Ultra Clean (UCTT) 27th Annual Needham Growth Conference summary

China business and export controls

• No impact expected from recent U.S. export controls; operations in China are fully localized and insulated from Western IP and personnel.

• Shanghai facility has operated for 20 years, serving key Chinese OEMs like AMEC and Piotech, with relationships expanding as Chinese equipment makers grow.

• Business continuity plans include supply chain duplication across Asia to mitigate regulatory risks.

• Direct China business now represents 10% of revenue, with recent growth driven by customer stockpiling; continuation of this trend into 2025 is uncertain.

• A potential decline in Chinese OEM revenue is not seen as materially impactful due to global diversification.

Market environment and business mix

• WFE market has shifted toward logic over memory since 2022, with memory now around 40% of business in a typical environment.

• Product mix is diverse, with strong positions in Dep, Etch, CMP, implant, ALD, litho, and wet chemistry tools.

• No significant overexposure to any single WFE segment; business remains balanced.

Product and service business evolution

• Product business has diversified beyond gas panels, now overlapping only 30% with Ichor; focus is on modules, integration, and new developments.

• Service business involves cleaning and refurbishing millions of parts annually, with global reach and high margins (10%-15% of revenue).

• Service business is well positioned for growth as TSMC expands overseas, leveraging global facilities.