© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Yes. Thank you very much, Heiko. Welcome to AIXTRON's Q1 2024 results call. I'd like to particularly welcome our CEO, Dr. Felix Grawert; and our CFO, Dr. Christian Deninger, who will guide you through today's presentation and then take your questions. This call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without commission. Your participation in this call implies your consent to this recording. Please take note of the disclaimer that you find on Page 2 of the presentation document as it applies throughout the conference call. This call is not being immediately presented via webcast or any other medium. However, we will place a transcript on our website at some point after the call. And with these introductory remarks, I'd like to hand over to our CEO for his operating remarks. Felix, the floor is yours.
Thank you, Carsten. Let me also welcome you all to our Q1 2014 results presentation. As you may hear, I caught a bad cold, and I hope my voice will make it throughout the call. I will start with an overview of the highlights of the quarter, and then I hand over to Christian for more detail on our financial figures. Finally, I will give you an update on the development of our business and our guidance. Let me start by giving you an update on the key business developments of the first quarter on Slide 2 and 3. The most important messages for today from my point of view are in Q1, we have seen a strong increase in revenues and profits. Our market position in silicon carbide has been significantly strengthened throughout the last 2 quarters with new customer wins. We were able to win an additional top 5 player in Zig. We have secured a substantial volume order from China. We could win several customers for our GTC tool amongst them several from Japan. This is the result of the recent technical progress that we have made with this tool. Also, the other family [indiscernibe] the G10 generation continued to gain strong momentum. We have secured various orders from multiple customers in the micro AED sector. The construction of our innovation center is progressing smoothly and is fully on track. Despite negative news flow from some segments of the industry, we can confirm our full year 2024 growth guidance. Let us have a look at our financial performance in Q1 '24. I will start with our top line and Christian will focus on the overall set of numbers. Our revenues have seen an upswing of 53% year-over-year, reaching EUR 118 million, reflecting the high demand for our systems and the fact that in the last year, some revenues have been delayed from Q1 to Q2 due to outstanding export licenses. Order intake in Q1 '24 came in at EUR 120 million with the equipment order backlog remaining stable at EUR 355 million, consistent with the full year '23 level. We have experienced well balanced demand across all the end markets that we address. Christian will provide a more detailed look into our financials on the following page. Christian?
Thanks, Felix, and hello to everyone. Let me start with the financial highlights of our income statement on Slide 5. We had a good start into the year with revenues at EUR 118 million, up by 53% compared to EUR 77 million last year. Gross profit in Q1 2024 was at EUR 44 million, up 41% year-on-year. EBIT for the quarter was at EUR 10 million, up by 183% and net profit at EUR 11 million more than tripled year-on-year. Gross margin was at 37% compared to 40% in Q1 of the year before, driven by product mix. In Q1, we shipped a larger share of old generation systems like G4 and G5 compared to the last year. These systems come with lower margins than the new generation. To be clear, the Q1 gross margin came in as expected and fit into our full year expectations. OpEx in the quarter went up to EUR 34 million, predominantly driven by higher R&D spending compared to the previous year. We are currently finalizing the development work for the G10 series, while we have already started development of our next-generation systems. That is why in 2024, we will see an increase of R&D expenses by a mid-single-digit million euro number compared to 2023. In 2025, we target R&D spending again around the level we have seen in 2023 or even below. SG&A, on the other side will remain flat in 2024. I just wanted to mention that this is confirming what we said in the last results call. Now to our balance sheet on Slide 6. Inventories at the end of March increased further to EUR 436 million from EUR 394 million at the end of 2023. This increase is still the result of our strategy to load the supply chain early enough to secure on-time delivery of our products despite tight supply chains. This strategy was very effective in the year 2021 until 2023 and have secured us numerous orders. Now supply chains have relaxed quite a bit, and we have now adjusted our strategy and are on the way to reduce buffer stock. Based on this, we target a reduction of inventory levels by the end of 2024. The main reduction though of the inventory is expected in the second half of this year when we target the majority of this year's shipment. Trade receivables at the end of March were at EUR 118 million compared to EUR 158 million at the end of 2023, mainly being a result of the collection of the payments related to the large shipments in the last quarter of 2023. Advanced payments received from customers at the quarter end were EUR 138 million, representing about 39% of order backlog very much like in the past quarters. Our cash balance, including other current financial assets as of March 31, '24, decreased EUR 249 million from EUR 182 million as of December 2023. This was mainly due to our inventory buildup and the CapEx related to the construction of the innovation center. Out of our quarter end cash balance, EUR 54 million were invested into funds, where we continue to follow a very conservative diversification strategy. Turning to our free cash flow on the next slide before I turn back to Felix. Free cash flow in the first quarter was negative EUR 33 million compared to EUR 2 million positive last year. Operating cash flow was at EUR 7 million negative, mainly due to the previously mentioned buildup of inventories. CapEx was at minus EUR 26 million, primarily driven by the investment in the Innovation Center. With that, let me hand you back over to Felix.
