Ichor Anticipates Market Growth and New Product Launches
Ichor Holdings, Ltd. (NASDAQ:), a leader in the design, engineering, and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment, has reported strong financial results for the second quarter, with $203 million in sales, aligning with the higher end of their forecast. The company displayed an improved gross margin and a positive earnings per share (EPS) of $0.05.
Q2 Performance and Future Outlook
Looking forward, Ichor expects a stronger second half of the year as the wafer fab equipment market shows signs of recovery. The company is focused on enhancing gross margins, managing costs and working capital efficiently, and is optimistic about revenue growth and market expansion by 2025.
Key Takeaways
- Q2 revenues reached $203 million, with a gross margin of 13%.
- EPS for Q2 was reported at $0.05.
- Anticipated Q3 revenues range from $195 million to $210 million with improved gross margins.
- Operating expenses for Q3 are expected to be around $22.6 million.
- Ichor forecasts a tax expense of $800,000 and an EPS range of $0.05 to $0.15 for Q3.
- The company has shipped over 20 gas panels and is progressing in their proprietary products pipeline.
- Ichor expects to return to $250 million to $300 million in quarterly revenues and believes a 15% year-over-year growth can support these revenue levels.
- Inventory levels at customers have normalized, and ordering patterns have returned to regular schedules.
- The company is optimistic about growth in the EV silicon carbide business and expects it to possibly double.
Company Outlook
- Ichor anticipates strong growth in primary served markets by 2025.
- Revenue growth is expected to be driven by high-bandwidth memory and the development of gate-all-around technology in the FoundryLogic market.
- The company is positive about next year's growth, particularly in lithography, although the timing remains uncertain.
- An improvement in the EUV business is expected in the second half of the year, following a temporary decline in Q2.
Bearish Highlights
- The impact of Intel's CapEx reduction has been noted, but no significant shifts in Ichor's business have been observed due to this.
- The surge in the component business has been less than expected.
Bullish Highlights
- The company has seen a sequential improvement in gross margin.
- Ichor is making progress in their proprietary products pipeline, which is expected to contribute to gross margin improvement.
- The EV silicon carbide business is showing strength, primarily driven by European manufacturers in China.
Q&A Highlights
- The company addressed the improvement in the UV business and future revenue expectations.
- The growth in the EV silicon carbide business and the expected recovery and potential doubling of its current levels were discussed.
- The company's next-generation gas panel is focused on new product introductions and will be backward compatible with existing OEM products. The adoption of the new gas panel is expected to take two to three years.
The company's solid performance in the second quarter and the detailed outlook provided during the earnings call suggest a strategic focus on growth and market expansion. With the anticipation of improved financial metrics and the development of new products, Ichor is positioning itself to capitalize on market opportunities in the coming years.
The company remains committed to its stakeholders, as evidenced by the gratitude expressed to employees, suppliers, customers, and investors, and plans to engage with the investment community at upcoming investor conferences.
