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X-Fab remains on allocation after boom year

Business news |
By Nick Flaherty


European foundry X-Fab saw growth of 38% last year, driven by its automotive and medical business, but remains on allocation in many areas from the high demand.

Full year revenues reached US$657.8 million, up 38% against the previous year. Quarterly revenues in the core markets – automotive, industrial and medical – amounted to $138.0 million, up 32% year-on-year and 3% quarter-on-quarter.

For the full year 2021, revenue in the core markets were $525.1 million, up 43% against 2020. Ongoing electrification in the automotive and industrial markets was a major growth driver in 2021, pushing demand for silicon carbide technology as well as supporting applications required in electric vehicles. The medical business benefited from the pandemic-related need for testing as well as point-of-care devices with lab-on-a-chip applications recording the strongest growth.

The Consumer, Communications & Computer (CCC) business was up 10% year-on-year in the fourth quarter and up 19% year-on-year for the full year. While the CCC legacy business manufactured at X-FAB France gradually decreased in line with expectations over the course of 2021, interest in RF SOI technology picked up significantly, driven by the increased deployment of 5G.

Q4 bookings reaching an all-time high of $249.5 million, up 31% year-on-year and 25% quarter-on-quarter with automotive bookings recording a particularly steep increase in the fourth quarter. This was driven not only by the acceleration of car electrification but also by the pressure resulting from the ongoing chip shortage.

Due to high order intake, which significantly exceeded short-term production capacities, the company continued to allocate capacity to customers and backlog kept rising. As long as capacity will have to be allocated, the company says it will ensure customers receive the minimum quantities necessary to avoid disruptions in their supply chains.

Efforts to move business to X-Fab France brought the site’s share of revenues based on X-Fab technologies up to 48%. The process of converting the French site’s capacity to manufacture the core technologies is ongoing with new equipment being delivered and installed regularly. This will contribute positively to meeting the high demand, in particular for the much sought after 180nm automotive technology.

“I am very excited about the strong business development and how well X-Fab is positioned to benefit from the transition to green energy in automotive and industrial as well as the increasing deployment of reliable testing and point-of-care applications in medical,” said Rudi De Winter, CEO of the X-Fab Group.

“The ever-growing need for semiconductor-based innovative solutions will ensure healthy demand for our specialty technologies in the long term. In the short term, it is key to manage the challenges arising from the tremendous demand requiring full attention and commitment of all X-FAB teams. Our key focus has been and will be on execution excellence and productivity improvements for the best possible supply to our customers. The installation and qualification of new tools to remove bottlenecks will particularly contribute to an increase of wafer output going forward. While it is currently not clear how the semiconductor industry and, in light of all the uncertainties, the world economy will evolve, I am confident that X-FAB is perfectly placed to achieve its growth targets for 2022 and beyond.”

Revenue breakdown per quarter:

in millions of USD Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 y-o-y growth
Automotive 68.3 61.6 40.8 65.4 83.5 82.8 81.5 83.8 28%
Industrial 22.1 23.9 23.9 27.3 32.4 35.2 38.3 39.7 46%
Medical 6.5 7.3 7.7 12.0 8.7 10.4 14.3 14.5 21%
Subtotal core business 96.9 92.7 72.3 104.7 124.6 128.4 134.1 138.0 32%
76.4% 78.1% 75.2% 77.1% 80.1% 79.8% 79.3% 80.1%  
CCC1 29.7 25.9 23.7 30.9 30.6 32.4 34.7 34.0 10%
Others 0.3 0.2 0.1 0.3 0.3 0.1 0.3 0.3  
Total revenues 126.9 118.8 96.1 135.9 155.4 161.0 169.1 172.3 27%

Consumer, Communications & Computer

in millions of USD Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 y-o-y growth
CMOS 112.8 103.4 81.1 115.0 134.9 137.5 141.8 144.2 25%
MEMS 9.6 10.4 9.8 14.6 14.4 16.2 17.4 17.5 20%
Silicon carbide 4.5 5.0 5.2 6.3 6.1 7.2 9.9 10.6 70%
Total revenues 126.9 118.8 96.1 135.9 155.4 161.0 169.1 172.3 27%

Prototyping revenues in the fourth quarter were at $24.2 million, up 9% year-on-year and down 6% quarter-on-quarter after the previous quarter had been exceptionally strong. For the full year 2021, X-Fab recorded prototyping revenues of $89.2 million, up 32% compared to 2020.

 

Prototyping and production revenue per quarter and end market:

in millions

of USD

Revenue Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 y-o-y growth
Automotive Prototyping 3.6 3.2 3.0 3.5 3.6 2%
Production 61.8 80.4 79.8 78.0 80.2 30%
Industrial Prototyping 8.2 9.0 10.3 12.9 11.5 40%
Production 19.0 23.3 24.9 25.4 28.2 48%
Medical Prototyping 6.9 2.2 2.9 4.1 4.0 -43%
Production 5.1 6.4 7.5 10.2 10.6 107%
CCC Prototyping 3.2 4.3 4.1 4.8 4.5 40%
Production 27.7 26.3 28.3 29.9 29.5 7%

 

In the fourth quarter, all the fabs continued to run at high load. Productivity improvements remained the top priority to further increase wafer output, eliminating production bottlenecks and recruiting additional staff.

For the full year, SiC revenues came in at $33.8 million which was a 61% increase over the previous year. In the fourth quarter, SiC revenues set a new record at $10.6 million, up 70% year-on-year and 7% quarter-on-quarter. Quarterly SiC bookings amounted to $17.0 million, up 141% year-on-year and 51% quarter-on-quarter.

In line with strong demand, X-Fab is looking to significantly expand its SiC manufacturing as well as in-house SiC epitaxy capacity to be available by the end of this year. While there is a lot of interest coming from new customers, the current main focus is on supporting existing accounts with products in development to progress with the launch of volume production.

In 2021, the company invested across all sites to expand capacities in response to the strong demand and the expected growth going forward. For the full year, capital expenditures totaled $67.0 million, up 74% against the previous year. Apart from maintenance capex, these were mainly prepayments for new equipment ordered in 2021 as part of the capacity expansion program. Most of these new tools are expected to be delivered in the course of the current year and will have to be paid in full after delivery and installation.

This does not include the total volume of investment projects initiated in 2021, which amounted to approx. $190 million, converting the French site to X-Fab technologies, the expansion of capacity at X-Fab Sarawak in Malaysia as well as the expansion of SiC capacity at Lubbock, Texas.

www.xfab.com

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