AIXTRON SE (AIXA) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the AIXTRON SE results of the first half 2021. [Operator Instructions] Let me now turn the floor over to your host, Guido Pickert. Please go ahead.

Thank you, operator. Welcome to AIXTRON's presentation of our Q2 and first half 2021 results. I'd like to welcome our CEO, Dr. Felix Grawert as well as our new CFO, Dr. Christian Danninger. Have a good start, Christian. As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without permission. Your participation in this call implies your consent to this recording. Please take note of our safe harbor statement, which can be found on Page 2 of our results presentation slide deck as it applies throughout the conference call. This call is not being presented immediately via webcast or any other medium. However, we will place an audio file of the recording or a transcript on our website at some point after the call. I would now like to hand you over to Felix Grawert for opening remarks. Felix?

Thank you, Guido. Let me all welcome you to our second quarter 2021 results call. I will start with an overview of the highlights in the quarter and then hand over to Christian for more details on our Q2 2021 figures. Finally, I will give you an update on the development of our business as well as our guidance for the year. Let me start by giving you an overview of the key developments in Q2 on Slide 2. During the second quarter '21, we continue to note a strong order momentum throughout all our business, but in particular, in GaN power in LED and in data communication. The overall semiconductor market has seen sustained strong chip demand across the board. Orders in Q2 came in at EUR 139 million, an amount slightly above the high level of Q1 '21. Some of these orders were of large volume, which led to the trading statement and the increase of our guidance on other revenues and EBIT margin in June. Revenues developed as expected at EUR 68 million that were higher than the EUR 60 million we have recorded in Q1. We expect the revenue figures to substantially increase in the quarters to come with Q4 being the quarter with the highest quarterly revenue of 2021. The current level of customer inquiries gives a good indication that orders will also remain very strong in the coming quarter. We, therefore, have increased our guidance for order intake once again, from EUR 420 million to EUR 450 million to now between EUR 440 million and EUR 480 million. In Q2, we have fully implemented the structural changes of our OLED subsidiary, APEVA, as announced in our last earnings call that is we have closed the operation of APEVA Korea and reduced the team size in APEVA to a smaller size. This move enables us to focus the APEVA activity on the differentiated key components for the Chinese market, preserving the upside of this technology. At the same time, the running cost to operate APEVA has been significantly reduced to a low single-digit million amount until a customer project starts. Including one-off charges, we will keep the cost of OLED in 2021 within the high single-digit million range that we have previously reached. Now let me give you a quick update on the COVID-19 situation at AIXTRON. Our strong internal safety measures continue to prove effective in mitigating the risk of infection within our premises. We have offered a first vaccination to all interested employments at our premises in Germany and continue to offer a regular testing twice a week resulting in the execution of more than 1,200 COVID tests, all of which have been a negative result. For July onwards, many of our employees are back to the office. At the present COVID level, we target an occupancy rate of about 50%, and we get feedback from many of our people that the personal face-to-face interaction, always adhering to strict safety standards, is much appreciated as it brings energy and spirit back to the company. We continue to operate all functions of our business without any significant effects related to COVID-19. Also, our supply chain continues to be stable, delivering on the preordered component as a group. However, we will continue to watch development of global pandemic very carefully and we remain to be ready to take further measures if necessary. Now I will be handing over to my new colleague, Dr. Christian Danninger, who took up his position as Chief Financial Officer of AIXTRON in May of this year. He will take you through the financials of Q2 and half 1. Christian?

