Company Reports

We see Besi’s third-quarter results as a clearing event that addressed the two key concerns we highlighted in our Oct. 7 note. Orders of EUR 343 million were ahead of our expectations, giving visibility into a strong 2027.

We are providing an update on Besi after the stock fell 10% on Oct. 7.

Besi’s second-quarter results were in line with guidance, while third-quarter revenue guidance of EUR 281 million was 12% ahead of FactSet consensus. The stock reaction was muted given semiconductor sentiment has cooled off since June, and Besi shares have run 60% year to date.

BE Semiconductor Industries, or Besi, understands well how to operate in a cyclical industry like semiconductors. Supply/demand balances change rapidly in the chip industry, so equipment suppliers need operational flexibility to adapt.

We attended Besi’s investor day on June 18, where Besi raised its long-term sales targets from EUR 1.5 billion-EUR 1.9 billion to EUR 1.7 billion-EUR 2.2 billion, and its operating margin target from 40%-55% to 45%-55%.

Besi reported EUR 270 million in first-quarter orders. We anticipate order momentum will continue to build up through the year, thanks to accelerating advanced packaging investments worldwide and higher hybrid bonding adoption.

According to technology media outlet ZDNet, Samsung and SK Hynix are considering relaxing their thickness standards for high-bandwidth memory, a development that could affect the timeline of hybrid bonding adoption. Besi shares were down more than 15% on March 6 in response.

Besi’s fourth-quarter results confirm that advanced packaging is moving into an upcycle not only supported by rising capital expenditures but also a higher share of wallet toward advanced packaging solutions.

BE Semiconductor Industries understands well how to operate in a cyclical industry like semiconductors. Supply/demand balances change rapidly in the chip industry, so equipment suppliers need operational flexibility to adapt.

We are updating our view on Besi ahead of the Feb. 19 earnings call for the fourth quarter of 2025.

Besi delivered the order growth it signaled last quarter, with new bookings reaching EUR 175 million in the third quarter, a 36% sequential increase. We expect orders will continue to accelerate over the coming quarters and into early 2026 as demand for hybrid bonding begins to inflect.

Wide-moat Nvidia and no-moat Intel announced a long-term collaboration for data center and PC products. European chip equipment shares were up on hopes this would be a step to revamping Intel’s foundry business. Arm Holdings’ shares are down 4%, given that this deal strengthens the x86 ecosystem.

Besi met second-quarter guidance and delivered a bullish outlook, expecting a “significant increase” in orders for the second half as artificial intelligence infrastructure spending keeps expanding and advanced packaging becomes essential to achieve system differentiation.

The 2025 investor day confirmed our belief that Besi is a well-run, competitively advantaged company with a bright future ahead.

The 2025 investor day confirmed our belief that Besi is a well-run, competitively advantaged company with a bright future ahead.

BE Semiconductor Industries understands well how to operate in a cyclical industry like semiconductors. Supply/demand balances change rapidly in the chip industry, so equipment suppliers need flexibility to adapt. Besi runs a very flexible business model by (1) multisourcing from different suppliers to rapidly adapt capacity to demand changes, (2) having 15%-20% of its staff working flexible/temporary hours, and (3) having 70% of its workforce in Asia, mainly in assembly and production, where it can save personnel and logistics costs, as more than 60% of revenue comes from Asia (including China). This strategy allows Besi to consistently maintain leading gross margins of more than 60% even in downcycle periods, compared with its peers ASMPT and Kulicke & Soffa, which are at 40%-50%.

We have updated our view on semiconductor equipment makers ASM International and BE Semiconductor. Both firms have significant exposure to leading-edge semiconductors and are leaders in their respective segments.

BE Semiconductor Industries understands well how to operate in a cyclical industry like semiconductors. Supply/demand balances change rapidly in the chip industry, so equipment suppliers need flexibility to adapt. Besi runs a very flexible business model by (1) multisourcing from different suppliers to rapidly adapt capacity to demand changes, (2) having 15%-20% of its staff working flexible/temporary hours, and (3) having 70% of its workforce in Asia, mainly in assembly and production, where it can save personnel and logistics costs, as more than 60% of revenue comes from Asia (including China). This strategy allows Besi to consistently maintain leading gross margins of more than 60% even in downcycle periods, compared with its peers ASMPT and Kulicke & Soffa, which are at 40%-50%.

Besi reported first-quarter orders of EUR 132 million and revenue of EUR 144 million, up 8.2% and down 6.1% quarter on quarter, respectively. Revenue came in below FactSet consensus of EUR 160 million, but investors liked the results due to progress in hybrid bonding adoption. Shares are up 10%.

On April 2 the Donald Trump administration announced 20% tariffs on EU products, which sent shares of Dutch chip equipment makers ASML, ASM International, and Besi down 5%.