VECO - Earnings call transcript Q2 2021

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Operator

Good day, and welcome to the Veeco Instruments Incorporated hosted Q2 2021 Earnings Call.

As a reminder, today’s call is being recorded. At this time, I would like to turn the conference over to Mr. Anthony Bencivenga. Please go ahead, sir.

Anthony Bencivenga

afternoon, good and you, everyone. Thank

available the Joining without have Veeco’s along recorded Officer. copyrighted prepared are is website. is Miller, a slide today Executive me expressed to Today’s by note Officer; we being Veeco’s follow release Financial you on Chief Chief and Bill our Veeco call John Veeco accompany or material. on that slides Instruments the on presentation earnings Please encourage We the today’s is It recorded be cannot veeco.com. rebroadcast webcast. and to with This permission. call Kiernan,

implies discussed X-K date the made this after call on statements. of Form are on company’s the factors does our in not future any those XX-K earnings statements about the and management’s including reports To the or market pandemic. expectations statements shareholders the about Form actual or participation subsequent undertake Form could to products, sales that extent such and annual statements expectations made, acceptances and a the and forward-looking to market and to including report releases. report company’s circumstances factors materially on risk the discusses are future cause otherwise and and reports Veeco quarterly risks update to business makes press analysis call and of a Your from COVID-XX our are current statements, conditions, as of future. discussion consent These any on in sections of future that Such number disclosures, uncertainties recording. results description, obligation differ to the forward-looking subject to of events XX-Q, result this future reflect

turn measures may Bill address will performance regarding financial With of call reconciliation this is GAAP to such over non-GAAP call, that, Miller. information on I available financial the website. to measures including our During measures, management non-GAAP

Bill Miller

like They exceptional to excellent our call. start you team everyone, results continued work. made the financial Thanks strategic Veeco United quarter for their today and for initiatives. delivered afternoon, joining thanking second thank advancing growth hard Anthony. by I’d progress the and Good and dedication

We remainder the about feel continue of to confident XXXX.

semiconductor plans near-term our our expected today and expand growth QX customers it of high on on plans. with track, making confidence also are turn investments unfolding John well the us the we’re growth to giving a highlights, drove Our and Veeco first, at longer-term Strong few But QX over a this update as discuss guidance. our of then I’ll are end for continues in $XXX revenue I’ll minutes. storage to and results data from our million. guidance. financial shipments execute in

Our $X.XX. in are top income at results significantly from non-GAAP operating the the improved diluted year gross better $XX sequentially non-GAAP came to Both non-GAAP and leading line we quarter. million EPS of XX% of last bottom and than margin achieved and ago quarter

had In improved in addition, cash and $XX we generated position. cash operations flow from million our

led by growth. our particularly is Laser and Lithography market while We our making improve systems operating obtained for model, continue I’m momentum, Ultratech our Packaging excited acquisition. with investments Annealing Advanced about semiconductor our future which to

We’re as serving the strategy. now to the overall pleased rationale that cornerstone Veeco acquisition strategic the a for growth is

driving on Before four each let’s our a mega-trends at get look markets, into the discussion business. we detailed of our end

with which always market people technologies leading these healthy High A a computing devices Technologies. machines and smartphones like applications move performance and The data Semiconductors, on and via as Advanced by artificial enable will for mobility first another and is driven Advanced edge alike, of large-scale with edge along connected and Packaging center and drive cases always performance High platform consumers exciting demand leading driven like businesses Packaging. Semiconductors and mega-trends XG, the is use intelligence. for Display by is increases will the mobility mega-trend computing outlook edge creates in exciting sensors. many

