Okay. Good day, everybody, and thank you for joining this webinar. For those who don't know me, my name is Nigel van Putten. I cover Besi here at MS. I don't think that Mr. Richard Blickman needs much of an introduction, as he is the President and CEO of Besi and has been in that position since May 1995. Welcome, Mr. Blickman.
Good afternoon, everyone.
Hello.
Good morning.
Yeah. Evening as well. In addition, we have Senior Vice President of Finance, Leon Verweijen, and the VP of Corporate Development, Mr. Edmond Franco, on the panel as well. Thank you all for joining. The format today is that of a fireside chat. I have some questions prepared, but you in the audience can submit questions as well through the Q&A box at the bottom of your screen. I will receive those, condense those a little bit so we're able to cover as much ground as possible. Please do take into account that we have quite a large audience today, so I'd like the questions to be quite specific but not too detailed at the same time. All right. Again, lots of ground to cover. We have about an hour.
I'd like the structure to go into three parts. Maybe to start off with a review of the year, including some of the important milestones, challenges and progress. Into current trading, the order book, the outlook, et cetera. I want to leave plenty of time to talk about technology and maybe even some stuff around hybrid bonding as well. With that, I'll turn the call over to you, Richard. Perhaps you can walk us through 2022 a little bit.
Well, thank you very much, Nigel, for the introduction, happy to focus on some highlights of the 2022 calendar year. If you look back, it's been a very important year for the development of our products, and in particular, the breakthrough of hybrid bonding tools. We shipped in total 35 machines, of which about 25 are used in production, which is basically from scratch in 2021. A major breakthrough in very substantial volumes and used in chiplets, which have been marketed as of September 2021. From that date, both volumes and specific designs have increased steadily. That has led to more orders.
Q4 was a very important quarter with 11 additional systems and then three more in the early part of Q1, which then totals 14 machines. What also happened in the hybrid development is, as we have explained in the Capital Markets Day, but also in our quarterly reviews, the objective to develop a automated line which supports the simply the quality of hybrid bonding process by eliminating more particle generation because that line is fully enclosed. That line consists of cleaning tools supplied by AMAT, plus the line itself, and Besi connects the bonders to that line. Very important, the first line has been set up at a customer in Taiwan, the major customer for hybrid bonding so far.
That should become the workhorse for the industry as this technology further is adopted in an ever broader sense. At the same time, integrated lines have been ordered in the U.S., and several will be installed this year. 2023 starts to look like a continuation of 2022, setting up the basic capabilities for hybrid bonding adoption, both in Taiwan, which started, let's say, one and a half years ago, and further developing of this capability onshore in the U.S. Summarizing, one can say that 2022 again has been a major breakthrough year for this technology. It is used for chip design architecture below 10 nm. Today, supposedly, it is used in 5 nm and 7 nm design environments.
In the future, it's intended certainly, and it has to, because it's the only way you can connect devices once the industry moves to node sizes below 5 nm to 3 nm and potentially also 2 nm. That is then made feasible by further designing this generation one tool, which allows 150 nm to go down to 100 nm. For that purpose, we will ship the first tool capable of 100 nm around April timeframe. In 2023, that will be further developed and using for these ever smaller node sizes. You would ask the rest of 2022. If you look at Besi's revenue, it reduced by, you could say, only 5% versus 2021 in a year where the downturn really took shape since Q2.
The overall demand for equipment reduced gradually Q3, Q4. With a major downturn now as it looks for, let's say the conventional business, also lower demand for high-end smartphone applications. The only bright spots were this hybrid bonding development and also a continuation for applications in the automotive arena. 2022 marks a year where we have benefited from early introduction, adoption or recognition of the need for a new process called hybrid bonding. That has helped us so far in this down cycle. Our margins improved versus 2021 simply because of very tight cost control. We also reduced the flexible headcount in operations simply because we built less machines in the second half. We were also supported by a strong U.S. dollar in that sense.
