BE Semiconductor Industries N.V. (BESI) Earnings Call Transcript & Summary

What COVID has taught us is to be on time. It's amazing how more efficient we have become. At least I feel that is the case, managing our time. So the start of this meeting is determined by when the webex starts. So the WebEx is starting momentarily. So welcome, everyone. Welcome also those who participate in the WebEx. Again, I'm very honored to see all of you visiting us in [indiscernible] especially after 2.5 years of COVID restrictions, not traveling. We have picked up traveling again in the last, I would say, 6 weeks. Finally, we're able to meet in person, face to face [indiscernible] and taking this opportunity to also introduce you to our machines. Many of you have followed this company for a long time, some a bit less. We have organized a program apart from showing the machines, covering our major products. And the ones here are Ruurd's CTO, most of you have met Ruurd, please stand up and then we have Chris, Chris Scanlan, some of you have met Chris in the CTO office, and then we have Peter responsible for Engine 2 and we have Christoph responsible for Engine 1, and participating from Singapore is Jeroen Kleijburg, who's responsible for packaging and who will also cover the plating. So the program for today is -- what you see in front of you, all of the information will be on our website, openly sharing that with the public. So let me start with this strategic overview. Dave? Why am I only seeing that on one screen, what means the screen next to that? Are we okay? Okay. All right. So the purpose of this meeting is simply to update you on where is Besi's business is coming from and where is it heading? It is not about detailed transactions, Q2, or our forecast for 2022. So those of you who had expected to get those details could be disappointed. But anyway, that's always the approach for our capital market. Okay. If we just briefly touch on the several key issues here, Besi surpassed its previous set goal of reaching EUR 800 million revenue. And simply with leading margins, I think we will spend some time of where that is coming from. But the important message is that this is all coming from businesses with today's technology. So Besi has performed very strongly with its current product portfolio in current applications. But then very critical is that, not a secret anymore, assembly growth has reached an inflection point that it has become after 50 years a very critical part of end-products applications. We, as Besi, have focused on the advanced packaging forever, that's been our strategy from day 1. And more and more, it is becoming more critical into the end products development of front-end companies either IDM or [indiscernible]. And that is done simply by technology ever smaller device geometry and the interconnect becoming more complicated. And that's why we proudly say that this world has become more important. And even so people are saying that this is an extension to Moore's law. So anyway, a very important inflection point in the development of this company and back-end in general. Next slide, please. Engine 2, you've heard us refer to Engine 1 and Engine 2. Those of you who are not familiar with that [indiscernible]. We have called today's world, our core business, Engine 1 and Engine 1 responsibility done by Christoph. And Engine 2, which contains hybrid bonding , which contains chip to wafer is under Peter Wiedner since start of April. Peter will explain a bit later. He's had a long history with Besi Austria and also Besi Die Attach in total and then worked for another company for some time, but came back to join us as of first week of April . So the Engine 1 and Engine 2 simply refer to core business titled Engine 1 and the Engine 2 is the next world. You see that here is simply the industry moving from individual dies to more integrated on die level, development of chiplet architectures and that requires a different environment. You've seen that downstairs, the cleanroom environment. That's also the reason why we are working with customers who we've not worked before. But [indiscernible] is a very simple example, but then gradually moving into front-end because the end products, again, is moving into a complete process from front-end until the final interconnect. Drivers in place for the EUR 1 billion plus plus model. Last year, we introduced the EUR 1 billion model, moving from EUR 800 million, which was in sight to EUR 1 billion, that is simply following the strategy for a year when we moved EUR 300 million to EUR 400 million to EUR 600 million to EUR 800 million and now to EUR 1 billion plus plus. Clearly, the next cycle should drive our Engine 1 business, and Christoph will share some more about those drivers, in particular to the EUR 1 billion mark. And then the plus-plus is the Engine 2 part of which we also have an update on the bundled model. We currently receive purchase model of last year. Next slide please. Then we are in a cyclical business. Many of you not only know the but also are very much excited about that as we are. And we simply see basis revenue going back to 2006. We also see the margin development over time. Third gives you several messages. One is don't be surprised that we -- after 2 enormous growth years, that we are currently in an environment that's -- that many people are convinced that the peak of this cycle is over. But then at the same time, you see these nice cycles, 2, 3 years, 4, 8 quarters, depending upon factors . But the second message, even more important, is that Besi's market position has improved dramatically over all those years. Our focus on advanced packaging, our focus on developing an operating model, which can faster react to industry demand and [indiscernible] , but also enormous flexibility in ramping when the industry needs, but also having low breakeven levels when the industry has no need for equipment. And that maintaining margins, which are well above the average of this industry. Next slide, if you look at these numbers and these are fresh, the latest numbers from VLSI Research, which is now called TechInsights, you see '21, '20, '21, '16 comparison. And you see in the overall assembly market supposedly our percentage share has increased by 1.2 points last year, of which enormous growth here is a lot. But that's not a surprise because in most upturn years, if you go back to '17 to '14, we have always enjoyed more of the upturn in upturn years. It's not surprising if you look at our margin development. If you look in more -- a bit more detail, the addressable market, even an increase a bit more than on the overall market. And then an enormous growth in Die Attach, now over 40%, 41.9%. And then in packaging and plating, roughly flat. But these are first round numbers, which we received only a couple of days ago. We still have to verify that a little bit, but the key message is clear to everyone that Besi has done well in this current cycle. Next slide, please. And we see that here also in some nice circles, if you look at the overall addressable market in '21, EUR 2.4 billion, of which 33% is where we are focused on. And then the Die Attach part, the Packaging and Plating parts and then more critical, but that is also consistent with previous years in the Advanced Die Placement, we supposedly have a market share of around 75%. And that also simply confirms our lead in [indiscernible] , but also now in the hybrid bonding space. Next, please. What we see here is strong financial support. I won't spend much time on that, enormous cash generation, and that also has led every year to a very shareholder-friendly share buyback and dividend policy. Anyway, next. And we see that here in some more details, leave it a lot since 2011, 25% of our cumulative revenue has been distributed to shareholders. Next slide. Strategic initiatives '22. What we did last year ended second half of '21, we have updated our strategy to reach out to 2025. And we've spent 18 weeks with our entire management to refine where we have to go. In this process, we also included 50 customer individuals of our Top 10 customers to engage them in basic strategy. One of the key decisions was to focus on the core business, the Engine 1 and set up an entire organization for the Engine 2 to afford the risk of cannibalization in one or the other. And in order to do that, we took the whole organization along, and that has resulted in a very solid plan 2025. So underpinning our ambitions to reach billion plus plus model. What's key, of course, is not only the beautiful products, but how you build those machines. And I've explained to many over all those years, we've learned, one of the key differentiators is to build those machines in such a way. Somebody asked in our presentation, how many hours does it take to built an evo, 100 hours. Our Swiss epoxy machines are less than 60 hours so we can deliver those machines in 3 or 4 months -- sorry, in 4 weeks to our customers, 4 weeks mind you, which is critical to an industry which is highly cyclical and unpredictable. So the one who can deliver the fastest wins, and at the same time, build a model, which can ramp with this cyclical model, but at the same time, when the industry goes down, that we don't end up with enormous inventories. And we do that by dual sourcing, triple sourcing. We spend equal amount of time of developing of our equipment and further developing of our operating model. So that's enormously important. And in these past 2 years, it's COVID years, we've learned a lot about our suppliers, individually. How they cope with the effects of COVID, and we had to qualify all of the sudden -- any additional suppliers because some were not able to deliver. So that has created even more knowledge about our supply chain, how we manage those suppliers. And as you quickly also see, we have already expanded our capabilities in Asia to be able to meet the EUR 1 billion plus plus model, so to be ready on time. And then, of course, the development, which we will spend a lot of time in a moment. And then the organization is ready to really build this enormous opportunity in the EUR 1 billion plus plus plus model. Next slide, please. What we see here is the quarterly development of revenue and orders simply as our latest information, I won't go in much detail. I only have one comment here. Our baseline operating expenses are very much under control, simply because it's all costs, and we want profit. Next. Currently, critical -- I think this red one needs to be even a bit bigger. If you look at stock markets in the last couple of weeks, especially the last days, headwinds are definitely facing our world and our industry in particular. Everyone is losing confidence in a way that will growth be stagnating where we have major recessions, so many headways -- headwinds. But on the other hand, we also always have very positive. In technology, there are bad times, it only becomes more interesting. So more focus on either extending existing technologies by a lot of developments in many applications because it's all about cost. And then the new technologies emerging, like, for instance, the hybrid bonding. And that is definitely the case in these times. So for us, very, very interesting, in a very positive way. We always benefited from difficult times. If I look back in the history of Besi, now 29 years ago, next year, 30 years. We have always had enormous progress in industry cycles. Next, please. And that completes my few words. So again, focused on the model in the last 12 months since our update last year, although virtually, it has become much more let's say, visible that we can reach this because of the success of our products and especially the adoption rate of hybrid bonding. If we look at our addressable market, we have simply this goal to reach from the 30s for many years to climbing up to the 40 bracket, gross margins within the range of 58 to 62 and that then leads with costs under control, OpEx, in particular, to net margins, which are somewhere in the mid- to high 30s range. Asia, what you see here today is development, it's prototyping, process development, but all the machines have built in Malaysia and also in China. China for China, Malaysia for the rest of the world. And then, of course, we have strict targets for all of our ESG. One of the beauties in this building, you may have seen that downstairs, the contribution of solar panels on the roof. By the way, these solar panels are built with these machines contributed a day like this when it's 29 degrees, on some days about maybe 60%. But that's a good start. Anyway, we have that also the groups in the buildings in Asia but then also energy, et cetera, and less travel, less footprint. We have a simple target. We made it for you also interesting to know it's a [indiscernible] . For everyone in this company going back to traveling again, maximum 50% of what you were traveling, pre-COVID, and anything above that needs top management approval. So simply as a target one of the first KPI's to travel less because in the last 2 years, we have managed this business without travel. But then there are many other goals, which are everywhere in our annual report. So next, Ruurd.

