Hello, and welcome to the FY 2022 Q1 sales call. My name is Rosie, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration, your lines will be on listen only.
However, you will have the opportunity to ask questions at the end. This can be done by pressing star 1 on your telephone keypad to register your question at any time. If you require assistance, please press star 0 and you'll be connected to an operator. I will now hand you over to your host, Paul Boudre, Soitec CEO, to begin today's conference. Thank you.
Thank you, operator, and welcome to Soitec conference call dedicated to the publications of the first quarter revenue of our fiscal year 2022. This is the quarter covering the period from the 1st of April to the end of June 2021.
I am Paul Boudre, Soitec CEO. Together with me on this call are Léa Alzingre, our CFO, and Steve Baburek, our investor relations officer. As usual, we will briefly comment on our sales performance, and after that, we will open the floor to questions.
Let's go straight to our Q1 2022 revenue performance. In line with our expectations, we had a very solid start of our fiscal year 2022. As a reminder, we are targeting for around 40% organic growth in fiscal year 2022, and around $950 million. Thanks to this strong Q1 2022 performance, we are fully on track to deliver our full year 2022 guidance.
Indeed, we achieved revenue of EUR 180 million in Q1 2022. Revenue was up 59% on a reported basis over Q1 2021, including a 10% negative currency impact. This represents a 69% growth excluding currency impact. On a sequential basis, it represents a 1% growth excluding currency impact over Q4 2021, which was our second-highest quarter ever. Overall, Q1 2022 is our fourth consecutive quarter of sequential organic growth since the low point achieved in fiscal year Q1 2021, in the middle of the COVID crisis.
This strong performance shows how we benefit quarter after quarter from strong tractions across our three end markets, as we defined in our Capital Markets Day last month. In mobile communications, sales were boosted by the ongoing adoptions of 5G and the increasing number of 5G smartphones. As you know, this is benefiting both our RF-SOI and our POI wafers.
Performance was also driven by the further recovery experienced by the automotive market, which benefits in particular our Power-SOI products and FD-SOI. Last but not least, smart devices also continued to expand, supporting our sales of Imager-SOI, FD-SOI, and Photonics-SOI wafers. We now comment our Q1 figures by wafer diameters, starting with 150/200 millimeter, which recorded sales of EUR 79 million.
We compare to Q1 last year, this is an increase of 24% excluding currency effects. This performance reflects higher volumes, especially from Bernin 3 in France, as well as higher volumes outsourced to Simgui, our partner in China.
This very strong rebound is explained by sales of Power-SOIs were much higher than in Q1 2021, thanks to the rebound in the automotive market. We see here the confirmations of the ongoing recovery of the automotive industry that had already started in Q4 2021.
In addition, we had another strong surge in 150 millimeter POI wafers for RF filters. Thanks to the ongoing capacity increase at our Bernin 3 facility and the good ramp-up in productions. Quarter after quarter, we have been able to respond to the increasing demand for POI. As you know, this is driven by the need for 4G and 5G smartphones to cope with an increased number of frequency bands, which translates into a higher number of filters and the requirement for enhanced performance.
Sales of RF-SOI 200 millimeter were stable compared to Q1 last year. If we now look at our 300-millimeter business, which recorded sales of EUR 96 million in Q1 2022. This is two and a half times higher than in Q1 2021, excluding currency effects. This is mainly due to a sharp volume increase. All our product lines for 300 millimeters grew strongly in Q1.
The level of RF-SOI 300 mm sales has been booming. Traction for more RF-SOI content comes from the need for more switches, more antenna tuners, and more low-noise amplifiers in new generations of 5G smartphones. We also achieved another strong quarter in FD-SOI at a much higher level than in Q1 2021.
This confirms the rebound that we started to experience in Q3. Fabless companies continue to strengthen their FD-SOI-based offering for applications dedicated to edge computing, automotive, and 5G. Regarding Imager-SOI for 3D sensing applications, sales were also much higher than in Q1 2021, at a level pretty close to Q4 2021.
Finally, sales of Photonics-SOI for data centers were higher than in Q1 2021, as well as than in Q4 2021. Finally, our other revenues went up from EUR 5 million in Q1 2021 to EUR 5.4 million in Q1 2022.
This represents a 12% growth at constant exchange rate, which was essentially due to another good performance achieved by Dolphin Design. To conclude these opening remarks, I would like to reconfirm our guidance for fiscal year 2022, as well as the medium-term outlook that we outlined last month during our CMD.
