased to 69.4 million euros in the first half of 2026. and now a short look on sales. While sales revenue in Americas in EMEA grew, we see a decline in APEC if you compare the first six months of 26 to 25. This is the result of the discussion phase after the initial ramp we had there. APEC's share of total sales revenue was around 75% in the first half of this year after 84% last year. EMEA's share of sales was 10% and America's 15% after 6.4% and 9.7% respectively. And now let's have a look to the most important balance sheet developments. Overall total assets expanded by 45.1 million euros or 8.9%. The changes in the non-current assets were immaterial. The changes in the positions almost canceled each other out. In current assets, we had an increase of 45.6 million, mainly related to inventories, with a plus of 10.7 million euros due to higher work in progress. We had also an increase in contract assets with a plus of 14.1 million euros and cash and cash equivalents with 13.6 million. The positive free cash flow in the amount of 16.4 million euros in the first half resulted in an increase of the cash and cash equivalents up to 112.3 million euros. And now on the liability and equity side, In the first half of 2026, equity increased due to net income and OCI by 10.6 million euros. The equity ratio, however, declined from 62.2% to 59% due to increased total assets. Non-current liabilities remained at the same levels as of December 2025 and amounted 75.5 million euros end of June 26. Current liabilities increased by 33.1 million euros or 28.1%. The main driver was higher contract liabilities resulting from increased customer advance payments, particularly in connection with the stronger China business. Contract liabilities rose by 33.8 million euros. And with that, I would like to conclude the financial review and hand over to Thomas, who will provide further insights into our planned application center, as well as an update on the upcoming product introduction.

Yeah, thank you very much, Cornelia, and good afternoon to everyone. As we have already announced during the capital market days in November last year, we want to build a new application and R&D center. Let me briefly explain why this project is important for SUSE. This investment is not about adding capacity. It is about creating the foundation for the next phase of innovation, talent acquisition, customer collaboration and long-term growth. The new application and development center will serve as an innovation hub. By locating the facility in Karlsruhe, close to the Karlsruhe Institute of Technology, abbreviated with KIT, We gain direct access to one of Europe's leading research environments. The location improves our access to a highly qualified teller. The proximity to KIT and our planned involvement in academic research create an attractive environment for engineers and semiconductor specialists and support our long-term growth ambitions. The country of Baden-Württemberg also sponsors a professorship in the field of advanced packaging and heterogeneous integration to support not only SÜS but also the city of Karlsruhe to generate a center of excellence for wafer equipment development. The project will allow us to relocate parts of R&D and application activities from Sternfels to Karlsruhe. Finally, the center will strengthen collaboration with our customers. Modern application facilities are becoming increasingly important as customers and equipment suppliers work together to develop and qualify next-generation manufacturing processes. We view Karlsruhe as a strategic investment in the future of SUSE. It supports innovation, strengthens our talent base, enhances customer engagement and creates the foundation for sustainable growth in the years ahead. Planning activities are progressing well and subject to the relevant approvals we expect the facility to be completed in 2028. This leads me to our product roadmap. As you can see on the slide, we are progressing with a broad range of new product introductions across both segments over the coming years. Some of these developments have already reached important milestones, while others continue to move through the final stages of development and customer qualification. As is typical for highly complex semiconductor equipment programs, timelines can evolve as we work closely with customers to ensure performance and process requirements are fully met. Looking at the roadmap as a whole, these programs represent an important refresh of our portfolio and are designed to address key technology trends, particularly in advanced packaging and in heterogeneous integration. Our objective remains unchanged to strengthen our technology position, expand the applications we can address and create additional growth opportunities over the coming years. While the commercial contribution of individual products may vary from year to year, we believe this next generation of solutions will support the continued development of our business well beyond 2027. With that said, I would like to hand back to Burkhardt for the outlook. Burkhardt.

Thank you, Thomas. Just a quick recap. We already booked 202.8 million euros of sales. And now we have a record order book of 473.7 million euros. This gives us confidence that we will meet the guidance for the full year. And as we said from the start of the year, 2026 will be a transition year. Q1 marked the low point. Q2 already showed the improvement we expected. Therefore, we confirm the guidance today. Sales range of 425 to 485 million euros. We see a broadly stable cross-profit margin of 35 to 37%, but a declining EBIT margin of 8 to 10% compared to the previous year. The expectation, a stronger second half for the year, but like Cornelia said, the window for orders that convert into sales for 2026 is closing. And with that, I'd like to open the floor for questions.

