VECO - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the Veeco Instruments Incorporated, Corporate Hosted Q4 and Year-End 2021 Earnings Call. At this time, I would like to turn the conference over to Anthony Bencivenga, Head of Investor Relations. Please go ahead, sir.

Anthony Bencivenga

Thank you, and good afternoon, everyone.

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

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

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

Bill Miller

a share and hope call. about well. families to are through to I'm and some today, outstanding supply of XXXX. quarter United we will QX in thank to Thank team taking over Veeco today recently This highlights. milestone at I'll We you new you before you, minutes. your won fourth I'd a and To chain and that we your provide I'll for strategy. the afternoon, on course exciting environment. our of Anthony. for begin start a application you and annealing progress in through edge you update joining a talk made the pandemic proud excited our execution team logic and markets like the by on first, to accomplished. year, John Reflecting then the has execute dynamic few the ongoing is like technologies our financial our us Veeco More I'm questions. a the laser Good I take But XXXX key everyone, what for discuss leading thanking United I'd and guidance, news. and growth as customer.

now think transformation, completed we're strategy. inflection Veeco, I point we and where executing as growth our our of at XXXX an squarely

XXXX on focus more projects MOCVD our and annealing, semiconductor R&D electronics a for evaluation continued innovation in P&L availability. capital have to our year with photonics applications, and first significant our highlights. we're systems our data were growth future semiconductor going progress and we semiconductor Veeco. wet of Results XXXX, confidence year for All and made year Analyst growth supporting responsibility issued on full and continue the governance, uptime EPS. for capability processing financial performing structure. for significant We service came focusing to was Veeco We growing spare non-GAAP significant culture. long-term had and our in on United now We laser shipped performance. both with applications. Switching with performance. a customers' revenue thrilled our our in needs from offerings, record lastly, reflected our of system market, had we profitability deposition our service San we ion program a robust to and with increase make year strategy the our our parts $X. our enhanced And XX% at improvements our over strides growth revenue. optimism cash driven capacity than million, XX% flow XX% our our of by prospects This in forward. growth diluted beam in model a sites. operating in further systems. our made profitability, record year from to at and We XXXX in our Revenue We great income in XX growth customer $XX in and our faster We systems operations gears improving installed demonstrating Also, great $XX a had was $XXX expansion progress XXXX. with and a million and place with and Day we as power for new our 'XX driving million, facility, commitment full well growth Jose and many corporate or growth in, significant over excited and about equally storage September, non-GAAP

throughout a X.XX, grew as the year ended we bookings ratio our of well, $XXX with book-to-bill with the Our in $XXX of revenue intake than order million faster year backlog. million and

the the of at solid $X.XX, a at non-GAAP and Now of diluted primarily million. operating Revenue market. end was strength $XXX non-GAAP semiconductor achieved driven $XX of QX in income million, in came our our above for high guidance near of guidance. which our another EPS QX at midpoint execution XXXX look came was which our marked highlights. We by in quarter

performance, on And with more details increased momentum, we In addition, order note call to over focus positive for cash financials. John generated our flow strong with and on we million execution. XXXX backlog With that, in the I'll turn $XX on a operations. from exit QX's

John Kiernan

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

of that a Breaking expect year. an down annealing, blank XXXX. revenue XX% flat we the mask the from Looking at our XX% on in over by $XXX million, full semiconductor AP increase XXXX On across strength made laser of in of market, represented up which million, was year Compound prior increase XXXX was $XXX at the XXXX, and revenue revenue growth $XXX and total million, came XX% EUV XXXX, of semiconductor total. from top significant board lithography. in in the XX% growth and

XX% hard increase and scientific as increase data visibility in million one-time XX% X% XXXX, by on $XX over selling areas primarily And systems underlying manufacturing. their disk semiconductor States photonics an LED growth and revenue. expect for significant million, and prior our about for compound Power. of year market capacity other from normalizing currently other total by of total the full the we XX% revenue and XXXX, $XXX customers. applications And of revenue million, in looking up revenue we the MOCVD Furthermore, customers made in continued revenue of the sales year driven the is in which XXXX magnetic region, growth slow-moving focus. million XXXX $XX of total However, inventory secondarily, Storage GaN into revenue in $XXX adding and of represents a was storage at made United commodity made based up and XX% where of drive up our backlog head was Data the