Yes. Thank you all. It's -- first of all, nice to see everybody in person again and some new faces, of course that Richard already mentioned. It's amazing that at these 2 years, we still were able to keep things growing. And the other world has changed substantially. We tried 50% travel level before. I was -- I was in the States already and came back yesterday from [indiscernible] so I think I have my 50% now for the rest of the year now. Let me go to the slides here. I'm the CTO of the company for those who haven't noticed it. I was yesterday at the 3D conference on 3D technology [indiscernible] and they showed the graph starting in 1984, which you see here. That was the year personally which I started with Besi. And I also said we started at that time with [indiscernible] semiconductor industry. And it's amazing how this industry has developed. Today, we had few things go down and so on, but I must say, since 1984, I've heard many times these remarks. Richard and myself, we always get nervous if people say, this time it's different, and it simply is not. It will stay like this. But the overall curve in the industry has never been as healthy as now. What we see is we see the proliferation of semiconductor devices in almost anything. I mean who have you asked in the electric lawnmower, nobody has water anymore. But even there, you have electronics in your -- it really is everywhere. And you see the enormous growth in the COVID year. So we are not afraid for the future. Obviously, there are more than enough opportunities. And yes, we expect that the semiconductor market will basically double again in the coming 10 years. It took 30 years to growth to here, 40 years almost and now in the coming 10 years, we almost expected to grow much, much faster than that. Maybe the next slide. This graph, we always use to explain a little bit where are we. And this is the temperature curve from the clock tech inside, it was seen as high the past. And if we are below to the green line, we are in the down and above, we are in a growth side. And you see, we are still in a positive category, but the trend is going in the wrong direction. How this will develop? We have these discussions. I make graph saying now we have 8 quarters, now it should go down. But yes, we have to see as each as already indicated it is difficult to estimate. There's a lot of uncertainty in the market, and that's something you don't like in generally. Maybe the next slide. What we're also seeing is that the CapEx increase is still tremendous, and what is important in this graph here is as you see that these top players are really dominating more and more the industry, and you see the investments that the Samsung and Intel is planning to do, say the top 5. It's a major -- our goal over the last years has been -- we want to, what we call pick the winners as the element of our strategy. Be on board with, I would say, the top players. And that has been a full point for the last year, but that has worked out, I would say, quite well. We are on board. We have place in all these locations. And yes, that's positive. What's also remarkable in this graph is that the strong growth of the advanced logic and foundry business, especially the high-power. Chris will tell a little bit more about that, but that's also favoring for our business. Maybe next slide. Yes. Here, you see and most of you have probably followed that. There's a lot of announcements of new fabs. Now at the end of the day, you have seen downstairs, now silver wafer material. But if you can't handle this and bring this into a package, it is no use. So this will also implement that there will be much more capacity needed also for packaging, which is also a very positive development. These are developments that will come online in the coming years. I mean if you announce the fact now in 3 or 4 years, it will be there. So that bodes very well for the, I would say, the midterm future for us also. These amounts are very seriously. There are also more spread out now and geopolitically, I don't want to go in anything there. It's a dangerous area to go through. But the world is changing, and we see more focus on bringing things back to the U.S., bringing up in Europe. I personally believe Asia will stay very, very strong. It will not change, but things will start moving a little bit. A lot of capacity buildup, that's very good for us. Next slide. What we also see in this slide is that the capital intensity for our business has made a jump. Typically, it was EUR 3 billion to EUR 4 billion. And if you take care of it in person that you have so much semiconductor sales, you need so much equipment, it was EUR 3 billion to EUR 5 billion, maybe EUR 4 billion, typically the range. And now it has made the jump with the EUR 5 billion to EUR 7 billion, maybe even better. So we see a really good change in the performance because the packaging part especially the advanced assembly part because a bigger part of it, that was where you have followed ASML, for example, they have in that presentation now also packaging as a key element. What you start to see is the moment from companies like an AMD with this advanced packaging, they are able to actually get almost the same or even more performance increase compared to going to the next node. And that's new -- that is really a new in this industry. So this is a good development for us also. Next slide. Now this is a little bit over. In history, we had a little bit of dip in around to '20, peaking up now tremendously and that bodes well for us. Next slide. This is also what is important for us is that our addressable area, especially in the Die Tech area, is growing more and more, it is essentially growing more than the rest of the market because, again, these elements that where we try to operate in are -- yes, we look carefully for the most attractive areas. We typically look for the higher value propositions that are needed, and that strategy has worked out. We started with it in 2008, 2009. That has brought us very far. Yes, that was it for me. So Chris will now take over. Chris joined us last year. Joined us much with more focus on the process technology, and I'm happy to hear from him.

Yes. All right. Thanks, Ruurd. I'm Chris Scanlan, SVP Technology at Besi. Relatively new to the company. I'm now with Besi for about 18 months only. I spent the last 25 years prior to this working really on advanced package development, mainly in the [indiscernible] Industry. It's really a customer of Besi so I kind of bring that end user perspective. I have a Master's Degree in material science and about 70 patents related to advanced packaging. So I'd like to talk about our end-user markets, and what are some of the things that are driving growth for our company and opportunities for our company. So, if you look at our end user markets, it's still mobile. It's a dominant market segment. That hasn't changed, but what we really see is competing in automotive starting to become more interesting and growing more rapidly. So at the rest of my presentation, I'd like you to provide some insight and examples of what is driving growth on the different market segments. So if you look at the application drivers that we're seeing our customers focus on and work on, I think they're really all at the moment, revolves around the data center and AI. So we're seeing explosive growth in high performance computing in order to just handle the massive increase in data that is being generated, processed and acted upon. This is all being fed into AI models and trained and used in other end applications to take action on that data. We're also seeing new communication technologies. 5G is rolling out, and we're seeing the customers now start development on millimeter wave and the next generation of communication technologies, also automotive, EV and [indiscernible] . So many application drivers. And all of this requires more semiconductor content with more advanced packaging. Next, we focus in on computing since this is really one of the major growth drivers for us currently, especially with hybrid bonding. This chart on the right is showing the explosive growth that we're seeing in cloud infrastructure, CapEx by the major companies, our data center services. And this is also reflected in the foundry market share in terms of their end markets. We saw for the first time last year, computing actually exceeding mobile in terms of foundry revenue. We expect that will continue to grow at a faster rate compared to mobile going forward. And all these computing applications are becoming very dependent on the trend of chiplet assembly technologies. So I'd like to spend a minute talking about chiplet assembly technologies. So what is a chiplet? Basically, a chiplet is the concept of taking what used to be,.

A little bit louder.

You can't hear me back there? I'm sorry.

I hear you. It's the air conditioning.