Yes, thank you very much for the presentation. And ladies and gentlemen, now it's your turn. We are opening the Q&A session. If you would like to ask a question in person via the audio line, please click on the raise your hand button. And we already have some participants raise their hands. We start with Martin Marandon. You should be able to unmute yourself and place your question.

Hi, thanks for taking my question. My first question is on the order intake. So if we exclude the 150 million euros of cutting order in Q2, orders were still 146. It was 149 million in Q1. So I'm just wondering if you should see that kind of range as a reasonable indication of the underlying quarterly demand run rate for H2 as well, or that maybe we should expect more considering the launch of a new equipment and a new equipment cycle in H2, like wafer cleaning, photo mask cleaning, and so on. And I have a follow-up.

Yeah. Martin, I think it's a good question. I mean, of course, you see how our single big orders can create quite spikes in the order entry. So of course these things, they're hard to predict. But the levels we achieved before were, as you said, but we are not guiding the forward-looking order entry, as a lot of things can still happen. We see different effects of maybe pull-ins in order entries. Therefore, it's very difficult to guide that.

Okay, understood. And then regarding the 26 guidance and for the backlog in general, I understand that almost half of the current backlog is for 27, but that you also expect orders in the following quarters to contribute to 26. So why some customers are asking for tools later? Is it because of different lead times on your hand? Some tools you cannot ship in 2026 if orders come today? Or that's because of constraints at the customer level, like lack of clean holds, for instance?

Well, as I said, I think the window is closing, so we don't expect significant orders anymore from now on, which contribute to 26. So the majority from now on is indeed for 27. The particular behavior of customers, they're hard to judge. We see more longer-term commitments customers are willing to make, potentially due to shortages in the industry. So we see request dates which are far above our lead times we have. That's why we already see now big bookings all the way till the end of 2027.

Okay, that's clear. And the last one, if I may. So beyond the larger OSAT order that you got in Q2, how broad is the improvement in coding and imaging demand across AI packaging applications in general? And are you seeing similar capacity requirements from other OSATs potentially in the future?

Yeah, well, there's one order we, I think, talked about. Of course, most of these orders are in context with AI application. Of course, we see less, at this point in time, less bond orders and much more OSAT-related orders, which are for the packaging space, but they're also driven by AI activity.

Okay, thank you very much.

Yes, thank you very much, Mr. Marandon, and we move on to Mr. Devos. You should be able to unmute yourself and place your question, please.

Yeah, good afternoon. I just had one on the exceptional coder order. Just curious whether you could talk a bit more about what drove that exceptional order. I think, you know, is this like a set of standalone spin coders or is it like sort of full code and develop tracks? Yeah, just what have been really the conditions that drove this order. And I mean, if we think about quoters, I think I've got it in my notes, it was like roughly around 16% of sales in 24. This 115 million order is already 24%, I guess, of the backlog. So it looks like it's a much higher base rate going forward. So yeah, some color on the quoter activities would be very helpful. Thank you.

Yeah, well, that's a good question. I think we mentioned earlier that this is in context with the large Taiwanese foundry. And the orders we are receiving, as I also mentioned, are for existing products we have, which are a substantial part of process records of those customers. And they are kind of increasing significantly their capacity. And therefore, we see these orders because we are the qualified tool of record there. So it is indeed for spin coders, the different variants of spin coders, different configurations, but all of these orders are for existing records and existing processes, which are being scaled up as we speak. And we see this at this large one order, but we see similar developments also with other coding customers of ours.

Okay. And regarding the product mix in the backlog, I mean, again, the quarter order quite distorts the numbers, but how should we think about the temporary bonder, debonder, and the imaging business in the backlog? How did that shape up in the backlog or maybe the past 12-month orders?

If you take out this one order, we are at the 140 million level per quarter and that distribution is quite broad across the existing product lines. Beyond the coders, nothing is really sticking out. So we do see good distribution for bonding, photo mask, and imaging solutions. Imaging solutions, of course, is not yet orders for this newly launched and a UV scanner because we installed this first system in the pilot line. I think there was also a question earlier, I think I forgot to answer. So we don't accept single POs for newly introduced products because they are not reaching a volume phase. That we expect for a 27 amp unit.