The advancements. early is of finally and be driven third the market major market arguably electronics, processed. XG trend autonomous another This intelligence is communication. power electrification amounts the of to its stages sensors, in is is trend expected with enormous transformation and cloud a stored and artificial automotive by of industry driver the XD And and mega-trend data

high-speed in communications. Forecast creating shows XX% for disk drives CAGR at for hard trends in growth a our growing expected time, some for to place are turn, initiatives. be These years, stored data market driving longer-term demand and

with recently market semiconductor underscores and billion This with spending spending forecast the fab major $XXX serve to up today market opportunities. are analysts been three looking specific equipment annually. lines. turn We market our our equipment now revised market, for XXXX. longer-term has ahead, predict this healthy wafer let’s and forecasting $XX to billion up Beginning times Now several product approximately

Annealing currently Laser in Our at advanced production products logic nodes. used

blank Packaging. Advanced production. Lithography our mask EUV for products Systems Deposition Beam And Ion Our for

the used most leading-edge are shrink. manufacturers products critical in geometries our Annealing multiple underscores record Laser process tool their of advantages customers Annealing by Laser production device currently unique as where which steps, Our at device of systems

build We semiconductor in customers evaluation sustainable long-term with their supporting on our work next systems by both logic to memory as relationships. and continue nodes we

This I and to now mask to for require demand lithography, devices. manufacturers happy unexpected to market, we continued expect further evidence see high These during to as today logic that With our Lithography. semiconductor shrink. advanced on about Beam planning geometries foreseeable Our Ion Furthermore, performance announced the solutions Mobility for in Laser quarter EUV blank another regarding Laser tied for commitment demand for with continue semiconductor of our most drive adoption used not talked and our the production. earlier. memory the device as leading we’re Annealing memory manufacturer future. adopting EUV Annealing mega-trends systems computing is is devices are closely along trends their EUV turn EUV

support Moore’s and demands down, performance of slowing packaging to Law the the system semiconductor context technologies scaling turning is improvements. Packaging. In Moving to industry Advanced to innovative

examples processing Wet is Lithography Packaging artificial and quarter Advanced during used integration such used activity for we Our the from Advanced see products packaging. Lithography performance. to coming for our growth fan-out advanced systems intelligence technologies order are packaging system into We improve Advanced and Packaging where Graphics and strong wafer-level had as are heterogeneous and Processing XXXX. Packaging

and expanding across We’re Compound our schedule. product lines. serve experiencing Laser three Jose Semiconductor products. products strong to We expected This Semiconductor manufacturing for in is momentum I’m two with the San all continue proud say footprint reason our remains is to primarily Annealing momentum And on and the our Lithography market. expansion capacity we’re market,

equipment and and applications. filters for equipment amplifiers power RF RF and Our for MOCVD power photonics Wet Processing

in We per filters. continue are Processing is mobile customers our RF amplifiers by and our equipment to capacity customers. device see strong demand and for communication an adding for power our increase XG driving responding Wet RF content from

quarter shipment In and during the for activity order RF we had fact, strong applications.

systems in and and wins Our other microLEDs. and these markets confidence power and phosphide build arsenide power These for we’re us and gallium and growth nitride applications looking XG Recent have enable emerging to potential RF evaluations MOCVD fast-charging grow tremendous our microLED devices early we’ll markets. stage give underway position. management solutions, market

of of Hard up corresponds years, with to a been larger an Data is is multiple are increasing. storage creating to enterprise drives, exabyte Storage. robust shipped last market increasing have with quarter. our These major tailwinds end server also head to of data for increase amounts to our keep customers likely who of with our third surveillance order record capacity increasing number digestion. been market After This demand. and This be complexity capacity first a nearline a and believe customers environment for period market enable consistent adding additions, Our data applications. growing equipment has equipment their years several aerial slowed disk capacity shipped in heads the will density drive including the improve in capacity new since XXXX, in seek rate XXXX we and half storage has and

traction confident and of business. the However, applications, long-term Semiconductor there with company of multiple amount Data see level. the Semiconductor the decline, at signs our given showing Data our in to generated data we’re about a growth slowing, Compound prospects is paths Storage Storage If of we no