Air conditioning, I'm sorry. Okay. Yes. So, chiplets are the concept of taking a system-on-chip device that used to be a single chip and breaking into multiple smaller individual chips and recombining into a package. And why is this happening? Fundamentally, it's because we're seeing a slowing of Moore's law. Moore's Law is the idea of doubling the transistor content on chips every 2 years, right? But because transistors are now getting so small that they're approaching the size of a silicon, it is really hard to scale them any further. And in fact, some functions that are included in the chips like analog [indiscernible] are already kind of at the limit where they're not scaling with the next node transition. And therefore, chips are simply getting bigger in order to provide the same functionality improvements for each generation. Solution then is to split them apart, so take an SoC, write the functions into different multiple chips and recombine them into a package. When you do that, you need really high-density interconnections between those multiple chiplets, and that's what's driving the transition to this chip to wafer die and hybrid TC units . This is one example on the lower left, Intel's Ponte Vecchio. It's actually 47 individual chips, assembled into the same package in order to make this device work. And if you look at it from the top, you don't see 47 chips, but this is a 3D assembly. So there are chips in the substrate. There are multiple levels in the package. Next. So this is a kind of conceptual view of what these chiplet packages look like in the high-performance P&A space. So in any given package like the one I just showed you, you'll see multiple different kinds of interconnects. So hybrid bonding is the most topical interconnect newest technology. You can see here 3D chiplets being bonded together using direct copper interconnects. But that chiplet that has to be still assembled into a system into a full package. And so we still have Flip Chip bonding, PCB and other interconnect technologies that all have to come together to make these packages work. So in Besi, our vision is really to offer a full solution that can support the assembly and manufacturing of these very complex packages. That includes thermal compression bonding, hybrid, of course, TC advanced system, so on and we showed you downstairs for those of you that are here, support for advanced flip chip and memory stacking. Bridge attach is a topical item. We even have wafer-level molding, and at the end of the day, the supplier assembly has to be mounted to a package substrate. We can do that with our evo platform that we showed earlier. Next, so hybrid bonding is really at the heart of this next generation of chiplet adoption. Why is that? So hybrid provides a direct copper-to-copper interconnect. So instead of having a solder interconnector in the old days [indiscernible] , we now have a direct copper-to-copper interconnect between the final layers that are manufactured in the wafer fab. And it's done in a very, very fine pitch so we can get down to 9 microns today and in the future onto 1 micron or less. This gives designers really unprecedented capability to perform these high-bandwidth, high-density chip-to-chip interconnects. So they can really think about their system design in a complete new way. They have flexibility now to integrate multiple chips with different nodes. With design tools and with electrical performance that kind of emulates what they used to do in the back-end line on wafer fab. It has to be not in a wafer fab environment with extreme cleanliness as well and extreme accuracy. When you pull it off, what it enables, as Ruurd mentioned earlier, it's really lower cost of ownership for a given performance model. So one of our customers has told us, for example, using hybrid bonding to add, for example, SRAM to the back of a CP chip provides a greater performance jump for a lower costs compared to going from 1 node to the next more advanced node in the front end. Next I'd like to share 1 or 2 examples of how this technology is being used today. So the first product that's shipping and production using this chip-to-wafer hybrid bonding technology is the AMD line of CPUs. And it's built on a chiplet they call the Ryzen CCD chiplet. And the way it's built is they have a CPU-based die, which you can see on the lower right, that's the bottom die. And on to the back of that, they use hybrid bonding to assemble in the face to back manner an additional SRAM chip. And then side-by-side, those SRAM chips, we actually have 2 pieces of black silicon, those are also assembled using hybrid bonding. That's the point that's often overlooked. So in this one level chip that we have 1 flip chip attached to the substrate and 4 or 3 hybrid bonding chips. Next. So AMD is first product with this architecture, it's called EPYC Milan X . And in this product, they have each of these chiplets modeled to the substrate. In addition, a center I/O chip that services all those CPU chiplets. And next slide. Another configuration, they've optimized the same chiplet architecture for the gaming space. Now they're only using one of these chiplets, but it's the same exact chiplet design in combination with the different I/O chiplet, and with this, it can service two completely different markets with the same exact CPU chip. So this gives them, from their perspective, really unparalleled capability to tailor and combine these things in different ways at a low cost from the point of view of mass sets and so on to be able to service different markets. What they can also even do is [indiscernible] that side component and ship just the base line at a lower performance level at a different price. So they really can offer a much higher performance product at a very attractive price point. Next, I'd like to comment on how this affects our business. So this is an example of, again, using the AMD EPYC product as an example, how these architectures have progressed. So in 2017, they first introduced the EPYC processor. And this was actually the first one to have had split a single CPU die already into 4 separate die. For those 4 die that were identical and attached to the substrate using hybrid bonding. So 4 die-placement setups. Next. Then 2 years later, they introduced the second generation and the second generation, they truly adopted a chiplet kind of architecture where they have 2 different nodes. The center of big die is on a less advanced node, and they have 8 of the CPU die that are on a more advanced. So 9 total flip chip placement steps in that generation. And now if you look at 2022, with this third generation EPYC that I just described. In the top it looks very similar, they still have the 9 flip-chip die attaching -- attached to substrate. And each of those small chiplets also has 3 additional hybrid bonding steps and maybe some other intermediate steps. So there's more than 30 die placement steps in that package. So you can see in the course of only less than a decade, we've gone from 1 before 2017 to more than 30 die attach steps. As a die attach equipment supplier, that's really good news for us. Thanks. So it's not just hybrid bonding, enabling these applications. It's also other kinds of interconnect. One of them is called embedded bridge attach. And this is kind of a new technology that takes the place of silicon interposers, which used to be used for very commonly for 2.5G integration. Basically, it's just the concept of taking a small slice of silicon and embedding in an organic interposer, using that for a really high density chip-to-chip interconnect. We provide equipment that performs a very precise placement of these bridge chips into those interconnects. There are a couple of new products that have been introduced using this technology. The first is on AMD device where they've taken again GPU and for the first time in their history split it up into 2 devices, and they are connected via as bridge die, those 2 devices as well as the HPM die that are sitting alongside of it. Apple also introduced their M1 Ultra chip using the same technology essentially. Effectively what they did is took 2 M1 Max chips, which are identical and connected them using this technology and package. And we're able to have a drastic increase in performance. So in the future, we see silicon photonics coming online in a high-performance packaging. We're already a big player in silicon photonics for optical transceivers that are used today. We perform things like attachment on lasers for the diodes, a number of subassemblies into those modules. The next step is really co-packaged optics. You can think of this like an optical chiplet that is added to the complex chiplet system, mounted onto the substrate with the other components. We're also seeing a lot of activity in wearables, sensors, other opportunities for us in the photonics. Next. Mobile, we see the 5G rollout still in progress. I'd say it's a mid-cycle at the moment. If you look at the adoption rates, you can see in Europe, for example only 4% of devices connected are using 5G connection today. So that as still progressing. We see mobile traffic growth growing. We're accelerating actually as more of this data is being transferred back to the data center. Next, in mobile, if you look out 2 to 3 years in the future, what do we see? The first thing in terms of communication structure is the adoption of millimeter wave. Today, most of the 5G deployments slow to 6G. We see more small cells repeaters being deployed, metal drive innovation in the RF front end and other portions of the RF radio. I think one of the most exciting opportunities for us is to get potential for hybrid bonding to be adopted in mobile application processes. So, if you look at the application processor today, it's usually the biggest component within cellphone and that chip is already pretty big. So it's facing the same headwinds that working chips are facing in terms of Moore's law slowing. So at a certain moment, it will have to go to 3D, we think. And so hybrid bonding could be used in the base package of processors in order to provide that generational boost in performance. And beyond that, we see things like the AR glasses and other peripheral devices that people are thinking could potentially either [indiscernible] . Then in automotive, really, the 2 big trends are electrification and autonomous driving to see those are the 2 areas that are really driving growth in the semiconductor content of ours. In some of the areas that we're working on with respect to electrification, we talked about earlier, the silicon carbide and gallium nitride in devices that are replacing silicon [indiscernible] and MOSFETs. These require new die attach methods like Sinter bonding for example, which we are supporting the EVO platform as well as new molding and singulation technologies supported by our Packaging business unit and even plating technologies for wettable flank QFN. And finally, autonomous driving, we see driving a lot of demand for different types of products, cameras, different kinds of sensors, lidar. Already radars are heavily used in cars are growing. It's also driving more just computing powers. We see for example the Tesla computer has to high-performance flip chip devices in the main board for their autonomous driving computer. So automation will also drive significant growth in both legacy, reframe and advanced flip chip. Next. So just to summary -- I mean we think we're very well positioned to take advantage of these trends. We see multiple drivers into our key end markets. The key thing that we really see is the slowing of Moore's law is really driving this chiplet architecture. It's really requires more high-density interconnect, more advanced flip-chip, hybrid bonding and TCB. We have mobile technology that is going to rise as well and a strong trend towards automation and electrification in automotive market driving our business as much. So with that, I'll turn it over to my colleagues.