Okay, thank you. And just a final question on margins. I mean, for the full year, it seems a bit conservative. I think, you know, obviously first half year, didn't realize that higher volume, higher sales, depressing a bit the operational profits. But I mean, we should see a significant step up from here on forward. What would sort of have to happen in the second half with a full year to land inside your range. I mean, also for the EBIT guidance, 8% to 10%, you're already at 9% in Q2 at only 160 million of sales. So, I mean, what a significant step up. What would sort of be the incremental drop through, not only for H226, but looking beyond that as well?

Yeah, I can start answering this before I hand over to Cornelia, but As we said when we put out this guidance, we see this dip. This dip is created by much lower order entry activity of 2025. So this has been anticipated and this is actually now materializing. We also said that we keep our high burn rate for R&D activities going because we want to launch all these new products. So therefore, the spend level is high. Now, if the top line drops as predicted, obviously the margin drops with that as well. So this is all within the anticipated range. The order entry activity now, of course, dilutes the picture a bit. That's also why we clarified a lot that A big part of the orders we are collecting, especially since the second quarter onwards, are already for next year. So they will not help us to get the top line up. So to answer your question, what needs to happen to improve the margins? Well, in the current constellation, it's a higher top line. But that's something we don't see happening this year. But Cornelia might want to add something more from the middle.

You mentioned what we have to say to this. Because the OPEX will slightly increase, I would say, in the second half. But this is all planned. And of course, we're in a transition year. And yeah, with less volume compared to prior year or what we expect in future in our long-term plannings, of course, EBIT margin cannot reach that high because of the lack of cost coverage. And as Burkhardt said, we do not stop our projects, whether the R&D projects nor other projects we have on our table and what we want to do. For example, digitalization projects like S4HANA and some others. We will not stop.

All right, thank you.

Thank you very much.

And we move on to Michael Kuhn. You should be able to unmute yourself and place your question. Please, Mr. Kuhn, go ahead.

Good afternoon. Thanks for taking my questions. I'll start with a follow-up on the guidance. If I look at implied H2, we talk about a good 220 to a good 280 million. Obviously, you showed that slide, I think, which was 240 million for a backlog conversion in H2. So I think lower end, not really an option anymore. And you said, let's say the window for 26 is closing, but it didn't sound like it is entirely closed. So maybe to give us a little more of a context, what could make you moving higher within the range? Is it rush orders? Is it, let's say, services which are not yet reflected in the backlog? So a bit more of an understanding here would be helpful. and then also on let's say your your availability by by product line I guess for quotas you're now pretty much sold out for for a couple of quarters after the the major order maybe quick idea on also what is is your let's say available delivery windows for the for the other products

Yeah, I mean, you are trying to connect the dots, obviously, which makes good sense here. Now, a lot of things can still happen. We don't have many production slots available anymore to build additional machines than the ones we already have planned. We have a few shorter lead time machines, but it's very rare that we can get a big surprise order still delivered this year. Of course, service orders and these things, they can make a small imprint here. But also, even if we get one or two more orders in, there's also a chance that some orders are being pushed out. So therefore, we have to be We want to be cautious here and not to over predict. But I think with the granularity we provided, I think you can pretty much estimate where we think we end up.

Thank you.

The second question was on the coders. Yes, of course, we have these record order entries for spin coders. And they are for 200 and 300 millimeter coders. We already started building the capacity in parallel, not only in our Taiwan site, but also in our Both sides are capable to build this product. So we are now using the operational flexibility we have to build these things in parallel. So far, we can handle this high demand. But yes, we do see that getting parts is becoming also an issue. But so far, I think we can confirm the orders we have received.

Great, thank you. And one more on the new products. We also had one slide included. Obviously, we're moving closer and closer to, let's say, more launches of those new products. Being fully aware, it's a number of things and a complex topic still. Maybe a few words on the progress in terms of discussions with customers, qualification processes, and we would say probably the biggest chances for nearer term orders in the product lineup.

For some of these products, we already have orders. We have to get them out. So that's the challenge we have. The mid-end cleaner, for example, is one of these examples which we are launching this year. That will be the second new product launch and not only launch, but also shipment this year. There we have already a number of orders and customers eagerly expecting those machines and we are building the first couple of machines in the second half of this year. But maybe Thomas wants to comment further.