semiconductor China was excluding for up year. finally, And region, driven X% Pacific Asia China, made up of XX%, customers. made the XX%. by total Our EMEA revenue

shipments photonic systems. lithography which semiconductor XX% market The XG contributed Turning multiple and to of market, strong was advanced multiple driven was driven revenue $XXX in compound driven totaled applications laser shipments annealing for our by the semiconductor by QX revenue performance packaging customers. Revenue for and of million revenue, our XX% and and made by geography. our market and system quarter RF by up to

made finally, in Our other of data up total and And revenue. revenue. storage XX% market our XX% came scientific of market at

looking revenue States our region. storage by driven total was revenue Now our data quarterly XX% customers. of The by at United

made by in RF annealing China finally, beam power total XX% Pacific for particular laser led trailing by quarter. the of sales. well made driven was for systems primarily by amplifiers. system with strength and And up total semiconductor excluding semiconductor XX% China, Asia systems as processing EMEA compound ion Our node semiconductor driven wet revenue up XX% as of systems revenue, region,

turning full basis, non-GAAP a XXXX with line in we was results. which XX%, operating year Now expectations. On of achieved to gross margin

and take a challenges chain increasing further our me supply as the times. on materials experienced lead higher Let to and longer we moment XXXX, inflationary elaborate on status. pressures saw progressed logistics costs, year Throughout

point chain team And overall, for has most one job year, Our a about gross done margin. fantastic impact supply was of issues to our mitigating the encounter. there they percentage a

our in a for impact situation XXXX. been We the few previously for incorporated has more expect similar of quarters, provided the which to guidance be

variable we've Our been the increased revenue $XXX an expenses future as million, to as increase reflecting investments making drive in order to annual intake. higher associated SG&A growth with and expenses operating R&D well

year-on-year XX% However, of Company. revenue leverage declined provided from a to as and XX% percentage OpEx to the operating

year EPS year. additional from for $XX million the to provide to in XX% income $XX full Our operating XXXX. increased in few XXXX XX%, figures. increased non-GAAP million I'll Diluted a And $X.XX now

amortization $XX.X XXXX was million. expense For

are credits course our $XXX XX% in by compound was for we $XX.X than NOLs result not XXXX. strong doubled mentioned, $XX the million, of backlog, interest of Cash At with fully over other expense ended our reserved. year-end, which XX%. of was the We $XXX as $XX.X year, Bill and taxes federal we XXXX year of the on increase were million from backlog non-GAAP comp and and million as our intake, And a net year million equity federal was tax our million. cash $XX.X and backlog Our of semiconductor order grew debt million material. semiconductor depreciation more a had

to gross XX Our environment as continuing Gross gears variations. influenced capabilities the our while with guidance. Gross came non-GAAP on million, a results. coming in in million million capacity $XX expenses customers of factors, line maintain income expect QX. invest was a in for $XXX,XXX, quarterly a On the decreased basis, at orders spite of supporting we the chain XX.X%, and diluted approximately expense were are margins quarter-to-quarter with in and XX% shares. by new of service share Notably, of of Operating backlog net was supply pace to this of number by slowed benefit in additions. flat were evaluation for challenging we since data which $X.XX level margin our field. and at storage quarter tax able the to to margin count EPS was a $XX Switching in

by fourth I'll when offset to $XXX notes million Now million, prior was decrease $XXX minute. explain of was cash This the a the and primarily We XXX, the million due convertible came ended for of the reduction was cash and effects during flat Inventory transaction to $XXX capital remaining carrying the $XXX sheet amount and the Long-term balance quarter. quarter. debt value in the of we $XX prior a the payable note for million, of just note with million Accounts cash. the in the investments perspective, represents repurchased to quarter, our in both in accounts $XXX at came sequential million million XXXX. associated recorded The of $XXX due balance XX primarily timing moving in short-term the at repurchase quarter flow a convertible of repurchased $XXX increased and decreased quarter is million. long-term quarter In of of shipments partially notes. the the due of million in $XXX to from and from cash XX due from operations. in from prior sequentially principal on sheet days $XXX a working a flow highlights. debt From inventory up This million of decrease payments convertible was the the customer $XX original at days, quarter. do. portion DSOs in to million. to reduction $XXX receivable convertible million,

CapEx Jose million facility used the during San with bringing used CapEx the the million quarter this $XX total $XX was to build-out, million for $X for the year $X.X for Our with million new expansion.

additional commentary convertible to on turning Now our notes.