All right. Good afternoon everybody, and warm welcome here to the audience in Austria and also to the online attendees. Let me briefly introduce myself. I am Christoph Scheiring, Senior Vice President for Die Attach. I am with Besi already for more than 20 years. I have had several management positions within R&D and PM over the years, and since 2019, I am heading the Die Attach group, which is the biggest revenue contributor for Besi. And I am -- that brings me to that slide. I am at that moment responsible as Richard explained the recent move we did. I am at this moment responsible for the following product lineup. The first one and the most relevant one in terms of revenue as it contributes around 50% or did contribute in the last cycle, about 50% of the revenue. This is the multi-module attached machine, the 2200 evo, followed by the single-chip epoxy bonder, our 2100 platform, also quite high volumes being delivered of this machine and very relevant from a revenue perspective. Next one, flip-chip with the 2100 and into 8800 flip-chip and also the Soft Solder with 2009, which is the workforce in the industry and the new one, the 2100. So all in all, we are talking about the revenue of about EUR 600 million in the last cycle, and those products were giving us -- the ones that are -- you see on the screen here with the green boxes behind are recently launched machines that are new in the market, launched in the last couple of months, as you see here, and together with some more developments in our pipeline, it will definitely help us to grow the business further beyond normal market growth and will drive us to the next level in the next up cycle. Richard in his presentation was giving you this indication of a EUR 1 billion ambition we are having with the products you are seeing here. We are aiming to get to an EUR 800 million level in the next half. So then let's go in the next slide, product -- product line and then get into detail to give you some context and specifically to explain where we do see the potential for further growth. Let me start with the evo platform. So as you can see here from the number of installed equipment, is a real workhorse in the industry for multi-chip, multi-wafer applications. Key competitive advantage here is really that this machine is highly flexible, feature-rich, highly configurable and can be adopted to the specific use of various different markets. And if you look to the middle -- the chart in the middle section of that slide, you see a classification of the markets. And the most relevant one is certainly here in mobile communication camera market. This is the machine we are serving in mobile camera modules. And yes, with a huge installed base there. Also very relevant here in SiPH is the SSD business also substantial installations. Automotive is important. Chris was talking about the Sinter market. And last but certainly not least, especially in terms of future development, is photonics markets, silicon photonics where also this flexible versatile platform is playing an important role and will play an ever more important role in the future as we are developing further. That brings me to the right-hand side of the slide that shows the major development directions we are having in mind, and we are working on right now. First one, it's all about accuracy improving, increasing the currency. We are currently at the 3-micron level, and we want to go down to 1.5 micron level. That will help us to increase our share and the number of process steps we cannot adopt in the silicon photonics market, which is expected to be a huge driver. Somehow in combination with higher currencies, we also see the need for higher cleanliness levels in the machine that will help us here in the silicon photonics space but mainly also in the camera module market, where we do see -- we have already a broad variety of processes that we are supporting, and we do see a chance to further grow the number of process steps we are serving. So it's not about growing the number of camera modules even further, that will not likely happen, but it is that we are taking more of these assembly steps. There is a good chance to do so. Last one here is targeting the growth in the automotive market by increasing force capability on our machine and that's basically an enabler for -- Sinter interconnects. Let me go to the next platform, a high-speed of epoxy-bonder. The key element here is really this is the highest shipped, highest accuracy single-chip epoxy bonder in the market. Also here, we are talking about a huge installed base at this moment, already 4,000 units or more than 4,000 units are installed. Key competitive advantage besides increasing speed is certainly here in this bond line thickness. The more you go to the high end, the more relevant it is that those dies are being bonded with a very consistent bonder, and that's the key advantage of this platform. There are competitors out there delivering similar machines, but here is where we are differentiating. Besides that, other features are relevant on that ultrathin dies is key, cleanliness levels is key, the Automation is key. You see once in a while with this "i" here, this "i" stands for intelligent machine. So we want to make that machine as independent from the operator as possible and put a lot of intelligence into the machine using artificial intelligence methods for teaching of products with the vision for all kinds of stuff. If we look to the markets, yes, we are certainly driven by the mobile markets. 5G infrastructure is driving a lot. We are in automotive. We have installed base and potential in the storage in the NAND flash placement as well as in industrial applications. Talking about where can we further grow. Clearly, in the higher portion of the epoxy market by introducing even more complex volume control -- epoxy volume control functionality, adding inspection functionality in order to do and here you see 6 Side Die inspections. For the long and short, we inspect 6 sides of the die, inspecting for cracks, for delaminations, et cetera, and as I said already, on the automation. And talking about the Flip-Chip product portfolio, our Flip-Chip machines define the standard for the market. Every Flip-Chip [indiscernible] at this moment is basically using these machines, either if it is in the lead frame business, which is on the lower end side from the accuracy point of view, using the 2100 Flip-Chip platform. If it goes more to the higher-end side that we are talking about 8800 platform and in between the 8800, there are 2 variants. One is the high-speed variant, which can go up to 14,000. That's the one we have seen downstairs. And we have a version, which is more than for the Flip-Chip BGA Market, the fan-out wafer level packaging [indiscernible] markets. This is the so-called 8800 Chameo platform, which is higher in accuracy, a little bit with the trade-off in speed, lower speeds as you can see. And on top of that, lots of additional loading elements, loading features, factory automation settings. So that's the product lineup. And as I said already, all virtually, all flip-chip manufacturers are using that as their process of reference. Where we have the opportunity to grow, very clear. On the one hand side, it's all about accuracy. Those hybrid processes of layers of only in these assemblies, these packages that drive the needs also on this side for higher accuracies. We're responding to that with a bunch of additional developments we are doing. We're going to granite. We have this V-axis, we added our integral feeder applications, et cetera. And the other direction is speed, and we have seen already as the group I was heading through the demo center. We are working on these Quattro concepts to make the machine faster, and we have more developments in our pipeline. We work on more speed and more productivity of this platform. The last one, soft solder machine with our 209 platform. We have true process of reference for key IDMs, the high-end automotive business as well as in the higher end side of [indiscernible]. What we did over the last 2 years already and we are now basically at the end of the third stage development is we transition this process of reference from the old 209 platform to the latest generation 2100 platform. That gives us an edge that certainly occurs in speed, but also usability. And beyond that, we were able to overcome limitations in the lead frame sizes, we can handle. The modern lead frames are going extremely wide and also those new types leadframes. Next steps are talking or are targeting so-called diffusion solder market [indiscernible] for us as well going forward. This is a new type of soft solder application that is even allowing a higher performance interface, some other aspects in terms of the [indiscernible] priority we are working on and will help us to grow. So that is already the last slide. But in our summary shows from the level where we are with our current product portfolio. There is this strong ambition to grow further. We do see opportunities for all of the product lines, probably the biggest part is here for the MMA product line because we are talking about further design and the processes of reference in the mobile space, in camera modules. We do -- we are engaged with key customers in API at this moment that will help us in the years to come to get into HBM. Second, a very big portion is here in the silicon photonics transceivers that need higher data needs in the communication space, it is driving this market. And with our improved accuracies, we will be getting more grip on that market. In the flip-chip space, it's -- the memory markets come to more and more to flip-chip. So these higher volumes will require higher speed machines with our Quattro or CQHS, we are having a good solution there. And we are working on higher accuracy on 1 micro and the lower accuracy on the Chameo platform to tackle the challenges [indiscernible]. For Epoxy, we are further improving the capability for the high end demands for RF devices and for soft solder is now launching phase of the 2100 soft solder platform. They've qualified the first customer, more to come, that also will be a growth engine for us going forward. That's what I have to share with you for ENGINE 1. Peter talk about Engine 2.