Regarding fiscal year 2022, we confirm we continue to expect fiscal year 2022 sales to reach around $950 million, around 40% growth at constant exchange rate. We also confirm that our EBITDA margin will reach around 32% in fiscal year 2022. Regarding our five-year outlook, we expect that our innovative wafers will efficiently support the advent of 5G, the development of artificial intelligence, and a stronger focus on energy efficiency, which will be the three driving factors of the electronics market in the years to come.
Market growth will be driven by multiple waves of technological change that will shape a more connected, energy efficient, and smart world. This will translate into a 2.5x increase of our addressable markets by fiscal year 2025, 2026, meaning that we see our addressable markets moving from around 3 million wafers today to more than 7 million in 5 years.
We expect growth to materialize in each one of our 3 end markets: mobile communications, automotive and industry, and smart devices. Involving further growth in our existing SOI and POI products, but also the development of new SiC product and, to a lesser extent, GaN products. To fully capture this growth potential, we aim to double our annual capacity to more than 4 million wafers by fiscal year 2026.
This involves the ramping up of our Singapore facility, further expansions of our other existing capacity, mainly Bernin 2, Bernin 3, and Simgui. Finally, the building up of a new 150/200 millimeter SiC facility, as well another 300 millimeter SOI facility. All these investments will require a CapEx plan worth EUR 1.1 billion over the next 5 years.
Our fiscal year 2026 targets includes to triple our revenue to reach approximately $2 billion, and to increase our EBITDA margins to around 35%, based on a euro-dollar rate of 1.2. This ends our opening remarks, and we are now ready to take your questions.
Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Should you wish to withdraw your question, you can press star two. You will be advised when to go ahead. The first question comes from the line of Alexander Peterc from Société Générale. Please go ahead.
Yes, good morning, and thanks for taking my question. First one, just generally, if you could comment, where was the growth strongest across your business lines, or across end markets versus your original expectations going into the quarter? Where did you see the biggest delta or jump in demand versus what you thought things would shape up as?
Second, if you could comment a little bit on the fill rate of your Singapore fab, where we are now in terms of that fab ramping up. If you could give us any progress report on silicon carbide, is there anything new there? Maybe a quick comment on the new management appointment for this business line. Thanks a lot.
Thank you for the question. Maybe going back to the first questions, which is about where do we see the most aggressive growth. First of all, I will say that it came as no surprise that it is across all products for us. We were expecting this, and it's really happening. Now if we want to dig one level down, growth has been driven, number one, mobile, that's for sure.
Then automotive, and third, smart devices. This is clearly exactly what we were expecting. No surprise, and we were exactly preparing our capacity to be able to respond to this. In terms of the Singapore ramp, you are absolutely correct. This is very important for us to execute well, this ramp, and it's moving ahead. Clearly, every week, tools coming in.
You understand that our growth year is really supported by our capacity expansions that we are materializing every day in Bernin 3, in Bernin 2, and in Singapore. The CapEx, I just maybe want to remember the CapEx that we have engaged this year. We are talking about an overall number of €240 million. 50% of the CapEx is dedicated to Singapore.
This is a strong commitment. Balance sheet 25% of this number and 25% for the others. Regarding your questions on silicon carbide, the project is moving ahead. We continue to monitor the progress.
Yes, we have been extremely pleased to celebrate the arrival of Emmanuel Sabonnadière, who joined the Soitec executive team management to really drive this project. Emmanuel is obviously a perfect fit for Soitec to drive our Smart Cut silicon carbide project and conquer new markets.
Emmanuel has the intimacy with our local ecosystem and our customers worldwide to lead this development. I think we will get more information, as I said, by the end of our fiscal year on this project.
Thank you very much.
The next question comes from the line of David O'Connor from Exane BNP Paribas. Please go ahead.
Great. Good morning, and thanks for taking my questions. Congratulations on the quite strong results. Maybe, Paul, firstly, on going back to the $950 million revenue target for this year, can you give us any color on how much of that is already booked? Then secondly, in terms of the visibility, has the visibility improved in terms of duration of contracts with end customers? Thank you.
Yeah. To answer your first questions regarding the $950 million, it's all booked. We have no room for surprises here. When it comes to visibility, what it is very important is that we have now extended visibility, I will say, compared to what happened over the last five years. Our customers are engaging discussions for multi-years contract.
They want to basically secure their capacity. I used to say that we are very pleased with that. We are obviously making sure that we have all the commitments, because attached to that, our capacity increase. We are very, very serious, but very pleased to see that visibility is coming for the next two to three years. For some customers, we are even talking about longer term.
Excellent. That's quite helpful. Thank you. Maybe if I could squeeze in one more follow-on. Just on inventories, how would you characterize your current inventory levels within the supply chain? Thank you.