Thanks, Felix, and hello to everyone. Let me please quickly introduce myself as this is my first quarterly earnings call for AIXTRON. I joined AIXTRON on May 1 and have used my time here to get familiar with our business and its financials. Due to Investor Relations being part of my responsibilities, I'm looking forward to soon be communicating with many of you on a regular basis. I was born in Austria in 1979. My wife, our 3 children and I live in Köln. I studied business administration in Linz, Austria and the U.S.A. and doing the doctorate in law. Among other roles, I was responsible -- I was a regional CFO in the Austrian ENGEL Group. Before joining AIXTRON, I was CFO of the Putzmeister Group. I look forward to playing my part in ensuring that we continue to shape the future. And in doing so, successfully realize our potential growth opportunities in our addressed markets. But now back to our financial results of the second quarter of 2021. Starting on Slide 3, our income statement. As expected, total revenue for the quarter was EUR 68 million compared with EUR 66 million in quarter 2 of 2020. Gross margin of 41% this quarter was 1 percentage point higher than the 40% in the same quarter last year. The difference is mainly due to the higher share of products with better margins in Q2 of '21. Operating expenses in the quarter increased from EUR 20 million in Q2 2020 to EUR 22 million in Q2 '21. This is mainly due to charges of EUR 3 million from the Q1 announced structural measures executed within APEVA. G&A expenses increased to EUR 7 million in Q2 '21 from EUR 5 million in 2020, influenced a higher variable compensation and also some charges resulting from the structural measures within APEVA. R&D expenses of EUR 50 million in Q2 was EUR 1 million lower than the comparable period in 2020. Apart from charges of EUR 2.6 million from the previously mentioned structural measures, this is in line with our fluctuations we have in R&D. Net other operating income was EUR 2 million in the quarter, which was stable compared to the same quarter in 2020. We recorded an EBIT of EUR 6 million for the quarter compared to EUR 3 million in Q1 2020. The further improved outlook has led us to recognize further EUR 3.4 million of deferred tax assets which leaves us with a net profit of Q2 2021 of EUR 8 million compared with EUR 3 million in Q2 2020. Turning to the balance sheet on the next slide. In line with the increased order intake and the expected output, inventories have risen to EUR 126 million from EUR 79 million at the end of 2020. Advanced payments received from customers increased to EUR 122 million from EUR 51 million at the end of 2020. This represents about 42% of backlog. Our cash balance, including other financial assets and post our EUR 12 million dividend payment in May increased to EUR 348 million at the end of the quarter from EUR 310 million at the end of 2020. Please note that we have shipped the financial assets through the amount of EUR 60 million from noncurrent assets to current assets due to a shorter remaining maturity of the respective financial instruments. Moving to Slide 5, which shows our cash flow statement. We generated free cash flow of EUR 18 million in the quarter, primarily reflecting our current profitability and an overall reduction in working capital, which includes i.e., an increase in customer deposits of EUR 22 million and an increase in inventories for future shipments of EUR 28 million. With that, let me hand you back over to Felix.

Thank you, Christian. I would like to give you an update on the key developments in our addressed markets before concluding with the outlook for the rest of the year. As mentioned at the beginning, we continue to see strong momentum from all our end markets, but in particular, for systems for the production of gallium nitride power electronics. Most of our customers from that space has made the decision to adopt GaN power electronics on a broad basis, resulting in substantial capacity investment throughout the industry, from foundries to integrated device manufacturers. Several customers have now placed volume orders in the range of 5 to 52 [indiscernible] in size. In the end market, we are already seeing a strong expansion of products we offer based on GaN technology. They range from high-performing chargers for portable consumer electronics to energy-efficient power supply of data centers and telecom base stations, just to name 2 prominent applications. In the area of systems for the production of silicon carbide power electronics, we've made further technical progress on the [indiscernible]. In addition to that, we have received repeat orders from some customers for our 6-inch silicon carbide solution, and we've been able to win additional customers. Given all that, we expect to benefit from the volume ramping of some large industry players. We see these developments in power electronics as only the start of a broader substitution wave of silicon power electronics by wide fintech materials, GaN and SiC. This is the beginning of a multiyear growth opportunity for us. In our optoelectronics business, we have recorded strong demand from the optical data communications market in Q2. The global build-out of optical data communication networks continue in order to serve the massively growing data volumes. We expect this momentum to continue throughout 2021 and also in 2022. On the 3D sensing side, we see some moderate demand in 2021, driven by individual tool orders from customers. We expect larger order momentum in this area once the rollout of VCSELs for the world side of smartphone bookings. This is in preparation today, but it may take 1 to 2 more years as the killer application for that functionality is missing as of today. Finally, we have recorded some large orders in the area of red-orange-yellow miniLED, which are used, for example, in fine-pitch LED display. Our customers are continually expanding their capacity at scale. On the other hand, microLED display technologies are still in the R&D phase. We expect significant volume in this area from 2023 onwards with '22 as a precision here with further R&D activities and some pilot line buildup. We are happy to be in such a positive environment with strong demand momentum from our addressed market. With that, let me move to our guidance on Slide 6. In June, we have issued a trading statement in which we increased our annual guidance. Due to the very positive order development, we increased our annual guidance on orders again from between EUR 420 million and EUR 450 million previously to a new range of EUR 440 million to EUR 480 million. Revenues are expected to be between EUR 400 million and EUR 440 million with an EBIT margin between 20% and 22% of revenue. We expect our gross margin to be around 40% of revenues. Out of the EUR 295 million backlog, we expect to turn about EUR 275 million into '21 revenues. Taking first half of the year revenues of EUR 117 million and the assumed after-sales business of about EUR 30 million into account, we still need about a further EUR 20 million to EUR 50 million of product to be converted into revenues to reach the expected revenue range. In summary, we are looking forward, significant growth of 2021 revenue and EBIT quarter-to-quarter within this year as well as compared to the previous year. With that, I will pass it back to Guido before we take questions.

