Veeco Instruments (VECO) Oppenheimer 27th Virtual Annual Technology, Internet & Communications Conference summary

Company transformation and strategic focus

• Shifted from data storage and LED markets to a semiconductor-focused business, restructuring to a functional organization and concentrating R&D on lasers, ions, and optics since 2018.

• Global provider of semiconductor capital equipment with approximately 1,200 employees and 2024 revenue guidance midpoint of $710M.

• Served available market now exceeds $2 billion, with growth driven by laser spike annealing, nanosecond annealing, and ion beam deposition technologies.

• No R&D or strategic investment in China; growth strategy is focused on leading-edge markets outside China.

• Ongoing transformation initiatives and focus on leading-edge customers position the business for long-term growth.

Market opportunities and growth drivers

• Served available market projected to grow from $2.4B in 2024 to $4.3B by 2028, with a 15% CAGR.

• Compound semiconductor and power electronics, including silicon carbide, GaN, and MicroLED, are targeted for future growth.

• Evaluation programs and agreements for new technologies are central to strategy, with rigorous customer qualification and a typical one-year evaluation cycle before high-volume adoption.

• Significant growth opportunities in epitaxy equipment for power electronics and advanced packaging.

• Expansion of served available market is focused on nanosecond annealing and ion beam deposition, with growth expected outside China.

Technology and product innovation

• Laser spike annealing is qualified as the process tool of record at all three leading logic customers and is expanding into high bandwidth memory.

• Nanosecond annealing is expected to create a $450 million market, with evaluation systems performing well at leading logic customers.

• Ion beam deposition achieves superior thin film properties, is exclusive for EUV mask blanks, and is being introduced to front-end semiconductor applications, targeting a $350 million future market.

• Technologies support artificial intelligence and high-bandwidth memory markets, with current and future production tool opportunities.

• Advanced packaging and wet processing tools are process tools of record for micro-bump flux clean in HBM stacks.