XXXX an Now for update priorities. on our

a our addition Veeco culture. to priority safety improve pandemic, the global First, United sought we during to making in

and this While recent survey shown improvements culture remarkable further has our on focused improving been we’re ongoing, has initiative year. the throughout

permeates is to Our organization positive essential that culture our success. employees and the our

Second, profitability. we focus continue on to

track Our results targets. on QX are reflective this and to effort we’re financial meet XXXX of our

and deliver Third, our with we’re Data Storage our Annealing, on revenue in make continue fourth, systems and RF investments XG And to solutions. service we track to infrastructure. evaluation Laser XXXX growth

and building Veeco to to material relationships these stronger goal evaluation is with Veeco. committed and difference making Our growth. And long-term four achieve customer is leading to the successes United team lasting priorities, a additional

John. hand I’ll to Now, it over

John Kiernan

non-GAAP I you press results refer financial earnings will Thanks, and in results GAAP the afternoon good to Bill, discussing at and the presentation. release everyone. encourage the end or of to reconciliation be our to

products. driven Looking customers. XX% by few increased XX% our for $XX contributed Semiconductor, and revenue by $XX revenue $XX made more made the by driven United and The little XX% our in QX Semiconductor to which $XXX by a revenue total was Ion revenue was from total increased represented sold region, million the total by Data increase XX% the up color. increase driven both million, at of by XX% And region following Semiconductor to of increase. driven RF technology Storage revenue systems Storage, States Compound from $XX quarter of by wet million and total Data increased year-on-year our was made Beam revenue, processing on Data XX% million Data by grew and Semiconductor a systems million XX% year-over-year quarter. representing comments Compound to for all a which details shipped to by a revenue up capacity and providing increased XX% Annealing Storage, XX% driven up by and to revenue X% revenue XXXX in Storage A additions revenue, sequentially QX customers. with and applications. Lithography of revenue, revenue, largely the Laser

and region China export China Asia-Pacific XX% excluding was licenses. revenue percentage order obtain from up to to activity Our and higher made of the ability improving XX%. expect revenue overall our given we recent trend China

the coming share million net on $X.XX was Operating in for approximately diluted $XX.X at same with for $XXX,XXX, was XX.X of the a and last sequentially year. quarter income million XX% the from and more EPS toward results. income XX% quarter quarter were XX% guidance. our and reduction in $XX.X turning of top revenue, which flat to at Now Operating QX. the for end last a last Gross our XX.X%, to the quarter to of expenses margin was million, non-GAAP flat million. quarter came of than doubled quarter Tax from quarterly $XX.X increased in expense shares. count

and timing with Now moving sheet cash ended short-term a We sequential Accounts working payable an quarter. increase investments drove days our and shipments $X increase From perspective, related days expansion million to in quarter. of increase increased of to to construction to with the accounts the from balance to a capital XX in quarter flow project. most prior cash our capital receivable invoices $XXX million. increased the of million, highlights. due of XX the the million, to in for the This DSO $XXX $XX

the investments carrying million to DPOs Long-term at inventory systems. a volume volume, XXX QX. in to value of increased sheet declined the On approximately representing on $XXX and shipment QX. evaluation from result, XXX in convertible support $XXX in million increased XX increased $XXX debt to from $X was Inventory XX million recorded As of days days million balance increased notes. in

Our capital quarter other million This was $X CapEx the $X million San for approximately $X spending. the expansion million. Jose and in project includes during

increase We coming expansion spending project our facility expect capital on quarters. to in the

our guidance. turning Now to

XX% expected million QX, and with $XXX between gross and For margin revenue be is million between to non-GAAP XX%. $XXX

OpEx non-GAAP be support along $XX uptick add QX and with and resources to growth. expect we $XX as our in between million, for million increases a to We selling R&D marketing slight us in

XX $X.XX for Non-GAAP QX expected full revenue diluted share. decline for count. EPS to a as expected Diluted XXXX. percentage between share $X.XX GAAP EPS is We is are $X.XX upon per diluted non-GAAP share. and is and year however, EPS compared of pace, between on based $X.XX million OpEx per to

to in reference, included convertible of a we’ve on diluted presentation of on backup effect count. detail For share the earnings the table section notes provide the