Thank you, Christian. Before giving you some more details on our reiterated guidance for '24, I would like to continue on Slide 2 and share with you our views on different end markets. Let me start with the silicon carbide market. The technical progress with our GT0 system has been confirmed by multiple customers, as you may have seen in the press releases we issued with Wolfspeed and with Vishay in the last 2 weeks. Upgrades of our installed base of tools to the new level of performance are planned throughout the year '24. Our recent technical advancements have led to numerous new customer wins in silicon carbide, including a significant volume order from China. We were able to convince several additional customers of our tools, including an additional silicon carbide player out of the so-called top 5 and several players from Japan. The GT10 has established itself now as the most productive tool in the market, meeting the required specifications, the technical specifications and offering the lowest cost per wafer. We maintain a clear #1 position with a growing market share. Let me take some time to elaborate in more detail on our view about the silicon market silicon carbide dynamics of the market. At this point in time, the overall market worldwide has built more capacity than the demand. At this time last year, the expectation for electric vehicle penetration was very high. And now throughout the last weeks and months, they have been adjusted to a more realistic adoption time. Nevertheless, we and our customers remain very positive about the mid- to long-term outlook. Interestingly, the situation at each of our customers varies strongly. Despite the overall market slowdown, some of our customers have a very strong order pipeline for silicon carbide. These customers continue their capacity expansion with large multitool order even at this point in time. In fact, at some of our customers, we have been working with them most recently in Rush acceleration shipment time lines and in Russia installations to meet their strong end customer demand. It is these customers who are driving our silicon carbide volume in '24, and we also count on these customers for '25. At other customers, business is slower, and we see part of the installed base of tools idle. In the case that there are tools from multiple vendors it is typically the AIXTRON tool that this situation keeps running due to our battery actor offering the most attractive running costs. We anticipated cost pressure and commoditization in the silicon carbide market from the beginning, and our expectations are now being confirmed. This was the reason for us to design for a multi-wafer batch tool all the way back in 2018. I would even go so far to say that the current market situation with increasing price pressure on silicon carbide devices put strong focus of our customers on selecting the most productive equipment with the lowest cost per unit, which is what our multi-wafer batch tool is offering. Hence, we see strongly increased customer interest into our tool due to the current market development. The other material system in power electronics, gallium nitride is running well. Customers continue with their fab expansion, the scope of applications in broadening and more and more power electronic players decide for gallium nitride as a product segment, choosing external equipment for their production. We are well positioned with our GT10 [indiscernible], which continues to gain share with this application and more than totally meets our expectation. Let me now come to LED and micro LED market. First of all, in 2024, we see a wave of investment into traditional red LED capacity ongoing. We expect high double-digit euro million revenue in the fiscal year 2024 from this market. On micro LED, despite the surprising news from Gap and AMS AIXTRON in Q1, the industry continues to work on microLED technology full scheme. We've recently reported on the Gold Supplier Award by BOE HC SemiTek, the largest Chinese display maker and there's multiple such collaborations ongoing. MicroLED revenues for fiscal year '24 are expected to be a double-digit million euro revenue driven by several customers building R&D and pilot production line to commercialize the micro-LDD technology. Multiple customers have placed new orders resulting in 38% of our order intake in Q1 '24. The manufacturing of microLEDs is challenging, particularly the mark trend for aspect. This makes timing prediction difficult, but multiple customers have confirmed their interest and the need for taking display technology to the next level beyond today's OLED technology. In the Optoelectronics area, we see stable demand, which is driven by demand for datacom and telecom labor, accounting