Talking about Engine 2, so a warm welcome from my side. My name is Peter Wiedner. I'm an electronic engineer by education and holding masters degree in process automation. And I have been working in the semiconductor industry and for Besi close to 20 years. Actually, I have to say in recent years, I tested also some other industries like automotive and jewelry industry, but as Richard said, I was joining back to Besi and with that to the semiconductor industry as of April 1. And why did I come back, because I got the great opportunity to lead this Engine 2 business that Richard has introduced in the very beginning of this introduction year. And we also got a name for that. It's called the submicron die attach phases. And at the same time, I'm also your host CFO for all of you who are present in Austria, before I was the site manager of this site. So welcome. Now as I said, sub-micron business or Engine 2, like Richard said in the beginning, what he said about. Let's start with that. And you have seen this slide in the presentation of Chris showing a schematic of this new chiplet design package dies. And he also told you, and it's written here that there is a lot of applications, a lot of processes needed in order to assemble such a chiplet. And actually, if you look at the first part, these first 4 are steps, which need extremely high precision. So 1 micron or better. And that's also where the name is coming from, the sub micro die attach because in order to make machines and have operates for the market for these process steps, that is what -- that is my job here. And how are we going to do that? We are doing that. We are covering that area with 3 different machine types. So from left to right, so on one hand, with a thermo compression field, which is still needed within these chiplets. Secondly, and also Christoph has said something about that already a little bit -- sorry, Chris has talked to that in his technology presentation, there is this connection thing, this bridge attach. And last but not least, the most important one, the new connection technology, the hybrid bond. And with these free offerings, we can serve majority of the real high-end connecting technologies within such a chiplet architecture. Now let's go through these 3 machines and sections and let's start with the thermo compression. Now thermocompression as a process is not new. That's around already for years. Still, why is it important or why is it different here because if you want to incorporate a chip with thermal compression with chiplet like on the hybrid bonding, it has to have much more connections, much tighter connection, a smaller boundary. And for that reason, if you provide a machine for that, you need much higher accuracy than in the past. So that's the reason why we are getting to an accuracy requirement below 1 micron. Now along with that, it's not only the accuracy. Also these chiplets are getting bigger compared to typical applications for thermo compression in the past. And for that reason, you need also much bigger sizes, die sizes. You see that here on the slide, 70x70. And last but not least, because everything is getting smaller in the [indiscernible] , also the typical process that has been used in the past for thermocompression using flux as an agent is not really suitable anymore. So you need to go to a fluxless process, and to incorporate all that into a machine, we decided to really start and build a new machine from scratch up. Never an existing one, by the way, the former offering, but in order really to serve this market best, we decided to go for it. We designed that the ones who have been here already and you could have a look at it down in our R&D lab. And this machine actually will be launched at the end of this year to the market, and we are developing that already together with a lead customer. As an add-on, we also are taking care about the inner chamber that because that's quite expensive on the N2 gas that you are needing, and we have designed, made a complete redesign with a much better inner gas chamber, which gives much more benefit to the cost that our customers have. So that's thermo compression being introduced at the end of the year. Let's go to the bridge and that's the next one. When you have these chiplet designs, where your different dies are sitting next to each other, you have to make the connection between. And there are a lot of different technologies. So let me be clear on that on how to do that. And one opportunity is to use the bridge die of silicon where you have the connection is to put it underneath and make the connection with the silicon die. You see the scheme on how that's working in the lower middle of my picture here. And that's also in the scheme of the [indiscernible] you see there. Now especially in the high-power computing, this solution is very well established, and we have seen specific examples in the technology section shown by Chris. And also this die, you have to place -- and what's different, perhaps to another wafer level fan-out application because that's what it is in the end. It needs to be much more accurate in placement because if the bridge die is not placed accurately. You will not fit with the other dies in connectivity. And what we did here is we use actually our picture platform that you just have seen on Christoph's presentation, which is a great basis for this wafer level applications, and we brought it to the accuracy level needed and to the 1 micron here in that case. And with that, we have shipped the first machine already in April, and we are just preparing the next machine to the lead customers. And what is also important to know and to understand here is, this is the methodology on how we can apply it, which that's not, let's say, straightforward right now because we can apply die first, die last not to explain what this is, but the different methodology is to build it in. And what is very important at this point in time that the starting of this new generation is to have a very flexible platform that you can follow different methodologies that customers want to apply and how to [indiscernible] And that's really great with using our existing flip-chip machine, which has a lot of capabilities and options are already built in. So really having the accuracy was the key point to get a perfect machine for this bridge event. Next one and most important one is hybrid. We all know in the meantime because all of these conferences that hybrid is a great technology, and I don't repeat what Chris told you about the basics of it. The bottom line, if you look at the machine is that you need to have a great combination of the accuracy because that's on us. Otherwise, it doesn't work, but to do it with a great speed because otherwise, the cost of ownership is not attractive to the customers and then also the whole people at Systematic is not practice to that. So that means -- the real key point here is to deliver a great speed. And that's what we are doing right now with 2,000 UPH at our customer site, and that in combination with 20-nanometer. So that's really the great achievement there. And compared to perhaps last year's investor presentation where I could not join obviously, yes, I just rejoined Besi. It is -- what really happened is that the volume production started this year to 1. So we did ship the teams, we set them up into operation and the right processor that Chris had in his presentation is built on these machines. Now the next step where we are working on right now is to integrate this machine into typical use cluster lines in the front end before the next step, which is needed, that's the next efficiency step, of course, the cluster lines keep a great benefit in front-end environments. And then after that, and we are working on that as well already. We are in contact with the lead customers who are telling us what they needs they have for their next package types, and they are thinking on even smaller pitches which is then requiring even a higher accuracy for the machine. And that's the reason why you see we are working already on the next generation of that getting into 100-nanometer accuracy at the end of this year. And target-wise, I come to that on a separate slide, but just in a nutshell here, it's really starting here with the compute in the chiplets, it either with the AMD, but that's definitely not the only applications. So clearly, the memory and also what we have seen in the mobile market is really bound to have hybrid bonding. So now for the ones who are not able to join us personally here in Austria. I have a quick video where just see the sites inside the machine. You have seen it already on our [ door ]. So let's just start that. It's fixing the idea it's making some adjustment and especially here now in that stage, the real high accuracy adjustments done, so the that we get to the nanometer accuracy. So that's a typical cycle, but you only see 1 bondhead here. So the machine has 2 bondheads, so it's [indiscernible] and that's together a very quick impression on how we are doing that and how the machine looks like and works. Now as I said, let's go to the markets. Clearly, we place in the logic side in the chiplets, that's what we are doing right now. That was the starting point. And really, this year was the volume production side. So that's really the front runner using hybrid technology. The next implication that we see coming up is the memory. Of course, you have seen it also in Chris' presentation, there is always the memory side, the processor as well. And if you have more computing power, and you also need more memory with high-speed connection. And the nice thing when you use hybrid bonding on such a typical memory buildup that you see here in the picture is that you can stack more memory dies on top of each other at the same size factor. So it won't increase the height or the total size of the memory. So it still fits into the same package size and you can get more memory into the same space. And that's the great advantage. And also once again, it needs to go with the more power logic and the high speed connection. Otherwise, it's not a good processor. But that's the reason why also the memory dies, the big IBMs are really working on this technology for their memory as well. Then third, what we are seeing is the mobile. Once again, already showed that the application processor is getting to its limits. Chris said that, I won't repeat that. But what he also said in his presentation is that also the RF module going for the higher frequencies, also are unique to have this better connectivity. And so the real nice thing, if I look at for our business opportunity is that if we go here, the mobile, there's a minimum of 2 devices that are heading towards the hybrid and not only the application processor. So that's another multiplication factor for the business. And perhaps farther out, but still already in, let's say, early discussions with end customers, we see that there is also some interest in sensors and displays. And when I'm saying displays, I'm not talking about our laptop and computer displays but really more about Google Glasses and these things, as we already contact and we're getting a lot of interest on what the hybrid technology could do to boost these type of devices in order to get more computing power in there, which they need in order to make more advanced products. So that might be once together far out another area where hybrids could be against -- will be a game changer. And if we sum everything up now, we are getting really to an increased picture of what we think the hybrid market will be. You see the lines actually what I called here, the blue one, mid case. That was for all of you who have joined last year was that the high case line of last year. But with what is going on with hybrid on the radar of really every relevant semiconductor producer. For us, it's really not a question at that if hybrid is coming in. You can buy it already. So it's there. So for us, it's only a question when and how fast and how much will become. And yes, we put our intelligence together, and we see compared to last year with all these adoptions gaining traction, we see really better opportunity, and we think that until '23, at 2030, not '23, 2030, that can be a business up to EUR 3 billion. Once again, here the expected rollout sequence, but I told you that already, also subcontractors coming on later. And with that, I'm would -- I'm already at my summer coming up slide. Once again, the logic customers have moved. The first ones have moved to volume production and the others, the competitors of them are on their neck. So there we are engaged with multiple customers. At the same time, also, we have matured everything. So our machine that we have built is out of the proof-of-concept, we are doing quantity shipments. We already had the first shipment to a memory customer this quarter. So that's the step #2 for the memory guys. We also see, and I'm sure you are attending some of these conferences as well, a lot of hybrid paper all over the electronic conferences and with that, also the interest in all the research companies of our industry is increasing. We have also set up our own center in Singapore, our center of excellence, where we are -- that we are using for more customer engagement. We also have signed a joint development agreement with IMEC Institute, and we have put a machine there to make research together on this hybrid. So also the R&D efforts of the industry are picking up greatly, which is always a good sign. And finally, also internally, we really did our own work so we have expanded our production capacity in Malaysia. So we have a clean room there. We can build up to 15 machines a month. We have shortened the production lead time from an initial prototype, which always takes longer to volume production of 3 months. Currently, we are 3 months of the lead time, which is much more fitting to a volume delivery. Also for sure, we have peaked up our service and support staff around the world from Taiwan to the U.S. And once again, one thing which we consider very important at this point in time, but what we are currently doing, I mentioned that already, we are preparing the combination of our tool, which is cluster tool together with AMAT at the same time in Singapore and in the U.S. at this time, so to really give our customers the next level of machine equipment that they can use them next year for their volume production. Thank you. With that let me head over to Jeroen.