QX. beyond update an for Now

we We project same the revenue which end revenue, QX around is range midpoint guidance. above previous at our as expect the of QX to year in high our million, which the be guidance, full provided $XXX

diluted previously quick toward we We EPS call I announcement up for share. which was expect of year reported guidance, questions. high the $X.XX our end to add per one non-GAAP would the for open before be to the like

will in and where take us. detail share eye a you’ll coming we I out an We weeks. hosting And your about strategy, be with September, Please announcement We will to for and a Virtual plan the Analyst Bill in questions. keep hope Day markets more technologies. be our formal to join happy that,

Operator

[Operator we’ll first O’Malley take from with And now question Barclays. Instructions] our Tom

Tom O’Malley

there? wins some and those at the least equipment you us and taking and Hey question on stand you full-year nice you or my tools customers traditionally update LSA going congrats into of where I normally business. equipment guys, that update you thanks just results kind us, your for updated guidance. to are how the you of on the have wanted currently some Bill of Could leading status dive an give dive into with of evaluation really

Bill Miller

Sure big company. Tom. a focus been has for the This

out We’re if or in during only time. look would the two field you evaluation and out at the XXXX planning field back to company put have tools any historically, into given typically the XX one

in is to well, tools quite logic So are them one the in next to is we as shipped are them semi of with four node space, engage those two into tools their and in their XX we annealing of customer quite have that of the at at laser are the Six tools a there. next support current eight and field. to node. those player new doing DRAM specifically today, evaluation memory develop One doing well have customer

really bullish on LSA. where we’re we specifically stand, with So pretty

compound from in We out microLEDs also electronics field, to X-inch. That power one have transitions the have space. for X-inch pretty X-inch GaN-on-Silicon a foundry, just Compound Semiconductor is opportunity exciting the tools two the another shipped application for tool, and at in as recently we semi world

have in Advanced in about activity tool memory six of wet at an a application I application Packaging. packaging advanced is lot idea. tools. We One I is a semi good we there. LSA. So mentioned four talked have two do one and processing Litho

excited pretty about really So that.

a So technology that of planning for in at is two in tools of customer One node we logic. memory Veeco tool that’s and this think and Laser we that have second to ship their are throughout to as we half in covers current well the one that a we’re field the the year. ready applicability a have eight for that now go logic core semi next has tool that’s lot front-end as Annealing

with We So we are it’s clearly work making investments in front-end our semi, expanding build critical relationships our service side-by-side think here. customer sustainable infrastructure. to position entrench customers our long-term to to

say now, obviously happy So focused we to things pretty are going with I keep the need we’re would but here, Tom. way

Tom O’Malley

business. And super Great, follow-up was then helpful. the question that’s on Data Storage my

us offset XX% the what players could on some have the of of you that the guys may forthcoming with you but some you update moving that in You’re starting your be and over us growth at quickly least that been year slowdown timing So seen have just declines starting year-over-year, in can that you see there, you areas. in up some and storage that moderating slowdown the some help to but pretty Can fact in market? of industry topline, would into some see there did? the square seeing But that you be if it’s other or next the to terms where pretty your market you’re in with slowdown capacity shipments, and some growth. you’re

Bill Miller

in the and the line, our what forecasted steps Data number pretty to XX% a grow and a clear is building forecasted all per equipment is, customer heads But equipment showing long, those with revenue seeing in X% Storage second a Storage big to Data per in quarter. are the third well. what’s third to XX% to the line is our now our Heads X% in quarter, grow do XX% of as Yes, – X-inch in in going is at backlog we at customers isn’t from up the a is slowing. have an going we tranche in proliferation which data complexity new – The second talking pretty of we’re year. forecasted that, to carry right grow year. to is area at of that the here