Thank you, Felix. Thank you, Christian. Operator, we will now take questions, please.

[Operator Instructions] And the first question comes from Janardan Menon from Liberum.

My first question is on the GaN power market, which clearly is doing extremely well for you right now, and there's a lot of demand out there. But I'm just trying to get a comment on how you see this market evolving. Is it likely to be reasonably smooth? Are people -- are your customers going a little bit ahead of themselves and ordering too much this year, especially when you say that customers are ordering between 5 and 50 tools? So the high end of that seems quite high. So what I'm trying to get at is, will we see some digestion into 2022? Or do you think they're still at a very early stage of this -- of the evolution of this technology? And so it will continue to be quite linear for some time to come. And even if we do get some kind of a sort of digestion phase in 2022, I just want to know what your views are on silicon carbide, especially your comment that you would expect to benefit from the ramp of some major industry players. Is there a timing for that? Is that likely to come through by 2022? Or will that be further? And then I have a very brief follow-up.

Thank you very much for the questions, Janardan. Let me take GaN power question first. So the question about the digestion phase of continued order momentum. I think that very well. I think it's clear. I think we have a view on the market that we all share, right, the starting point with the quick charger and the fast charging and other applications are being opened and being added. Of course, we do not look into the detailed order books of our customers, what orders they get from their customers. But what we do see from the market is that gallium nitride power electronics is currently experiencing a very broad adoption in the market. The quick chargers for mobile devices was in first market. Now other applications in the high-power domain, which are efficiency-driven are being added, data centers, telecom base stations. I clearly would expect that, that is a multiyear trend because we all see that the desire to go green and to go energy-efficient is not only driven by a few companies. We see it across the European Union, say the green deal. We see it now by the Biden administration, right? We all see that all the big silicon value players with our data centers want to go 0 emission. So very sure that, that's going to take a strong momentum. And furthermore, we do see that our customers are working on opening up additional applications. Be it on GaN ICs, integrated circuit based on gallium nitride for power electronics devices or be it low-voltage devices. That being said, very clearly, the adoption of GaN power is at the beginning, and I expect a multiyear trend here. Now how exactly that translates into orders on a quarter-to-quarter basis? That, of course, I cannot tell you. I can only give you the big picture. That I would like to say on GaN. On silicon carbide, I took your question a bit related to a timing of potential order momentum. Also here, it's always difficult to predict exactly on a quarter-to-quarter or half year-on-half year basis when exactly customers are playing orders. So I look rather on the big picture of the market. And here, we very clearly see that -- we all know that silicon carbide experiences the biggest order momentum from automotive applications. We are charging our worth, be it onboard chargers in the car or be it the main inverter. And we do see that a large number of EV models are going to be launched in '23 and in '24. And with the usual lead time of about 9 months or so, our customers will need to get the tools up and running qualified and the lines established. When exactly that translates into orders for us or orders placed to AIXTRON? Once again, on a quarterly or half year basis, I would not be able to tell you.

Okay. But do you have confidence that you will benefit from the ramp of some major industry players outside of your historical large customer?

Yes.

Okay. And then my follow-up is just 2, if I can. One is on silicon carbide systems, again. Where are you on 8-inch silicon carbide systems? And then a brief follow-up on tax rate is, you have these tax benefits that you've brought forward. If you maintain this sort of profitability, what should be modeling as an effective tax rate for you over the next -- over this year and next year?

So 8-inch wafers in reasonable quantity and with good process results are running in our Erlangen lab to your first question. And the second question, I pass to Christian.