All in all, the year 2022 was for Besi very successful with, you could say, only a small revenue decline. Margins improved. What also is very important to note, in Q4, our orders increased by 40%, 40+% versus Q3, which also demonstrates that our equipment is at the forefront of technology. Once there are applications which will become, let's say, used in mainstream applications, we see that translated into increased orders. We also mentioned that these orders are typical for forefront technology, so they will use some more time to be manufactured. The effect of that increased orders we will see in Q2 mainly, and also partly in Q3. We guided the 1st quarter down between 0% and 10% versus Q4. Remember, we're in the midst of a downturn.
Margins to, say, stay roughly at the same level as in Q3, so between 61% and 63%. Our OpEx will be similar to slightly below, apart from the one-time cost related to our incentive program, which we mainly take in Q1. That is in a summary, what has been 2022, and also a slight outlook for this Q1 of 2023.
Yeah. Thank you for that great introduction. I think there's actually one topic you haven't addressed, but I know is important for both you and most investors on the line here, and that's capital allocation. Even though-
Uh-huh.
Top line was down, R&D up 48% of the year, EUR 416.3 million returned to shareholders. Actually, my question would be, it seems you're on track to do even more in terms of both growing R&D but also returning cash to shareholders this year. Talking about the share buyback and the already announced dividend proposal.
Well, we have a very simple, let's say, rule in the company developed. We maintain 20% of our revenue in net cash simply to be prepared to invest in R&D in particular, but also, if faced with real downturns, we are in the position to healthy develop through these down cycles. Anything above 20%, we simply distribute to shareholders, either with dividends or share buybacks. Last year marked an important year in terms of share buybacks. We increased our program significantly to EUR 300 million, which then, as you said, totaled both the dividends of EUR 3.33 per share over the year 2021, paid out in May 2022. In addition to that, the share buyback, in total EUR 416 million.
Still, if you look at our net cash, things have not changed in that sense. This year, again, we will propose at the AGM a slightly lower dividend of EUR 2.85, and at the same time, a continuation of our share buyback program, which is until basically end of September, October this year. If things continue as they do, we will certainly extend that program further. Simply based on the rule of thumb, 20% net cash in 20% of revenue, which is what we maintain as a baseline.
Excellent. Thank you. In the meantime, trying to consolidate some of the questions that are coming in. First, looking into the March quarter, you've already alluded to the guidance. I'd phrase it a little bit different. Like you also said, FTE, especially in Asia, temp were down quite significantly, into the current quarter. Do you see that number going down further, or is it stabilizing here or maybe increasing already a little bit in sort of preparation of what's to come?
Well, the latter. If we look at the order intake, what I mentioned in Q4, an order intake of around EUR 180 million, that brings us again to higher revenue levels. Remember EUR 137 million in Q4. That means you need more hands to assemble those machines. Also they are machines, let's say in a higher category. The key question is, of course, all of us don't know, are we really at the bottom or are we reaching a bottom maybe in the next quarter? That's the big question for everyone. Again, Besi's model is very flexible. We have this flexible workforce, which works excellent, I can say. Whatever we need to do, we can organize very rapidly.
Excellent. Maybe on to the backlog of orders. Quite high. Also seeing a bit of a change in the seasonality of ordering, already in the third quarter, more in the fourth. Is that continuing into the first and maybe second? If I'm correct, the shipment is still due the second quarter, so most of the smartphone seasonality is still there. However, the orders were placed earlier. How does that look, sort of where we stand today, end of February? Is that continuing still?
Well, first of all, we must bear in mind we've had nearly three years of major supply chain issues, partly due to COVID, partly due to an enormous increased demand for semiconductor equipment across the board. That's also why certain times backlogs have built differently than from pre-COVID times. Pre-COVID, we had run rates per quarter, typically of all of our machines. You could very much see in the order intake in the previous quarter how the next quarter revenue would develop. Because of COVID, supply chains have lengthened for, and still for certain components, there are longer lead times than we had in the past. Also the systems, the simply design of the systems has changed. Hybrid bonders, they take about six to nine months, depends a bit on the configuration.
