BE Semiconductor Industries (Besi) recently revealed it increased its third-quarter revenue by 20.7 percent from 2019. The company, which manufactures component assembly equipment, greatly improved its net income year-over-year.
The firm also provided a mixed forecast for the fourth-quarter that indicates annual growth but sequential contraction.
Besi’s Strong Q3 Performance
In the September quarter, Besi brought in €108.3 million ($128.1 million), an improvement of one-fifth on its Q3 2019 results. It explained its sales spike is due to increased demand from its U.S. and Asian based clients.
It also recorded €94.9 million ($112.34 million) in orders, up 15.5 percent from the same time last year. The equipment maker attributed that jump in requisitions to the mounting popularity of 5G-enabled products.
Last month, research firm Future Horizons predicted the global semiconductor market would grow by 12 percent annually in 2021. The group noted the coronavirus pandemic prompted a widespread digitalization trend that will be a big driver for the component sector next year.
Besi’s robust sales and orders last period support Future Horizons’ forecast of a double-digit expansion of the chip market.
Apple also launched four different versions of its first 5G enabled iPhone this month. As the device maker anticipates selling 75 million units this year, the handset’s launch will play a big role in mainstreaming fifth-generation networking technology in the U.S.
Besi’s swelling orders indicate device makers intend to capitalize on that development by ordering 5G components to make a host of compatible electronic devices.
In addition, the Dutch manufacturer earned €34 million ($40.22 million) in Q3, up 77.1 percent year-over-year. The firm said surging revenue and reduced overhead enabled it to boost its net income in the September quarter.
Besi’s Q4 Outlook
For the holiday quarter, Besi believes its sales will be consistent with Q3 or down by as much as 15 percent. Compared to its Q4 2019 results, the firm expects income growth of 17.2 percent or a contraction of 0.43 percent. It also anticipates its gross margin will be 58 to 60 percent, which is 1.7 to 3.7 percent better than last year.
In a press release, Besi explained its near-term guidance is influenced by seasonal trends and concerns about the coronavirus pandemic.
On the one hand, the equipment manufacturer’s outlook is positive as its low-end suggests stable sales in Q4. But on the other, it means the company expects its three quarter expansion streak to end in the current period.
Either way, its projections make a lot of sense given its history and the present state of the world.
Traditionally, Besi does experience some intake softness in the final period of the year. The firm’s worries about a new wave of COVID-19 infections are unfortunately prudent. Time reports diagnosis rates have jumped in Europe and the United States recently. If conditions worsen, the semiconductor industry could suffer widespread production shutdowns due to new lockdown mandates being issued.
Still, the digitalization trend kicked off by the coronavirus outbreak is having a transformative effect on society. That suggests semiconductor demand will stay high in the long-term even if production disruptions occur. And to meet that demand, chipmakers will continue purchasing Besi’s manufacturing tools on an ongoing basis.
Regardless of how Q4 unfolds, the Dutch company’s sales should be strong in 2021 and beyond.