My investment case is the revival of the equipment business for GaN coating systems for semiconductors in cooperation with Infineon due to the increasing demand for power semiconductors for the energy supply of data centers.

$AIXA (+0,92 %)
$IFX (+0,49 %)
$NVDA (+0,89 %)

Hello my dears,

How do you classify the DZ-Bank report?

And is Aixtron with a P/E ratio of 19 and a PEG of +0.80 even a hidden AI pearl?

Profit growth of almost 30% at such a P/E ratio is rare.

In addition, there is a dividend yield which will rise to 2.65% by 2027.

(Dear all, I remain invested, so this is only my personal opinion and not investment advice)

Aixtron, a leading supplier of deposition equipment for semiconductors, is positioning itself as a key beneficiary of the rising demand for gallium nitride (GaN) chips. These energy-efficient semiconductors are on the verge of a breakthrough in data centers and will drive the GaN market significantly in the coming years. In particular, the strategic cooperation between Infineon and NVIDIA in the development of new power supply solutions for AI data centers should provide Aixtron with strong impetus in the medium term and establish the company as an indispensable partner in the digital transformation.

Technology leader in GaN production systems

Aixtron is the global leader in epitaxy systems. These are machines that are used to apply ultra-thin crystal layers to semiconductor substrates. A market share of around 90 % for epitaxy tools for GaN on silicon speaks for itself. Aixtron sets the pace in this specialty segment. The core products in the portfolio are the MOCVD systems ("Metal Organic Chemical Vapor Deposition"), including systems such as the G10-GaN or the AIX G5+ C, which were developed specifically for the production of GaN-based power semiconductors. These systems make it possible to apply particularly uniform and high-performance GaN layers to wafers, which is a decisive step towards the mass production of efficient chips. The G10 GaN system is characterized in particular by its scalability, high productivity and reproducibility. According to Aixtron, the G10 GaN systems also enable higher production volumes at a lower cost per wafer, improve the energy efficiency of the components and allow a more uniform layer quality. These advantages are crucial to meet the high demands placed on components in modern AI data centers and power supply solutions.

The GaN market: explosive growth through energy efficiency

The global GaN market is poised for a period of explosive growth as GaN chips replace traditional silicon-based semiconductors in an increasing number of applications. This growth is fueled by several factors, including the increasing adoption of 5G technology, electric vehicles, renewable energy and, last but not least, the rapid expansion of data centers. The AI boom, with models requiring trillions of computing operations per second, is causing power consumption in data centers to explode. In data centers, where energy consumption is a key cost and environmental factor, GaN chips are on the verge of a breakthrough in board and rack-level architecture. Their properties, such as higher switching frequencies, lower energy losses during power conversion and significantly lower waste heat, make them the ideal choice for high-performance yet energy-efficient power supply solutions. These advantages not only lead to significant power savings in cooling, but also to more compact designs, which makes optimal use of the limited space in data centers. The transition to GaN-based power supplies in data centers is seen as a megatrend that will significantly shape the GaN market in the coming years and will directly benefit Aixtron as a supplier.

Infineon-NVIDIA cooperation makes Aixtron a future AI beneficiary

The recent collaboration between Infineon and NVIDIA in the area of next-generation power solutions for AI data centers represents a strategic milestone from which Aixtron should benefit significantly in the medium term. This partnership aims to dramatically improve energy efficiency in AI data centers. At the heart of this development is the expected use of GaN power semiconductors as the standard for high-voltage DC-DC converters. The transition to 800 V HVDC architecture, which Infineon and NVIDIA are planning, is a key enabler of this development. This new power supply is to be introduced on a larger scale from 2027, with the partners explicitly emphasizing the need for energy-efficient power distribution. This is where the advantages of GaN chips over conventional silicon semiconductors come into their own. GaN enables significantly higher switching frequencies and therefore less energy loss during current conversion. This leads to less waste heat, which in turn means massive power savings in data center cooling. As Aixtron supplies the necessary deposition equipment for the production of these high-performance GaN chips, the company is directly involved in the value chain of this pioneering technology. Any expansion of GaN production by Infineon or other semiconductor manufacturers inspired by this cooperation will generate direct demand for Aixtron equipment and secure the company a central role in the evolution of AI infrastructure.