So of seen half period digestion seen the first we’ve half we slow in terabyte rate feel very time, good we year what about our lead prospects half XX have of order the in can in the industry the the of we as moves given business XXXX. first this likely is long-term and But our a to data XX storage drives. the see terabyte, first

that compound So than these to though, more does if offset semi next decline what investments XXXX. semi is Data I level, the the in making continue equipment digestion even markets will Veeco year Storage. been throughout we’ve say Data At in Storage and grow to

in specifically Advanced out Semiconductor book are pretty this in booked for order XXXX. a is Packaging the lithography the have we year seeing rest our space, for building and in space we’re what So good of litho

I will be growth for think this engine a us.

business EUV we have and strong pipeline up a in activity I Our Annealing. good of remains queued Laser think

electronics going to are we So XG. in the seeing Semi I photonics. continued see opportunities think In Compound strength growth year as see We space, well there. in strong power, as next we’re

digestion we’ve the I year we’re positioned next So – seeing Data think have company but the growth. here in to we Storage, good continue a think a potential I pretty

Tom O’Malley

thanks, congrats again. Great, and

Bill Miller

Thanks, Tom.

Operator

with next our take question now will We Schafer Rick from Oppenheimer.

Rick Schafer

Bill. about in everything year, given Obviously, sold I add Maybe on just you said on great questions just you basically times quarter. lead Follow is out I half. get and you slowdown potential could. I first a about maybe of whatever the additional congratulations I’ll trying is, Data to what flexibility What And said similar guess, close my just are have talking supply of think supply? if this lie. can some guys. two were pull levers Thanks you what where possible to upside any guys you is there out half do sources the of What might to to kind to in there? gap second pull Storage, I’m sort demand

Bill Miller

question. to just your Rick understand So,

more Your half XXXX? second the of kind focused question of is on

Rick Schafer

This of obviously looking pretty for been couple year. and year, you the have guys next this was quarters consistently beating I raising because

in to the room of areas in if where we was supply not there incremental So half, upside Storage to a could from Data well come as upside you’ve clearly going the I and Is second see well? found little pull as might first half might just it’s quite that dig, for any from. upside drive trying and come lever tightness that’s that you alleviates kind some out

John Kiernan

Rick, so Yes, take I’ll is that. maybe John, this

$XXX So year million. at was $XXX midpoint, the revenue when raise from for guide just the the to we the midpoint the what around million previously

indicated, revenue where that quarter, we’re backlog this revenue it Bill executing with the for in Storage As the to coming against we expect be. even data Data from storage, that’s even and increase strong

a activity continuing. business both Semi bit activity revenue. is So started where at as that’s that and as in right reported, our in side where with strength pick the of and up driving previously service our higher driving higher utilization also a see with revenue bit and now And litho customers we to we are little higher we Bill some mentioned

as, as into and out us helped look well. as as really and that in QX QX QX well So both we into

Rick Schafer

any piece kind question talk increasingly but LSA like more still My we the on some for guys month to about know pie. so, becoming and Day XX% I a the kind as target? but talked of a – should bias way that EUV can continues to upside – mean on being you’re advanced I I’m margin and sort just about, about of think of that second curious, Is more is products they curious, only margins color. I us outlook? we could going in just term? Analyst some in takes is of particular long-term does and what Thanks update is is are sort long-term – favor where there long-term contributing mix where XX% of the margin of you to and products. there know puts and much longer on at for or you maybe maybe go to gross of the so growth bigger mean that the to advanced What I’m

John Kiernan

Sure.

to the plans cover have planning service with answer I Rick, make to ramp, Day supporting out, would those is as just views gross shortly expect we growth a XX%. mid that years margins. we in would our do for on what think get to mentioned a in of are manufacturing investments are Analyst – current and are you gross and both financial we reminder, the I of items as our But we’re few margins that we model. to the on the right in infrastructure focused growth in continuing are number impacting now and evals including

Bill of got driving As evals we’ve increase our the as in manufacturing. investments service and applications well these the we’re a semi that supporting in requiring we’re today, in that amount is field earlier, said that as significant

think I move we toward mid-XX%, gross years margin execute out be XX% couple for a and plans our would Rick. here our growth target, of So as we

Rick Schafer

color the for Thanks guys.

