Letter to Shareholders

AIXTRON continued to grow in its fiscal year 2022: despite a slowdown in some areas of the semiconductor market and the strain on supply chains, we succeeded in raising order intake to EUR 585.9 million (+18%), revenues to EUR 463.2 million (+8%), and operating income to EUR 104.7 million (+6%). These figures underline the continued success of our strategy with its clear focus on the compound semiconductor equipment business.

Compared to traditional silicon – the conventional base material of the semiconductor industry – compound semiconductors offer superior physical properties in terms of electrical performance, switching speed, and light generation. Step by step, our vision of emerging markets driven by the overarching themes of ecological sustainability, electrification, and digitalization is becoming a reality. This is the foundation for our growth, and in 2022 we made significant progress in all core areas.

For example, our new G10-SiC deposition system for the innovative material silicon carbide (SiC) already generated the highest order intake of all our products in its first quarter on the market. The G10-SiC enhances both performance and productivity for the established 150 mm SiC wafer size and also gives customers the option to process emerging 200 mm SiC wafers. As such, AIXTRON is making a significant contribution to the reduction of CO2 emissions and the transition to electromobility. SiC is fast becoming a key technology for electric vehicle power trains and charging infrastructure, as well as for the efficient conversion of renewable energy. The market launch of the G10-SiC not only represents a first milestone in the revamping of our product portfolio, but also lays the foundation for additional growth in SiC power electronics. Analysts forecast sustained growth for the SiC device market over the coming decades – the electrification of our world is still in its infancy.  

We also made significant progress in the field of gallium nitride (GaN) power electronics in 2022. Since its commercial breakthrough two years ago, this material system has been opening up an increasing number of new applications. Several customers continued their build-up of production facilities for the large-scale production of GaN power semiconductors last year and numerous new customers chose GaN as their material system and ordered AIXTRON equipment. In addition to initial applications in consumer electronics, there is particularly strong growth in industrial applications – such as power supply for data centers and telecommunication facilities – as well as in photovoltaics. Further applications are set to follow and will help make our vision of efficient, compact, and fast electricity conversion a reality, thus largely replacing the incumbent material silicon.

In optoelectronics, we were able to meet consistently strong demand for systems to manufacture lasers for optical data communication via glass fiber optic networks. The megatrend digitalization continues to drive strong growth in data transmission volumes – be it for video streaming, virtual meetings, or cloud and edge computing. We have also been working closely with customers on the development of micro LEDs for the next generation of displays. Micro LED displays are far superior to conventional LCD- or OLED-based displays in terms of image quality: they consume up to 90% less energy and also  offer greatly superior luminosity and color gamut. This makes Micro LED displays particularly attractive for mobile devices such as smartwatches, smartphones, and augmented reality glasses, but also for next-generation televisions. In this particular field, we received our first volume production order for Micro LEDs supporting the target to launch the first commercial Micro LED product on the market. This is a first, highly promising step into a further new market segment. 

All these developments demonstrate that compound semiconductors play an increasingly significant role in the semiconductor industry and are gradually opening up further applications. We expect this trend to generate further growth in the coming years. In order to cope with this growing demand, we worked hard to strengthen our internal structures and processes across all areas of the company in 2022. In addition, our asset-light business model gives us considerable flexibility to adapt to rising production volumes. We receive valuable support in this regard from our business partners and suppliers, with whom we regularly exchange information on expected business developments. We also actively support them with their own development and systematically qualify new partners to meet anticipated volume growth. In view of the prevailing shortage of materials in the manufacturing sector, these measures proved to be highly effective in fiscal 2022: despite global supply chain bottlenecks, we were able to satisfy all customer requirements and at the same time increase revenues.

Our customer proximity and strong connection to the academic world allow us to identify industrial and technological trends at a very early stage and to incorporate these insights into our processes to develop products that best meet customer requirements in terms of performance and cost. With our completely revamped product portfolio, we expect to achieve or maintain strong positions in all our markets – both now and in the future. Following the launch of the G10-SiC, we also recently introduced our G10-AsP platform on the market. A further product platform will follow in the current year.

Our Executive Board Members Dr. Jochen Linck, Dr. Felix Grawert and Dr. Christian Danninger (from left to right).

AIXTRON also plays a pioneering role when it comes to ecological sustainability: we have been carbon neutral since 2019 and AIXTRON was one of the first companies to report EU taxonomy aligned figures in 2021 – when it was still voluntary. We made further progress in this field in the fiscal year 2022: our taxonomy alignment for revenues is now 58%, for OpEx 73%, and for CapEx 38%. The driving force behind these figures are our markets, as environmentally sustainable applications in the field of SiC power electronics and micro LEDs in particular accounted for a higher share of revenues last year. Our sustainable business model is also reflected in the positive and steadily improving ESG ratings we received, e.g. the upgrade of our MSCI rating from A to AA.

The key to our success are our employees. Their creativity and problem-solving skills, their experience and industry know-how, combined with an outstanding commitment to performance, continue to be the foundation of AIXTRON. In 2022, we were able to recruit more than 230 highly skilled colleagues who will help us successfully scale up for future growth. After all, we are extremely optimistic about the future. And this is reflected in our strong, AIXTRON-specific corporate culture and the special spirit that permeates the company. We will continue to carefully nurture this culture with a great sense of responsibility. Our special thanks go to all our colleagues for their dedication and hard work!

Our suppliers and business partners also played a decisive role in our success. Despite the constraints on global supply chains, they successfully contributed to another very strong year of growth for AIXTRON. We are also indebted to them. We would also like to express our sincere gratitude to the Supervisory Board for their trust and cooperation. Finally, we would like to thank you, our shareholders, for your confidence in us and in our ability to lead AIXTRON into a successful future of ecologically and economically sustainable growth.

The Executive Board of AIXTRON SE