Thanks. To take that question, first time for me. But I would recommend to use -- as we do for our internal budgeting to use a 15% tax rate that is not taking into account the swings that result out of adjustments on deferred tax assets.

Understood. And just on the silicon carbide side, when will -- when do you think it'll move into commercial volume of commercially available your 8-inch system?

We are shipping first volume system in the first half of 2022.

The next question comes from Uwe Schupp from Deutsche Bank.

I've got 2 questions, please. Firstly, on the supply chain; and secondly, also on the silicon carbide competitive front, if I may. So firstly, on the supply chain. Can you just comment, generally speaking, on what you're seeing out there with regard to times given that the constraints that I think we can hear and read about every day in the newspaper? So how have lead times developed lately? In terms of -- maybe in relation to that, can you also talk about whether certain customers have tried to make sure that they absolutely get the machine in time? In other words, do you think that you have seen double ordering here and there or even on a broader basis? And then secondly, on the silicon carbide and really related to Janardan's question, I think, we have heard now from several competitors that your main competitor on silicon carbide may have issues on the 8-inch tool. Is that something that is -- that you've heard as well and that you would comment on? Probably, no is the answer, if I may. But let me put it in a positive way. Do you see a certain chance for you to get a kickstart as this market gets in bigger volume next year?

Thank you very much, Uwe, on those questions. So let me first comment on the supply chain questions with respect to constrained returns along our own supply chain and then potentially double ordering of our customers, yes? So we have been preparing very well our own supply chain with respect to order volumes in 2021 and also in '22. And because we have taken precautions and we have taken action with an active act from us, so the proactive activity that we have started. Due to that fact, we are, so to say, well set, so to say, yes, to secure all the volumes for 2021 and also going into 2022, yes? So we have been proactively taking that. And due to the productivity, we now really benefit from that, yes? The counter side of that is we have been able to communicate to our customers all the time, yes, we are able to ship. And yes, we are able to ship at reasonable lead time. And due to the fact that we have been able to give such messages to customers, I was just 2 days ago on the phone with a very large North American customer, who also said, well, we see with other equipment vendors lead times doubling towards 12 months or 12 to 15 months, is that one not from AIXTRON, we are well prepared given the order when we need it. And so therefore, I would -- I mean, you never know exactly when it's a double ordering, yes? But I would rather -- and also given the messages that we give to customers, I would not assume that it's double ordering. I would rather assume it's ordering based on the demand that customers have, yes? Again, this is my own assessment, but I've given you the logic and the reasoning how we come to that and in which perspective on which context I give that to you. Now let me come to the question on silicon carbon. I would not want to comment on the performance of the wafer transition of a competitor, yes? There is always competition in the market, and it's always important to take the competitors very serious but very clear. Our aspiration is, our equipment is capable of doing both 6-inch and 8-inch wafer size that allows our customers to buy our equipment now use it initially for 6 inch, which is today the dominant wafer size in the ramp-up of silicon carbide and then later on convert the equipment to 8 inch if the customer, for example, decides to switch a line and 8-inch wafers become available. We all are aware that today availability is limited. And therefore, we very much expect and target to benefit actually from the wafer size transition to 8 inch.

That's very clear, Felix. if I could have a follow-up, please. In previous upturns over the last 15 or 20 years, there was -- you might frequently use of the good market environment and adjusted your pricing accordingly. I was just wondering whether on a year-over-year basis or over the last 2 years, you've done this again and adjusted your prices not only to reflect the rising raw material price input costs.

So I think we need to find good time to adjust prices, meaning at point when we have made an improvement on our equipment or deliver an additional performance such that such a price increase can very well be justified in front of the customers, yes, rather than just saying you get the same piece of equipment with the same piece of performance, but now a little more expensive, yes? This is not the strategy that we are pursuing. So we rather than just across the board raising prices and link price increases to performance improvements, performance gains and generation changes of tools, which, I think, you all are very well aware, is what we are actively driving across our portfolio. So yes, there is opportunities for that but not just across the board, but on a very well linked also to a customer benefit.

We have another question from Oliver Wojahn from AlsterResearch.

Can you hear me?

Very well.

Okay. Very good. Two questions, if I may. So the first one is a follow-up on the order book. So compared to the end of last year, the order book more or less has gotten size, the order backlog. And at the same time, prepayments increased like 2.5x. So my question there would be, is it that you're taking higher prepayments on each system or maybe not showing all of the orders you have collective prepayments on the order book because of execution risks?