Bill Miller

Thanks, Rick.

Operator

now Patrick take We’ll a Ho from with Stifel. Instructions] [Operator question

Patrick Ho

congrats the Bill, results first and off, maybe and outlook. on very much your your nice quarter and terms you Thank outlook. of in

outlook procure those good. experiencing The delivered side issues upside. looks inability pop the clearly allocation constraints, to up industry all are is in in certain supply particular The Semi. parts, really chain Semiconductor to really starting on You the

any chain you of understanding are even understanding line, on revenue full that supply you a have tools comment with delivered and upside or potential any providing kind you’ve to seen the actually can on are guys outlook? strong for full you of and the you impact markets, see had starting again types your different constraints nominal With and that pretty have different

Bill Miller

And supply chain. here a job taking unique and and at team an question more timely interesting a this But approaches of time. are constraints our mitigating has supply really John excellent that chain in kind I little some turn say that’s experiencing of over Patrick, done we to it for I’ll lots just the will of detail.

John Kiernan

Sure.

just to just what carry on haven’t in the on industry. think going we I to said, immune been Bill what’s from

Here and Patrick, say is mitigating successful material time exceeding seeing lead we pretty target. our the But risks and I you those shortages some and as said we [Indecipherable] been or situation we longer would dynamic. are have are revenue

So any what than more suppliers out upstream we’ve trying monitor to issues. here, of risks in we’ve done closely front been to with get their in

quickly selected ahead in We of things you able can we’re to And have been that making buys of demand carrying. successful the and to see inventory would been some one that increased I that say be other to extent the we’ve of as suppliers when maybe identified, on in and supply outside in traditional in able we’ve working in and to regard competencies execute is do semi aerospace. with move to defense been we’ve been that supply base, alternative issue focusing

market performing guess, supply a in tight an team I is overall, So I is organization chain well environment. think our

Patrick Ho

on and maybe kudos guys that. to as you follow-up And thanks Great, my question.

buys to in How industry assisted to and beginning to and on much energy heads? see you next WD drives and of technology the is and on see those Maybe to types the difference HAMR between commentary you starting Data with drives. capacity the related move qualitative you Bill, see on the basis, its by the particularly [Phonetic] buyers the completely as maybe I say the comment consistent your the think can versus technology period. Storage a digestion are generation potential more

Bill Miller

over last that, I over I driven. to few years, – years volume, back particular I look within think a it I in been to now transition we – would lot the last kind seeing what if of technology the but And is – volume say, number of specifically in not really yet of has HAMR, in say. would HAMR of we’re steps buyers, more enable not a Patrick

look seen we’ve rate here. of not bit we’re shipping. And order certainly, I a pivot what at the a So

Patrick Ho

thank Great, you much. very

Bill Miller

Patrick. you, Thank

Operator

take question from our Miller Mark Benchmark next We with Company. The will now

Mark Miller

add my congratulations me quarter. on Let the

most supply. one on of there some and equipment major I at wondering question to IBD are systems following shortages your of about Just you exposed How but kind cryo semi reports know by turbopumps? component Patrick’s least turbopumps are manufacture. have up pump, been

Bill Miller

deposition some Ion do tools, mentioned aggressive John think We in been cryo more of in we’ve little our pumps have etch that and these taking Beam a turbopumps key and components. position and I

I so, have yes, covered. think that we fairly And

Mark Miller

that around And increasing CapEx. Do You team of micron IBD dilutions? mentioned remarks manufacturers in and for their the suit had blank the if you to quickly? other your mask mean does follow orders what another EUV so, in committed expect very introductory terms for they’re that