for about 20% of our order intake in Q1. Datacom lasers are critical to data centers to meet the higher demand of AI workloads, both for intra data center and data center interconnect requirements. We maintained a clear #1 position in the Meta market with a strong market share, and we are very well prepared with the G10 ASP to secure this position also in the future. In summary, we are very happy with the market traction of our G10 series. We have invested into significant amount of R&D. And as of today, we expect that the return of invest is coming even faster and stronger than expected. This confirms our strong focus in technology -- on technology and innovation, which we will also continue in the year to come. In the May of last year '23, we have announced that we will be expanding our facility at our headquarters with a new innovation center. We are excited to report that the construction is fully on track and fully within budget. We are planning to move our first system into the innovation center within 2024. With that, let me now give you the update on our reiterated full year guidance for '24 on Slide 8. We are well on track with respect to our full year guidance for '24 with respect to all metrics. Hence, we reiterated our guidance for '24, which is as follows: we expect total revenues in the range between EUR 630 million and EUR 720 million. We expect a gross margin in the range of 43% to 45% and an EBIT margin in the range of 24% to 26%. Please recall that starting with the fiscal year '24, we have decided to no longer issue a guidance on order intake in line with the other major semiconductor equipment player. We have received positive feedback on this move from several investors and analysts over the last 2 months, which confirms our decision. However, we've added a revenue guidance for the subsequent quarter. For Q2 '24, we expect revenues between EUR 120 million and EUR 140 million. In line with the typical seasonal pattern, sales in the first half of the financial year will be lower than in the second half. We have seen this pattern in several of the last years and can confirm that this is fully in line with our expectation for the year '24 and that we are on track with respect to our revenue guidance, which we have reiterated. And with that, I will pass it back to Carsten before we take questions.
Yes. Thank you very much, Felix. Thank you very much, Christian, and I would pass it then to Haike to start the Q&A.
[Operator Instructions]. And the first question comes from Olivia Honychurch form Jefferies.
I've got a couple, if that's okay. The first one is on your new customer wins in silicon carbide. Would it be right to assume given the low order number in Q1 that some of those new customers haven't yet officially placed their orders. And if that's the case, when could we expect them to be placed? Is it Q2 or later? I guess following on from that, I'm just trying to figure out what the latest is that a customer could place orders this year for it to still be realized as 2024 revenue.
Okay. Thank you very much. A very good question, Olivia. Well, in fact, we have received those orders by now. Otherwise, we wouldn't be talking about them here in this place. However, you're absolutely right. Not all of these orders have been booked as order intake in Q1, some have, some have not. But as your question is indicating, you will see a strong amount of silicon carbide share of the total order intake in the Q2. Yes, I can confirm that it spot-on. Now with respect -- when is the latest point that in 2024, customers can place orders? Well, the situation in '24 is a bit different than in previous years. In expectation of continued further growth, we have secured a decent amount of inventories because still in the last year, some parts of the supply chain were short. You see that in our current inventory levels. And based on that, it depends a little bit on what type of tools you want. We expect some of our customers, which we have in our order pipeline to place their orders at late Q3, and we still expect the unit to ship out in the year 2024. Yes. So there's a bit different pattern from the past years and also a bit of a reason for the inventories that we have currently in the books.
Okay. That makes sense. And then just my follow-up is on -- is also on silicon carbide. Your competitors ASM spoke about double-digit growth in the SIC business this year, earlier this week. That's despite the slowdown in the EV market. Last time we spoke at your Q4 conference call, you said that you were expecting silicon carbide revenue to fall slightly this year. Firstly, I guess, is that still your expectation? And secondly, if so, how can we reconcile the differences between your outlook and theirs?
