BE Semiconductor’s fourth-quarter revenue of EUR 153.4 million was at the midpoint of guidance, a 4% year-on-year decline.
The outlook for next quarter disappointed investors, as Besi expects a 5% quarter-on-quarter sales decline, compared with consensus expectations of 10% growth, or EUR 168 million.
The full 2025 outlook remains unknown, but management signaled “cautious optimism” due to strong performance in artificial intelligence-related applications and an expected recovery of mainstream applications in second-half 2025.
We model EUR 702 million in 2025 revenue, a 12% increase. We slightly raise our fair value estimate to EUR 125 per share after updating our forecasts.
Key Morningstar Metrics for Be Semiconductor Industries BESI
- Economic Moat: Narrow
- Morningstar Rating: ★★★
- Fair Value Estimate: EUR 120.00
- Morningstar Uncertainty Rating: High
- Forward Dividend Yield: 1.86%
- Sector: Technology
We believe the main question around Besi’s thesis is “when” hybrid bonding, or HB, will see a big inflection, not “if.” The firm’s long-term technology roadmap is in place, with HB-related revenue tripling since 2023 and the number of HB customers growing from 9 to 15 in the same timeframe.
Last quarter Besi received its first HB orders from Rapidus and Samsung for advanced logic nodes. Applied Materials, which integrates Besi’s HB equipment into its systems, also confirmed last week it has received several volume orders for HB.
The exact timing of growth is unknown, but we believe investors with a three-year time horizon will see a meaningful uptick in sales driven by HB and complemented by other technologies.
We model a 50% CAGR in hybrid bonding revenue in the next five years, with the largest inflection occurring in 2026 to 2028. According to the CEO, utilization rates in mainstream applications (excluding HB) are approaching 80%, the level at which customers normally consider new capacity expansions, so this should help with revenue growth.
Growth in research and development investment and planned capacity expansions in 2025 reinforce our optimistic view. R&D expenses grew 32% for full-year 2024, and Besi expects they will grow by 10% to 20% next quarter despite the muted revenue outlook.
Be Semiconductor Industries Stock vs. Morningstar Fair Value Estimate
Source: Morningstar Direct. Latest price as of 14:09 PM. Data as of Feb. 21, 2025.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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