Besi: enabling the next leg of Moore’s Law. Buy, €90 Target Price
We initiate coverage on Besi with a Buy rating and a €90 target priceChip design is going through a Copernican revolution, switching focus from “small is good” to “big is good”, and hybrid bonding, the packaging technology enabling the seamless interconnection of multiple leading-edge dies, is a key enabler going forward.
Besi stands at the heart of hybrid bonding, with a strong leadership position in the difficult task of bringing together and attaching dies, with a high accuracy and at a high throughput. Like ASML did in lithography, we expect Besi to strengthen its competitive position towards the domination of die attach, as it continuously improves the accuracy and throughput of its tools.
We expect the shipment of hybrid bonding tools to take off this year, and to grow steadily, as the technology is increasingly adopted across all leading-edge manufacturing segments. This, along with an upcoming cyclical recovery, gives Besi’s EPS the potential to grow 18 to 26% p.a. over the next 5 years.
BE Semiconductor Industries N.V. (Besi) is a holding company. The Company is engaged in the development, manufacturing, marketing, sales and service of semiconductor assembly equipment for the global semiconductor and electronics industries. It operates through three segments: Die Attach, Packaging and Plating. It develops assembly processes and equipment for leadframe, substrate and wafer level packaging applications in a range of end user markets, including electronics, computer, automotive, industrial and solar energy. The Company offers products, such as Die attach equipment, which include single chip, multi-chip, multi module, flip chip, thermo-compression bonding (TCB) and enhanced wafer level ball grid array (eWLB) die bonding systems, and die sorting systems; Packaging equipment, which include wafer level molding and singulation systems, and Plating equipment, which include metal plating systems and related process chemicals.
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