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 Q4 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. Coit de Hennepe, Senior Vice President of Finance. At this time, all participants are in listen only mode.
Later, we will conduct a question and 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 Q4 and the year ended December 31, 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 375 €400,000 and a net income of €65,300,000 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 €168,100,000 an increase of 23.2 percent versus 2015. Revenue growth built progressively during 2016 stimulated by expanded investment by Chinese and Taiwanese subcontractors for new state of the art and funds 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 functionalities such as fingerprint sensors and advanced dual camera and flashlight modules.
The second half twenty sixteen witnessed much stronger than anticipated order revenue and profit levels with particular strength in the 4th quarter. During a traditional weak period of the year, revenue and net income reached €93,100,000 16 €700,000 respectively and significantly exceeded expectations. In addition, gross and net margins rose to 50 3.2% 18% respectively. Besi's results significantly exceeded guidance, due primarily to much stronger than anticipated shipments of epoxy and flip chip tie 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 $67,800,000 in 20 16 increased by 11.3% versus 2015 and since 2011 totaled €186,000,000 In September we completed the 2015 buyback program under which 1,000,000 shares were repurchased for €22,500,000 Upon completion we initiated a new 1,000,000 share repurchase program in October under which we've bought so far 220 7.907 shares for €7,400,000 through February 22. In total we have approximately 2,800,000 shares in treasury currently at an average price of 13 point €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 1 of this year. The proposed distribution represents a 45% increase versus 2015 and is the 7th 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 'sixteen revenue decreased by only 1.3% versus Q3 'sixteen as we experienced particularly strong customer demand for flip chip and multimodule die bonding systems for mobile and automotive applications.
Versus Q4 Q4 'fifteen revenue increased by 19.7 percent due primarily to higher demand by Asian subcontractors for new advanced packaging capacity and improved industry conditions. Similarly, orders increased by 17% versus Q3 'sixteen and by 18.2% versus Q4 'fifteen. Order strength are broad based with sub contractor orders up sequentially by €5,800,000 or 16.9 percent, while IDM orders increased by €7,500,000 or 17.2%. For the year, base revenue and orders grew by 7.5% and 7.3% respectively, with particularly strong growth experienced by our leading epoxy, motor module and EWLB dyebonders 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% 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 cost versus 30% 3 years ago. We expect this trend to continue.
Besi's gross margin of 53.2% in Q4 'sixteen increased by 2.7% versus Q3 'fifteen and by 3.2% versus Q4 'fifteen. Similarly for the full year gross margins reached 51%, an increase of 2.2%. In general basis 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 weakened Malaysian ringgit versus the euro. OpEx trends for the quarter year reflect the benefits of Besi's ongoing cost control initiatives. Although Q4 'sixteen operating expenses increased sequentially by €1,600,000 or 5.7 percent, baseline OpEx only increased by €200,000 The €1,600,000 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 €3,800,000 was due to similar factors as well as increased warranty expenses related to higher sales levels. OpEx actually decreased by €800,000 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 'sixteen net income was up by €100,000 versus Q3 'sixteen. Moreover, net income was up by €7,000,000 or 72.2 percent versus Q4 'fifteen and net margins were up strongly to 18% versus 12.4%. Similarly 2016 net income increased by €16,300,000 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 €150,500,000 versus Q3 'sixteen to reach €304,800,000 primarily due to the net proceeds from the €125,000,000 convertible note offering in December. In addition, net cash increased sequentially in Q4 'sixteen to €36,200,000 to reach €168,100,000 due to profit generation and improved working capital management, which was partially offset by €4,500,000 of share repurchases made. On a year over year basis, net cash increased by €31,600,000 or 23 percent due to strong profit and cash flow generation. Cash flow from operations reached €98,700,000 in 2016, an increase of 14.1% versus previous year.
Cash flow was utilized primarily to enhance shareholder returns in the form of €67,400,000 paid in dividends and share repurchases. And 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 Q1 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 1 to 2 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 favorable 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 structure costs, move operations closer to customers and improve cycle times and working capital management. In 2016, we executed all key operational and R and 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 back bonding lines at Besi's Lushan, China facility targeted specifically for the local Chinese market. By such actions top selling epoxy and multi module Diablonyx 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 5 year plan to become a greater force in global semiconductor markets.
