The conference is now being recorded. Good morning, good afternoon, ladies and gentlemen, and welcome to Besi's quarterly conference call on the audio webcast to discuss the company's 2016 fourth quarter and annual results. The audio webcast is available on Besi's website, www.besi.com. Joining us today are Mr. Richard Blickman, Chief Executive Officer, and Mr. Cor te Hennepe, Senior Vice President of Finance. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission of the company. Now I would like to turn the call over to Mr. Richard Blickman. Go ahead, please.
Thank you. Thank you all for joining the call today. We will begin by making a few comments in connection with the press release we issued earlier today, and then take your questions. I would like to remind you that some of the comments made during this call and some of the answers in response to questions by management may contain forward-looking statements. Such statements may involve uncertainties and risks as described in the earnings release and other reports filed with the AFM. For today's call, we'd like to review the key highlights for our fourth quarter and the year ended December 31st, 2016, and also spend some time updating you on the market, our strategy, and the outlook. First, some overall thoughts on the past quarter and year-to-date results. 2016 was a year of unexpected industry growth, strong financial performance, and strategic positioning for the future.
Besi generated revenue of EUR 375.4 million and a net income of EUR 65.3 million, increases of 7.5% and 33.3% respectively versus 2015. Net income grew even more rapidly than sales this year as gross margins reached 51% and cost control initiatives kept expense growth in check. In addition, our financial position strengthened with net cash at year-end reaching EUR 168.1 million, an increase of 23.2% versus 2015. Revenue growth built progressively during 2016, stimulated by expanded investment by Chinese and Taiwanese subcontractors for new state-of-the-art advanced packaging capacity, accelerating demand for flash memory devices, and the continued proliferation of intelligent automotive electronics. In addition, growth was aided by a new technology cycle, which encouraged capital spending for next-generation below 20 nanometers application. In the smartphone arena, there was expanded customer investment in more advanced features and functionality, such as fingerprint sensors and advanced dual camera and flashlight modules.
The second half of 2016 witnessed much stronger than anticipated order, revenue, and profit levels with particular strength in the fourth quarter. During a traditional weak period of the year, revenue and net income reached EUR 93.1 million and EUR 16.7 million respectively and significantly exceeded expectations. In addition, gross and net margins rose to 53.2% and 18% respectively. Besi's results significantly exceeded guidance, due primarily to much stronger than anticipated shipments of epoxy die bonding and flip chip die bonding systems for mobile and automotive applications and faster customer cycle times. Our quarterly and annual results reflect industry benchmark growth and net margins, highlighting the strength of our advanced packaging portfolio in the marketplace. Besi's capital allocation policy seeks to provide a current return to shareholders while retaining sufficient cash to fund future growth opportunities.
In aggregate, total dividends and share repurchases of EUR 67.8 million in 2016 increased by 11.3% versus 2015, and since 2011 totaled €186 million. In September, we completed the 2015 buyback program under which 1 million shares were repurchased for €22.5 million. Upon completion, we initiated a new 1 million share repurchase program in October, under which we've bought so far 227,907 shares for €7.4 million through February 22nd. In total, we have approximately 2.8 million shares in treasury, currently at an average price of €13.47 per share. Given continued strong cash flow generation, our healthy financial position and prospects, we propose to pay a 2016 cash dividend of €1.74 per share, of which €0.35 per share represents a special dividend for approval at Besi's AGM on May 1st of this year. The proposed distribution represents a 45% increase versus 2015 and is the seventh consecutive payment.
The proposed payout ratio relative to net income is 100% in 2016 versus 93% in 2015. With that, I'll turn the presentation over to Cor.
