Ichor (ICHR) 28th Annual Needham Growth Conference Virtual summary

Leadership and strategic vision

• New CEO with 22 years at the company emphasizes a shift to a more technology- and product-focused leadership, aiming to solve high-value customer problems and drive growth through engineering excellence.

• The company is transitioning from a manufacturing to a product and ultimately a technology company, with a vision to lead in active process control for semiconductor manufacturing.

• Five key levers for growth include foundation building, footprint realignment, cost management, leveraging market tailwinds, and expanding differentiated product offerings.

• Focus on operational discipline and predictability, with a commitment to doing what is promised and improving business transparency.

Operational and cost transformation

• Major cost transformation underway, including consolidation and realignment of global manufacturing footprint, especially leveraging new capacity in Mexico and Malaysia.

• Targeting a 35% reduction in overall footprint and a 15% reduction in product costs, with execution roadmaps in place.

• Realignment aims to mitigate past headcount ramp challenges and ensure multiple sites for each product, reducing risk from single-site dependency.

• Faster product ramps and improved cost management are expected to drive margin improvement by 2026.

Market outlook and growth drivers

• Strong market tailwinds expected in etch and deposition, which are projected to outgrow the broader wafer fab equipment (WFE) market due to technology shifts like 3D NAND and Gate-All-Around.

• The company is highly leveraged to gas-heavy processes, positioning it to benefit from increased capital intensity in etch and deposition.

• Non-semi business, including aerospace and defense, is becoming more significant, with SpaceX now the fifth largest customer.

• Market expansion from $2.5 billion to $25 billion over a decade, driven by new products, capabilities, and strategic acquisitions.