William Blair initiated research coverage of Axcelis Technologies, Inc. (ACLS $162.36), a company that designs and develops ion implantation equipment for the global semiconductor manufacturing industry.
Analyst Jed Dorsheimer estimated that the company would grow revenue at a compound annual rate of 13% over the next three years (2023–2025), with total revenue growth for fiscal 2023 projected at 12.7%, to $1.04 billion.
“Based in Beverly, Massachusetts, Axcelis develops and manufactures ion implantation and other processing equipment used to fabricate semiconductor chips,” said Dorsheimer. “Over 97% of Axcelis’s calendar 2022 revenues were derived from the company’s ion implantation business, while the remaining sales were attributable to aftermarket sales for legacy processing systems. Through its Purion platform, Axcelis offers a complete line of high-energy, high-current, and medium-current implant tools across all application requirements. The company provides extensive aftermarket service and lifecycle support through its CS&I business. Over 80% of its systems shipments in 2022 served mature semiconductor device markets, with about 39% total systems shipment exposure to the power device market, driven largely by favorable trends in automotive electrification.
“In the niche of ion implantation equipment for SiC semiconductor manufacturing, Axcelis has a superior product offering and a leading 70%-80% market share over its closest competitor, Applied Materials,” added Dorsheimer. “We estimate the capital intensity of ion implant for SiC device manufacturing is roughly five times that of tradition silicon power semi fabs. The company’s Purion suite of three individual tools together cover a wide processing space, providing valuable optionality to customers compared to the capability of Applied’s single tool. Customer fabs typically include a bespoke mix of all three of Axcelis’s tools, optimized to their process and product line. As SiC devices continue to become more complex, device manufacturers will rely more heavily on the edges of the processing window that Axcelis’s tools provide. Our proprietary supply/demand forecast concludes that ion implant equipment demand will exceed 1,200 tools and $6 billion of capital expenditure by 2030. We believe Axcelis will maintain and potentially increase its market share in SiC ion implantation, capturing a larger portion of our $6 billion estimate.”
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