There are also other equipments which have been developed for next generation application. We look at a slightly different pattern of lead times, so internal manufacturing lead times. That reflects then, of course, in when a backlog will be fully depleted, and then new orders coming in. I think it's fair to say that we are gradually going back to a more normalized pattern before COVID, but the equipment we now supply for a large extent has a longer manufacturing lead time. How order development, and that's what I said earlier as well, don't forget, we are in a downturn. There are some thoughts on that we may well be in a bottom. There are some others who think it may be a bit longer.
Let me give an example about the Chinese subcontractors. What is of course, in a way disappointing is that, with China opening up in December, there was a clear thought that the industry would pick up again, shortly thereafter. Chinese New Year is a usual, let's say, a moment when orders are picked up for the rest of the year. This time, they're disappointed. Some people think it may take a bit longer. Orders may well come in the second quarter for, yeah, an improvement in the second half of this year.
We commented on the call to some questions about the utilization rate at Chinese subcons, and we shared that our own system of counting that utilization still tells us that we are not at a point where there's imminent shortage of manufacturing equipment. It has improved, but. My answer summarized is simply that we're still in, as we said, also in the press release, in a downturn. The question is, are we hitting bottom or will it take a bit longer?
Understood. Got it. Okay. I think it's time to switch gears into some technology. Yes, we'll get to hybrid bonding very soon. We have quite some questions coming in already. I do wanna touch upon TCB first. I think there was FormFactor saying they see quite some movement in what they said, x86 client computes, chiplets, CPU. We all know what we're talking about here. Then there's also perhaps a foundry that may or may not adopt TCB as well. Just curious to see. I mean, you said in the call you're shipping the first chip to wafer tool in April. What is the outlook there?
How many applications are you targeting, what do you think will be sort of the ramp into the current year?
Well, first of all, you have hybrid bonding, you have thermal compression bonding, TCB, and you have flip chip. In our deck, there's this beautiful slide which explains a certain design where different technologies are used. For many product roadmaps, you can see for certain critical, especially microcontrollers, and once you start to stack memory on top of that hybrid bonding is the technology that has to be used because of the shorter distances. For the broader, let's say, total design, you may need to use TCB, and then ultimately the entire package you connect with flip chip. In, yeah, let's say, many of the designs of the major roadmaps, you are starting to see that combination.
With the shipment of the first TCB tool, we will be able to supply both to the industry and of course the flip chip for the entire package, already today. That total solution is used by a major U.S. customer. Also in the foundry world, it's recognized that that completes the offering to those customers, who are using the. Those are the fabless companies. With the shipment of the first tool, after qualification of about six months, you can expect in the second half of this year, orders for this first application where this is designed for. That opens up a major expansion program in 2024, 2025 and onwards. It's a simple completion of a product offering.
We started with TCB back in 2012, where we shipped numerous machines for stacking, at that time, DRAMs in memory packs. That technology is still used, but in limited volumes. We switched to hybrid bonding full speed, because that was a direct requirement from a very major customer, and now several. On top of that, we have this next generation TCB. Simply following the roadmap in high-end CPU and memory applications.
Excellent. Very, very interesting. Couple ways to go from here, I do suggest we start covering hybrid bonding. Maybe my introduction would be, seems that in the past, packaging was quite specific to the chip. I think there's over a dozen type of chip packaging and the specifics could be triple digit even if you sort of take the configurations, et cetera. Then hybrid bonding seems to be a very sort of common process across multiple applications, more like a front-end process. My question would be, what do these applications share? You got CPU, GPU, ASICs, DRAM even, smartphone processors. Why are they all looking to hybrid bonding?
Well, the easiest way to make this, let's say clear is that, if you look at this industry over the past 60 years, it has been an industry with individual components, whether that's a processor, or whether that's memory, or whether it's power devices. The industry designs circuits combining these components and mostly on a printed circuit board. This chiplet architecture allows that on chip level you connect multiple devices. You eliminate the interposer, and simply you go from single devices to integrated devices. That is what the industry already several years ago has presented as the way forward. It's not brand new, but it is certainly a next step in integration on chip level.
