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The first quarter was characterized by continued strong demand for X-FAB's 200mm CMOS technologies, in particular the 180nm process, and microsystems technologies, resulting in record quarterly bookings of USD 271.5 million, up 20% year-on-year. This is also reflected in the backlog, which amounted to USD 520.9 million, up from USD 475.8 million at the end of the previous quarter.

In the first quarter, automotive revenue came in at USD 135.6 million*, up 12% year-on-year and down 11% compared to a strong previous quarter. Industrial revenues were USD 52.6 million*, which is an increase of 12% year-on-year. The industrial end market benefited from record silicon carbide (SiC) revenues in the first quarter. SiC revenues totaled USD 26.3 million*, up 100% year-on-year. On the other side, customer actions to reduce high inventory levels resulted in low quarterly SiC bookings with a book-to-bill of 0.38 in the first quarter. Despite this temporary weakness in silicon carbide, the outlook remains positive. X-FAB's SiC customers continue to be upbeat about the long-term prospects and X-FAB signed another long-term agreement with one of its silicon carbide customers.

The long-term fundamentals for the automotive and industrial end markets remain strong. The megatrend of "electrification of everything" to mitigate climate change drives the structural demand for X-FAB's specialty technologies that enable energy-efficient and climate-friendly solutions for a wide range of applications. Apart from silicon carbide, X‑FAB's 180nm HV CMOS technology is in high demand and one of the key technologies used. Its growth will be supported by the ongoing capacity conversion and debottlenecking at X-FAB France. In the first quarter, the French site’s revenues based on X-FAB technologies recorded a year-on-year growth of 42% and accounted for 93% of the site’s total revenue.

In the first quarter of 2024, medical revenues were USD 14.5 million*, down 18% year-on-year, mainly due to normal fluctuations. A key driver for innovative medical solutions is X-FAB’s microsystems expertise to combine MEMS and CMOS and to enable the integration of different systems at wafer level. Microsystems revenue in the first quarter amounted to USD 24.1 million*, up 9% year-on-year. The main contributors to X-FAB's medical business in the first quarter were a next-generation DNA sequencing application and an ultrasound probe head IC.

In the first quarter, X-FAB’s CCC (Consumer, Communication & Computer) business came in at USD 16.0 million*, down 29% year-on-year.

Quarterly prototyping revenues totaled at USD 23.2 million*, down 12% year-on-year. Apart from normal fluctuations, the decline is mainly related to industrial customers and the current temporary weakness in silicon carbide.

Prototyping and production revenue* per quarter and end market:

The lower revenue guidance for the second quarter reflects the anticipated decline in demand for X-FAB's 150mm CMOS technologies, primarily from industrial customers, as well as a decline in SiC revenues following the reduction of SiC bookings in the first quarter. The second quarter is considered to mark the bottom of the current slowdown with X-FAB’s SiC business expected to gradually recover in the second half of the year. The positive long-term outlook for X-FAB’s business remains unchanged due to the Group’s positioning in high-growth end markets and its future-oriented technology portfolio, which enables sustainable solutions for today's key societal challenges.

Operations update

In the first quarter, X-FAB’s 200mm CMOS lines and the MEMS/microsystems fabs were running at full load and capacity still had to be allocated.

The sites that produce the 150mm CMOS technologies, i.e. in Erfurt, Germany, and Lubbock, Texas, recorded lower utilization rates in line with the lower demand for these technologies. Both sites are focused on the transition to their respective new areas of business, i.e. MEMS/microsystems in Erfurt and silicon carbide in Lubbock.

In the first quarter, X-FAB's capacity expansion program continued as planned. Key projects include the expansion of capacity for X-FAB's popular 200mm CMOS technology at X-FAB France and X-FAB Sarawak, Malaysia, as well as X-FAB's SiC business at X-FAB Texas. The building construction at the Malaysian site to create additional clean room space is on schedule, and it is planned to start moving in equipment in the fourth quarter of 2024.

Total capital expenditures in the first quarter came in at USD 105.0 million, up 5% against the previous quarter.