For sure, the situation is completely different for each and every tool which we develop. So, as Burkhardt said, in the phase where we already have orders on hand, which we have to fulfill in the short term. and others are still partially in discussion with customers and others are on the way to get finished in the next year. And when we ship one to the customer, we have always to keep in mind that the tools are in the first step qualified at the customer for the process. So this means that in this phase also we have deep discussions with customers about minor improvements or bug fixes or whatever. So that we have all phases of the product development in our portfolio. and this really brings us in next year also in future let's say stress to get all these tools up and running at the customer side but we are prepared for this and so it makes us very optimistic to launch all the products we have in our portfolio plan.

Great, thank you. Thank you very much. We move on to Malte Schaumann. Malte Schaumann, you should be able to unmute yourself and ask your question. Mr. Schaumann, we can't hear you. You seem to be unmuted.

Yes, now we can hear you. Congratulations on the strong owner intake, especially. First question is on the product mix next year. I mean, seeing that quotas might deliver disproportionately high contributions in 2027, doesn't that represent what happened on the gross margin level next year? How do you see that?

I can also imagine that if you can build at that scale, it also has a positive margin impact. But coders, as you know, Marta, they're kind of in the middle of the margin spectrum of our portfolio. So they are not pulling us down significantly or lifting us up. They're kind of in the average. So in that sense, it will not move the needle negatively, for sure not. But we're still looking if we can gain some volume effects by large material orders. In a world where also supplies are tightening, so it's a hit and miss here, but I think the sheer volume allows us also to build and scale.

Okay, let's go to him. And is that the end application linked to the outsourcing, of course, to OSATs in Taiwan?

That's a good guess, yeah. We have mentioned the customer, but I guess your guess is as good as mine.

Okay. Then gross margin for 2026. I mean, you have come up at the upper end of the guidance range for the end of the first half. Utilization will be somewhat better in the second half of the year. We have seen in the second half of last year, not disappointing, but lower gross margin levels in Q3, Q4. You see the risk For such a decline in any of the quarters or how do you feel about the mix in your order backlog for the second half this year?

No, I think we will stay in that range. That's also why, you know, although we were pushed to positively adjust our guidance, we are reluctant to do so because we see similar mixes, similar effects as we had before. So that's why we stick to this guidance and we think this is well advised.

Yeah, okay. Then on temporary bonders, how do you assess the Korean customer to place orders in the second half of the year? Do you think that is, do you see that? Do you have any visibility on that? Do you think that this will happen or is that something that might get postponed to 27?

Yeah, so far we haven't seen this happening or developing and we have to see because we have a strong share in the HBM3e mix and we have to see how the product mix will look like. But we don't see current momentum from that particular customer.

Okay and do you think this is because the customer has sufficient utilization or do you see potential competition getting orders?

I think it's a mix of both because especially that customer there is quite significant competition but it's about the process records which are changing as we speak and we of course try to stay in this process record.

Okay, good. Then in terms of the new products, I mean, you have talked about quite a couple of product launches this year and you seem to be on track. When do you think these might come through at order intake level to greater extent? Will that start early next year so that order intake will benefit from a pilot ramp, volume ramp, certain customers?

Now I have to give you an answer to your question. Because for the mid-end cleaner, we already have quite a significant number in the high single digits of POs. So that is already kind of starting to ramp, at least in order intake. The other products we talked about, we of course see now the initial machines being ordered or being installed at customers and we have a couple of those coming in the second half as well and early first quarter. of Next Year and as Thomas already said I mean these are initial systems which often go through a verification qualification phase at launching customers and then after that and that can be a period of six to 12 months, then you will get a follow up and volume orders. Sometimes even earlier than that, depends how eager those customers want to move or if they want to foresee validation data. Real Heart Production Data. So to answer your question, I think we will see something in the first half of next year, but then I think more in the second half of next year.

Okay. Last one on lead times. Do you think that Coda production spots and slots will extend lead times also for the other products? How do you expect lead times to progress towards the end of the year and early 27?

Let me answer this, Malte. I expect no changes on our lead time. We are prepared right now for huge order intakes to really manage them with the same lead times as before. We are prepared for this with our flexible workforce, with our supply chains. For sure, we see actually some Some problems rising up in our supply chain because of the huge demand but from our side we are prepared for this and we can really stick to the lead terms which we promise to our customers.

Okay, sounds good. And of course, the beauty comes in of our new Taiwanese factory because we can not only add manpower, but also increase the space, which we can utilize. So we wouldn't have been able to do this in the previous setting. So actually, we have this room to grow and we are now exercising as we speak.