To meet strong demand, we quadrupled production at Luzon 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 Q4 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 5 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 Q1 guidance. VLSI forecasts continued industry growth of 9 point 3% and 5.3% in 2017 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 underway which will require new advanced packaging solutions. This is also a favorable growth driver for our business. Besi's Q1 2017 guidance calls for revenue growth of between 15% 20% versus the Q4 of last year based on strong Q4 'sixteen bookings.
The midpoint of revenue guidance suggests substantial growth versus the Q1 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 Q1 significantly exceeding levels realized in all of the Q4 last year. We are scaling our Asian supply chain and production capabilities rapidly to meet anticipated demand. In Q1 'seventeen gross margin is expected to be in the range between 52% 54% and OpEx should increase by 5% to 10% sequentially mostly due to higher share based incentive compensation expense. We anticipate that our tax rate will remain in the 10% to 15% range for the full year of 2017.
That ends our prepared remarks and I would like to open the call now for some questions. Operator?
Thank you, Mr. Liechmann. Ladies and gentlemen, as said, we will start the question and answer session now. The first question is coming from Mr. Nigel van Piven, ING.
Go ahead please.
Hi, good afternoon. And 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? And then as a follow-up also on the market, 2016 in terms of absolute revenue, euros was already quite close to the absolute record in 2014. But 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, Teitel. 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. But if we focus on EWB, 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 dyes 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 the 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, etcetera, and also automotive. Those are the 3 cornerstones. And revenue wise, it's about 25%. Computer world slightly over 30%, communication devices and around 18% to 20% automotive.
On your second question, the growth rate for 'seventeen, if we look at the current guidance for the Q1, the quick math tells you that we will not be far off from the peak in the Q2 of 2014, about 8%, 10% depends a bit. Then if you take the guidance we gave on the order intake so far until February 23, 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 Q1. How much? We do not guide.
So 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. VLSI expects an ongoing growth, a broad based strong 8 quarter growth trajectory for investment in CapEx driven by a new technology cycle, also Chinese expansion. So this could be with those elements a stronger growth cycle than the previous one.
But this is all to be seen. As we know we are highly dependent upon GDP. So 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.
The next question is coming from Mr. Peter Olofsen, Kepler Cheuvreux.
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. So there's quite some orders that you already shipped within the quarter. Is that causing any capacity constraints on your side? And 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 evermore faster. So 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 4 to 6 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. So 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. Then 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. And any thoughts on what kind of seasonality we might see in 2017? And maybe on the outlook for Q1, is there any effect from the fact that Chinese New Year is 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 Q1, 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. But that is there's no direct link.
Okay, but 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. Then coming back on the earlier question by Nigel on Advanced Packaging. You mentioned EWLB and PCB.
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 'seventeen to be up compared with 'sixteen? And 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. So the life cycles lengthened. And 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 TCP that was more in 2015. Next year 2017 still to be seen.
There are some programs of course further fan out EWB, but there's also and look at the bookings information we provided so far and 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. So it's not all fan out or EWB 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. So 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. Then 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 markets you will address?
Well, first of all, it's not in the SMT market. We are 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 fifty-fifty 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. So that is behind that statement. So not new markets, but expanding market shares in existing markets with similar gross margins, which directly translate to the bottom line.
Okay. Yes, so that brings me to my final question. In recent quarters, we saw 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, but we have said that many times, this is not a market where your fate is determined on market share. You have to be very much focused on those applications where your product is really better than that of your competitors. And that determines your pricing. And at the same time when you continue to reduce your costs 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 and also expanding production in China, so more closer to the Chinese customers and those effects are translating into ever stronger gross margins.
On the other hand, and we've also said that in the notes and always, key is of course exchange rates. This industry is very much a dollar industry. And a dollar industry tied to the strength of the U. S. Economy and those influences are very important for our overall gross margin.
So you can also say we've had tailwind as we have mentioned in the notes from a high dollar, a weak euro, a bit offset by a strong Swiss franc but less since we've moved a lot of the applications and support to Singapore, 2015 mainly. We have low Malaysian ringgit. Chinese currency is still low. But if these things change and please look at the matrix in our presentation that will have an impact on the sustainability of our gross margin. But 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.
Yes, 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 AirSim 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 mean, SMPT 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. It does seem like the fan out trend does seem to be losing a bit of momentum. MediaTek and HiSilicon Dense seem to be moving forward with info. And a lot of the customers at Swift are struggling with the cost and complexity.
So 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 get 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 and there is no customer with a larger revenue percentage of about 8%.