Because the simple fact that below 10 nm, the interconnects using flip chip or TCB on individual devices is not feasible below a certain distance between IOs. The fact that you then have to move to chiplets using hybrid bonding is driving this technology into mainstream application. This writing on the wall has become, I would say seven years ago, by major forces. One of them is, of course, in Taiwan, TSMC, who has told the world, "You better prepare that this is in the end, the only way to create these circuits if you move down to node sizes below 10 nm." That is what has driven our R&D programs and simply focused on those customers to be ready in time and to enable this technology.
One of the important things with that is, of course, the partnership with Applied Materials. AMAT, one of the largest ones in this industry, is very close to the design tables of these key customers. They have recognized, which we then call the advanced packaging, that that has become the major end goal as opposed to just supplying equipment to produce these devices. That has brought us together about 3.5 years ago now, and that simply confirms how the industry is changing from an individual building block or device environment to an integrated chip directly connected, which has to be done in front-end environments because of particles and cleanliness of those processes. That's in a nutshell where we are in the very high end at this moment.
Up till about one year ago, there was definitely other voices in the industry who said, "Well, this is very nice, but it's very expensive because it has to be a front-end. These machines have to be very accurate, so because of that accuracy, also the ASPs go up. If we can stretch it further using the older technologies, larger die sizes, but that immediately has an impact on the speed of this circuit. The chiplet architecture, which is enabled by using this hybrid technology, simply proves to be able, in the end, even to stretch Moore's Law in a same node size, expanding the size of these CPUs by simply connecting CPUs designed in multiple devices. Again, and that's where we started.
2022 has been a major year in bringing this technology from the lab into mainstream applications, and that will simply continue.
Definitely with more and more chips being manufactured using hybrid bonding. Question here, but also something that I picked up on the call was there seems to be an acceleration in the number of clients that are interested in the technology at the moment. What customers do you see adopting this technology next? I think AMD has been quite public that they pretty much see packaging and hybrid bonding as key in their roadmap going forward in pretty much all their chips. They recently announced a new one, Instinct MI300, using a different type of using hybrid bonding, but seems quite significant. Besides AMD and maybe more in terms of the domains that we should be thinking, where to next?
Well, easy, of course, the first adopters are the top five. If we look at the forefront of this technology, and it's very well known who are the top five . We, of course, have Taiwan. We have in the U.S., two major ones, and we have Korea. What is very important is there's of course, these high-end fabless companies making CPUs for, especially for the mobile space. Also, as a clear proof of adoption is that now also the subcontractors in the assembly space are starting to prepare for setting up capabilities using hybrid bonding technology. In a year's time, that has changed significantly from you could say only two who are in the development phase and one ahead in production for mainstream applications.
That now is further expanding in a more broader sense. As we mentioned also in the call, day before yesterday, it proves, as just said, capabilities to be set up. In the end, you need end applications. You need the roadmaps of the, let's say, Intels, AMDs you refer to, but also many others. You in a sort of a chicken and an egg situation. What's very encouraging is of course, setting up these capabilities is very expensive, capital intensive, huh? Yeah, the positive message is that setting up these capabilities is supporting demand ultimately by customers which have made those commitments. That's in a broader sense an answer to your statements.
Yeah. Couple of follow-ups on that. Starting with the big U.S. logic IDM, I think I should call them, deciding on three major families. Could you give us a little bit color what we should think about?
Well, their families are very well known. They have, as we mentioned, what we've been told, decided on three major applications. We are not allowed to share specifics, which we never do, of any of our customers. In a broader sense, one can guess which ones they are. The important for us is this mainstream? What equipment do they need? Ultimately, how many machines do they need? If we look at it from that angle, we simply ship machines, so we build machines for applications. It still fits into our model where we have set up capabilities to build 15, depends a bit which ones, so between 12 and 18 machines per month. That translates into about 200 machines per year.