Thank you, Richard. As Richard mentioned, we had a much better financial performance than anticipated at the start of 2016. Besi's Q4 '16 revenue decreased by only 1.3% versus Q3 '16, as we experienced particularly strong customer demand for flip chip and multi-module die bonding systems for mobile and automotive applications. Versus Q4 '15, revenue increased by 19.7%, due primarily to higher demand by Asian subcontractors for new advanced packaging capacity and improved industry conditions. Similarly, orders increased by 17% versus Q3 '16 and by 18.2% versus Q4 '15. Order strength was broad-based, with subcontractor orders up sequentially by EUR 5.8 million or 16.9%, while IDM orders increased by EUR 7.5 million or 17.2%. For the year, Besi's revenue and orders grew by 7.5 and 7.3% respectively, with particularly strong growth experienced by our leading epoxy multi-module and eWLB die bonders and ultra-thin molding equipment for mobile and automotive applications.
Orders by IDMs and subcontractors were roughly equal. Given the change in our customer profile and production model in recent years, the euro is becoming less prominent as a transactional currency. About 70% of our revenue is in USD, which has fluctuated between 65% and 75% in recent years. However, on the cost side, given our Asian production transfer and diversification, the Malaysian ringgit, Chinese renminbi, and Singapore dollar have become more important versus the euro and Swiss franc. In fact, Asian-based costs now represent 45% of total costs versus 30% three years ago. We expect this trend to continue. Besi's gross margin of 53.2% in Q4 '16 increased by 2.7% versus Q3 '15 and by 3.2% versus Q4 '15. Similarly, for the full year, gross margins reached 51%, an increase of 2.2%.
In general, Besi's gross margins continue to benefit from the optimization of our Asian production and supply chain, shorter lead times, improved working capital management, and tailwinds from a stronger dollar and weaker Malaysian ringgit versus the EUR. OpEx trends for the quarter and year reflect the benefits of Besi's ongoing cost control initiatives. Although Q4 2016 operating expenses increased sequentially by EUR 1.6 million or 5.7%, baseline OpEx only increased by EUR 0.2 million. The EUR 1.6 million increase was primarily due to higher performance-based compensation and one-time consulting costs from our strategic planning work. For the year, OpEx growth of EUR 3.8 million was due to similar factors, as well as increased warranty expenses related to higher sales levels. OpEx actually decreased by EUR 0.8 million, or 0.7%, versus 2015 when you exclude restructuring benefits taken in 2015 and strategic consulting costs in this year.
Consistent with better-than-expected revenue and gross margin, Besi's Q4 2016 net income was up by EUR 0.1 million versus Q3 2016. Moreover, net income was up by EUR 7 million or 72.2% versus Q4 2015, and net margins were up strongly to 18% versus 12.4%. Similarly, 2016 net income increased by EUR 16.3 million versus 2015, with net margins growing from 14% to 17.4%. Our financial position continued to improve in 2016. At year-end, Besi's cash and deposits increased by EUR 150.5 million versus Q3 2016 to reach EUR 304.8 million, primarily due to the net proceeds from the EUR 125 million convertible note offering in December. In addition, net cash increased sequentially in Q4 2016 by EUR 36.2 million to reach EUR 168.1 million due to profit generation and improved working capital management, which was partially offset by EUR 4.5 million of share repurchases made.
On a year-over-year basis, net cash increased by EUR 31.6 million or 23% due to strong profit and cash flow generation. Cash flow from operations reached EUR 98.7 million in 2016, an increase of 14.1% versus previous year. Cash flow was utilized primarily to enhance shareholder returns in the form of EUR 67.4 million paid in dividends and share repurchases. With that, I'll turn the presentation back over to Richard. Now I'd like to update you on our strategy, the market, and our guidance for the first quarter of this year. Besi's strategy focuses on technological leadership in assembly equipment markets with the greatest long-term potential. Of equal importance, we seek to reduce costs to enhance our competitive position and increase profitability. On the product side, we refresh systems every one to two years to meet
Ever-demanding industry specs for speed, accuracy, and miniaturization. In addition, we are at the forefront of leading-edge technologies such as fan-out, wafer-level processing, TCB, thin dies, and wafer-level molding, all of which have favorably influenced revenue development last year. On the operational side, our strategy seeks to generate ever higher levels of through-cycle profitability and cash flow from the execution of initiatives designed to further reduce European structural costs, move operations closer to customers, and improve cycle times and working capital management. In 2016, we executed all key operational and R&D initiatives, including an update of our strategic planning. Key objectives for 2017 include ramping our production and supply chain to meet projected industry growth, refreshing products so that we maintain advanced packaging leadership, further reducing European-based costs, and assimilating newly hired Singapore and Chinese personnel. One important initiative this year was the expansion of our local Chinese production capabilities.