XXXX or to principal of January million. on outlined amount the is XXXX now convertible change has note $XX the the repurchase, no the principal notes As slide, after amount note due in the XXXX. convertible There been convertible

driving the our a $XX.X interest Our expected we growth the million a have well long-term down and to go-forward flexibility million $X.X financial facility. focus from we be XXXX, sheet, repurchase. by million flexibility With improved into $XXX is annual expense capital to as revolving our balance on along entering added cash business. on to prior credit across credit basis, facility, with In the

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

to and OpEx million between $XX We expect non-GAAP be $XX million.

GAAP net is between million. and Non-GAAP expected income $X $XX million We $XX expect between million million. be net to $XX and income

EPS is be GAAP $X.XX between $X.XX based share upon million between diluted share. expect to XX share and diluted Non-GAAP EPS and count. per $X.XX expected is We per and $X.XX a

for additional our would non-GAAP highlighted our accounting principal this standard earnings the guidance GAAP previously some EPS which semiconductor to drivers visibility EPS current update. of of $X.XX a growth and recently of will debt, million. $XXX guidance and we compound both with diluted and added markets. the calculated to over call, the are reaffirming outlook semiconductor Based XXXX I'll to our section effective to and for release ASU provided the purposes on share. strong for The earnings calculating QX. we $X.XX non-GAAP how for accounting. market noncash $XXX million if-converted As method illustrate during on earnings GAAP in ranges per backlog, for that, EPS and And back Bill change And XXXX-XX provided beyond January now backup year-on-year we the to be the schedule XX% to QX between our continue new year be outlook interest XXXX, full and for is our and new of it the QX expense target turn press between and convertible based reduce method X, We've presentation color section our a revenue diluted are for

Bill Miller

John. Thanks,

deployments in the artificial our we large-scale computing the learning. in markets computing which to for GPUs of data processors driving and in faster is intelligence, machine and now and the center mega Turning serve technologies context trends

a and smartphones in XG. for major megatrend drive automotive form is driver The entity the communications cloud demand devices today higher AI semiconductor a includes applications. driving and immersive EV such VR computing, logic, AR, source processors, user the infrastructure efficient represents seasonally devices. second and mobility as another It finally, powerful the more higher-speed of of power And the also and experience. sensing of gaming, includes is includes requiring storage. endless density communications memory and and disk variety It autonomous of and hard Transformation

WFE our more Now are measured nodes. semiconductor current is specifically by at very several additions for analysts by XXXX, node overall driven our markets. equipment market, the well and wafer backdrop capacity In looking growth in spending transitions strong as fab There extremely growth trailing healthy. estimating as

we is this than for to faster revenue WFE good grow semiconductor expect Veeco, While remember that backdrop news growth. our

their engaged additional adopted manufacturing We DRAM laser expect been a with process to for who served our is we've our memory market expand annealing evaluating is logic as technology and leading annealing for steps by available laser customers. additional customer And logic process.

variety add as experienced for customers annealing orders applications. nodes pull multi-tool advanced capacity trailing our quarter, a with we to systems During as multiple from node of laser well the for broad

recently further laser delivering validates annealing us systems continue efforts I'm evaluation high-volume production our is production budgets tool solution and is Veeco's to customers. record news be to logic that that process shrink. attractive technology its demonstrates They'll and status thermal at off. annealing Our becoming great with it annealing node. This supporting increasingly we our paid for their as annealing laser another differentiated introducing announce next their customer. laser to our leading-edge of in excited have won

systems of adoption systems and our is laser of ASML shipment ion XX three deposition approximately received mask serve is With demand. systems forecasting market EUV lithography lithography in of its XXXX market production. to field, XX XXXX continuing lithography is beam driving addition in in us. XX momentum. blank both with systems XX annealing, this we for memory to systems semiconductor we required the and EUV to momentum EUV manufacturing one In process. EUV over at for EUV We to with improvements the demonstrated beam for for a customers beam size seeking in five In EUV logic applications for wafer order for order products. chip deposition from This advanced one by systems blank and market our year to sophisticated process the recently This per every use integration EUV strong revenue systems heterogeneous products. level their our customer player. Veeco's bumping, system mask activity saw beam a ion create had packaging, multilevel high and the as demand choice across packaging blanks. with remains new such deposition we ion a in ion new of deposition positive flip stack our metalization mask lithography performance lithography intends quarter deposition fan-out our for highly this is