That should simply fulfill the capacity in the next three years, or something must dramatically accelerate, and then we are able, in six to nine months, to expand our production capability significantly. We have set up in Malaysia, the high volume assembly of these machines in a ISO room six environment. We've also prepared the rest of that facility that we can expand when needed. We've added a new facility close by, which then enables for the conventional business also to once the tide turns and the cycle picks up again, that we are able to build significantly more machines than we did in the last upcycle.
And customers, come regularly to evaluate our capabilities, test our supply chains, because they have to be sure that once they, accept an order from their customers, that Besi can deliver. That's in a nutshell, where we are today.
Got it. Maybe very specific, has this have to do maybe with the, with the generation of tools? Are they ordering the second, or you've got a 1+ , got a 2.0 type tools? Is that also why maybe there's an acceleration now with these customers deciding, "Okay, we're gonna use this tool for this process as we see this capability"? Is it still actually on the, on the tools you've already shipped to the market?
It's still generation one. As we mentioned in, I think also in October, after the third quarter, but certainly at the Capital Markets Day, this first generation is designed and capable to place accurately down to 120 nm. It's used today around 200 nm. You have some way to further, yeah, make these machines more tight. The 100 nm, as explained, will be shipped in early April, and it will take at least the rest of this year or maybe somewhat earlier, but to really bring this machine to full acceptance. It will be used as of 2024, and probably that is for the node generation 3 nm.
Above that, so 7, 5, that is the sweet spot today, where the major volume is expected and also the first chiplet families can be done with this generation one. Generation one plus or, let's say the 100 nm is more expected to 2024 onwards. For those applications which are based on the 3 nm design world.
Yes. Very clear. April for a shipment to be delivered next year, let's just say it's a little bit earlier than I expected. The question would be, how is your competitive position today? Because it seems that if you are already moving to a gen-2 , I don't think there's a competitive product in the market yet. It's difficult to say your lead is expanding because it was already... there wasn't a competitor, but it does seem that you are moving ahead quicker than competition is even getting towards the starting line. Is that a good sort of way to look at it?
Yeah. You could... Well, let me answer differently.
It was a little bit leading indeed, so.
Well, a year ago, we were the only one who offered really production-capable systems. That is today is still the case. What happened in the meantime is several high-end die attach platforms are, let's say, offered to the industry to also be developed for below 10 nm design, so accuracy is around 200 nm. The industry ultimately wants to have a choice. Today we offer these machines, and we have the largest, by far, installed base. Ideally, the industry wants to have a choice. How far competitors are lagging, that's always difficult to tell. Our concept is very well proven. It is also proven to be ready for the next generation. With that baseline, we expect that we can further extend our lead.
That's at least our objective. One also has to note, this is not easy. This is very difficult technology, not only accuracy, but also this whole particle zero particles. Otherwise you cannot create this connection. These machines are pretty complicated, and we have great help from the partnership with AMAT in how to build those machines for those front-end environments.
maybe 'cause if you say there's competition down to 200 nm, are those considered hybrid bonders or maybe very accurate, call it fluxless TCB tools that can, to a large extent, you know, do?
No, no.
Maybe in a different way.
No, there's, as we mentioned several times, there's a major Japanese competitor who was also invited seven years ago in Taiwan to develop this technology. Their concept is simply not able because we have a dual bond head design. The output of that machine is significantly lower. It's more from that angle. TCB is a different process. It's also different, the accuracies. The system we will ship has an accuracy of 1 micron, and that's the most advanced in the TCB applications, so that's not yet nanometers.
Sure.
That's a different situation.
To fully understand what you're saying, there is competition in hybrid bonding. However, based on especially throughput but also accuracy, you don't feel threatened. Is that a good way to summarize it?
You're always aware of only the paranoid survive.
Yeah.
ASM has announced that they are working on a beautiful concept, and they are offering that to customers to co-develop. Maybe something comes out of that or. Yeah. Never expect that nothing will change you.
