Besi shares tumble as weak mainstream chip markets hit Q3 forecast
Flat Q3 revenue outlook lags market expectations
Weakness in mainstream assembly markets continues
Q2 bookings slightly ahead of consensus
Shares fall 11%
Recasts with Q3 outlook, adds shares in paragraph 3, analyst comments in paragraphs 4-5, comments on market in 6 and 9
July 25 (Reuters) -Dutch chipmaking parts supplier BE Semiconductor Industries (Besi) BESI.AS forecast flat third-quarter sales on Thursday, below expectations, hit by weak growth in mainstream assembly markets, particularly in China.
That weakness was only partially offset by higher orders for its systems used in AI and other advanced packaging applications in the second quarter, it said.
Besi's shares fell 11% by 0822 GMT, adding to their 8.5% drop a day earlier, when Hong Kong listed rival ASM Pacific Technology 0522.HK also reported weak results and outlook.
Degroof Petercam said in a note that the mainstream business may be in a deeper downturn than the reported numbers suggest, as around a half of Besi's new orders came from AI applications.
"PC and smartphone shipments are ex-growth, automotive, industry, and consumer electronics end markets have been sluggish, and sales of the foundry sector are going nowhere, with TSMC 2330.TW being the sole AI-driven exception," Degroof wrote.
Besi said the lagging recovery in high-end smartphones, automotive and industrial markets was expected, as inventory levels at semiconductor producers remain high.
The chip assembly equipment maker said its third-quarter sales would be broadly in line with the 151.2 million euros ($163.9 million) reported for the second quarter.
Besi has been banking on a wider adoption of its hybrid bonding tools by chipmakers, driven by booming demand for AI-enabling technology. Hybrid bonding is Besi's top product used to create tighter interconnections inside a chip.
"We anticipate additional share gains in the next market upturn as node sizes shrink further and placement accuracy increases," CEO Richard Blickman said in a statement.
Order bookings rose to 185.2 million euros in the second quarter, beating analysts' consensus of 179 million euros.
Besi said it received 29 orders for hybrid bonding systems from two customers during the quarter, all of them for its latest generation 100 nm accuracy system used in 3D logic applications.
Besi, whose customers include AI chip giant Nvidia NVDA.O and the world's largest contract chipmaker TSMC, expects more bookings to come in the second half of 2024, as chipmakers ramp up capacity for high volume manufacturing next year.
($1 = 0.9226 euros)
Reporting by Dagmarah Mackos in Gdansk; Editing by Christian Schmollinger and Milla Nissi
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