2025 is a transition year. The next growth phase should start in 2026!

Aixtron is currently experiencing a cyclical weakness because, among other things, SiC chip manufacturers are investing less due to the slower transition to electric cars. Nevertheless, the company managed to increase incoming orders by 10% to EUR 132.2 million in the first quarter. The order backlog of EUR 307.9 million represents a solid basis for the annual targets, which include sales of EUR 530 to 600 million with an EBIT margin of 18 to 22%. "With the ability to now process 300mm GaN wafers ourselves in the innovation center, we can support our customers even better in the future transition to the next wafer size," says Aixtron. As a result, the company believes it is well positioned for the next growth phase, which should start in 2026. The P/E ratio26e of 14.4 is favorable for the start of a new upswing.

http://www.dzbank-wertpapiere.de/Magazin/aktien_trading/aixtron-ein-kuenftiger-stern-am-ki-himmel-was-dafuer-spricht-newse052fe5a3f1bda2c885e9a468d5172fff8c0a12d

...has become Aixtron :)

I am now fully invested up to 2.5k and have cracked a big milestone!

Had the plan to do it at 35 and not at 37, but oh well ;)

Tonight I'll have a single malt (any whisky drinkers here?)...

And hopefully the spare parts for the motorcycle / Moto Guzzi will arrive (any old iron fans here?)

LG and have a successful week!

$AIXA (+0,92 %) particularly interesting right now.

The last quarterly results were positive, with the Annual General Meeting in a few days.

$AIXA (+0,92 %)

The world of integrated photonics is facing a huge upheaval. AIXTRON and SMART Photonics are driving the future of this technology with their collaboration. The new G10-AsP system will take production capacity to a new level. This investment marks a decisive step in SMART Photonics' innovation strategy.

AIXTRON SE will deliver the new G10 AsP system to SMART Photonics in the Netherlands to increase its production capacity and performance.

The market for InP Photonic Integrated Circuits (PICs) is expected to grow at a compound annual growth rate of 14% until 2027, driven by trends such as 5G/6G telecoms, healthcare and AI.

SMART Photonics, founded in 2012 with Eindhoven University of Technology, is an independent InP-PIC foundry based in Eindhoven and a long-standing customer of AIXTRON.

The G10-AsP system offers up to four times better on-wafer uniformity and is fully automated, enabling consistent and reliable production.

SMART Photonics' purchase of the G10 AsP system underscores its confidence in AIXTRON's technology to accelerate time-to-market for innovative products.

SMART Photonics sees the purchase as a major step towards accelerating its innovation strategy and positioning itself at the forefront of the integrated photonics industry.

The next important date, 28th Annual General Meeting of AIXTRON SE, at AIXTRON is on May 15, 2025.

https://www.wallstreet-online.de/nachricht/19309978-smart-photonics-expandiert-aixtron-g10-asp-produktion

$AIXA (+0,92 %) reported Q1 2025

Sales: 112.5M vs 102M expected 🟢

EBIT: 3.3M vs 5M expected 🟡

Earnings: 5.1M vs 3.5M expected 🟡

Outlook for 2025

Sales: 565M vs 540M expected 🟢

Gross margin: 41.5%

EBIT: 113M vs 99M expected 🟢

Outlook for Q2 2025

Sales: 130M vs 115M expected 🟢

• Incoming orders at 132M and thus above sales and previous year
• Backlog increases to 310M (B2B still below 1)
• Aixtron sees demand mainly from Asia
• New production center for 300mm wafers has started operation
• Nokia acquired as new customer
• Cash flow significantly higher (35M) due to further inventory reduction. Here even FCF was achieved since ages
• Inventories fall further to 350M (PY 436M). Still too high, but good trend
• Headcount reduction leads to annual cost savings of 5M in the long term
• Equity ratio has risen to an incredible 87% (PY 76%)
• Aixtron does not see itself affected by the tariffs

"We are pleased with the start of the new year. The higher order intake compared to the previous year confirms that our product range is very well positioned, even in a challenging market environment. Additionally, the swift ramp-up of our new Innovation Center showcases AIXTRON's execution capabilities. The ability to process our own 300mm GaN wafers in the Innovation Center enables us to better support our customers in the future transition to the next wafer size. This will position us optimally for the next growth phase," says Dr. Felix Grawert, CEO of AIXTRON SE.