We decided to set up parallel production in 2014 of certain die bonding lines at Besi's Leshan, China facility, targeted specifically for the local Chinese market. By such actions, top-selling epoxy and multi-module die bonding systems produced at Besi APAC in Malaysia could also be tailored specifically for local Chinese customer demand. In this way, we could better increase local brand equity and further reduce cycle times and cost. The timely expansion of Besi's Chinese production capacity favorably coincided with the launch by the Chinese government of a five-year plan to become a greater force in global semiconductor markets. To meet strong demand, we quadrupled production at Leshan from 33 units in 2015 to 139 units in 2016. Reflecting growth of this important market, Besi's revenue from Chinese customers increased to 30% of consolidated revenue, versus 23% in 2015.
Looking forward, there still remains much unrealized potential to increase Besi's market position and profitability in the years ahead. We completed in the fourth quarter a comprehensive review of our business strategic positioning and cost structure with an independent consulting firm. Revenue and cost initiatives were agreed for implementation over the next five years. Key actionable items included initiatives to increase our share of the high and mid-range segments of the assembly equipment market and further drive structural cost reductions via continued West to East personnel transfer, acceleration of our common platform initiatives, and further optimization of our Asian supply chain. In addition, Besi's issuance of the convertible note will help us, amongst others, to capitalize on the future growth opportunities in this next growth phase. Now, a couple of words about the market and our first quarter guidance.
VLSI forecasts continued industry growth of 9.3% and 5.3% in 2017 and 2018, respectively. Global geopolitical developments add an element of uncertainty to the path of global GDP growth and assembly equipment trends this year, but the underlying industry baseline still appears favorable. Longer term, there are many reasons to be optimistic about the industry prospects. Exciting new applications for the digital society, such as driverless and electric cars, artificial intelligence, virtual reality, and increased automation in our daily lives will complement the ongoing mobile and cloud revolutions. Such applications provide strong underpinning for future growth in equipment spending. In addition, a new technology cycle is on the way, which will require new advanced packaging solutions. This is also a favorable growth driver for our business.
Besi's first quarter 2017 guidance calls for revenue growth of between 15%-20% versus the fourth quarter of last year, based on strong Q4 2016 bookings. The midpoint of revenue guidance suggests substantial growth versus the first quarter of 2016 of around 38%. Order patterns to date in 2017 confirm a continued industry upswing well into the first half year, with Besi's bookings to date in the first quarter significantly exceeding levels realized in all of the fourth quarter last year. We are scaling our Asian supply chain and production capabilities rapidly to meet anticipated demand. In Q1 2017, gross margin is expected to be in the range between 52%-54%, and OpEx should increase by 5%-10% sequentially, mostly due to higher share-based incentive compensation expense. We anticipate that our tax rate will remain in the 10%-15% range for the full year of 2017.
That ends our prepared remarks. I would like to open the call now for some questions. Operator?
Thank you, Mr. Blickman. Ladies and gentlemen, as said, we will start the question-and-answer session now. To be registered for the queue, please press star one. Star one for your question or remark. Go ahead, please. The first question is coming from Mr. Nigel van Putten, ING. Go ahead, please.
Hi, good afternoon. First off, congratulations on the strong quarter and outlook. I have two questions. First, on the advanced packaging applications you already alluded to just now. Could you perhaps provide us an estimate of how big that segment is now relative to your overall revenue for last year, and what you believe the growth rate might be in the near to medium term? As a follow-up, also on the market, 2016, in terms of absolute revenue, EUR was already quite close to the absolute record in 2014. This year, 2017 seems particularly strong in terms of growth rate, at least so far, and also in terms of your guidance. Could you perhaps contrast this upcycle to the previous one? What might be similar or different, and particularly, what the sustainability is of this cycle going forward. Thank you.