Yeah. It's very difficult to answer these questions in a precise manner, but across the board, it's very tight. The inventory is very, very healthy. Very, very healthy.
Thanks so much.
The next question comes from the line of Varun Rajwanshi from JP Morgan. Please go ahead.
Yeah. Hi, good morning. Thanks for letting me on. I have two questions, Paul. The first one is on your fiscal year 2022 guidance. You've guided for 40% constant currency revenue growth for this year. If I look at the end market unit growth assumptions over the past two months, they have been coming down.
Smartphone growth assumptions have come down from 10% to mid-single digit. Auto unit growth assumptions have come down from mid-teens to low teens. How does that stack up versus your fiscal year 2022 guidance?
Are you still comfortable on delivering the 40% guidance? Do you think this will be driven by restocking demand even if end demand is not as strong? My second question is on FD-SOI. You've been talking about a recovery in FD-SOI sales over the past few quarters.
Can you provide more color on how much recovery have you seen, any quantitative color? Do you still expect a significant step up in growth going into the second half of this year? Finally, on the POI business, can you give us the status of the capacity ramp at the Bernin 3 fab? Thank you.
Regarding the fiscal year 2022, we stick with our guidance. We have no reason to change this today. Clearly, the market to us is very, very healthy. Here and there, you see a little bit of polarity change. The high single digit that the global rebound in 2021, including 5 million to 550 million unit 5G phones. This is still what we are driving.
There is no change in this. Automotive is also coming extremely strong with double-digit global rebound forecast in 2021. We have to obviously address this and respond to that. No change in our fiscal year 2022 guidance. As I said, we have clearly a strong commitment from our customers on our activities. Regarding the FD-SOI recovery. Yes, I told you exactly that last year that we were expecting to see this rebound coming in this current fiscal year.
It started a little bit earlier. We continue to see a quarter after quarter improvement, and we will continue to see a quarter after quarter improvement in FD-SOI. The end market is using and driving the growth of this technology. It happens in the automotive. This is today one of the number one market for FD-SOI, and we see IoT going into edge computing.
The other part of the growth will come probably towards the end of this fiscal year for us, beginning of next fiscal year, in a more aggressive way for the edge computing. On POI, we do not really give a number. The ramp-up is exactly as expected. We have the target to reach 750,000 wafers at full capacity. We are really working on our plan and executing our plan.
Thanks a lot.
The next question comes from the line of Sébastien Sztabowicz from Kepler Cheuvreux. Please go ahead.
Hello, everyone, and thanks for taking my question. You mentioned a strong increase on POI in Q1. Can you help us understand a little bit the size of the POI business today? Have you made any progress during the quarter regarding the qualification of other RF players on top of Qualcomm that you're ramping up right now?
That would be the first question. The second one is regarding the speculation in the market that Intel could be looking to acquire GlobalFoundries going forward. Do you see any potential implication to your business or your relationship with GlobalFoundries, any positive or negative? Thank you.
On the first question, clearly, you know that POI wafers have been designed to allow superior thermal stability, larger bandwidth, and to integrate multiplexers. Obviously the adoptions for 5G smartphone filters is really driving the ramp in business. Qualcomm is our number one lead customers.
As I told you, we have now multiple customers at different phases in manufacturing and in qualifications. What I said during the previous talk is that by the end of this calendar year, we will have multiple customers qual and ramping on this product. Regarding Intel and GlobalFoundries, clearly no comments at this time. You just consider that this is a rumor, and we do not want to talk about rumors. Both are Soitec customers, and both are using SOI, so this is all good news.
Just one last, if I may, on Silicon Carbide, you have all your milestones. Have you passed certain milestones already, or this is more back-end loading in this year and you will have only, I would say, an answer on your ability to serve this market at the very end of the fiscal year? Just to understand the progression.
No, it's really throughout the year. Clearly, the news we have got this quarter is clearly in line with our expectations. We have now new samples being shipped to our customers to evaluate some of the progress we are making. Clearly, the process is in line with our plan right now. As I said, we are structuring also this project, and with the arrival of Emmanuel Sabonnadière, it will also take another dimension.
Okay. Thank you.
The next question comes from the line of Didier Scemama from Bank of America. Please go ahead.
Yeah. Morning, Paul. Thanks for taking my question. Most good questions have already been asked and answered. I just wondered if you could maybe just give us your sense of what's going on in the supply chain, in Asia, most particularly the lockdowns in Malaysia or any other parts of Southeast Asia, if that's having any impact or if you're worried about contraction of supply chains or anything like that. I've got a quick follow-up. Thank you.