No, of course. I think my view was that as you move to generation two, competition is actually still trying to even ship an initial product, except maybe the Japanese competitor who has his own difficulties.
Yeah.
I guess that would still be an okay way to sort of summarize that. That's helpful. Plenty of questions on AI. Large language models seem to be quite memory intensive. I was looking at, you know, some of the presentations or articles, et cetera. And there does seem to be two key areas, which is both there can never be enough SRAM, it seems, for CPUs and GPUs can definitely benefit from having a lot of near DRAM, so call it HBMs, et cetera.
Yeah.
Now, I know this is quite recent, the hype, but have you already seen some acceleration? I think the Koreans memory makers.
Mm-hmm.
Have come up quite a bit during the call on today. Do you see sort of that movement there accelerating for memory as well?
Yeah. Well, also a long roadmap which has been presented to us in the last three years, I would say. That's very, very easy to understand. Since about a year, we're sampling those memory devices, either stacked or on top of CPUs in the center of excellence in Singapore for the major U.S. memory manufacturer. Also that is now being extended in programs for the major Korean memory manufacturer. Along a very, yeah, let's say clear roadmap that is happening. I should add that that's not simply just adding memory. Memory are much thinner than CPUs, so there's another complexity in really making this happen. So it will take some time before those next steps are really mainstream.
Everyone knows that and, we're fully engaged in making that happen.
Got it. Thank you. Talking about roadmaps, I think a lot of investors are curious to hear more about smartphones, application processors, and the possible adoption of hybrid bonding there. The major smartphone clients seems to already move to N3 without the use of hybrid bonding. Why would they, in a future process, include hybrid bonding, considering that maybe N2 seems two years away? You've hinted that maybe 2024, 2025 is a logical envelope for introduction. What would drive that? Why would that not yet happened, and why is that increasingly likely sort of next year and the year after?
The simplest answer is yield. With hybrid bonding and a chiplet design capability, you can achieve a higher yield, and for that reason, a lower cost. That is why this technology is being tested, being developed at this moment. I believe it will find its way into 2024. I think it's a bit early because time flies, huh? We're now already close to March 2023, but certainly thereafter. That is what is driving the adoption of this technology.
Got it. That's yield on the front-end process. Of course, we've talked also about yield in the hybrid bonding process, up from 20% at introduction to 80% by October and moving up. When should we sort of expect full maturation of the process? I guess it depends on the customer.
In the course of this year, we're already in the 90s. There are sometimes one of the issues to have a specific example, is the flatness of these chips. We cannot fully control that. That is how the material is delivered. Yeah, that's one of the issues. The machine itself is more and more, yeah, production, 100% yield capable. There are also other issues, simply, particles. We mentioned particles. How can you control that you have zero particles on wafers, on specific dies going into this process? That will take more time. One of the answers to that is this integrated line concept. How fast are we able to bring that line into full production?
That will take the remainder of this year to make that happen. There's significant commitment in setting up this first production line as we speak. The same will happen in the U.S. with two lines in the course of this year. Those are the major issues facing further mainstream adoption of this technology.
Got it. I'm not muted. Excellent. I think a couple of specific questions in terms of, you've mentioned inflation this year, I think also into next year, and your impact on margins. Now, I think you used to comment that hybrid bonders would have a above corporate average margin. With sort of progress, et cetera, how is that looking today? Is that still the case?
The best way to look at it is the margins 2022. Imagine we shipped all of a sudden 35 machines, of which 25 are used in production. They passed all tests. The customer paid, pays the bills, huh? We have, yeah, significant support, I wanted to say armies, certainly in the first half of last year, and then less because the machines become more reliable. Margins of well over 60% is showing that we both have some handle on cost, we have that on inflation, and that's the way how to do it. What could impact the margin negatively is, of course, a rapid decline of the U.S. dollar. A more rapid inflation. It doesn't look like now, but we immediately act and increase cost.
