Axcelis Technologies with a 46-year legacy, with a billion dollars in revenue and >1,600 employees, engaging in the design, manufacture, and servicing of capital equipment for the semiconductor manufacturing industry.
Why does Axcelis Technologies matter in today’s market?
Axcelis is a global semiconductor capital equipment provider to the world’s leading manufacturers of memory, power, advanced logic and many other types of semiconductor devices. This includes leading semiconductor manufacturers like Intel, TSMC and Samsung. We design, manufacture, and support ion implantation equipment, essential for modifying semiconductor substrates' electrical or physical properties. Every semiconductor device, in products from doorbells to laptops, relies on ion implantation, making our technology critical to semiconductor manufacturing.
As AI's demand for power increases, our equipment enables the manufacturing of critical power semiconductors such as silicon carbide, while also enabling high-performance processors and memory, helping companies such as Hynix and Samsung push the boundaries of high-bandwidth memory. Our ion implantation technology is indispensable in semiconductor manufacturing. We’re a key player in this process alongside lithography, deposition, and etching. As AI technology grows and energy usage becomes more critical, our solutions are at the forefront of addressing these challenges, contributing to advancements across various markets.
As a leading supplier of ion implantation solutions which are found in many devices, could you explain which new verticals you are focusing on?
We are active in every market using semiconductors, including power devices like silicon, silicon carbide, and gallium nitride, as well as image sensors and memory technologies like DRAM and NAND.
Our technology is vital for creating silicon IGBT devices used in electric vehicles and industrial applications. Additionally, we're developing our roadmap to address new customer needs in the Si power space. Our systems are critical in the power and image sensor markets, with silicon carbide seeing growth due to its use in automotive and industrial applications.
With your new technologies including Purion H200 and Purion XEmax, what is the driving need right now from your customers?
Our advancements in silicon carbide tools have improved productivity significantly. Initially, medium-current implanters were slow, but with increased demand, we developed tools like the Purion H200™ to improve medium energy implantation. It’s similar to upgrading from a paintbrush to a roller—faster and more efficient. Our Purion XE platform supports high-energy implants, essential for producing trench devices used in electric vehicles and data centers. These devices improve power efficiency and switching performance, making them crucial in addressing growing demand in sectors like data centers.
What do you see as the key growth areas for Axcelis over the next three to four years?
The power market, including silicon, silicon carbide, and gallium nitride, is a significant driver for us. With AI and clean energy demand rising, efficient power devices are increasingly important. AI requires substantial energy and data, and we’re well-positioned to support that growth with ion implantation in data centers and consumer electronics. We also see growth in memory, power electronics, and image sensors. While these markets are cyclical, long-term trends in AI and electrification ensure demand for our products will continue. These areas are crucial to our growth strategy moving forward.
What challenges do you foresee, and what keeps you up at night?
Geopolitical instability and industry cyclicality are always concerns, but the insatiable demand for semiconductor solutions keeps us optimistic. The semiconductor market is expected to double by 2030, but the availability of fabs remains a challenge. Electric vehicles are also a focus. While EV adoption in the U.S. has been slower, China’s market is growing with EV prices falling due to high demand and incentives. The U.S. needs to catch up in terms of infrastructure and consumer options. The EV market in the U.S. remains unpredictable, but the global trend toward electrification is clear.
Given the challenges around raw material sourcing, particularly for silicon, how is Axcelis addressing this?
We are exploring other materials like gallium nitride, which offers potential for high-frequency, high-power applications. While silicon remains volatile, we’re pursuing inorganic growth strategies, including potential acquisitions. Organically, we’re heavily investing in R&D, with $100 million annually focused on solving customer challenges. Our leadership in silicon carbide and silicon remains strong, and the automotive market’s strict qualifications create a barrier to entry, further solidifying our position. Our continued investment in R&D helps us maintain a stronghold in these critical markets, which demand high-reliability solutions in automotive and power applications.
What are Axcelis' key milestones in the coming years and what can shareholders expect from Axcelis as the company grows?
Electrification and AI are the two big secular drivers for us. One goal is to qualify our tools across customer applications, leveraging our full portfolio. We’re also focused on regional expansion, particularly in Japan, where we see growth potential. We’re also gaining traction in advanced logic, where AI innovation is occurring. By 2027, we expect these areas to drive us to $1.6 billion in revenue, a significant increase. Our growth in regions like Japan and markets like advanced logic will help us reach our goals. We’re positioning ourselves to capture significant market share in these areas. Regarding financials, we aim to achieve over $11.50 in earnings per share by 2027. While we do not predict stock prices, applying standard industry multiples gives a positive outlook for our valuation. Our focus is on executing our strategies to achieve this target and maintain strong operational performance.