Well, I think you can reconcile the numbers. If you see that currently AIXTRON and ASM is essentially the 2 companies, which is currently collecting orders, yes. If you recall in the 6-inch market, there were still some other players around which now all the orders are going for 8-inch. That's clear. Every customer selection every order is not being placed in light of customers wanting to use the equipment ultimately on 8-inch. That's clear. Now nobody is ordering equipment purely for 6 inches. And some of the incumbent on 8-inch -- sorry, on 6-inch is no longer really receiving orders because the tools are not competitive in 8-inch. So I think that allows you to reconcile both the position that we have indicated as well as also gaining momentum from ASM. This would be my interpretation.
And the next question comes from Martin Marandon-Carlhian for ODDO BHF.
First on silicon carbide on the new customer gain this morning. I'm not sure that you have sustained the visibility, but do you know, for instance, if it will be multisourcing there? And if you would be the main supplier of the top 5 customer and I have a quick follow-up.
Well, we've gained multiple new customers in this quarter that we've been speaking about. And the situation at each of these customers varies a little bit. But let me comment, in general, on the multi-sourcing, we are not afraid of the multisourcing as I indicated, because we see that in many situations, when customers have multiple pieces of equipment in the end, they really like to use our equipment to run in full because our equipment allows to produce them at a very high productivity and low cost.
Okay. Very clear. And a quick follow-up on 200 millimeters. I mean we heard recently some negative noises in the market on that topic. So could you confirm and clarify that the transition to 200-millimeter wafers is a clear positive and not a negative for AIXTRON?
Yes, I can confirm. As you see from all these recent orders and what I just mentioned, all equipment orders, which is currently being placed are being placed and all tool selections are being made, having 200 millimeter in mind? Yeas. And I think both customer wins and those customer orders that we can report are the best evidence for the statement that we have given in previous quarters where we had indicated already that our technology is working just fine. And now you see this really confirmed by orders, money talks.
Okay. And the last question, if I may, on Gallium nitride, I was wondering what are in your view the most important drivers for Gallium this year between smartphone chargers, automotive and service? And how do you see that adoption play out in the next couple of years?
I think this is a very good question. I think GaN is getting beyond the point where you can assign the growth to a specific sub application. We rather see that GaN has been getting very, very broad in the market. And we see that our customers or the customers of our customers are using GaN devices as a general silicon power device replacement across all applications. So we see GaN penetrating in large in the 650 world class, yes, that was -- I mean, the consumer market was just the opening point because volume is now, I think, data centers, but also automotive onboard chargers, yes. But we also see huge GaN adoption in battery-driven devices, 100 volt, 200 volts and not to forget, GaN is just starting now to find a way into chips for AI power supplies, not only like in the power supply connecting to the grid, so to say, but also really to make sure that you can have a down conversion and supply the individual chips and processors in a more efficient manner. So GaN is really on a large penetration and adoption.
And the next question comes from Michael Kuhn from Deutsche Bank.
3 from my side as well. First one on composition of the guidance. You had 2 points in the presentation stating that both LED and micro LED are expected to contribute high double-digit euro million amount this year. I think in that level of clearness, the statement was new. So group guidance unchanged, but is there any change in the composition of the guidance compared with February. So with a higher LED/ micro LED share and others expected a little lower?
Not significantly, not -- I would say, not fundamentally that there is like one segment declining in the others coming. I mean, there's little fluctuations, of course, over the years. One customer comes earlier and the other comes later, but not structurally fundamental. And your question is indicating. However, we wanted to make the point to really bring it out that these 2 market segments are really continuing to contribute in this year and I think that's the point we wanted to make. Also to make the point that micro LED continues to be significant. We had a bad news flow from one company in the Q1, which was quite a big surprise. But as I mentioned already earlier, the micro LED momentum across the market, across the whole industry is continuing. I think this is what we really wanted to get across to you as a message. And again, it's number had underlying the trend. It's not just some search labs, and just cost, but it's really also revenue with orders that continues with again speaks something that the customers are really continuing also to invest in this.
All right. Understood. So no change in the growth expectation for your power semi tools in February?
We didn't want to indirectly say power as last year, but the other is filling up, if you want to ask that.
All right. Then one on visibility, and that is, in a way, a follow-up on Olivia's question. So you mentioned some orders expected in Q3 and still expected to ship this year. Is there also a certain backlog currently where you have actually signed a contract, but not obtained a license yet. So let's say, a certain time shift in reporting the order intake? Or is that not a topic anymore? And following up on this, let's say, what level of the stability do you think you have for now for the next 3 quarters in terms of phasing of the intake and of the shipments?