Wrapping to growth annealing, for from experiencing and blank trend market continue currently this this in and our and XXXX. comments, expect laser some We demand packaging drive semiconductor up continue time. production EUV to we're semiconductor expect advanced significant strong mask demand

market with MOCVD compound serve to equipment. Moving semiconductor. primarily wet processing We this and our

Our wet and photonics processing excellent systems control customers, compound process adding to amplifier We applications. for shipped customers well semiconductor during power capacity. and RF many offers the as quarter flexibility filter as equipment multiple

to Lumina recent our GaN photonics X-inch LED a positioned Looking the we're market a for platform. and we're both we traction see believe for at announcement MOCVD and opportunities our micro with Lumina business, our in platforms. Longer multisystem Propel power for the well beginning term, with order

market expect XXXX, to we semiconductor into the compound Going grow significantly.

grown which We're customers system years. data added their Now XXXX and storage expecting deliveries has in decelerate absorbed to our for looking at capacity. market recently

equipment. expected applications products time, opportunities requiring vehicle demand these magnetic and of to continue several per with center the fundamentals data drive, These market increase improve continue heads current that however, activities manufacturers of for is to in years. develop expand, drive At XXXX, same higher cloud to their us to XXXX. lead and Beyond the to customer additional industry the expect as numbers storage

turning backlog our today's position. coupled Therefore, with Now given our to environment, it's on year healthy the priorities. to demand us great optimism strong XXXX entered ability execute. with our protect incumbent We to

our our toward our maintain initiatives is the we've further we our future for advance safe manufacturing and We're customers top making as toward systems equally in support highly margin expect important. improving is mind. we healthy make the to several have all are transition maximize our delivery new to service so our on them chain R&D and us an revenue keeping to culture progress Our can our we progress new on-time evaluation to priority we technologies improving place facility on and to motivated customers. enhance outcomes first potential. to customers in efforts with fully new and deliver eye Jose, while Tactically, keep execution, semiconductor evaluation been of our focused long-term with And successful lastly, and keep and our San systems capabilities moving, supply our quality to Keeping target in driving gross our grow our XXXX, employees model. as the

priorities to With we're will your and material a happy that, I these difference Operator, take making stronger and line. serves a our stakeholders. And Veeco to all the be with that in open questions. committed please mind, building John

Operator

of will Oppenheimer. Rick first And to Instructions] Schafer [Operator go we

Wei Mok

quarter on Mok Rick. the Congrats your call Wei and the for is LSA recent This strong announcements. on

multi-systems. do delivering was expand you should many to when we if repeat year? on about I press think wondering And them? you on expect release, can like the start you how this, per So systems mentioned

Bill Miller

for that you going Yes. question. our multiple multisystem is announce year. largest us did business excited And the We're we laser Thanks to really yes, be next customers this that annealing for the with mentioned business orders. because

to And very a technology that in technology. going of XX% our so annealing opinion, kind breakthrough huge in for our system, from And in the milestone named we Company. nearly an excited had growth we're laser record the we also of logic that leading-edge over we XXXX. were tool 'XX email shows that's and have kind annealing customer in of see laser where a We're production

Wei Mok

Great.

As my follow-up, MOCVD. regards in to it's for on

a past, in of a you a been but been lot has emerging repositioned has like looks applications. tool So delivered And customer. for MOCVD for to the this used LED,

that I So, you're more sitting you -- was particular if if or any specific applications seeing wondering, adoption? faster can

Bill Miller

lot X-inch like power field put very power evaluation number two gallium red application, well. going the an product systems and electronics we're we as We this Also, applications well. red in for to in micro nitride as Lumina red our into applications electronics. capable evaluation micro have the customer. we that One such LED have in the of of new applications look lasers, field. system, that some And is gain tools is is starting a revenue, at and But have for VCSELs, of capable a Lumina beyond LED evaluation platform LED also is specialty orange edge-emitting momentum

lines product well fairly going certainly for those MOCVD to of are albeit both in in piece. drive XXXX. doing the market compound 'XX, So, from it's -- levels semi we're our But low incremental fairly growth

