- pcb007 Magazine
Latest IssuesCurrent Issue
The Registration Sweet Spot
Registration is underrated and underappreciated. The key is to ensure proper registration from layer to layer across the entire printed circuit board. It’s a holistic process requiring anticipation, prediction, precise attention at each step, and detailed data tracking and monitoring.
- Events||| MENU
- pcb007 Magazine
AT&S Stays on Track; Another Important Growth Investment InitiatedAugust 2, 2019 | AT&S
Estimated reading time: 4 minutes
In the first quarter of 2019/20 the business of AT&S recorded a stable development overall: Revenue, at € 222.7 million was stable at the prior-year level, with revenue from the mobile devices and industrial segments decreasing. The declines were largely offset by volume increases in the IC substrates and medical & healthcare segments. Demand in the area of IC substrates, which is strategically important for the group, is very positive. This is confirmed by the decision of the management board to make substantial investments in the further expansion of this segment.
- Revenue stable thanks to strong development in IC substrates and medical and healthcare segments
- Strong seasonality for mobile devices and weak demand in the automotive and industrial segments push EBITDA margin down to 15.7%
- Management confirms annual guidance for revenue and EBITDA margin
- Investment project of up to €1 billion initiated and medium-term guidance significantly increased
Earnings for the quarter declined as expected: EBITDA fell to € 34.9 million (previous year: €52.0 million) and the EBITDA margin dropped to 15.7% (previous year: 23.4%), leading to EBIT of €-0.6 million (previous year: €18.3 million). Finance costs –net declined from €1.7 million to €-1.7 million, primarily due to foreign currency differences. The net loss for the period amounted to €-6.2 million (previous year: €13.5 million).
The reasons for the current earnings figures can be found both in the market and in the substantial future investments in the strategic expansion of the business. With respect to the market, mobile devices were faced with increased seasonality in the past two quarters. In addition, the Automotive and Industrial business slowed down reflecting the general economic situation. Both aspects lead to underutilisation of the production capacities and a lower operating performance.
AT&S is increasing investments in research & development to prepare for future technology generations and to pursue its modularisation strategy. These expenses secure the company’s sustainability and significantly expand the earnings potential in the medium term.
The asset and financial position remained very solid at the reporting date for the first quarter. The equity ratio declined slightly by 2.2 percentage points to 42.8% compared with the balance sheet date, which was mainly currency related. Cash and cash equivalents amounted to €286.1 million. In addition, financial assets of €250.4 million and unused credit lines of €185.3 million are available to secure the financing of the future investment programme and short-term repayments.
To strengthen the IC substrate business, the Group decided in July to further expand capacity at the locations in Chongqing and Leoben. The investment volume totals up to €1 billion and will be distributed over the next five years. The start of production is scheduled for 2021. First revenues from these additional capacities are expected for early 2022. The investment focus is on Chongqing. This decision was triggered by the significantly growing market demand for IC substrates for the application in high-performance modules in the coming years. This gives AT&S the opportunity to significantly strengthen its position in the market for IC substrates. As a result of expanding its business volume with these applications, AT&S will be able to further balance out the entire product portfolio and to reduce dependencies. This capacity expansion also provides the basis for a further diversification of the customer portfolio in the future.
The investment project will be implemented in close cooperation with a leading semiconductor manufacturer. In addition to production, the partnership also comprises the technology development of future substrate architectures.
Based on the high earnings power, AT&S will finance the new project primarily out of existing funds. The investment amounts will fluctuate over the five years depending on the respective project phases.
“In line with the industry, we assume that the market for high-performance computer modules will grow strongly in the coming years. The strategy to massively support the trend of modularisation addresses many applications in the electronics industry and consequently also the area of microprocessors,” Andreas Gerstenmayer, CEO of AT&S AG, comments on this important step.
After the first quarter, the Management Board confirms the earnings forecast for the full year although the market environment is very challenging and visibility is still low. Based on the current weakness in demand in the Mobile Devices, Automotive and Industrial segments, revenue is expected to remain at the level of the previous year, with an EBITDA margin expected in the range of 20% to 25%.
A volume of € 80 to 100 million is planned for basic investments (maintenance and technology upgrades). Depending on the market development, an additional € 100 million for capacity and technology upgrades may be incurred. For the capacity expansion in the area of IC substrates, expenses for investments will be increased from € 80 million to up to € 180 million.
With the current investment decision, the Management Board is increasing its medium-term guidance: As part of the strategy “More than AT&S”, the Group expects revenue to double to €2 billion in the next five years (previous revenue guidance: €1.5 billion). This corresponds to a compound annual growth rate (CAGR) of roughly 15%. Based on the stronger focus on high-end applications, the historical trend of a continuous and sustainable margin improvement can be continued, and an EBITDA margin in the range of 25% to 30% can be achieved in the medium term. The Group’s medium-term ROCE target is more than 12%.
Global semiconductor equipment billings contracted 11% year-over-year to US$25.6 billion in the third quarter of 2023, while quarter-over-quarter billings slipped 1% during the same period, SEMI announced today in its Worldwide Semiconductor Equipment Market Statistics (WWSEMS) Report.
New Energy Collaborative Aims to Accelerate Creation of Low-Carbon Energy Access in Asia-Pacific for the Semiconductor Climate Consortium12/01/2023 | SEMI
Aiming to reduce global semiconductor ecosystem carbon emissions, SEMI and the Semiconductor Climate Consortium (SCC) have created the Energy Collaborative (EC) to understand and clear roadblocks to the installation of low-carbon energy sources in the Asia-Pacific region.
Hyundai Mobis is poised to secure new orders for premium vehicle displays, characterized by large screens, high definition, and slim design, using a fusion of innovative technologies targeting global automakers.
Hi Sharp, a leading maker of video surveillance systems, is globally announcing its expansion into AI and cloud-based technologies for video capture.
Global TV Shipments to Fall Below 197 Million Units for the First Time in 2023, Slight Growth of 0.2% Expected in 202411/29/2023 | TrendForce
TrendForce’s latest research indicates that despite a decrease in the CPI in Europe and the US this year, consumer budgets are still constrained due to the current high-interest-rate environment, and the real estate bubble in China has suppressed TV demand. Moreover, a significant increase in TV panel prices this year has led brands to scale down promotional events.