Okay. This is my set of question. I hope to sort through otherwise, please chime in and follow up with a follow-on question. I take it as I got your question and then to follow up, if needed. So overall, the situation for export license has normalized. We are back to a kind of normal situation after we had, if you remember about this time of the year, last year, yes, there was huge delays and so on, which really is visible also in the numbers. So we are back to a nominal on that one.Yes, of course, there is certain ones where we have sort of say, just applied for a license, and we have to wait for a couple of weeks or a couple of months, depends on it a little bit, what it is to get the license, yes? So -- but it's back to a normal kind of picture. And then please help me with the next one, again, Michael.
Yes, as generally, let's say, on visibility, let's say, based on your negotiations with customers, let's say, how specific are you as of now? And what visibility would you say you have for the remainder of the year?
I think this is a very good question. So I think the current market environment is a bit difficult for some of our customers. I think we overall see that electromobility is getting a bit of a headwind, yes, due to the, I call it, a normalization of expectation. I mean it's almost like in the last 2 years, the honeymoon. And I think it's just a normalization of how fast an adoption can go through such a big revolution, which essentially it is. So I think it's nothing unexpected. We had expected as it comes at some point. So that's clear. And also in some of the other market segments, our customers themselves do not have such a high visibility. That's clear. And therefore, the only thing we can say is when the momentum comes back in the overall market, we will clearly we are ready to ship. We are also ready to receive orders relatively late in the year then take for those orders and ship a major part of that means to achieve also the high end of the guidance. On the other hand, if the momentum stays a bit, so to say, cool or its customers at the same maintain more of the, let me call it, wait and see position. In that case, we would be coming out more towards the lower end of the guidance. So the full range of the guidance is possible under these 2 cases, which I outlined.
Excellent. And then one more follow-up basically on that topic. In your February call, you made quite some optimistic statements on 2025 and actually, that you are more optimistic on '25 compared with '24. Does that still hold 100% to? Or is that, let's say, any element of dilution to those statements compared to just 2 months ago?
No, I think essentially the same statement, which I made now for '24 and the orders coming in, in Q3 in the summer or into Q3, the one for 25%, the momentum continues to pick up. Then '25 will be what we've indicated a clear growth year. So to say, if the momentum -- we have to wait a little bit for the momentum, and we have to wait a little bit. But I think we are better positioned than before to catch the momentum, especially in silicon carbide, as you have seen now.
And the next question comes from Madeleine Jenkins with UBS. So the next question comes from Jurgen Wagner with Stifel.
A follow-up on GaN, you mentioned that the adoption now happening across all applications, what tool number should we model, let's say, from '25 onwards per year? And then on China, you also mentioned a major order for your silicon carbide tools. What kind of tools are you selling to China? Is it the G10 as well?
Exactly. Yes. Thank you very much. So GaN adoption, honestly, we have to really update our model. It's based on the most recent one. So I don't have it, but we clearly see increasing momentum based on that one. But that's a national item on our side, yes. You may have seen the most recent dual numbers. So it's a beautiful picture maybe for everyone. If you take the most recent dual report for the last 3 years, very often with new technology, you see curve being pushed to the right. Currently, we see curve being pushed to the upwards. So in each of the report, the numbers projected whatever for 28 or 29 is a higher number because the penetration is beyond the tipping point of really increases now. You may check that out. And I haven't done my homework yet. I have to admit to really model that and answer your questions. We can follow up separately.Now on China, and definitely in China, we also -- China is also in the transition now to 8-inch, a little slower than other markets, but clearly coming. The delay is maybe 6 months, 9 months, but it's definitely on the transition as we also talk about the G10 silicon carbide here.
Okay. At the same price then, I guess, so?
Of course.
And the next question comes from [indiscernible] UBS. Sorry, we had quite a lot of tech issues today. I just had a quick follow-up on the EUR 100 million to EUR 220 million new orders that you need to meet your full year guidance. Did I understand correctly that you expect these incremental orders to come from silicon carbide? Or was it other end markets?