Operator

We'll our question Barclays. of go from next O'Malley Tom to

Tom O'Malley

just I in the to mention on to a you thought ask prepared Photonics there I the of your went remarks, of the way opportunity. business. out follow-up kind MOCVD wanted

changing now that grow was past, you've starting market traction customers? really now? again? For the Is new some tools a know of bit mentioned is a full. you've Because capacity the in it to What's It's years to get Or in that to are market. well. trying loosen I as now, starting better more up for just couple industry been that proving

Bill Miller

for our But fairly would market few say late being we qualifying a for that number Lumina using order it is a add that customer a capable multi-tool for And applications. it's now actually qualified very we've And a VCSEL. opportunity. said, weeks it announced product. tool, I beyond bit Tom, our a a of Lumina and VCSEL was number for to of the applications ago, tool it

GaN-on-Silicon. as the definitely traction are the Lumina -- for some So as we Propel well seeing definitely with

Tom O'Malley

gross follow-up one the for side. is John my Helpful. on margin then And

progress margin talk throughout year? Can this through a may what as here? the really and steady keep model, why Or are things more wouldn't better little guiding you entire what number this long-term look you at just year at throughout gross the seen puts a you're and Can When takes there. You've to your rationalize well. progression them higher a may you margins about rate? of cautious walk

John Kiernan

Sure.

undertaking some being said, in significant supply continue of of the XX% So XXXX come we to higher a talked number margin the in unexpected within of in XXXX, actions a did midpoint if than about in to chain advantage steps margin take for gross our costs. our XXXX inflationary or volumes and taken margin to of that done of service And and investments to But throughout for supporting we've these we longer-term We probably step any there. in, forecast of are challenges make that goal a inflationary expectations. capabilities not improve would evaluation XXXX, gross not the margin XX% guide, forecasting improve and we improvement and in at That have take some making XX%. also and in an our supply we higher field. advantage systems chain as bit gross of margin really and better little improvement the towards we gross factors are our and gross

Operator

question next Patrick our to move We'll Ho of Stifel. from

Patrick Ho

next-generation heterogeneous starting advanced stages of early believe see the you some activity of environment. these on advanced the litho processes to current business, the we very and Or of in still from that that obviously quarter packaging you and strong more seeing and some Do off, of integration devices? are the like much you're processes the really congrats Bill, the nice based adoption? that at maybe terms Thank on next-generation year. first you're are

Bill Miller

would us. seeing say our spaces heterogeneous it's also wafer-level more traditional et that we're integration high -- still But what heterogeneous cetera. said packaging, yes, memory, said, opportunity for an pillars we copper are being in bumping, seeing like bandwidth is is integration. business true I fan-out you in opportunities That

'XX, advantage are to and from able and I customers think tool more book purchases amount we've fleet gain -- standpoint take revenue a where and standpoint we're more fair some very been where critical. matching business a orders these and is seeing in of multi-tool booking share like the making

And up is as that so, well. the the quite position in our holding leader I think marketplace

Patrick Ho

Great. That's helpful. question in John, Jose terms And of San follow-up for maybe facility. new as my the

are up. well going obviously there. ramping You things like that It seems

the getting shipped incremental potential But of environment, given You're there demand CapEx out for of is into being strong there. products that kind dollars any facility. put

of expanded it the into strong outlook are quickly, semiconductor comfortable a the can current little this you across seeing that that current demand more environment we're So, Or board? given demand grow your kind capacity?

John Kiernan

a That's Yes. really Patrick. good question,

despite So were stuff COVID little we schedule challenging previously ahead had actually bit And a plan we in accelerated XXXX. environment we of had our mentioned that a in and getting built.

into this So we're accelerate year. really happy and spending did we

to the year, about we X/X the cost move to same spending about overall we're building. So and basis, to continue into the spending of next project the and XX% going the about of expect on the this accelerate starting an year,

already. expect of new the product transitioned As we still by And QX you said space QX. be into systems end the that we We started in to XXXX. fully manufacturing shipped

when And in Jose moving San along manufacturing our do about have previously So to things and we are plan. the mentioned fully as the as it's get facility. up current output we running going new that double facility, to

