Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BESIY reported solid first quarter results with important new advanced packaging orders despite a challenging market environment.
- Orders increased by 3.3% compared to the first quarter of last year, driven by increased bookings from Asian subcontractors and AI-related data center applications.
- Cash flow generation remained positive, with net cash increasing by 10.8% compared to the fourth quarter of last year.
- BESIY repurchased EUR22.1 million of its shares, bringing the total cumulative purchase to EUR51.4 million under the current EUR100 million program.
- Applied Materials announced a 9% ownership position in BESIY, further validating BESIY's wafer-level assembly technology and strategy.
Negative Points
- Revenue decreased by 1.5% compared to the first quarter of last year due to ongoing weakness in mobile and automotive end-user markets.
- Net income decreased by 7.4% compared to the first quarter of last year, primarily due to lower revenue and gross margins.
- Gross margin trended towards the lower end of the target range due to a less favorable product mix and adverse currency movements.
- Operating expenses grew by 10.3% sequentially due to higher consulting costs, despite efforts to control overhead development.
- The timing and trajectory of a mainstream assembly upturn are difficult to predict due to new tariff uncertainties, impacting market confidence.
Q & A Highlights
Q: Can you provide context on the hybrid bonding orders for HBM and the stage of development for your customers?
A: Richard Blickman, CEO: The preferred technology for stacking memory is a reflow process due to cost advantages. Hybrid bonding offers better performance but is more expensive. Customers are testing hybrid bonding as an alternative for better performance and energy efficiency. Current orders are for testing, not full production, and the industry is developing hybrid bonding for future needs.
Q: What is the potential revenue trajectory for the mainstream business in the second half of the year?
A: Richard Blickman, CEO: The market is cautious due to tariff uncertainties and economic conditions. While there is some improvement in orders, a significant uptick in the second half would require a dramatic increase in orders in the first and second quarters. The company is prepared for a potential recovery but remains cautious.
Q: Did the first quarter play out as expected, or were there any order pushouts?
A: Richard Blickman, CEO: Revenue was in line with guidance, but there was some delay in orders, possibly due to caution from customers. The company expects some orders to still come in, which could lead to an upside in the second quarter.
Q: Can you elaborate on the follow-up orders from foundry customers for hybrid bonding?
A: Richard Blickman, CEO: The orders are for AI applications, computing applications, and co-packaged optics. There is a growing application field for hybrid bonding, and significant plans are in place for 2026, with potential orders in late 2025.
Q: What are the key advantages in memory that allowed you to win orders versus competitors?
A: Richard Blickman, CEO: In memory, the complexity is different due to thinner dies. Hybrid bonding offers better performance with less heat, but it is more expensive. The industry is developing both reflow and hybrid bonding processes to understand their advantages and determine when to use each.
Q: What needs to happen with your US customer before receiving follow-up orders for hybrid bonding?
A: Richard Blickman, CEO: The US customer is sampling the market with hybrid bonded devices. The success of these samples will determine future capacity increases. There is a commitment to make hybrid bonding work, and the company expects to understand the success by early summer.
Q: Can you provide an update on the launch of the Gen 2 hybrid bonding platform?
A: Richard Blickman, CEO: The Gen 2 hybrid bonding platform is expected to ship by the end of September or early October. It will be made production-ready throughout 2026 and used for mainstream production in 2027 for devices under 2-nanometer design geometry.
Q: What is your view on hybrid bonding competition arising from China?
A: Richard Blickman, CEO: There is a lot of activity in hybrid bonding development globally, including in China. While competition is expected, Besi is well advanced with its 100-nanometer technology and plans to ship the first 50-nanometer system by the end of Q3 or early Q4, which is not available elsewhere.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