Thank you. It's a very good question. And so the prepayment or the ratio of prepayments for order book fluctuates, simply given due to the fact that we do not have the exact same policy with all customers, but there's a certain range. So like you know, also on prices or margins, you have a certain product mix, yes, or mix behavior, there is mix effects on the payment behavior. In the mix, there is different regional habits, for example. There is different habits by some large key accounts and so on. So it's rather a -- so to say, a random or like a mix effect, yes, from regions, from customers, leading to that one, then a systematic effect out of which you could read a systematic pattern or something like that.

Okay, fair enough. Second question is on your margin guidance. As I understand, the gross margin guidance of 40% was based on an exchange rate of USD 1.25 to euro. Now we've been around $1.17, $1.18 for a while so if we would extrapolate that into the rest of the year, would that mean that you would consider upgrading the gross margin guidance?

So we will definitely stay with our guidance throughout the year at the ex rate of $1.25, yes? This is -- we have fixed that rate for the year, and it's, so to say, our annual, call it, budget rate, yes? We will stay on that one. So we will not change the guidance throughout this. And nevertheless, is, of course, what we would very much appreciate, the euro-dollar exchange rate comes in favorable for us, we will recognize positive effects out of that one. Christian, do you maybe know how large these effects could be?

Right now, we -- as we said, we are planning there for a $1.25. We are expecting to give you an approximate number of $130 million additional sales in U.S. dollars that we have factored in with $1.25 rate. So you can do calculations to your expectation what the exchange rate will be. Or the thing is that the overall exposure to the U.S. dollar has been consistently going down with -- depending on customers, but also an increased proportion of revenues and orders coming from Europe. And it is also limiting that exposure.

The next question comes from Andrew Gardiner from Barclays.

I just had one in terms of the perhaps medium-term outlook and how you're planning for capacity, Felix, the guidance that you've now given us for the second half of the year, as you pointed out, is quarter-on-quarter increase in shipments and revenue in the third quarter and again in the fourth quarter and quite a steep trajectory of that could perhaps around EUR 200 million or so of revenue in the fourth quarter. And how have you been thinking about planning for 2022? You've already told us in the Q&A that you've got your supply chain ready for that. You've got the parts committed. In terms of your own site, what do you -- are you really stretched at that EUR 200 million or thereabouts in the fourth quarter? Do you need to add more capacity to make it a bit more comfortable in terms of meeting these with larger volumes? Just a bit more insight as to what the latest order surge means for your planning in '22 and beyond.

Yes, thank you very much. And I think you captured the situation quite well, yes? So we will definitely see the largest output in systems and then, of course, in revenues in euros in the fourth quarter, as we've indicated and as you quote. And also, very clear, I think, we just need to do the math, yes, is we still -- we have a nice -- or we have an excellent and a big order backlog, yes? Big part of that we will work down and a small part of it goes into next year. And of course, we just have raised slightly our order intake guidance for the second half of '21, which then, of course, with our typical lead times of 6, 7, 8 months. And again, we stay as we discuss supply chain-wise on the same averages that we had in the past, yes? So we will ship a big part of that what we are now taking as order intake in the back in second half of '21. We will ship as revenue in the first half of '22. This is just clear. This is our normal period. So we will have a good start revenue-wise in the year 2022. And -- so capacity-wise, coming to your question, we fortunately have a very flexible production model, yes, which allows us to absorb such high volume. And concretely, let me give you 2 facts here. We have out of the current facilities that we at AIXTRON have in the past, yes, many years back, shipped already a total of 450 units. So that, of course, is a big peak with a lot of effort, but such quantities have been shipped out of our facility. And already now in the fourth quarter of this year, we take one additional measure which is we have activated a remote top floor. So some part of preassemblies which take time and by taking time, occupy job floor space. We put that on a remote job floor, just some assembly, some modules, you could say, are being assembled there, which means then that the big systems, as you all know it from photos, yes, it's big, I always say, like a school bus, yes? They need a couple of weeks left on the job floor in our facility, and that means more systems in the quarter, so to say, can be finished and being shipped, yes? So you get the idea how with very little add-on measures, or flexible add-on measures, we can, so to say, vary and extend our capacity, yes? And in the fourth quarter, we do that. And it works quite nice.