Thank you very much, Peter. Okay. Good. So thank you very much, Peter. Yes, first of all, as well a warm welcome from my side. Currently, I'm in Singapore in our center of excellence, discussing with some customers some new opportunities. So therefore, I am not able to join you in site in Radfeld. My normal residence is Duiven in the Netherlands. My background is a Master degree in Construction Engineering with specialization in Thermodynamics and Robotics. I've started at Besi in 1998, so almost 25 years in service. Throughout the years, I had several R&D positions, product management positions. And I took over the full P&L responsibility for Besi Netherlands, from Besi Packaging in 2012. And today, I am responsible for them until now, we're still responsible for the mainstream packaging product line that includes more molding, trim and form and singulation. Next slide. So as Chris already mentioned, the semiconductor market consists out of 4 segments. Which is the 5G and wearables, the IoT and computing, automotive and; storage and networking. And for all these 4 market segments, we have various equipment located in this market or addressing this market. Looking at the 5G and the IoT, there we have 3 main machines in there, which is the AMS-LM. There's a molding machine that is doing substrates, 2-sided molding. It's highly specialized in exposed die and wearables for SIP packages. This machine is the highest revenue for packaging and the #1 in this market segment. Looking at singulation, the FSL, that was developed a couple of years ago and now finally, with some new developments with step cut and high-speed sorting, we are gaining market traction and in -- from our customers. Then we also have wafer and panel molding. As Chris already mentioned there for the chiplets, there's also molding involved with this machine, we're able to do the chiplet exposed die. Then on the other market segment, the automotive and storage, we have another molding machine, which is a new machine, the AMS-X that is introduced in 2019 and that is focused on high-density leadframe high-power packages. After the molding, we need the trim and form. Trim and form and FCL-X/P, that one is the high runner for packaging in that market. It is the #1 machine, and we are focusing on this machine for further optimization and to gain more market share. Then last but not least, is plating, after trim and form we need to plate the leadframe or the power packages. With plating, we have a machine already several years in the markets where we are developing new kind of applications as well. As Richard mentioned in the beginning, there is the solar panels on the rooftop from Radfeld. They are produced with this kind of plating machine. Okay. Next slide. I'll go a little bit of the details of each machine. As mentioned, the molding machine, the AMS LM is the highest runner of packaging. This machine is capable of doing complex 3D shapes as well for the 5G market. As an explanation, you see here on the picture this [ 5ft millimeter wave ] component where you have an exposed area and unmolded area and the next generation, where we see the 5 bumps on top of that, those are the 5 antennas. So the future antenna in package applications. At the bottom side, you see also there the component placement that can be done on the later side. From both sides are modeled from our machine. This is an SIP package. So a lot of components are placed on very short distance from each other that can create a certain ESD issue. So we have developed a new functionality in the machine where we cannot reduce the ESD to the lowest level of below 50-fold per inch. As well in this SIP package, there is also for wearables. In wearables, there are a lot of MEMS sensors. And these MEMS sensors are measuring blood pressure or heartbeats, fluids, all those kind of things. And these sensors -- these MEMS sensors, these dies are very sensitive. And these, we cannot handle the standard packing pressure that has been used in the molding machines. And for that, we are developing a lower transfer pressure so that we can save die and still encapsulate the whole die without any voids or air constriction. Now with these SIP package and becoming so close to each other, there's also this compound that goes around it that is these days, almost like-to-like water. So all those compounds can get into the smallest corners of the molding and that needs to be removed. So we have developed a new design of particle removal for [ molding layer.] Yes. Next slide. As I mentioned, the FML, the wafer level modeling, that one is focused on the overmolding wafers. You see there are small picture. In this case, it's a wafer level mold with an exposed die as shown in the presentation from Chris, you see on a chiplet also the top cycle is exposed. Currently, the market, this is still over modeled and then is done by [indiscernible] coming back to the exposed die. But with this machine, we are already able to do that completely exposed. That's also written in the market, so we are engaged with several front-end OSATs as we've been saying. On top of that, we are developing the improve reliability, an outer leveling system. With that one, we are able to get a 300-millimeter distance, a planarity of plus or minus 5 micro and that is needed in order for the exposed die not to have any compound over the exposed die because later on, there could be some replacements. Now next to that, there you see the TSV molding, the hybrid bonding dies, where these days, we see first a glass carrier with some tape in there. Then the bridge wafer, then the dies are placed on top of that, then we mold the whole package. And later on, this glass center will be removed from the package. Next one, for singulation, as I said, we have this machine very quite a while in our portfolio. We have invested in last 2, 3 years, quite heavily in this machine to develop new applications and new features. One of the biggest contribution is the step-cut functionality, it's what you see in the middle section and step-cut functionality is that you first made a small cut in a QFN leadframe then you go for plating. So you cover then the exposed area with tin or nickel palladium. And at the end, then you make the final cuts. And then only a small area is then exposed with copper. And that can be then sold to [indiscernible] board. By reducing the level of copper, the reliability of the package goes up because there's almost no chance for oxidation of the copper anymore or of sparkling with these high-power products. The first machine, we shipped that one in 2021 to the customer that is now fully accepted. And in the last 6 months, we got traction from several automotive customers to deliver these step-cut functionality. On top of the step-cut functionality is for the mobile market where we're talking about the RF devices, also there, you need some plating of these RF devices. So also there, you make cuts through the molding compound and then you go for the plating and then you make the final cuts. Also in a year, this can help the stack up. This year, we're also developing the high-speed sorting, then we can reach a UPH of 45,000 and there we will outperform the given market. With the high speed sort and the step-cut functionality, we are -- there has also included 6-sided inspection to do a full inspection of the sort products to increase reliability and to sort out [indiscernible] Next slide. Yes, the latest machine that we have introduced in the market that is the AMS-X. This one is machine especially designed and engineered for the automotive power packages. We have introduced that machine in 2001 -- '21, sorry. And currently, we are engaged with multiple customers for various configuration of these machines. With the high-power packages, it's very important that the compound density around the chips must be in order because if there is some air entrapment or some voids then it could be a short circuit. So on those machine, we have developed a vacuum controlled mechanism where we can achieve more -- less than 50 millibars of air pressure inside of the sleeves or inside of the cavity. Alongside with these high power packages, the compound need to have very good adhesion with the leadframe over the carrier. If the adhesion is not optimal, then there could be water or moist going between the package and the leadframe that can cause further delamination. The adhesion or the delamination has mostly caused right after molding when the mold [ incurring ] is finished. By having an independent ejector beds, we can release the products more smoothly and therefore, presenting delamination of these power packages. Now on top of that as well, because it's a new machine, we also have to basically committed to the environment. We have engineered that this machine will have 20% less power consumption as the standard these days in the market. Also, we have a reduction in compounds, so about 12%. So all these items have been taken into account in order to support the ESG targets that we have set out for ourselves within Besi. Next one, please. Also for the automotive market, that's the trim and form machine. Trim and form machines, we have more than 1,500 systems shipped already. This trim and form machine is the high runner or the higher revenue system for this market for packaging. As widely adopt, it is capable of handling multiple of various different configurations. The trend that we see at the moment within the automotive is that you need zero defects, factory automation and full traceability. So for this, we have developed the leadframe flipping, with that one, we can do laser marking on the top and on the bottom. And at the same time, we can do a full inspection of the devices, and we can sort out the no good guys. Next to that, we see on the existing leadframe packages. There is normally the leads is connected to the leadframe and also a tie bar connected there. And tie bar is to prevent packages of the chips, mobile chips falling out of the lead frame because first, we will cut the leads, then we will shape the leads. And then at the late moment we cut out of tie bar. The tie bar a metal connection that's connected to the lead frame. If there is a high power going through this power package, there could be a short circuit through this tie bar. So the next generation, what we see is that there is no more tie bar. And that gives us a little bit of headache problems because when we cut the products, then they are removed from the leadframe. So we come up with a new solution to still hold the product inside the lead frame and we still can cut, we can shape and then we take it out of the frame without having a tie bar. Also, the power packages are on evolution. They are -- 10 years ago, they were very big. You can see that on the top side. These days, these packages also become smaller and smaller and thinner and thinner. By shaping the leads of these packages, we see that the compound is not taken off anymore. It can cause some stress on that compound and creates a microcrack or a chip off, you call it. In order to prevent this, we are -- have developed a new mechanism where we can do with a low stress cutting. So we're not putting too much on the lead anymore. So it will prevent microcrack. Next one. Then after the trim and form, we need to do the plating, so to cover all the leads with tin or nickel palladium. Plating is quite well-known established into the market. We have more than 820 systems shipped in the market. What we are doing in this machine is further enhancement and improvement. So the latest development is the wettable flank for QFN and just explained to you about the step cuts, where we do the half cut. In this case, we do then with singulation and full cut then we places on a sort of carrier, and the whole carrier goes into the plating line. And then we are plating the sites of the QFN, but also the deburr. For [indiscernible] the packages there to get the heat out, there is a clip attach, that's what Christoph already mentioned. This clip attach is done with a flux and there will be some residue. The sort of flux needs -- this flux residue needs to be removed. That is what we can do with the plating line as well. And then the next part is when we do the molding, there is a heat sink. The heat sink is also to get the heat out of the package. There will always be a little bit of residue on that heat sink and with the chemical deflation, we can move that compound. So we have that clear heat sink and we have -- the customer has a maximum area where he can extract the heat out of the package. Next slide. Yes. So summarizing the growth opportunities for packaging and plating. So here, we have the lineup of all the 6 machines again. So for the substrate AMS-LM, there is the market -- the future market is the SIP packages that started, I think, 4 years ago, and now it's going into a high run. We see all kind of small devices like the wearables, which you have on the wrist. As Peter mentioned, the Google glasses, the AirPods. Okay. The AirPods, all those kind of small wearable devices regarding SIP packages. And this is the machine that we -- is fulfilling that need in the market. Now on the wafer molding, as also Peter mentioned, the chiplets or the hybrid bonding. So with the wafer molding, we also can overmold and also do an exposed on a complete wafer. Then for the AMS-X, the high power packages for the drivers are there, the autonomous driving and also electric motors. You see the motor drive train, the adoption of electrical cars is widely accepted. We see growth opportunities in these electrical cars. For the compact line, trim and form. Now the same as for the leadframe molding only there, we are focusing on 0 defects and factory automation and as well as Industry 4.0. We have the growth opportunities. For singulation, the RF devices and the QFN power packages, the step cuts and the high-speed sorting for standard BGA and LGA packages. And last but not the least, the plating line for focusing on the industrial and the automotive market also here, same as trim and form and molding on the autonomous driving and electrical motors. And that is packaging and plating. I think we are now at the end of the presentation. So I hand this over to you, Richard or [indiscernible].

Christoph, Peter you step forward. Christoph. Are there any questions?

[Operator Instructions] But I see already some questions here. So let's start at the front.

Yes. Francois-Xavier from UBS. I have 2 questions on hybrid bonding specifically. One is, can you talk about the average lead price that you are seeing today and how it is evolving with the road map that you have? How do you think the pricing of these 2 should evolve going forward based on our evolution and the performance? And second of all, you've mentioned memory and mobile, of course, is the next adopters after computing. When do you think you will have the commitments for new customers to -- ready to see the ramp?

