Soitec (Euronext Paris) hosted its 2021 Capital Markets Day on June 10. CEO Paul Boudre, accompanied by the Group’s management team, presented his vision of the likely future development of the semiconductor market, along with his operational roadmap for harnessing the untapped potential in each of Soitec’s three end markets (mobile communications, automotive and industry, and smart devices). He also unveiled the Group’s financial objectives for 2026, which according to him is a tangible reflection of their growth trajectory that began five years ago.
Paul Boudre, Soitec’s Chief Executive Officer, said “As a recognized key technology player in the semiconductor industry, Soitec is ideally placed to capitalize on a new phase of unprecedented technological change that will continue to revolutionize applications, both home and industrial, personal and professional. Thanks to our early-stage involvement in roadmaps for the development of new electronic equipment and applications, Soitec is increasingly instrumental in the design of these products, which allows us to create whole ecosystems based on the use of our engineered substrates."
"This model obviously gives us a clear view of the growth outlook for our addressable markets, and especially of the decisive role that our substrates are playing in driving the burgeoning momentum in our end markets, whether it be mobile communications, automotive and industry, or smart devices." Boudre continues, "In light of the increasing number of applications and ever larger material foortprint for each product and application, we are confident in the ability of our organization to scale up further over the next five years. We are targeting to triple our revenue over this period, while growing our EBITDA margin by more than four percentage points. Our solid financial position also gives us the means to expand our production capacities to keep pace with this growth push."
"Lastly, we are determined that this process of value creation will be part of our wider sustainability strategy at all levels of our organization. Thanks to products that offer ever greater energy efficiency, Soitec is directly supporting the transition to a more sustainable business model, which is increasingly demanded by our customers and by society as a whole. We intent on creating an inclusive organization that is capable of attracting, developing and retaining top talent, and on nurturing long-lasting, mutually beneficial relations with all of our stakeholders.” Paul Boudre concludes.
After having delivered a 2.5x increase in its revenue over the past five years, Soitec is looking ahead to the next five years from its position as a recognized leader in innovative semiconductor materials. With key roles in the widescale roll-out of 5G technology and the fast-paced adoption of technological megatrends such as electric vehicles and artificial intelligence, the Group has laid the foundations for its future growth.
Since its 2019 Capital Markets Day, Soitec has made significant progress in many different areas, including signing new long-term procurement contracts with major customers, ramping up a new Piezoelectric-on-Insulator (POI) substrate production facility for RF filters used in smartphones, contributing to the adoption of FD-SOI substrates through Dolphin Design, and advancing with its R&D programs focused on new materials such as gallium nitride (GaN) epitaxial substrates and new-generation silicon carbide (SiC) substrates.
From an operational perspective, Soitec has continued to invest in its human capital and industrial capacity both at Bernin and in Singapore, in order to keep pace with its customers’ needs and support the Group’s growth.
From a business perspective, the Group has seen organic revenue growth of almost 30% over the past two years, despite the economic slowdown caused by the health crisis.
Soitec estimates that growth on its addressable markets over the next five years will continue to accelerate, from around three million substrates to over seven million substrates by 2026. In this bullish environment, Soitec will benefit from the main fabless and OEM manufacturers adopting its advanced technologies in the mobile communications, automotive and industry, and smart devices segments. By continuing to strengthen its foothold on these three end markets, which are expected to prove major drivers of the global economy over the next five years, Soitec is aiming to triple its revenue to around US$2 billion by fiscal year 2025-2026.
The Group also expects to see its EBITDA margin widen from 30.7% at the end of March 2021 to around 35% by 2026, driven by an operational leverage effect but also by products with higher added value. Thanks to its solid financial structure, the Group will also increase its capital spending to support its growth and strategic priorities, with a five-year capital expenditure program worth some €1.1 billion.
Financial Outlook
For fiscal year 2025-2026, Soitec is targeting revenue of approximately US $2 billion and an Electronics EBITDA margin of around 35% based on a EUR/USD exchange rate of 1.20.
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