Thanks, Nigel. Let's answer your first question. As a percentage of revenue, advanced packaging applications is around 30%. It's, of course, somewhat subjective for definitions of what really is contained in advanced packaging. If we focus on eWLB, TCB, also the direct lid attach for the high-end processors, those are the most predominant advanced packaging. You could also argue that fingerprint sensors, stacking of ultra-thin dice also are part of the advanced packaging, but that's a question of definition. You could say overall, Besi is, of course, focused on the high-end of advanced packaging, but a major part of our revenue is in the high-end of the overall applications of semiconductor assembly in the three areas: computing area, telecommunication devices, smartphones, et cetera, and also automotive. Those are the three cornerstones. Revenue-wise, it's about 25% computer world, slightly over 30% communication devices, and around 18%-20% automotive.
On your second question, the growth rate for 2017, if we look at the current guidance for the first quarter, the quick math tells you that we will not be far off from the peak in the second quarter of 2014. About 8%-10%, depends a bit. If you take the guidance we gave on the order intake so far until February 23rd, which is significantly above the total order intake in Q4, you can imagine that all things moving positively forward, that the second quarter should be higher than the first quarter. How much? We do not guide. How will this unfold? As it looks now, stronger than what we had in the last peak cycle. Whether this year will be the peak is also questionable.
Viasys expects an ongoing growth, a broad-based strong eight-quarter growth trajectory for investment in CapEx, driven by a new technology cycle, also Chinese expansion. This could be, with those elements, a stronger growth cycle than the previous one. This is all to be seen. As we know, we are highly dependent upon GDP, whatever happens in the worldwide economical situation will have a direct impact on the demand for semiconductor equipment. Does this answer your questions?
Yes, very clear. Thank you.
Ladies and gentlemen, for further additional questions, please press star one. The next question is coming from Mr. Pieter Olijslager, Kepler Cheuvreux. Go ahead, please.
Good afternoon, gentlemen. Quite a couple of questions, actually. Maybe first one, if I look at Q4 and also at Q1, sales are clearly higher than what you had as order backlog going into the quarter. There's quite some orders that you already shipped within the quarter. Is that causing any capacity constraints on your side? Do you see any risk orders from your clients, or are you well able to manage the increase in demand?
Well, the first is, of course, proven by what we have demonstrated in several quarters last year, but also the year before. We are able to adapt our ramps ever more faster. Several years ago, we had a quarterly Defined revenue more or less by backlog at the end of the quarter. We can now shift for many products in four to six weeks, and that then, with underlying demand strength, translates into higher revenue than backlog at the end of the previous quarter. Are there bottlenecks? So far, there are no bottlenecks. We are able to ramp. We've demonstrated in the past ramps quarter-over-quarter by 80%, and that we have further improved. The key is, of course, to be able to turn around any business in a timeframe of a quarter and even shorter for many of our products.
Okay. That's clear. Maybe looking at seasonality in your business. I think in the past, typically H1 was a bit better than H2. We didn't really see that last year when the business remained very strong in the second half. Any thoughts on what kind of seasonality we might see in 2017? Maybe on the outlook for Q1, is there any effect from the fact that Chinese New Year is relatively early this year? Is that affecting the dynamics in terms of sales and order trends?
Well, first of all, you are asking the seasonality in a year. This industry is well-known that the first half year is typically stronger than the second half year, and that has to do with the launch of new end products, mostly in the second half of the year and sometimes with certain consumer products, Christmas sales focused. Whether that in 2017 will be the same is to be seen, but that also ties to the first question. We manage this business on a weekly planning basis, and whether we go up or whether we go down, it is, for us, important to respond immediately to market changes both up and down. Chinese New Year, the impact for the first quarter, there is no relationship between when Chinese New Year, whether it's early or somewhat later.