From all market segments.
All market segments. Okay. And then given the current market environment, do you kind of bake in any order pushouts in your '24 revenue guidance? Or are you, I guess, taking more at face value, what your customers are telling you?
Sorry, I didn't get the question. Can you say it more precisely from the acoustics.
Sure. Do you -- are you baking in any order pushouts in your '24 revenue guidance? Or are you kind of taking more at face value what your customers are currently telling you?
So push out. No, I get it. Sorry, I didn't hear that clearly, yes. So we have seen push out in 1, 2 cases, yes, not more cases than that one, yes. So we don't expect that there is a large amount of pushout coming.
Okay. But in your -- are you going to kind of -- are you basically baking any in that are going to come to your '24 guidance? Or I realize you haven't seen a lot yet, but yes, it's more kind of the rest of the year.
Honestly, I think -- I don't think the question is so relevant. Let me explain to you why. Our orders are typically very well spread out across multiple market segments and also across very many customers. So it's not that we have a small number of very high-volume customers and that an individual customer or two customers would mean a relevant shift or something like that. So due to the high fragmentation that we have across the customers and the split across the different market segments, this is not like a major risk for us. Yes, this may be different than in the silicon world, whether it's a much higher concentration. So our guidance, as I mentioned before, is based on our overall expectation about how the different market segments evolve, taking into account some cautious assumptions as you were alluding to, some cautious assumptions to secure the low end well, which we believe we will achieve, but also to take into account the full order pipeline, if it comes, can really be shipped within this year.
And the next question comes from Simon Simon Alexander Cole, Barclay.
On silicon carbide, it sounds like you think 8-inch transition is coming fairly soon. So I was just wondering if you can give us some more color on how we should expect that dynamic to impact the business, specifically thinking sort of around pool demand? And then also, does that mean sort of extra upgrade revenues or things along those lines when that happens?
Sorry, I didn't get it. What do we expect to come soon? I didn't get that.
The transition to 8-inch in silicon carbide you're saying customers choosing AstroNova others because of your tool being able to do 6-inch and 8-inch, just trying to understand better the dynamics when that happens.
Okay. Now I get it. Thanks for the clarification. I didn't get that from the acoustics. So I think what's the game here? So the industry and all players of the industry will be enjoying a productivity gain or reduction of cost steps, so I say, in the transition for 8-inch, yes, simply because whatever all the other processing steps, be it some other deposition steps or be it lithography or edge steps, whatever you do, yes, when you do it on 6-inch or 8-inch, you have about the same cost ,but agents you have bigger wafer area. So this is a driver for the industry to go to 8-inch in the end to really make it and to be cost competitive. Now that's the driver. Now the transition is about to happen. We see some customers have already now switched to 8-inch early adopter and 1 today already in 8-inch, others are planning to switch their lines throughout '24 to '25, but for sure, everyone in '26 will be on 8-inch.Now just to give you a flavor about the transition. Now we all know those pieces of capital equipment that we are making, typically run at our customers for multiple years, at least 5, very often, 10 years in many, many instances, extra equipment keeps running for even 15-plus years. Now with the clear view that 8-inch is going to be the more productive, the more cost-efficient wafer size going to be in 2 years or in 3 years or tool selection that is being made now and all equipment that currently is being purchased is being made having ultimately the long lifetime over the equipment with 8 inch in mind. I think this is what we mean. And now in the end, does this lead to more orders or to less orders. In the end, it's just the normal rollout. It's just a switch of the wafer size. And as we discussed already earlier in the call, some equipment is suitable for 8-inch equipment from other vendors is not suitable for 8-inch. And therefore, the transition has now changed the vendor base. And the incumbent from, let me call it, the 6-inch era are not necessarily the winners of the 8-inch era. I hope that explains a little bit the overall dynamic that's happening.
Yes, that's great. Maybe I could just ask a quick follow-up. So if I'm a customer and I've already bought tools from you, and I'm using them on 6-inch and then we switched to 8-inch. Do I get a 15%, 20% increase in my sort of supply. Is that a number that we could use to sort of think about that transition?