Well, for the pricing for [ Link, ] it's between EUR 1 million and EUR 2 million and we are seeing the price rather increasing than decreasing because the accuracy, as I have shown you on my slide, is going up. So not 100-nanometer. We are already having discussions about 50-nanometer and the higher incurred accuracy will also drive the price. So that's for your first question. For the other question, we do have this contact with these RF and application processors providers at this point in time. They are definitely not as far as the ideas and example, but I can definitely foresee that depending on the speed, they want to move between, let's say, 3 years, 4 years, I see them definitely in the arena of hybrid.

Got a question on the segmentation of the market between die to wafer, hybrid bonding and wafer-to-wafer hybrid bonding. And there's a slide of [indiscernible] around where, especially in the memory area, both DRAM and NAND are in the wafer-to-wafer seems like different opinion, can you elaborate on how that is different?

Chris, I think that's best to you.

Yes, definitely in the NAND market, we see some wafer and wafter bondings. So there's in China already have production going to the wafer. DRAM we actually see customers interested in die-to-wafter. It's higher-value components that build or important factor and it's [indiscernible]

Maybe as a follow-up. In terms of ultimate accuracy. Is there a difference between die-to-wafer and wafer-to-wafter? Again, I think sort of [indiscernible] that maybe the wafter-to-wafer side has potentially longer-term higher equity. But I guess it's a sort of yield versus -- I guess yield is better for the die wafer. Is that the right thing to think about.

Well, there's 2 fundamental limitations for wafter-and-wafer. One is that either are limited to identical die sizes. So there's many, many complications where you simply cannot do. So for memory kind of applications, inherently, there are less dense in terms of the pitch generally speaking. The inherent accuracy of the lining of wafer to another wafer versus a die to a wafter. I don't think there's much here. I do think there is some fundamental limitations on what you can do with wafer-to-wafer because of the asset limitation.

Maybe the last one because then we covered all of the digital cost, is there any difference? And again, I think more towards second half of the decade where maybe both technologies are more mature. Any color will be appreciated.

The advantage from a cost perspective that you have what die, wafter, bonding in simple that you can pretest or die on the [indiscernible] wafer can only place with die in target wafer. So even for the same size, die size applications, if the value of the die is high, they're not fully inexpensive chips. Then I think that the die and wafer probably will still be always more [indiscernible].

Once again, if there are any questions from the online participants, please raise your hand in the WebEx, so we can entertain that. Otherwise, [ meanwhile ] in the group here, let me just held this way.

[indiscernible] Just to question on the [indiscernible] As you said, most of the volume come from the smartphone and mobile applications and likely in future devices, not just the processor. So if hybrid bonding is already the success, we expect with an acceleration?

Let me correct. I did not say that the most of the volume is coming from mobile. I said that's just the third in a row and it's giving another upside potential. But what you have seen actually in the presentation of Chris, is that with the high-power compute in which perhaps has not that high volume, if you count the high-power computing devices compared to mobile devices, but as you see in this, you have 30 die attached that have to multiply that by 30, so it's very happily intense actually. And so really, this section that has started now is already giving us great and the big portion of our forecast. And I just said that's the nice part also on the mobile is that it's not only one hybrid bond, so not only one device, but also there, we see on one hand, the application processor. On the other hand, the RF device and RF devices because of the bandwidth are sometimes more than one actually in a smartphone. So it gives also a good opportunity in this segment. But don't just read me, please. I did not say this is that real [indiscernible] . Actually, we are starting with the high power compute already.

Okay. And just a quick follow-up. So capacity for now that you're building. Do you see that you will have to increase it further in the next few years, if hybrid bonding is really a success?

You mean our production capacity -- you're talking about. Yes, I think so.

Marc Hesselink, ING. My question is actually on the slide that shows a couple of times, Slide 29 where you state that with a system on a chip, you get -- you're using several different die techniques. Also as suggested you will follow it. And I think that you also show that on the [indiscernible] make set to over 30 steps. Having said that sort of cannibalization, actually, the opposite, you see a sort of [indiscernible] effect that when you move further into the system, you're actually going to see more and more growth on all these techniques. Is that correct? And if that's correct, how can you make -- how can we make that link in your scenarios for the hybrid boning, how does is going to be reflect in Engine 1?

So first of all, I think you are perfectly right in saying that hybrid bonding and those chiplet type of applications are not cannibalizing in any form, the Engine 1 business. It is just at the end, we will be seeing these package devices that are consisting of not only one single chip, integrated monolithically, but being done with various chiplet. And next steps we will be seeing that later on at the end of one of our flip chip machines, for instance, doing a regular flip chip there. So taking your logic further or what you also suggest that we will see that portion of the business in addition and we will just see similar volumes in the Engine 1 as we had in the past. So slowly with the margin up.

If I may add to this, that this slide is the best illustration to your question. You need for the insight. This also tells you why it is an extension of Moore's Law. Think about that. But in the end, the device has to be connected to enhance application. So for that purpose, you need both Engine 1 and Engine 2. But there's no cannibalization with respect even the opposite. And if you're very acceptable high performing engine actually going to sell in narrow. Yes, because you're moving inside the chip architecture. Why everyone is excited is it is interconnect into the wafer.

So it's a very simple calculation that you've take a classical [indiscernible] I see a normal chip. We a lot of our functions on it. And now you split this chip in 3 or 4 smaller ones, obviously, you need, simply you need but more bumpy equipment to mold them. Ideal case for me. I think that we showed it in the past on one of the investor conferences that said we have a bridge below it that we have, we have 5 bridge. We certainly have 10 times volume in bonding only. 6 will take time to develop because it sounds all beautiful. But of course, you have to make the balance between if I separate and ship in different functions. I also have to connect them again. I have to get some real estate on the chip for the connections and so there's a fine balance and customers or the end customers like AMD and so on, they do all these calculations. And for some products, it will be early feasible then later fees, but it generally use breakup this shift a long time, it has gone more above on the chip, and now we still are proceeding to go [indiscernible] trend to splitting them up again. That is really in our favor, and that needs both the most advanced steps and also a number of, I would say, the more [indiscernible] at the end.

Yes. [indiscernible] if that's okay. The first is, I think this is the second time today that you've updated your production capacity for hybrid bonding tools. You're now saying it's going to be about 18 to 20 tools a month, which I guess annualized implies a run rate of about 240 tools a year. At what point do you expect to reach that 240 tools a year. And secondly, what exactly has driven those upgrades to the production capacity? Is it something like a new customer sign or just an anticipation of an ever-increasing opportunity in hybrid?

Let me give some flavor on that because Peter rejoined us, and we are very, very happy he rejoined and he start in April and then some of the elements are actually still bringing into us also. But the issue is when we started with it, we estimated 1 or 2 products. And we were already happy with that. And then we said we need a small clean room to build in that process we saw. I know we need already more, so we built a substantial clean room. And Richard said this earlier on, in our industry, it's always at the end of the day, also a capacity questions. It will never come all the way from that. It will come -- now in 20 because we're going to ramp up this factory. So we are preparing for that. We did the same in [indiscernible] factory where in 2018, we opened up an extension and we're actually empty. So I was you got to play football here, but that was not the point. The point was to be ready for the way because if you have to do it when it comes, is you're too late. So we have to prepare. We have to look at from. We take some risk in it. Its clearly also, but we built a sizable clean room now. We are training people. We train the supply chain for them because now certainly a part that looks the same is clean part or it has to have a different part and we have to have different procedures. So we built that capacity and I think each [indiscernible] summary there was this very nice strategy is capacity.

Capacity is strategy.

Yes. That points out a little bit. So this moment where you say, when are you at 240, I understand the question. But let's say, that probably 2 to 3 years will start to reach that type of level. And then we can move on to the next one. But you always have to invest in front.

To add to that, customers are qualifying us, ongoing base, are you ready to supply in time when this adoption reaches those market segments, which we are discussing. So it's all customer interest. And your question is there the next customer setting up? So we have said over the past 12 months, we had a very, let's say, unexpected. We're clear on this. The adoption rate has increased significantly. So that forces us to simply prepare more than after [indiscernible] and that may be '23, but certainly '24, '25, are expected to be major, major adoption mainstream applications in many end products, not only high-end computing. But as I already mentioned earlier also on the communications. Simply [indiscernible] will replace, let's say, still today on printed circuit boards, designing electronic circuitry that been designed on chip level need to chip -- chipset architecture, and that will be finding its way to the end market in the next 3 years. [indiscernible] we're ready for that.

What I felt was very different with this technology and I can say quite a long time in this field is that now that these [indiscernible] because now they start, we have a lot of problems, let's say, the L2 and L4 and also getting enormous capacity on the chips themselves, but they have difficulty to getting this calculation power connected to the memory sites, the L1, L2 catches and things like that. And they said, with this technology, we can actually rethink how we do that. And that's a major difference compared to what we have seen in the past is [indiscernible] can mount it instead of complex of flip chip, I can mount it a little bit closer, but this -- it's a real serious breakthrough and how do we think about how we [indiscernible] the chip itself. And I said I was yesterday in this 3D conference, and I may get a nice presentation, not on bonding technology, but really on how you can now design the kind of next-generation high power calculation device or a very efficient power device. And what is also new, and that was really present that I was and were in the States last few weeks, visiting many people as one of the areas also if you think about 5G since we were now in the rollout of 5G, which is very good for us and extension is not yet, but 6G is already in the thinking. 6G will be early 2030 global standard really come. But there, you have even more requirements on the RF part. I think a couple of years ago, we had an investor round where I showed this old from that on the telephone with all the bands that you have to separate. And that part, some of the big providers that take said, we actually think that there is also a chance for this hybrid issue because also they are complex. That was a new one that I didn't see yet, that is also probably shown. So overall, the uptake is very, very substantial.