Operator

question from Benchmark. next Miller our to go Mark we'll of And

Mark Miller

on Congrats another good quarter.

you've in on compound color two also evals field? the the other the tools, on semi, any eval other tool. for got mentioned the mentioned the Anything tools more eval DRAM You

Bill Miller

We in number of evals have the a field.

field concentration time. much given evals And know, closer we've in that any or in throughout to customers making a existing with the the annealing. of semi very at you within we're two growing to with talked laser semi node. As going in 'XX a strategy concentration C their tools very XX that, have semi, we we that's a in Company's space. one state from compound high and high And next in change the at aligned have And

manufacturing track, DRAM of future PTOR laser logic very programs at we we are said are recently on in just as moving game. Third, well and we very, the in where in want we're really for where the tool content point and excited as These customer annealing. this a

one just We also systems red MOCVD, in nitride micro for have said, gallium for LED. two electronics X-inch and as you one power specifically

Mark Miller

of ships, generation to opportunities logic laser terms more anneal going for there steps? In nice are the be

Bill Miller

believe requirements more the what the I which more our product. become as is to nodes continue stringent, Mark, are, plays there we're the and The laser actually budget of seeing shrink. to annealing strength thermal and on

thermal We're need solving hopeful. very budget these with they we're challenges as So, much advanced engaged their customers those chips. on

Operator

move to question our Dave next from Steelhead we'll Duley of And Securities.

Dave Duley

progression I a was bit see are think stronger revenue could of just the half? than about kind first you the Or about quarterly throughout that? we it quarterly going we Or -- should half to how is wondering, the XXXX? Is revenue? in of growth talk little back Yes. continued

John Kiernan

$XXX We the So of guide our of the higher say the midpoint the progression back the XX% XX% so QX range, year. half $XXX year at in that increase the half in would $XXX to expect yes, front I around revenue million guided to be we we're midpoint. to expecting would at of a than million million a And year-on-year. the from standpoint,

of higher half the slightly upon second expect we based revenue full So outlook. our year the current year in

Dave Duley

midpoint, kind realize to time the you which And WFE calibration of the numbers let's of market XX% or just Okay. XX%, to range. XX% I market at some I is the you there's recently, grows, do is targets your consensus And now? curious, of to I'm XX% think think out growth ago, you the say, XX% if I WFE put in these upside mentioned think XX%.

John Kiernan

Yes.

and So our that guide at of and XXX the in say that out that when here. midpoint recently the business. ease midpoint is semi roughly in looking We're XX% reaffirming the for discussion million range here at put in we're increase we just that guide of a

the side So that wins the strength up that recent we're laser be and in about XX%. will semi Bill expecting mask in with these EUV talked lithography and blank about annealing

to compound in like also we're amount Now expecting up as XXXX well. a semi be

expecting and we're years the more data number is offsetting storage increase the there, So, will XX%. growth, of the driving business of that that for and in be XX% this around is expectation overall the around our increase is solid a after which Company data year than storage down the decrease

strong semi improved position. really and Dave, on an compound the So, we And entered semi backlog side. with the year

of with backlog entering the we're about more million semi by the $XXX semi year than So increasing year-over-year backlog doubling PAM about and with the XX%. backlog

the So, for pretty and our are the XXXX. there confident expectations where market rate in growth in we

Dave Duley

really Thank you helps. That that for color.

And final guess things a think to you you Could quarterly is be the just is probably we I the that mentioned going this guess or going drive transition they should inflection year. take me at which said and hard that quarter XX% this for growth XXXX. business? to it see also you Now in going the just point? XX% grows down I thing down business the Is when Or where calendar we see stop year point in inflection up? in start disk

Bill Miller

comfortable on with pretty activity probably increased in back lead our most working 'XX, early Dave, to reading but the I out point, we start that 'XX. guide. would is feel But at earlier the times, in of probably And likely we're half certainly, would right 'XX. our the seeing and just XXXX Yes. now that we're activity, this say, given

Operator

[Operator Instructions] of now Gus Northland. to Richard go will We

Gus Richard

thanks the up have hoping and year. point? taking scorecard had I XX Congratulations give of question. won many at evals set you a could many on for this you for are open? How was those you How last my still us

