(AOF) – Soitec’s revenue for the third quarter, ending at the end of December, of the 2022-2023 financial year reached 274 million euros, up 32% in published data and 25% at scope and rate. constant exchange rates. “This performance is the result of sustained growth in Mobile Communications and strong sales growth in both Automotive & Manufacturing and Smart Devices,” explained the technology group.
Growth in Mobile Communications continues to be driven by the adoption of 5G smartphones and WiFi6, as well as the deployment of 5G infrastructures.
Demand from the automotive industry continues to be supported by the increase in the volume of semiconductors embedded in new vehicles.
The designer and producer of innovative semiconductor materials has confirmed its objectives for the 2022-2023 financial year. Revenue is expected to increase by around 20% at constant scope and exchange rates, and the EBITDA margin around 36%.
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Key points
– World leader with 2/3 of the market for the production of semiconductors using SOI (silicon wafer) technology, recognized by all the major energy and electronics players and granting a virtual monopoly;
– Turnover of €1 billion achieved 61% in Asia, 25% in Europe and 14% in the United States;
– Business model based on 3 areas of expertise – Epitaxy and Smart Cut and Smart Stacking – serving 4 mass markets: smartphones, automotive, data centers and the Internet of Things;
– Three reference shareholders in the capital – BPI France (10.35%), the Chinese NSIG Sunrise (10.35%) and CEA Investissement (7.31%), Eric Meurice chairing the 12-member board of directors and Pierre Barnabé being Managing Director;
– Solid balance sheet with €1 billion in equity against debt of €518 million.
Challenges
– 2026 strategy financed by €1.4 billion and aiming to triple turnover to €2.3 billion and an operating margin of 40%;
– Innovation strategy with 2 unique technologies -Smart cut and Smart stacking- and 2 areas of expertise -epitaxy and composite materials- serving 4 mass markets: smartphones, automotive, cloud and mobile telecommunications infrastructure and IoT;
– R&D at 11% of turnover (39th patent applicant in France and 2nd of ETI with 3,700 patents including 2,700 active),
– co-development partnerships with CEA, Leti, etc. or customers and suppliers,
– focus on vertical integration of circuits and basic materials for qubits;
– 2026 environmental strategy validated by the SBTi:
– 24.6% reduction vs 2020 in carbon emissions in production and from suppliers and 24% reduction in water consumption,
– use of maritime freight,
– supply of energy efficient products;
– Balanced distribution of production sites (Bernin, Hasselt, Shanghai and Singapore) limiting logistical risks;
– Ability to outperform the market through internal growth and through partnerships (Qualcomm and GlobalFoundries, STMicro, etc.) and unrivaled positions in silicon wafer substrates for cellular 4 and 5G, reinforced by the acquisition of EpiGAN;
– Increased visibility through upstream association with the projects of semiconductor producers, hence the 2 factory extensions in 2022.
Challenges
– Towards a sharp decline in the smartphone market from 2023, which will have to be offset by the offer of 5G functionalities;
– Waiting for launches in piezoelectric diversification, gallium nitride and silicon carbide and fallout from the MobiSIC project with Valeo and CEA-Leti;
– After an 18% increase in turnover in the 1st half, 2022-2023 objective: 20% increase in turnover and operating margin around 36%.
Growing market and price pressures
According to the SIA, global chip sales were $151.7 billion in the first quarter of 2022, up 23% year-on-year. Sales increased in all major regional markets and for all product categories. As global uncertainties, including the war in Ukraine and the health crisis, weigh on supply chains, demand for semiconductors continues to significantly outpace supply. Manufacturers Samsung and TSMC have announced that they will raise their prices, in a context where players in the sector have good leeway and benefit from increased bargaining power. However, wage increases and component prices could weigh on future performance.