Yeah. Okay, May, thanks. Thank you very much, Mr. Schaumann, and we move on to the next participant, Basil Tays. You should be able to unmute yourself and ask your questions.

Hi, can you hear me? Yes. Yes, good afternoon. Thank you for taking my questions. On the guidance, just a follow-up to make sure that I understand that correctly. So, basically, the order backlog... Is that including service? So the shipable backlog of 240 million for the second half of the year. Would that mean this is now with services or would you see the 15% service business on top?

It is with service.

So it will be wrong to assume that in second half we will, depending on the revenue level, to assume service business on top.

Yes.

That's already reflected.

It's already included in our guidance and also in the order book as far as we have orders for service.

So got it. And then on the comment regarding that, yeah, so the order window basically closed or the shippable order window closed. for the for the for 2026. And I remember historically you said, yeah, just orders you receive the first two quarters, it will be turned into revenues. But this comment has shifted some some time last year, particularly with the Taiwanese fab. in the sense that early part of the Q3 orders could be still turned into revenues. What is your stance between these two statements today? Do you think July and August orders can be still shipped or would you, from today's perspective, exclude this?

I would say, as Burkhardt said even before, it depends. It depends on the tool type which are ordered. For sure, we can still really manage to take some orders for easier or simpler tools which have a shorter lead time. For those, we can still accept some orders for this year. But for bigger tools, more complicated tools, also with a more complex supply chain, it takes more time. And for those tools, the window is really closed right now.

So for photo mask, basically, it's closed.

But I would say... For mask aligners, for example, we have some open topics, which are open slots, which we can use for this year. And the tools are somewhere in between.

Got it. And what about temporary bonder, debonder and the scanner?

is that more shorter lead time products? No, these are also long lead time items so half a year is minimum so there would be Let's say a really very urgent demand for a tool. Okay, we can perhaps think about this, but this will not happen. Normally, it does not happen.

And those slots are already taken. So because we know, especially for those products, we have orders on hand, which we are executing. And that took the available slots. There's very little additional you can book. That's also why we stick to the guidance.

Yeah, well, but your first half revenues plus the 240 gives you 445, whereas the market is around 475, 480 million. So the top end of the guidance range rather than midpoint or low end. That was what I was trying to sense a bit, how you think about...

I think the market judgment is a bit driven by previous assumptions that anything which you book before the end of June, as you said yourself, you can convert. Especially in the second quarter, we got these large orders which have a large portion in 27. So this old rule of thumb we used doesn't work anymore. And I think this also has to be more or less put into estimates of the analysts.

Got it. And then this question was also asked, but again, to just make a little bit sure that we understand the business dynamics. If you strip out the large order, the 115 million, then the quarterly order rent rate was for the first half. Something around 145 million versus last year around 90 million quarterly run rate. And looking now into the second half of the year, what needs to go forward? Wrong that the quarterly order run rate of first half would deteriorate materially towards the run rate we have seen last year, below 100 or around 90 million.

Yeah, well, again, this is a glass bowl question. So, you know, for example, just assume for one second that customers order early. If they placed orders in Q2, they would have placed otherwise in Q3 or Q4. If that assumption is correct, then, you know, orders for the second half can be well lower. So we don't know. We do see an ongoing strong momentum for the running quarter, but this time I will not be let to make an estimate if we will beat our previous quarter because it will get increasingly difficult. I'm not taking that gamble. So we don't know if customers have placed orders early. They otherwise would have placed in towards the end of the year in anticipation of equipment or parts shortage. And until we haven't really understood the dynamic well enough, it will be too early to estimate future intake runways. Because you see how we jumped out of our usual patterns just in the recent two quarters. So I think it will be super exciting what's happening in the next few quarters. But we see currently still a very strong demand signal.

Okay. Sustained momentum into Q3, so to say. And then final question on China. What we're hearing is that Chinese foundries are increasingly shifting and Capacities to AI related products because there is clearly the willingness that in AI chips the capacity needs to rise and supply needs to support the AI ambitions there. So which basically tells me that demand is quite strong for new capacity build up in China. Your photo mask business was, in terms of order entry, not really as strong in this quarter. But what is your general view from in China, do you think? Demand prospects have accelerated versus Q1 or what is your view there or the signals you are getting?