Bill Miller

year. adopting in XX that And can shipping – are shipments of have I year want our ASML has EUV. Micron public adoption. from from Yes, read out to know doing, about their others are a I take to systems I customers this going position in very is last about what be don’t that there the really EUV been And booking XX the first think half

high of business think – if I two as not of point, coming XX shipments, they are I targeting say kind it. don’t about us they you plus out, were where a average be shipping, to sizing to say to that XX should lumpy, one start up shipments through which four year that system a to but positive XXXX leg believe we this take that’s that ready of Obviously bias would tool toward So our take up Blank that put yet. but ASML’s per obviously I to have at for about they’re productivity They lot Veeco. our we’re seeing is And a for about going I way. a XX tool that’s at puts bit ASML systems scanners, Mask a assistance every onward, we’re upward would that quite to EUV and if an continues what and

Mark Miller

you. Thank

Bill Miller

Mark. you, Thank

Operator

with our Securities. now question We’ll take David Steelhead Duley next from

David Duley

what a I said you the out. for a is that thanks it wondering is bit your if you where more base in applications believe questions. I booked business, about a in that are on just Thank question Advance are? little your that then to more? talk Packaging And was you. Packaging just seeing elaborate a my it and simple business. response Yes, could broad Advanced was little capacity or you customer you demand taking Could bit

Bill Miller

this significant I’d Sure, it Wafer market The and seeing, pillar like OSAT, serve like to clearly Dave. integration, positive and Level activity, bumping this level. at and copper a and Applications and levels going We business activity rest XXXX the actually pickup typically characterize has lithography growth well numbers, our area, processing we’re enough heterogeneous looks we’re kind as as this put which as so current customers. wet year XXXX with broad out have see lithography of business some foundries, seen Fan-out to Packaging, positive in base through IDMs our in equipment. of with we of applications a that over order state capacity

David Duley

this a And but ago, two hard probably gauge, I to is one was or weren’t think business. it calling quarters in growth this really you I know driver your

really and you’ve causing the – order that’s that that’s curiosity, from sudden in since adopted marketplace just to IDMs, much customers was is being forcing the – customers all something So what greater demand there levels? in broad-based is or come of OSATs foundry, there got a what and off switch or went in

Bill Miller

adoption. a have like I we quarters, start – of packaging to we’re we time, very months, only about to multi-chip I to would – a say build – building bit visibility in that period broad three level. as say broad in I out short were our heterogeneous back would look still we’ve four seen pretty – applications pretty with opposed happen few was I carrying months, a say, to would integration seen order in and we if were a a forecast

there activity where And integration, on to seems of of in steps, something up. in I pin I it general. basic OSAT to be also or choose heterogeneous so does automotive seem wouldn’t is the there’s to has but picked of a might just some and But the equipment that the that’s shortages kind speculate chip more I were it volume want

John Kiernan

cautious more activity pick a get six starting we outlook. Yes, so. to we I in up the started we to our now, rate we’re quoting little or to would to I to four we listen, a last and to bit rate. some that current typically were as idea three a started see even little optimistic. some started and maybe think, months bit have Bill up get then would I months say months And were out order We picking a And bit. little getting five the given order in order visibility, the where over say would visibility, now, six and indicated, cases. a Right bit more bit the

a that’s really us year. – out opportunity be a think I bit an more to So given this

David Duley

about heterogeneous just a as term. So, follow-up, and kind that’s talk integration broad-based you when of a

I think of system like that and modules some and the package and forever then these, is strategies IDM triplets.

perhaps that So volumes that’s lot much adopted it’s and production if of observation why the higher of is into stuff being and a simple broadly a I actually guess this – seeing levels is you’re moving orders? level

Bill Miller

Dave, I agree with that characterization.

we’re I without dealing – don’t are really I go heterogeneous disclosing that what to with and I what want to think seeing really much want broad we customers. don’t below integration

think I the So, I you fine. it that’s way is characterize but think yes, –

David Duley

Okay, thank you.

