Chip industry supplier AIXTRON has also felt the sadness of the electric car market.
The MDAX-listed company had to lower its annual targets for sales and operating profit margin. However, this was hardly surprising, as experts have long been pointing to a rather difficult transition year for electromobility – with long-term prospects remaining good. And so AIXTRON’s order intake gives analysts hope for a business recovery in the coming year. The share price, which has recently been badly hit, rose sharply on Friday.
In 2024, AIXTRON now expects sales of 620 to 660 million euros, up from 630 to 720 million euros previously. Earnings before interest and taxes (EBIT) are now expected to account for 22 to 25 percent of this, instead of 24 to 26 percent, the company announced on Friday night.
In the second quarter, sales and operating margin fell significantly. Based on preliminary figures, sales fell by almost a quarter compared to the same period last year, to around 132 million euros. The preliminary operating result was 13 million euros, compared to 44.6 million a year ago. This gives a margin of around 10 percent. However, the previous year’s quarter was also particularly strong because AIXTRON had benefited from the granting of numerous export licenses and had therefore been able to reduce a delivery backlog.
The order intake of around 176 million euros in the second quarter of 2024 gives hope. This increased after the weaker start to the year and thus stabilized compared to the same period last year.
AIXTRON CEO Felix Grawert pointed to good demand in the area of SiC and GaN power electronics. “This confirms the ongoing momentum in the industry to replace traditional silicon with the high-performance materials GaN and SiC.” The AIXTRON boss therefore expects similarly strong order intake in the coming quarters, “as major customers continue to expand their production facilities for wide bandgap power semiconductors.”
Electronic chips based on silicon carbide (SiC) are more efficient and more temperature-resistant than classic silicon chips, which is a prerequisite for fast charging technology for electric cars, for example. High-voltage SiC components are also becoming more interesting with a view to the expansion of alternative energies. Power and high-frequency electronic chips based on gallium nitride (GaN) are also on the rise. These have now replaced classic silicon parts in fast charging power supplies, for example in smartphones.
Analyst Tim Wunderlich of Hauck Aufhäuser Investment Banking described the order intake in the second quarter as impressive. In addition, the new annual outlook for sales and operating profit was not as bad as feared – a very gloomy scenario had already been factored into the share price.
The share price had only slipped below the 18 euro mark at the beginning of July, reaching a low since spring 2022. This Friday, AIXTRON’s share price temporarily shot up by 16.41 percent to 21.96 euros.
This means that the stock price is still down 44 percent in 2024. However, the shares have also had a strong run. They have been rising for four years in a row, after the shares had cost significantly less than 10 euros at the end of 2019.
Hauck-Aufhäuser analyst Wunderlich expects a further recovery in the share price in the medium term and left his price target at 29 euros for the time being. The recovery in SiC orders in the second quarter signals customer and market share gains by AIXTRON, wrote the expert. This is also due to the company’s technological leadership. The fact that SiC orders came from several customers, according to management, should also allay any concerns about concentration risk. Overall, investors’ confidence in the company’s growth should now slowly return.
Details on the longer-term growth outlook and the current business trend will be available on July 25 when the full quarterly report is published. The company’s management will then answer questions from analysts in a conference call.
Shares from the chip industry were also in demand across Europe. In addition to the positive news from Aixtron, another significant jump in profits at Samsung is also supporting this. Rising chip prices as a result of strong demand for artificial intelligence (AI) are continuing to boost the electronics giant’s results. In particular, the demand for high-bandwidth chips, which are used in the development and operation of AI platforms and are also manufactured by Samsung, has grown significantly. The figures for the past quarter were well above market expectations.
As a result, shares in chip supplier ASML NV rose to a record high in Amsterdam, recently gaining a good one percent. In Paris, shares in chip manufacturer STMicroelectronics rose by almost three percent, and in Frankfurt, Infineon shares recorded gains of a similar magnitude. According to industry experts, Infineon is also likely to be behind some of the Aixtron orders of the past few months.
HERZOGENRATH (dpa-AFX)
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