So on the other hand and we have a beautiful slide on that about 70% of the active components in smartphones are manufactured with basic equipment. So yes, a dual camera module is a special module. We deliver for that all the equipment which makes the brackets, But then there are also lenses and also other components. But we have fingerprint sensors where we have a very large share. But 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 the broad based of smartphones. Chinese, 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 using 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.
So in that sense you're very, 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. So it will happen.
The question is only when. Your question about panel is maybe somewhat different. That's another way of reducing costs. So 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 and panel is used simply because some designs go as far as 540x540 millimeter panels, but that is still very early days. So that's another direction to reduce further cost by asset higher density developments. Does this answer your questions?
Yes, it does. Thank you very much.
The next question Mr. Edwin de Jong, NIBC. Go ahead please.
Hello, gentlemen. A couple of questions left. Also getting back to Peter's question on improving the position in mainstream assembly, should we think of flip chip, maybe even the lower kind of flip chip or is that the direction we should look at in mainstream assembly?
No, there are several areas. Start with epoxy dye bonding is a nice avenue. 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. And those systems are not only faster but they are more flexible, easy to program. So many customers in China, many subcontractors simply because of these features by our machines in the mainstream applications.
Flip chip is still a smaller segment. Yes, we are very successful in Flip and evermore, but that is not the area which we mean specifically with our pending the mainstream.
Okay. So then we're talking about epoxy dye bundle, but do you have other examples of
Same with molding, with trim and form. Trim and form is very strong at this moment. With also the same reason, cost which is very competitive, machines which are faster and 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 or more the mainstream it is both technology and very much the cost. So 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.
So it's not looking at new markets, not going downstream, it's focused on building the best cost of ownership systems in the world. That's my root job. Everyone's job. Okay.
And then 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. But 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. So 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. And that's unknown.
There is a general roadmap saying that at some point using substrates as an interposer is not anymore feasible. So wafer level is determined simply by the requirements of the interconnect. But still then in that world, there are different choices and our competitors and we are choosing different avenues. And in the end, it's still not known which will be the prevailing solution.
Okay. Mainly for the Interconnect.
Yes. But you can say on average, the Japanese are certainly focused on the most far reaching type specifications. Asian companies are more focused on the faster solutions which with less advanced accuracies and we are somewhere in the middle. And so far in the middle seems to be a very good choice. It's not an easy it's sort of telephone explaining always a bit you have to be careful because you generalize.
But the main message is they are definitely competitors because simply these new technologies with higher cost systems will increase the total market for the interconnect of those devices and there are models which predict that from a 3,500,000,000 market today our assembly equipment market may well go to 6 €1,000,000,000 in the next step using wafer level etcetera. So there are many companies focusing on those exciting growth areas.
And what you as Besse still needs is probably a company or equipment that can reduce the interconnects? Is that
No, there are several processes which we do not service today. So if you take the whole process flow for wafer level, we deliver beautiful fan out systems, also molding systems, singulation for certain application. But there are many, many process steps in between where we do not offer any equipment. So there's still a huge world open in the next years to come with very interesting growth.
Yes, very clear, very clear. And then my last one, two questions left on cycle times. The cycle times have been reduced to 4 to 6 weeks now. And that's what I see what you stated in the presentation, I think, before has come down quite a lot, I think. But could you give an idea of how much it has come back?
Was it 2 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 4 years ago. And by moving to Asia, by changing designs, also dramatically changing our whole supplier base, we have been able to reduce that. And of course, we are reducing that further. As I mentioned to China, for Chinese customers, this is very important because it takes out the transportation and import process at least 4 weeks. So the delivery to the shop floor of the customer is already 4 weeks reduced by building the systems in China.
But that's what it's all about. Yes. That's probably also one
of the reasons that you have not 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. And with China ramping this will even give us more capabilities expanding volume in the future.
Okay. Very clear. And the last question is on solar. How is that developing at the moment?
Solar, you can say has witnessed in the last 2 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.
So we expect definitely again some pickup in the solar world going forward.
So some 5% of revenues now?
Slightly less, because revenue is growing a bit more, but around 5%, yes. Plating from semiconductors is doing again very well. So some offset between last year's stronger solar, but now stronger silicon. Okay.
Development. The next question, Mr. Peter Olofsen with Kepler Cheuvreux. Go ahead please.
Yes. I had a follow-up on cash. I noticed that you have invested €80,000,000 in deposits. Just to confirm that you have immediate access to that money, or are there any restrictions there?
No significant restrictions.
Okay. So basically, it's cash?
Yes. Okay. That's clear. Thank you.
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.