What is often the case is that before Chinese New Year, subcontractors are not yet really moving, and they typically move directly after Chinese New Year with new orders. This year, with the order trend, what we have guided, that is somewhat different. There's no direct link.
Okay. You already saw some quite decent ordering before the Chinese New Year.
Yes, we have to. Otherwise, we would not be able to make this statement.
No, correct. Coming back on the earlier question by Nigel on advanced packaging. You mentioned eWLB and TCB. There was a lot of talk about eWLB and fan-out wafer level packaging last year. Do you expect fan-out wafer level-related spending in 2017 to be up compared with 2016? When it comes to TCB, it seems that 2016 was relatively quiet. You think 2017 will be a better year for TCB?
Well, we have always, in the past several years, tried to inform you that these new developments take time. Simply because it's a matter of cost, and also whether the previous technologies can be further stretched. The life cycles lengthened. Every year, there's a certain push by certain technologies, whether that's logic or memory, specific applications where customers are trying to push the envelope. Last year was a specific eWLB fan-out investment route, less in TCB. That was more in 2015. Next year, 2017, still to be seen. There are some problems, of course, further fan-out eWLB, but there's also, look at the bookings information we provided so far, also pointing towards China. In many of the high-end products, there is still a significant substrate flip-chip-based assembly solutions, which are definitely leading-edge technology.
It's not all fan-out or eWLB or TCB in an immediate shift. Gradually, year by year, you will see more adoption simply forced by ever smaller design geometry on chip level. Concluding this year, yes, some more in fan-out, some more maybe again in TCB, but don't expect that to take over the entire market.
Okay. That's helpful. I had a question on the slide on the 2017-2021 initiatives, where you talk about expanding market share in mainstream assembly. Are you referring to the SMT market, or are you referring to maybe moving lower in your existing market? It's not fully clear to me which market you will address.
Well, first of all, it's not in the SMT market. We're not going downstream.
Okay.
If you also look at the slides we update regularly on the share of wallet at certain customers, at key customers, OSATs. Today, 50/50 split revenue, IDMs, OSATs. The statement is very much geared to with the further reduction of our cost base in Asia, the faster turnarounds, cycle times, we already see that. We are convinced that there is still much more in that market we can address successfully, also with high margins. That is behind that statement. Not new markets, but expanding market shares in existing markets with similar gross margins, which directly translate to the bottom line.
Okay. That brings me to my final question. In recent quarters, we saw a gross margin of around 50%, and now in Q4 and also Q1, it's more like 53%. That is a sustainable kind of margin, even with you going more into mainstream?
As I just said, to repeat that, we have said that many times. This is not a market where your fate is determined on market share. That determines your pricing. At the same time, when you continue to reduce your cost with also the initiatives which we have, again, tried to explain to you, it's not only cost on supply chain selections, but also further development of common modules, common parts, also expanding production in China, more closer to the Chinese customers. Those effects are translating into ever-stronger gross margins. On the other hand, we've also said that in the notes and always. Key is, of course, exchange rates.
This industry is very much a dollar industry, a dollar industry tied to the strength of the U.S. economy. Those influences are very important for our overall gross margin. You can also say we've had tailwind, as we have mentioned in the notes, from a high dollar, a weak euro, less since we've moved a lot of the applications and support to Singapore, 2015 mainly. We have low Malaysian ringgits. Chinese currency is still low. If these things change, please look at the matrix in our presentation, that will have an impact on the sustainability of our gross margin. That is something which is in effect for all of us.
Okay. That's very helpful. Thank you.
Okay.
The next question, Mr. Robert Sanders, Deutsche Bank. Go ahead, please.
Good afternoon. My first question was around camera modules, just the trend of dual cameras in smartphones. I know your exposure is not as great as high as ASM Pacific, but I was just wondering if you could sort of quantify the impact that you've seen from that trend on your orders. I know ASMPT talks about it being 10% of their sales. That would be my first question, if you could just give some color around that. Second one would just be around the fan-out trend. Does seem like the fan-out trend to be losing a bit of momentum. MediaTek and HiSilicon don't seem to be moving forward with InFO. A lot of the customers of SWIFT are struggling with the cost and complexity.