Sorry, I just had one more. Just on -- I think you mentioned in the presentation that you've started what I call a second-generation hybrid bonding tool at about 100-nanometer accuracy. I think you said kind of ready later this year. What kind of pricing uplift do you expect to see from that second generation tool relative to the first tool and will it be the case that certain types of customers such as logic customers will stick with Gen 1 and then newer memory customers will go with Gen 2? Or do you expect all of your customers eventually to migrate over to the Gen 2 type tools? So I guess to ask the question another way, by the end of 2023, what do you think will be the split between the number of Gen 1 tools you're shipping and the number of Gen 2 tools for shipping?

Well, what hasn't been set yet, we've set in mobile already. Is that is 150, below 200 nanometers today is what we think tied to 7-nanometer chip design on. And the world is moving down to 5 nanometers and even less [indiscernible] but that's very far away. But in the 100 nanometers capability in placement accuracy should be tied to that 5. And what Peter mentioned quickly 60, and this is very serious. Customers have told us we were very advanced nodes that we should be able to meet 50. And if we meet 50 with the total scope you can cover the entire design geometry, let's say, road maps, which are currently in consideration. So some of it, and that's again why this site is very important to understand. Some of it is tied to the very high end interconnects technology, whether that is 100-nanometers or even down to 60 or 50. But then the rest is, of course, still with a further fan-out design. So you to have the full scope of those capabilities. And that will all be, if you take this example again, most ideally designed into one ultimate package as opposed to having and created a circuit board with all kinds of electronic components. So that's the way how you have to look at it percentage-wise, which will be which is impossible to forecast [indiscernible].

And on ASPs.

APS are moving simply up as Peter already said, complexity is directly linked to cost and so you can imagine moving from below 200 nanometers to 50, 60, take content separate 30 years ago. They moved from 10 million to 50 million and in our case, there will also be a significant ASP increased. What you haven't seen in the basement. We're already working on, let's say, the basic concept of reaching below 100-nanometer accuracy.

I think what has also changed over time is taken for a long time will always some because that take the last -- we need to package somehow. Then, of course, the guy is working on hybrid bonding, now we are much earlier in the descriptions much further ahead. And we're talking about what is needed in 2025, 2026 already because it's so connected now to the base design of what they're doing. That's also really, really a very good experience. Certainly our cooperation with AMAT also helped a bit, and they have a much bigger portion of that market. They have higher access to the speeds will certainly help. We will also get more deeper into this, connected with equipment on that point and really helps. And I think the current goal, with our current machine, as you have here, we can think we're reaching this 100 nanometer range so it will be [indiscernible] first. And if you follow the whole bridge [indiscernible] we've always have these different level of machines. So they can go quite some generations. You if you can improve, improve. But for the -- if you go into 60-nanometer range, we definitely have and a somewhat different platform also to do that. That is what Richard mentioned is if we were a seller of that, but that's for later.

Jim, you had a question already.

Just following up on the updated cumulative hyper bonding charts. Obviously, there's quite a gap between low and high case within your projections. And that's quite a quite a significant gap even in 2023. So I was just wondering what the difference is? What key variables are within the low to high case for '23 for your hyper bonding projections? Is that end market adoption? Or is that customer adoption within HPC?

Both. But in the first place, adoption rates. I mean, we've had, as I said already, Peter said, everyone. It's been a very positive look on the last 12 months. With any conference you attend. On interest in the ECTC, they compare to 1 and this compared to what was in 2018 zero [indiscernible] this time with presentations. In a similar way you learned yesterday at the conference [ Dresser. ] It's very -- it's making its way because of all the reasons we try to expect. Having been around a few years, they're certainly going to be noise which will take longer because it's not just a placement of the die. There are also materials involved. There are, let's say, copper to copper is very critical technology. So how fast this adoption rate will emerge over time. It will face many hurdles and some can be overcome in relative short time, some in longer time. So we have to be a bit evasive on -- this is how many now project this market to develop.

Try to do it in different ways. You look at when something we introduced and then you have to translate this to when do they then have to have machines and so on. We look at yes, I would say simply what discussions we have with specific customers, when are talking about the orders. So we look at a different model for us, and then we did a disclosure as we could then we came with these numbers. We did this already 2 years ago. We already started with that. We're more or less attracting along those lines. So they are...

They are the key customers. So big with us in our simple strategy. At the same time, we have this relationship, our partnership with AMAT and we're all in this market, and this is in fact what we can sort of conserve particularly because we also always try to be a little on the conservative side. You may find models which are far more aggressive. But again, we have to be ready. Patiently and we have to be ready and we've done major steps in many ways. And so far, it looks that we are able to be forefront.

I think we will see a certain more of the same success that we have seen with the [indiscernible] that we're presenting you to move from that micro [indiscernible] If you're too far ahead is also not good. So that model has worked well for us, and we think it will work with this also. Some people have to escape.

Michael Roeg from Petercam. Removing all the functionality in the chip to individual chiplets to [indiscernible] Is that generally leading to larger dice?

Yes. I think it's twofold. On one side, if you want to compute down that you're front guy or bottom guy, actually it is increase from us but the chiplets, by nature small. We also get a fairly small things and [indiscernible] but there are other areas where you still see all the very big dice coming up. So this [indiscernible] will be huge at this moment, and also testing on all package size and grow and Chris is also one of our guys. We see it in both directions. And we see one direction going to much bigger. So ECP, for example, we get a request to do dies for 270 by 70 [indiscernible] on the same side for hybrid, we started to get request for dies in the range of [ 2 by 2 millimeter, 1 by 1 millimeter. ] Now we have to think about it in hybrid for that's what -- it goes in both directions.

So actually bigger chip will not gets bigger, but the combination then in side-by-side that is going to get bigger and that you also once again need protection. So it's yes, it's all directions.

So actually, that's good for back end, but also good front end?

Yes. Absolutely. That's also a benefit out of that whole new package or they can be more effective.

But that's precisely why these big companies all of a sudden interested in advanced packaging. That's the answer.

Which you can also [indiscernible] little bit like it to, for example, the more complex this chip the more difficult is to get power globally to [indiscernible] construction we have from that of the chip traded on wiring and then you have the what is called the power supplies going from the bottom side. So there's also a whole new generation work also for the fronted guys, they have to rethink how they do that. There are a lot of opportunities and the fronted guys have also other areas that are really impacting like and you look at the [indiscernible] So -- and remember that draft, I show particularly from the applications we started. So I think that's for all working to application justify the correct [indiscernible]

Any last question because we've come to the end.

Yes. It's Angela from Bank of America. So I think today, you added an extra plus into your 1 billion plus plus target. So perhaps you could help us understand what that means. And then your hybrid bonding productivity of 2000. Just why you think your [indiscernible] periods in relation to that to that?

One second, again, who is our closest competitor?

No, just in terms of productivity unit per hour, whereas your cost peer?

500 UPH, but not at the levels of accuracy we have discussed. So we had a great fortune that our system has been moved into production environments, it's in operations about a year ago. And that has made it into a production machine. Most competitive platforms are still in development phase. They cannot complete certain accuracy also a big difference. And you may have seen that we have the skew 2 of them straight to production on [indiscernible] 2 weeks ago. It's like the AMS-LM print scan concept. And it's true if you look at it. And that sets us apart in and you saw that with the 2 [indiscernible] concepts for flip chip for memory that we reached with these [ 4 heads ], 14,000 UPH. In the end, it's all about units per hour because that determines the cost to the end of it.

Over what we have seen in this moment from of the [indiscernible] publications and market issues. And we have seen this many times that we set a pace and then we can also do this it, we can also do it. But between, say, a machine that does mechanically better at this at a certain accuracy once we start to work with the live material, we see [indiscernible] maybe a limitation how you can check things. And so there's a lot of things are open, but we try to standardized or say, the speed of that addition, which is mechanical speed and [indiscernible] we will do that and that gives a number, but it may well, you see there is a clip with every machine it may be well different on specific [indiscernible] first there don't be too much anchor on these numbers. But from what we hear is that we are clearly ahead of everybody on this one.

Well, maybe a last one. I noticed in your presentation in 2030, semi expects EUR 1.3 trillion semiconductor sales. Last time I checked it was only EUR 1 trillion based on the deals, 30%.

Yes, that is very important. And that was confirmed. We were at this Intel supplier summit and they forecast that [indiscernible] somewhere the trillion, trillion [indiscernible] and that is a growth [indiscernible] which is more than double what it is then in the past many years. And these are all these drivers of the digital society, everything. And on top of that, you have this enormous technology tend.

I sure achieve this number, it's 10 years. So we're 10 years ahead and we don't know maybe [indiscernible] But we see bigger companies like that there is [indiscernible] all have that type of projection. And that's all like more or they will. It's probably try to make [indiscernible] in that bridge and that's the measurement.

Great. Thank you very much.