Release Date: May 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amtech Systems Inc (ASYS, Financial) reported strong demand for advanced packaging equipment, particularly for AI applications, with Q2 bookings exceeding total bookings for fiscal 2024.
- The company is focusing on expanding recurring revenue streams, such as consumables, parts, and services, which offer higher margins and more stable revenue.
- Amtech Systems Inc (ASYS) has implemented cost reduction measures, expecting annualized savings of $11 million, enhancing their ability to generate positive EBITDA at lower revenue levels.
- The company ended the quarter with a solid cash position of $13.4 million and no outstanding debt, providing financial flexibility.
- Amtech Systems Inc (ASYS) is leveraging its proven technologies to address challenges in adjacent applications, aiming for long-term growth.
Negative Points
- Revenue for the second fiscal quarter came in below guidance due to a shipment delay related to a customer dispute, impacting profitability.
- The company recorded an impairment charge of $22.9 million and an inventory write-off of $6 million due to prolonged softness in the mature node semiconductor market.
- Net revenue decreased by 36% from fiscal Q1 and 39% from the second quarter of fiscal 2024, primarily due to a customer dispute and weak demand in the mature node semiconductor market.
- GAAP net loss for the second quarter was $31.8 million, compared to net income in the previous quarter and the same period last year.
- Orders for reflow equipment in the US were weak due to high tariffs, although this was offset by strength in Asia for AI-related equipment.
Q & A Highlights
Q: With the outlook for a positive resolution on the US-China trade disputes, how might this affect Amtech's business, particularly given its exposure to the Chinese market? Also, how could US policy actions on semiconductor manufacturing repatriation benefit Amtech?
A: Bob Dagle, CEO: In our semiconductor fabrication solutions, most products are US-produced, so tariffs haven't significantly impacted us there. However, our reflow equipment, manufactured in China, saw weak US orders due to tariffs. If tariffs decrease, we could see stronger US market performance. Regarding US manufacturing repatriation, our US-based manufacturing could benefit from this trend, and we're exploring manufacturing in other regions to mitigate tariff impacts.
Q: Can you discuss Amtech's involvement in the silicon carbide power semiconductor industry and other cutting-edge technologies like diamond wafers?
A: Bob Dagle, CEO: We see advanced packaging and thermal management challenges driving the industry towards semiconductor fabrication processes like chemical mechanical planarization (CMP), where we have expertise. We're leveraging our CMP Foundry service to help customers solve advanced problems, potentially expanding our role in advanced packaging.
Q: What is the current margin profile of Amtech's existing backlog, and how does it compare to recent margins?
A: Bob Dagle, CEO: We've worked through lower-margin legacy backlog, and current bookings have margin profiles near historic levels. As we increase volume and leverage our reduced fixed cost structure, we expect meaningful margin improvements.
Q: What specific products are driving strong demand for advanced packaging, particularly related to AI?
A: Bob Dagle, CEO: We are the primary supplier of reflow equipment for advanced packaging, especially in AI applications. This demand is primarily in our thermal process solutions business, driven by equipment sales.
Q: Can you provide insight into the revenue from spares and services?
A: Bob Dagle, CEO: Approximately 25% of our thermal process solutions segment revenue comes from parts and services. In our semiconductor solutions, revenue is primarily from consumables, parts, and services, as equipment sales are low due to low utilization rates in mature node fabricators.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