Bill Miller

the now, in supporting say Two evals and well. way, them We're are and into seven right they're turning we And logic the have off. and advanced and now have been in DRAM. of signed open in field laser that progressing we're would four those some are those -- in annealing Gus, I business. by of three are

period line, -- So just eval, actually it progressing GaN-on-Silicon and well. are over power electronics step. turned but that's red In to product to of the MOCVD has evaluation is microLED. and in very the the our well were able as short they Lumina we get a That's a tool positive certainly have that's for to results been foundry. customer. wafers early They've a turned for the first area, positive, have positive. we at X-inch -- over time That still is positive that have tool the tool run And other fact under results MOCVD first

targeted RF evaluation We some And as time underway. the that's for market. is on And the well. been also at progressing wet filter processing really field that's have in tool and

say, Gus, I would are planned. progressing or better So evals that at time, originally this our than we thought

Gus Richard

Okay.

three talked to still and of there's of go. beginning in you've down the seven And you last so the about got evals year,

Bill Miller

the with open the step just third we're to and noting, won we that in logic on they worth probably were we that a annealing. -- still work Right, it's challenges one keeping challenging tool material are evaluation other announced, to continuing and PTOR there them though,

open. but it's So a open, profitable it's

John Kiernan

that few signed I to a so readouts would add Gus, we've had that, off.

a technologies be program we few 'XX. and evals to in expect new signed evals. expect of with But more new off We this also refreshing

and about at think plus a for around very program just XX eval get be or for element I very, in think time, tools continue growth important us point I signed So drive to minus evals, the will think any semi shipped when in semi, us. to a and program off. compound But

Gus Richard

Right. And next my up you question. teed

And tool one is semiconductor up And for this I that depth that is ion beam mask going the the EUV still tool customers lined QX? in and for is other applications? to that quarter going probably you was the not out tool application lengths. do go tool I wondering, to for think have ship

Bill Miller

Yes, leading as we're of have and actually the lot DRAM running demos. guess, a with a time, of engaged you we're logic might at few customers -- we this all

you a there. and customers from interest down as and loop they're customers very progress making ALD. deposition few technique slower line, where those novel remains or engagement high. such maybe CVD we're PVD, the new because wafers. It's a the if processing and full running bit We the But little it's will, have And a to them compared

Gus Richard

drive that like is is price EUV mask an it then priced ion beam tool? tool Or hard tool? And like disk it. in Got

Bill Miller

somewhere probably it's say I'd in between.

John Kiernan

Yes.

I think, -- for average so and allow Company's margins Gus, mean target gross I on that depending would gross above price upon gross the I configuration, margin. we or at how many product we would chambers that would and would selling and margins the say yes. and for configuration

Patrick Ho

work And it. terms in any at XX. Are then GaN-on-Silicon in XX-inch of know anybody with you with other else? working at the you're RF at or this anywhere GaN-on-Silicon on, Got working tools I GaN-on-Silicon, at for X-inch, time you you shipped somebody on additional

Bill Miller

We've tool, and the wafer customer the at on the approach blue, time. a recently XX-inch a sold the and microLED, green XXX-millimeter pixels one red to putting the same where is and that's disruptive for taking a wafer

And XXX-millimeter failed and XXX-millimeter they I tool. bought guess little of tools, to so, have a looking I mention a earlier. now now they're a number -- they've

for that's make Yes. And size wafer other silicon. have will. in have where tools X-inch of applications. at well lot kind business, X-inch a field, a really not of repeat the transition. from of also it sold a their that customers whole X-inch number tools as that seems we're but we follow-on And you GaN-on-Silicon targeting per the if And industry looking to it's We few X-inch transition a gallon to is to

Gus Richard

care Okay. reason, those are odd for power just GaN-on-Silicon. RF And I for just some clarification,

Bill Miller

Both.

Operator

questions call speakers now to in queue, I for over other closing no the with turn back will the any the comments. And

Bill Miller

the strategy. We're our their for have Thank I evening. we forward United the want you I joining along at a continued today. and you, conferences and great execute support call upcoming and to as and our all thank Veeco updating thanks with entering to shareholders operator, the growth customers excited look for do XXXX, team

Operator

conclude you call. for And participation. that today's Thank your does

may now You disconnect.

Veeco Instruments (VECO) 17 Feb 222021 Q4 Earnings call transcript