I was just wondering if you saw any potential in the panel-level fan-out market, because certainly that's something that we're seeing as a new trend, and how you gear to that. Thank you.
Excellent questions. Thank you, Robert. First of all, we are fortunate that we are not exposed to any of our products to an extent. First of all, the top 10 customers represent 47% of revenue. There is no customer with a larger revenue percentage of about 8%. On the other hand, and we have a beautiful slide on that, about 70% of the active components in smartphones are manufactured with Besi equipment. Yes, the dual camera module is a special module. We deliver for that all the equipment which makes the brackets, then there are also lenses and also other components. We have fingerprint sensors where we have a very large share. There are also all kinds of other components. As I mentioned earlier, just over 30% of our revenue, which is quite a lot, is related to mobile internet devices.
On the other hand, what is also important to note, we are very strong in a broad base of smartphones. The leading-edge Chinese models also use our technology, and that also ties into your second question. The envelope of existing flip chip interconnect technologies, not using fan-out but using substrate still, is from a cost but also performance, so far similar to that of using wafer-level solutions using fan-out, and the cost is significantly higher of this fan-out technology. In that sense, you're very right in your statement. The breakthrough is not yet as one might have expected with all the commentary from many in those areas. We think it will still take several generations before the limitations of current assembly technology will force the world into wafer-level solutions. Simply, technology will force at some point that transition. It will happen. The question is only when.
Your question about panel is maybe somewhat different. That's another way of reducing cost. If you look today at the density of assembly of devices in every nature, there's a lot of development going on to increase that density, and by that way, reducing the cost by less equipment needed for the same volumes. We are involved in that since many years. We've been riding the forefront of the ever further increase of that density. Panel is used simply because some designs go as far as 540 by 540 millimeter panels, but that is still very early days. That's another direction to reduce further cost by, as said, higher density developments. Does this answer your questions?
Yes, it does. Thank you very much.
Our next question, Mr. Edwin de Jong, NIBC. Go ahead, please.
Hello, gentlemen. A couple of questions left. Getting back to Pieter's question on improving the position in mainstream assembly. Should we think of a flip chip, maybe even the lower kind of a flip chip, or is that the direction we should look at in mainstream assembly?
No. There are several areas. Start with epoxy die bonding is a nice avenue.
Okay.
Simply because we were able to increase the throughput from 14,000 UPH to 18,000 for ultra-thin devices, has increased our market share last year significantly, and that is in the big mainstream of semiconductor assembly. Those systems are not only faster, but they are more flexible, easy to program. Many customers in China, many subcontractors, simply because of these features, buy our machines in the mainstream applications. Flip chip is still a smaller segment. Yes, we are very successful in flip chip and ever more, but that is not the area which we mean specifically by.
Mainstream
tending the mainstream.
Okay. We're talking about epoxy die bonders, but do you have other examples of?
Same with molding, with trim and form. Trim and form is very strong at this moment.
Okay.
With also the same reason, cost, which is very competitive, machines which are faster, are more accurate. It's all about cost of running these products, and that's, let's say, in the highest end, technology is more dominant, but also cost. On more the mainstream, it is both technology and very much the cost. These systems are tested every single day side by side with our competitors, and the true cost of ownership, we are winners in more and more areas. It's not looking at new markets, not going downstream. It's focus on building the best cost of ownership systems in the world.
That's my root job.
Everyone's job.
Okay.
Good to hear.
Maybe still on flip chip and also on wafer-level packaging and TCB. Could you maybe explain a little bit what the position is of competition nowadays? Are they getting more inroads, or are you still more or less the only one in these fields?