Well, it depends. So our G10 generation is able to do 6-inch and 8-inch. So you can run the tool in both configurations. You can put into the tool 6, 8-inch wafers or 9, 6-inch wafers. That is you lose 1/3 of the wafer number when you go from 6 to 8 inch. But with each wafer, you gained 69% more area. And now you can do the math yourself.
The next question comes from Martin Jungfleisch, BNP Paribas.
Just 2, please. First one is on the Tollstreet release that you had a few days ago, you mentioned that Tollstreet has chosen the G10 seek for the JP and the derm fab. Can you confirm or disclosed that it has also been ordered for the new Mohawk Valley fab? Or is this just for these 2 other fabs? And also, can you disclose when these tools will be shipped -- is this more of a 2024 or 2025 time line?
So Mohawk Valley is a chip processing plant, yes. So the equipment is dedicated for the other consults. And in terms of shipment, some is in '24 and some goes into an extent into '25.
Good. And the other question I have is on the Visa order. Is it correct to assume this will be a single-digit number of tools, and this will also be shipped this year?
So part of that shipping this year, I don't want to comment on the number of tools because that's customer confidential. Please allow us to maintain that. I think it's already great that the customer has given the name and allowed us, but I don't want to put numbers out which lower publicly without customer consent to give indications on their ramp plans. That would not be appropriate. We take that over very, very serious year,.
The next question comes from Arthur Sharman Wawick Research.
The first one is on silicon carbide. These customers that tougher more from excess capacities. Have these adjusted their ramp plans maybe going into '25 also? Or is that just more of a short-term issue?
That's a very good question. No, in fact, some of those customers who continue both continue full steam in '24, yes, and there is also some orders which are reaching into '25 from these customers. But it's not like long term, securing something would only come next year. No, this is really that customers continue pushing their orders and also doing some shipments in '24. That really mean all in.
Okay. So no structural change of the scenario, as you confirmed earlier for next year then?
Exactly.
Okay. Then on Micro LED You had a quite good order intake in Micro LED in the first quarter. So what does your pipeline look like for the remainder of the year? Do you see kind of a similar amount expected then for the upcoming quarters? Or have you already seen now that the bulk of the expected order intake in the short term?
So the pipeline is always right customer by customer, order by order, so to say. So Q2, it will be a little less. Q3 and Q4, you will see more again.
And next, we have a follow-up question from Olivier Honychurch, Jeffries.
Just wanted to clarify on the 2024 guidance. Felix, I understand that the lower end of the range, as you said on the school is in place really in case of any further export license issues. So if we're to assume that those don't come back, can we understand, therefore, that you are still targeting the upper end of your range, which I believe is the comment you made at the last call? Or is there some other factor that could impact you getting to that upper end?
No, I would not relate the guidance range explicitly to export licenses. As said before, that situation has mostly normalized. So this is not the driving factor. It's still one factor that can push the one or the other to beyond the December 31 deadline as always, the timing effect. This is why I mentioned that topic. But for the same, the range remains mostly intact or open, wide open in order to reflect the dynamics in the end markets and the order behavior currently, yes. We see some headwinds on the power side, a little bit of a slowdown. If that continues throughout the year, we will be around the low end, if the momentum returns and orders pick up, we will be at the upper end and the inventories are secure to also shift the other end.
Okay. That's really clear. And then just one more on the silicon carbide win in China. I know before in the past, you've been -- well, there is a general worry about tools getting copied in that market. Is there any type of change to your thinking there? Or have you implemented any type of solution to prevent that from coming through?
So we have seen more simple types of equipment getting copied, single-wafer reactors mainly in China. That's definitely the case. So for our more complex equipment that hasn't happened yet. And in the end, as always, right, I mean, copying the commoditization and the best response to commoditization is innovation. And we have many ideas to drive innovation forward and to do the next better type of equipment such that if at some point, a low cost copy is arriving, we are so much better that the low copy looks old.
At the moment, there are no further questions. [Operator Instructions]. There are no more questions from the audience. So I hand back for closing remarks.
Yes. Thank you very much for your participation in this conference call. As usually, hint, if any questions pop up afterwards. I mean, please give us a call, or give me a call, and we will try to help you as best as we can. Thank you very much, and have a good day.