Aixtron summarizes the figures itself as "Strong in a soft environment".

I gave the company this quarter and next quarter to deliver and I have to say they did. It almost looks like the bottom is just behind us. Inventories are down, they have a solid order intake and new customers. Sales expectations are rising, FCF is positive

$AIXA (+0,92 %)

AIXTRON SE revolutionizes the production of photonic circuits with the delivery of the G10-AsP system to Nokia, paving the way for the future of high-speed communications.

AIXTRON SE delivers the G10 AsP system to Nokia for the production of 6-inch Indium Phosphide (InP) wafers.

Advances in the development of photonic integrated circuits (PICs), which are critical for high-speed data communications and 5G.

The global market for PICs will grow from USD 12 billion in 2023 to USD 41 billion by 2031, with a compound annual growth rate of around 16%.

Nokia's PICs integrate multiple optical functions on one chip, reducing cost, space and power consumption while improving performance.

The G10-AsP system offers up to four times

uniformity on the wafer and enables efficient operation through automated wafer loading.

The transition to 6-inch wafers improves production capacity and reduces unit costs, which is important for sectors such as telecommunications and automotive.

AIXTRON's next important date, publication of the quarterly financial report (Q1 reporting date), is April 30, 2025.

https://www.wallstreet-online.de/nachricht/19174262-aixtron-g10-asp-photonik-treibt-nokias-innovationen-voran

A small and final additional purchase in $AIXA (+0,92 %) .

Extremely beaten up, a bit too much in my opinion.

Only intended for a short holding period.

Edit: through @SemiGrowth I just saw from his post that they actually generate a gross margin of 41%.

I might stay in here longer after all

$AIXA (+0,92 %) Reports FY 2024

Sales: 633M vs 625M expected 🟢

EBIT: 131M vs 137M expected 🔴

Income: 106M vs 117M expected 🔴

Outlook for FY25:

Sales: 565M vs 566M expected 🟡

EBIT: 113M vs 121M expected 🔴

Outlook for Q1 FY25:

Sales: 100M vs 126M expected 🔴

The following things are mentioned:

• Competitive position and market shares in key sectors expanded 🟢
• Difficult environment 🔴
• Power electronics for AI (making the move here) $IFX (+0,49 %) move) 🟢
• Record quarter with 227M sales 🟢
• Bookings have fallen by -7% to 596M, Q4 2023 to 2024 even by -23% 🔴
• Order backlog thus falls to 290M 🔴
• Weakening demand due to cutbacks in customer investments 🔴
• Decline in gross margin from 44% to 41% 🔴
• It is emphasized that a lot is now being invested in R&D to play the next cycle
• Reduction of the dividend to 15 cents (from 40 cents) is justified by the build-up of a cash position
• Gross margin to remain constant in the current FY2025 (41-42%) 🟡
• The balance sheet looks more solid, with less debt and a higher equity ratio 🟢
• Inventories have also been reduced, resulting in a positive cash flow 🟢

"We will use the current phase of market consolidation to optimally prepare for the next growth phase of the semiconductor cycle," says Dr. Felix Grawert, Chief Executive Officer of AIXTRON SE

"The year 2024 has developed significantly differently than originally expected. Nevertheless, we are continuing to invest consistently in our future. Our new innovation center will further strengthen our research and development activities. The focus of our activities in 2025 is now on strengthening profitability and rebuilding a strong cash position," says Dr. Christian Danninger, Chief Financial Officer of AIXTRON SE.

Conclusion:

The figures were pretty much as expected and the revenue outlook was also in line with expectations. However, profitability has suffered and will continue to do so next year. The difficult market environment was known. The dividend cut sounds sensible, as do the investment plans. However, the order backlog does not look so good, as the order backlog is only sufficient for half a year. However, the balance sheet and the reduction in inventories are positive. I don't really see the share price loss as justified. What do you think about the development and would you buy now? @Tenbagger2024 What are you doing with Aixtron?