Bill Miller

Thanks, Dave.

Operator

now We’ll from with a Richard question Gus Northland. take

Gus Richard

execution. know thanks luck. and random not good my Yes, question that’s I taking for

a follow-on bottleneck tools basically a items, are the was glass you raw is the that getting as door? fabricators, is creating fixed a wondering long on and some and out Just for your lithography. is – how in the that There lead-time shipped glass

Bill Miller

that. No, it’s not

long. it’s glass. are glass processed Our glass various stages mean carry – particularly in raw fully processed we it’s I of width, of or glass lead partially years whether or times

never very to would, we out glass. hard so run And it’s of

carry... we So

Gus Richard

Fair enough.

Sorry to interrupt.

quick, in bed? those wondering I’m And stretch for or dates stressed why real ship the just book normally and is that it because flat deliveries, is like a are just customer Just and tools quarter.

Bill Miller

running of slots. are out We

business did laser lithography. away We manufacturing us that’s our on really facility, current doing business from in footprint for and doubling we announce business. are annealing lithography that We pending our critical annealing ramping leased to of that’s front a mile we and us. and obviously building of And execute the about a laser the are expansion, our that’s

this what CapEx only year. $XX is, year we’re and we so next spent And in million between seeing about

ends our in building lease XXXX. current Our January

to of overlap we completely the going building will be We’re have next QX new some but expenses, year. in

to the with critical us. really project. And is track ramping pleased construction an say on I’m facility for aggressive second is we’re really what really So

Gus Richard

the second getting little LSA business that to does then peaks? piece and the it prior Got on back to

Bill Miller

like don’t XXXX think XXXX the prior and about model. peaks, our I

I yet. think there we’re

John Kiernan

to No, I that level. wouldn’t categorize it

Gus Richard

Got it. finally in of for That’s for potential applications you number are wondering was GaN, on semi, compound the seeing particular? a helpful. is And then of there I and RF. Power which demand ones those

Bill Miller

it demand charging consumer is seeing GaN GaN rapid lot for in We’re applications. of charging, a Power,

customers as industry industry X-inch placed today. mention at that of the number a minutes few scale just And a going that and opposed infrastructure we economies to we’ve at to tools X-inch for that I is sold ago X-inch for did X-inch infrastructure. move believe the to X-inch to of have foundry, leveraging a GaN-on-silicon tool application. an is We

So, opportunity we us. for pretty think a exciting that’s

Gus Richard

Got it. And any RF GaN business?

Bill Miller

RF. at power GaN have as GaN-on-silicon the as applications. multiple for A do equipment companies We well number RF uses and are of looking of

Gus Richard

in any – – then And at the all? there photonics Photonics, Okay. activity picking and production for on revenue core is up is

Bill Miller

system believe orders but well. we an arsenide applications are top had are eval from in we We photonics for orders exciting with phosphide don’t that on believe I is looking microLEDs have We do seeing, ago. repeat year a of that at the yet, over applications, for as we for customers pretty which have eval I

Gus Richard

the Is application Photonics [indiscernible]?

Bill Miller

opportunity. more it’s No, would of microLED. It for arsenide substrate be gallium red

Gus Richard

taking Got so good. for questions. the Thanks it. very All right, much

Bill Miller

Thanks, Gus.

Operator

further turn remarks. Miller, I’d over no Mr. closing telephone any back appears additional to have questions, we it for or the And conference to like

Bill Miller

execute thank strategy. Veeco we and customers their thank with I the Thank our and about remain our you, excited joining shareholders you and continued to operator, United want our along growth XXXX We for support team today. for as call do

more of introduce We our evening. some details to a great are – excited few in to members a Day share key at you keep Have September. Analyst our and team leadership

Operator

does We thank for Once participation. today’s your all conclude again you conference. that

You may disconnect. now

Veeco Instruments (VECO) 4 Aug 212021 Q2 Earnings call transcript