Felix, perhaps just a quick follow-up related to the same topic. I mean now that some of the customers are giving you particularly large orders, as you mentioned in the GaN area, are they -- I know you -- as you said it, right, your normal lead time is 6 to 8 months. But are they giving you longer visibility than that given the -- they are planning for significant high-volume ramps themselves and are going to need consistent tool deliveries? Even if it's not committed orders per se, are you getting better visibility into the long-term plan of your customers?

Yes, to indicate with your question, 2 very good points. Is it such a large orders? Very often, we stretch them so that not all, let's say, you mentioned the example of 10 systems, not all 10 are shipped, let's say, within a month because, of course, our customer themselves cannot digest 10 systems to be installed in their factory and then with their people being ramped up and put into volume, right? So it's rather than spread over a certain period of time, let's say, whatever one quarter or so, yes? But step by step, every week or every 2 weeks, a certain number of units leaves the factory, go to the customer, installs. Clear, yes? Simply from operational standpoint at the side of our customer also. And I guess some of our customers do give us a longer-term visibility. However, other customers continue to surprise us with how sudden they make a decision to order a large quantity. Let me put it that way. So in other words, we can, out of that, not derive a certain pattern or not derive a certain visibility beyond the 6 months that we typically give as an indication.

And we have a last question, which comes from David O'Connor from Exane BNP Paribas.

Felix, I'm just curious, given the broad-based strength you talk about across the business, I was just wondering why the order intake for the second half is guided 25% below the first half. Maybe can you give us some of the puts and takes around that? And maybe even if there's any pull forwards in the order intake into the first half, given the tight supply chain across the industry? And I have a follow-up.

Yes. Thank you. Very good question. So as I said, we typically have a visibility into -- for 6 months forward. So we have a good visibility now for the Q3, yes? For the Q4, it's a moderate visibility. Based on these data points, this is the estimate, yes? I think you've done the math, yes? If you add it up to the high point of our guidance, it's now coming to -- 480 is the high point of the guidance for order intake; 250 is ship, meaning another 220 to go, right; on average, 120 -- sorry, 110 per quarter, which is a little below the first half. We believe the first half was characterized by some very large volume orders. There could be some in the second half, maybe, maybe not. We don't know it yet. However, we would not expect that these volume peak orders that we've seen that also surprised us in the second quarter, hence, the trading statement. We do not expect that such effect reoccurred in the second half. And that's the reason why we have given the guidance. This is what we currently see in terms of the volume. And still, we believe it's a very good volume and we are here on a long-term trend.

Okay. Got it. Understood. And maybe just within that order, very strong order intake, is there -- was there any pull-ins there by customers? I mean we did hear about pull-in from other 2 vendors. So just wondering if there -- if we experience a similar factor in the Q2 order intake.

So we have not seen effect that orders that have been placed to us have now been moved forward by a quarter as an order. That effect we have not seen, yes, if that is what you mean as a pull-in. Nevertheless, we have seen that some customers have placed orders with us and ask us for a very short -- selected, some and selected customers have asked us for very short lead time simply saying, the AIXTRON, we have been surprised by end-customer demand ourselves. We have an aspiration to increase our volumes faster than we initially had planned. So could you do us a favor and ship the equipment not within 6 to 8 months, but let's say, rather 3 to 4 months, yes, in some selected cases. In not all cases, but in quite some cases, we have been able to make that possible, which, of course, then really support our customers, and it's our desire to really support them in such manner.

Okay. Got it. That's helpful. And maybe if I could squeeze in one last question just on the backlog close to the previous LED peak. Can you just maybe give us a split of that backlog across end application, LED opto, telecom and power, just to give us a sense of kind of where the percentage of the backlog, where it lie from an application standpoint.

I must admit that I don't have data on the exact backlog split, but I think the backlog that we see is probably strongly correlated to the order intake of the first half and I have that split here in front of me, yes? And that will -- that is to a very large part, a little less than half of it is power electronics, GaN and SiC. Then I think around 20% is on the LED side. And I would say, about 25%, 30% or so is on the telecom side. So very clear also as we have written in the report, power electronics being #1; telecom, datacom, #2; and LED being #3.

Thank you very much. With this, we would like to conclude today's call. Thank you to all of you attending. Please note that our next earnings call will be on November 5, 2021, of Q3 '21 quarterly results. Thank you, and bye-bye.