Yeah, I think we already saw that Chinese activity did pick up in the last two quarters compared to expectations. And that momentum can even increase further. Now for photo mass business, of course, these orders, usually they are large orders and few. So large in single order size, but then they are scattered over sometimes months and quarters. So it's difficult to predict, but we do see a positive momentum out of China, which also could result in business opportunities for us. We will see this in the second half of the year more clearly. But it's too early to make a prediction there. But I, in general, share your assessment.

And then final one. Sorry, I forgot that. Cornelia, you mentioned during your presentation a one-off expense. I'm not sure if I got the number correct. Was it 2.4 million?

It was 2.1 million.

And it was related to an older project you discontinued or what? And in ABS segment, right?

Yes, ABS segment. It's a recall of a product that we removed from our product portfolio Yeah, I don't know last year for two years. Yeah, in the context of optimizing our product portfolio and that is what it is. We have it back and we booked it in full through P&L because it's no longer in our portfolio and we will not sell it or refurbish it or whatever.

And that was in Q2, right?

Yes.

Okay, thank you.

Well, thank you very much. And there's one last participant with a risen hand, Mr. Johannes Riess. You can place your question now and unmute yourself. We can't hear you.

Can you now hear me?

Yes, now we hear you perfectly well.

Good afternoon. Finally comes the call, because maybe most questions are answered, but two follow-ons. First on temporary bonding. Maybe you can explain a little bit more, follow-on, on the question of Malte. What's his answer regarding to your largest customer in the temporary bonding from the three memory guys? And... How much maybe it could be affected by this technology change or there may be development at this customer you mentioned and how is the development at the two other players in HPM, at the memory side, especially the one maybe you had maybe seen a chance to enter which was a closed job in the past?

Yeah, let's start with the last one, which is the second Korean customer. We booked an order in early Q1. We delivered the system, I think, towards the end of Q2. And I think another one is in the pipeline. So this is too early to see how well this will result in follow-up business. We wait for feedback and results because R&D has to comment and also operations before we see significant shares there. But the good news is, Johannes, we are in with our hardware there, which was quite a long struggle to be there. The other customer, which is the non-Korean one, of course, we are heavily engaged there with all kinds of ramp and optimization activities. We are currently increasing the throughput of those lines by using the existing footprint, because if there's no space to put in more machines, then you need to We are now involved in a lot of optimization. to increase the yield and the throughput of our installed base machines. Plus, where there are slots and spaces available at that customer, we will also install additional machines in the second half of the year.

And as the third customer from Korea, the third one, you have been also a strong position in the past, which had still machines bought and couldn't it utilize in the past how has the development gone on there?

Yeah, the utilization goes up, but as I said before, we haven't received significant follow-up business. We got a couple of machines, but not, I would say, real substantial volume orders. So that can be a mix of both still available capacity and new processes we are currently not qualified for.

Okay, thanks. Last question from my side on the waiver cleaner. Maybe you talked a lot about the mask cleaner, but what about the waiver cleaner? How is the process there? Update us when maybe you will launch the first product and where you see maybe the broader launch of the product. Will it be second half next year?

Well, It's, I think, first of all, we have the first machine running in our application center in Sternfeld. So we have received the first hardware. We are now in a phase where we run our internal validation plus we are testing customer wafers and use it internally. We were planning to ship out the system in the second half of the year but we decided to keep it internal to optimize the performance before we get it out and therefore customers are coming to our site and running the wafers there. Next year we want to ship the first system and also we want to launch The development of the 300 millimeter version of the wafer cleaner because the current one is at 200 millimeter system.

Final point. What about pricing? We heard from other semiconductor equipment companies that they partly intend to increase their prices because of the supply chain. You see maybe the one or other price increases. Is it also the case for you? I think about pricing and if yes, how pronounced could price increases be?

I will quote you there. We partially intend to increase our prices. Where we can, of course, Johannes, we do this. Usually, you cannot just simply raise prices and cite a shortage or inflation for things, but where we have solid grounds to raise the bar, we will do that. Usually, customers expect new products, new features, and then let's Thanks a lot. You're welcome.

Well, thank you very much. And with no further questions online, we come to the end of today's conference call. Thank you very much for your interest in this Microtech and for successful remaining day. I wish you all and I'm handing over for some closing remarks back to Sabrina Müller.

Yeah, thanks a lot. And thanks to the audience for joining our conference call. And if further questions arise, please do not hesitate to contact us, the IR team. And we wish you a nice rest of the day and bye bye.