Can you maybe provide a little bit more sort of context around the dollar impact on the gross margin? Let's say 1.06% today, 1.15% perhaps. Is that then sort of a 100, 200 basis points impact there? How should we think about that?
No, no. It, there used to be rules of thumb. Today it's different because our manufacturing costs are very global. We've seen that in 2022. You could say that 10% is something like 2.5%-3% impact both ways. That was the situation last year. It's difficult to forecast with all the different elements. We also have Swiss franc, we also have euro costs, we have Chinese renminbi costs. If you look at the total margin or the total cost structure of Besi, you have to look at it at that moment in time. I would say 10%- 2.5% is a very good rule today.
Got it. We still have some time. Just wanna go back maybe on the adoption roadmaps of customers. You've mentioned the Big Five, I think the IDMs plus 1 fabless. On the sort of more specialized producers, maybe for hyperscalers, their internal programs, et cetera, are you also engaging with those type of customers for, I guess, the ASIC products also tying into what seems to be the AI hub that's to come?
Well, it's mostly the institutes. You have in Europe, in Belgium, you have imec, you have Leti in Grenoble, Fraunhofer in Germany. You have in the U.S. institutes. You have in Taiwan an institute, ITRI. They are all setting up those capabilities. Which is simply supporting the, along the whole supply chain, the, let's say, basics starting at universities, supported also by the CHIPS Act programs in the U.S., in Europe. Expecting that this technology becomes the basic technology for the next two decades. Then you have the, yeah, early adopters, and they use the front end infrastructure. Today, this is Taiwan-
Mm-hmm.
IDM capabilities setting up at those which we referred to earlier in this call.
Yep. You also referred earlier that capacity looks pretty good. 200 tools that could give you revenue above, you know, EUR 400, depending on the, on the generation, EUR 400-EUR 500. That seems to be tracking a little bit ahead of maybe the cumulative numbers that you provided at the Capital Markets Day. Is that a fair view? I know it's sort of.
Well, we said the same at the Capital Markets Day, we still were at a very early phase. It becomes more six months, seven months down the road. further adoption. As I said, we can increase that number pretty much within six to nine months timeframe. The key is to understand is 2023, as we said, 2022, 2023 are the adoption years and the first rounds in end applications. 2024, 2025, 2026 will be the further rollouts. You have models predicted by the TSMC, also by in the U.S., by Intel, which have big numbers. They built those fabs, huh, for advanced packaging. They do that with underlying roadmaps because it's very capital intensive. That all fits into that model which we explained.
Right. The model doesn't change. The numbers maybe don't change, but I do have a sense that, you know, we're, like you said, I don't know how many months down the line, you're certainly not less enthusiastic of making maybe the upper end of those numbers.
Well, in 2025, 2026, certainly. Something really must happen. Either the technology that we're overexcited that this all works, huh. The proof of concept, I think is already made.
Mm-hmm.
You have to be careful with these new technologies, and we keep saying that. What's different this time is that the adoption is simply following the roadmaps. Usually there's a delay because of whatever reasons. Remember EUV for a long time. That has not happened so far.
Got it. And help is coming from the integrated tools that could certainly further.
Yeah.
Contamination effects, et cetera. That's something to watch. Maybe the final question then, on how should we think about 2023 breakthrough year in terms of orders? Seems a bit lumpy, 11 first quarter, maybe three so far this quarter. IDM potentially coming in, into the second half. Would you argue that there might be sort of an expectation of, you know, not orders yet, but an expectation of this accelerating into the second half of the year, both there but also elsewhere?
We should see an acceleration, or we should see some programs being ordered in the next quarters, to fit those roadmaps, because there's a manufacturing lead time of six to nine months. Then there's the installation, the startup, the training, all the support. That is what we are anticipating, and we are ready for that, in our supply chains. We will report as time comes.
Excellent. I look forward to that. I think with that, we're even slightly overrunning the hour. I wanna thank you, Richard, and the rest of the Besi team for joining us today. Same goes to the audience. I hope it was insightful, and thank you very much.