Financial update

First quarter EBITDA was USD 51.0 million with an EBITDA margin of 23.6%. Excluding the impact from revenues recognized over time, the EBITDA margin of the first quarter would have been 24.0%, at the lower end of the guided 24-27%. The quarterly guidance does not take the impact related to IFRS 15 into account, as this cannot be reliably predicted.

First quarter profitability was negatively impacted by a combination of lower 150mm CMOS production and lower SiC wafer starts. A reversal is expected in the second half of 2024, driven by the recovery of the SiC business and the positive effects of increased economies of scale as additional 200mm CMOS capacity becomes available. In addition, X-FAB has initiated a number of measures to adjust the cost structure of the sites producing 150mm CMOS wafers while accelerating the transition to silicon carbide in Lubbock and microsystems in Erfurt to replace the 150mm CMOS business.

Thanks to the natural hedging of X-FAB's business in terms of currency exposure, profitability is not affected by exchange rate fluctuations. At a constant USD/Euro exchange rate of 1,07 as experienced in the previous year’s quarter, the EBITDA margin would have been 0,1 percentage points lower.

Cash and cash equivalents at the end of the first quarter amounted to USD 351.5 million.

Management comments

Rudi De Winter, CEO of X-FAB Group, said: "In the first quarter, we continued to see very strong demand for our popular 200mm CMOS and microsystems technologies, resulting in an all-time high quarterly order intake. On the other hand, our silicon carbide business was impacted by the general weakness in the SiC market, reflected by a decline in SiC order intake. Supported by our SiC customers' confidence in their future business development, we see this is as a temporary dip. We are confident in X-FAB's positioning in the semiconductor market, and the overall high level of bookings underscores the importance of our ongoing capacity expansion program to ensure reliable supply to our customers in line with their business needs. With more capacity coming online and the recovery of the SiC business, we expect strong growth in the second half of the year versus the first half."

X-FAB Quarterly Conference Call

X-FAB’s first quarter results will be discussed in a live conference call/webcast on Thursday, April 25, 2024, at 6.30 p.m. CEST. The conference call will be in English.

Please register here for the webcast (listen only).

Please register here for the conference call (listen and ask questions).

The second quarter 2024 results will be communicated on July 25, 2024.

About X-FAB

X-FAB is the leading analog/mixed-signal and MEMS foundry group manufacturing silicon wafers for automotive, industrial, consumer, medical and other applications. Its customers worldwide benefit from the highest quality standards, manufacturing excellence and innovative solutions by using X-FAB’s modular CMOS processes in geometries ranging from 1.0 µm to 110 nm, and its special silicon carbide and MEMS long-lifetime processes. X-FAB’s analog-digital integrated circuits (mixed-signal ICs), sensors and micro-electro-mechanical systems (MEMS) are manufactured at six production facilities in Germany, France, Malaysia and the U.S. X-FAB employs approx. 4,500 people worldwide. For more information, please visit www.xfab.com.

Forward-looking information

This press release may include forward-looking statements. Forward-looking statements are statements regarding or based upon our management’s current intentions, beliefs or expectations relating to, among other things, X-FAB’s future results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. By their nature, forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results or future events to differ materially from those expressed or implied thereby. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein.

Forward-looking statements contained in this press release regarding trends or current activities should not be taken as a report that such trends or activities will continue in the future. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless legally required. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this press release.

The information contained in this press release is subject to change without notice. No re-report or warranty, express or implied, is made as to the fairness, accuracy, reasonableness, or completeness of the information contained herein and no reliance should be placed on it.

Condensed Consolidated Statement of Profit and Loss

Amounts in the financial tables provided in this press release are rounded to the nearest thousand except when otherwise indicated, rounding differences may occur.

Condensed Consolidated Statement of Financial Position

Condensed Consolidated Statement of Cash Flow

Condensed Consolidated Statement of Cash Flow – con’t

*excluding impact from revenue recognized over time according to IFRS 15

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Contacts

X-FAB Press Contact
Uta Steinbrecher
Investor Relations
X-FAB Silicon Foundries
+49-361-427-6489
uta.steinbrecher@xfab.com