No, we're never the only one. The important thing to understand is that, first of all, the requirements from the customers are not 100% fixed, and even more so, far less than 100%. There are choices to be made.
on all these process requirements. We have to choose for which applications do we develop our system solutions, whether that's in fan-out or TCB or any of these new developments. That's unknown. There is a general roadmap saying that at some point, using substrates as an interposer is not anymore feasible. Wafer level is determined simply by the requirements of the interconnect.
Yeah.
Still then in that world, there are different choices, and our competitors and we are choosing different avenues. In the end, it's still not known which will be the prevailing solution.
Okay. Mainly for the interconnect.
Yeah. You can say on average, the Japanese are certainly focused on the most far-reaching tight specifications. Asian companies are more focused on the faster solutions, with less advanced accuracies, and we are somewhere in the middle. So far, in the middle seems to be a very good choice.
Yeah.
It's through the telephone explaining always a bit, you have to be careful because you generalize. The main message is there are definitely competitors because simply these new technologies with higher cost systems will increase the total market for the interconnect of those devices. There are models which predict that from a EUR 3.5 billion market today, our assembly equipment market may well go to EUR 6 billion in the next step using wafer-level, et cetera.
Yeah.
There are many companies focusing on those exciting growth areas.
What you as Besi still need is probably a company or equipment that can reduce the interconnect.
Well, there are several processes which we do not service today. If you take the whole process flow for wafer level, we deliver beautiful fan-out systems, also molding systems.
Yeah
singulation for a certain application. There are many process steps in between where we do not offer any equipment. There's still a huge world open in the next years to come with very interesting growth.
Yeah. Very clear. My last one, two questions left. On cycle times. Cycle times have been reduced to 4 to 6 weeks now, and that's what you stated in the presentation, I think before. Has come down quite a lot, I think. Could you give an idea of how much it has come back? Was it two years ago, 6 to 8 weeks, and can it go even further to, let's say, 2 to 4 weeks?
No, it was even 8 to 10 weeks, four years ago. By moving to Asia, by changing designs, also dramatically changing our whole supplier base, we have been able to reduce that. Of course, we are reducing that further. As I mentioned, China, for Chinese customers, this is very important.
Yeah
because it takes out the transportation and import process at least 4 weeks. The delivery to the shop floor of the customer is already 4 weeks reduced by building the systems in China.
Yeah.
That's what it's all about.
Yeah. That's probably also one of the reasons that it has not been necessary to invest a lot in a new facility or so.
Well, we have invested timely in new facilities, and as we've mentioned in the past, responding to questions about this, we are definitely able to handle the expected growth in our current facilities.
Yeah.
With China ramping, this will even give us more capabilities expanding volume in the future.
Okay. Very clear. Last question is on solar. How is that developing at the moment?
Solar, you can say, has witnessed in the last two years a reasonable recovery that has slowed down somewhat. Whether that has to do with the change of administration in America is a question.
Some programs have been pushed out. On the other hand, our technology is being proven better and better. We expect definitely, again, some pickup in the solar world going forward.
some 5% of revenues now.
Slightly less
Low
revenue is growing a bit more, but around 5%, yes.
Very clear.
Plating for semiconductors is doing again very well. Some offset between last year's stronger solar, but now stronger semiconductor.
Okay. Yeah. Okay. Very clear. Thank you.
Thanks, Edwin.
The next question, Mr. Pieter Olijslager, Kepler Cheuvreux. Go ahead, please.
I had a follow-up on cash. I noticed that you have invested EUR 80 million in deposits. Just to confirm that you have immediate access to that money, or are there any restrictions there?
No significant restrictions.
Basically it's cash.
Yes.
That's clear. Thank you.
Ladies and gentlemen, for any further questions, please press star one. Star one for your question or remark. Mr. Chairman, there are no further questions.
Well, we thank everyone for taking the time and asking questions. If there are any further questions, you know where to reach us. Thank you very much. Bye-bye.
Ladies and gentlemen, this will conclude the Besi conference call and audio webcast. You may now disconnect your line. Thank you. Have a nice day. The conference is no longer being recorded.