Aixtron: This chip latecomer helps to make data centers more energy-efficient!
As the market leader in MOCVD systems, Aixtron is benefiting from electromobility, data centers, optical data communication and micro LEDs. GaN chips could gain acceptance in data centers due to their energy efficiency and thus increase demand for Aixtron's new G10 GaN system. 2024 will be a year of flat growth, but it could pick up again as early as 2025, leading to a 15 P/E ratio. The price correction has made Aixtron's valuation attractive again. Aixtron is the market leader in MOCVD Aixtron is the market leader in MOCVD technology...
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- As the market leader in MOCVD systems, Aixtron is benefiting from electromobility, data centers, optical data communication and micro LEDs.
- GaN chips could gain acceptance in data centers due to their energy efficiency and thus increase demand for Aixtron\'s new G10 GaN system.
- 2024 will be a year of flat growth, but it could pick up again as early as 2025, leading to a 15 P/E ratio. The price correction has made Aixtron\'s valuation attractive again.
Aixtron is the market leader in MOCVD
Aixtron is the market leader in MOCVD technology with a share of around 75%. This refers to chemical vapor deposition. This process is used to grow crystalline layers by depositing ultra-thin layers of atoms on a chip wafer. MOCVD is required for the production of LEDs, lasers and transistors. The MOCVD process is particularly important for the production of compound semiconductors based on gallium nitride (GaN). This is because GaN is gaining acceptance due to its outstanding material properties. Semiconductor components based on GaN increase the performance of chargers, ensure an energy-saving power supply for servers and data centers and enable efficient power conversion. Components based on silicon carbide (SiC), on the other hand, are used in chips in electric cars because they can extend the range. With its G10-SiC and G10-GaN, Aixtron has the right products for epitaxy, a form of crystal growth, on the market. The G10-SiC offers the highest wafer throughput per square meter of clean room area, enabling SiC devices to be produced at the lowest cost of ownership.
GaN chips increase the energy efficiency of data centers. Aixtron supplies the equipment!
The share of power consumed by data centers in the US, for example, will increase from 3% to 8% by 2030 - making power-saving properties of semiconductors more important. As a result, GaN chips could prevail in data centers and thus also increase the demand for systems from Aixtron. First, the G10-GaN was recently launched on the market, which is suitable for highly productive power electronics factories and is used to manufacture GaN devices on 150 mm and 200 mm wafers. Consequently, this equipment should also benefit from the expected growth of the GaN market from $235 million in 2023 to $2.2 billion by 2028.
2024 will be a transition year!
After Aixtron massively expanded its revenue from €269.2 million to €629.88 million in the period 2020 to 2023, flat growth is expected in 2024. This is indicated by the first quarter, including incoming orders. This is because orders fell by 14% to 120.3 million euros. The order backlog fell by 15% to 355 million euros. Due to the previously large number of orders, revenues climbed by 53% to € 118.3 million and the net result tripled to €10.9 million. In the course of the figures, Aixtron spoke of a positive assessment of demand and is aiming for an EBIT margin of 24% to 26% this year with revenues of €630 to 720 million. Aixtron recently dispelled concerns about a possible loss of market share by winning another customer from among the top five silicon carbide manufacturers, as well as orders from China and Japan. In the medium term, growth impulses could result if micro LEDs become established or more demand for lasers for optical data communication arises. Micro LED customers are currently investing in development and pilot lines in preparation for commercialization.
Aixtron\'s valuation has become attractive
Aixtron should still have significant growth potential in the coming years due to the transition to GaN and SiC devices and the possible commercialization of Micro LEDs. The use of GaN in chips for data communication and in data centers in particular could cause a demand surprise. This is because energy efficiency is becoming more important in all applications. With revenue of € 747.1 million, the Factset consensus expects EPS of €1.48 in 2025, resulting in a PER25e of 15, which is not too expensive for a clear market leader in MOCVD systems. If order intake picks up, the share has a realistic chance of sealing the end of the current bottom.
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