I think that what you see happening is exactly what we have seen happening over the last 18 months. I think that our supply chain is now basically, I won't say totally used to, but we have built many capabilities to work through these type of situations. Clearly, what is important to us is to secure our capacity ramp.
We are working with all the equipment manufacturers to make sure that we are slotting our equipments properly over the next two years. We are also giving them a lot of visibility because this is important.
Same for our supply chain in terms of materials. It's clearly a lot of work that is being pushed to our procurement team, but this is exactly what we have to do to secure the growth and to secure the ramp.
Got it. Thank you. Medium-term question, perhaps, on the CapEx funding. Would you consider taking external money, maybe from customers or anything like that would help you accelerate the ramp-up of your capacity?
Maybe I can answer the first questions, and Léa, if you want to take a little bit more on these questions. What I want to say is that when we seal a deal with our customers today, we are obviously looking at these long-term agreement contracts, and it takes with firm purchase order, take or pay type of purchase orders.
It takes also sometimes upfront deposit when we have to do specific, I would say, capacity increase for given customers. We are using all the tools to secure the long-term agreement that we have to sign with our customers. Léa, do you want to take more on this?
Yes, maybe more generally, we are able to finance our CapEx plan thanks to our cash position and thanks to the cash we will generate through operating cash flows in the next few years.
Very clear. Thank you.
The next question comes from the line of Robert Sanders from Deutsche Bank. Please go ahead.
Hi, good morning. Thanks for taking my question. I have two. The first one is can you talk a bit about the fab expansions at your key customers, such as in Singapore, U.S., Germany, as well as the government-led expansions by the EU, Japan, China, U.S.? For example, there's a discussion about a new 12 FDX line in Europe with involvement from STMicroelectronics. You just met Thierry Breton.
Could these plans be incremental to the trebling of sales outlined at the CMD? The second question, Paul, ahead of this AGM next week, can I check what's the process on when we should hear about the extension of your term as CEO? I think your term expires next year, but I think it's a formality, but I wanted to check when we would likely to hear about that. Thank you.
Let me comment on the first one. Yes, semiconductor actuality is on the frontline right now, and you have heard about the alliance that Thierry Breton is pushing to Europe. You have heard this morning about the communications between France and Germany on semiconductor.
It is very important that everybody understand today that it's an inflection point for European semiconductor. The good news is that there is a process that is being put in place right now for the industry to share what we see and what we would like to see.
If you look at the ambitions that Europe is claiming today, there is an ambition in technology, there is an ambition in industrial capacity, and there is an ambitions to support financially this journey in Europe. If you think about Soitec, we have an ambition in technology.
We want to support and drive the growth in digital and power applications, and also telecommunications and communications. FD-SOI, as you know, is one of critical point for us in terms of supporting a roadmap that goes from 22 nanometer in Europe today to 18, then 12, and 10, and below 10 nanometers.
I think it's important to drive these inflection points to set the vision and to do it with our partners, customers, and suppliers in Europe makes a lot of sense. I think this is good directions.
Regarding my, basically, your second question regarding my renewal. Nothing to report, as you said, at the moment. We have just announced a five-year strategic plan with the Board, and I am personally committed to ensure that we will be implementing and/or adjusting this strategic plan, but it's on.
Got it. Thanks.
Before we go to the next question, if I can just remind everyone, if you do have a question, you can press star one on your telephone keypad. The next question comes from the line of Emmanuel Matot from Oddo. Please go ahead.
Hello, everyone. Sorry, Paul and Léa, but I joined late the conference call. Maybe you already talk about that, but have you given any colors about volumes and pricing contributions to your Q1 sales growth? That's my first question. Second, is Soitec part of the Transform Consortium for silicon carbide in Europe? If yes, can you come back on it?
Okay. On the first questions, the revenue growth comes from volumes. Okay? We have not seen yet any other impact. Okay. That's very clear for us. It's driven by volumes. Regarding your second questions on Transform, yes, we are obviously a key part of this project and program in Europe. It's obviously silicon carbide driven with all our partners, and we are a key element of these programs.
Is that an exclusive relation with Transform or not at all?
For us, it's a platform, right? We are opening up with multiple partners on these platforms, and it's a development platform. Okay, we obviously will be exposed to many partners in this project, which is great.
Okay, understood. Thank you.
We have no further questions coming through. I will now hand back to Paul for any closing remarks.
Thank you, operators, and thank you all for your questions. I would like to add maybe that the next date in our agenda will be our AGM on the 28th of July, then the publications of our Q2 2022 revenue on the 20th of October after market close. This ends our call for today, and thank you for your attention, and I'm looking forward to talking to you again soon. Thank you all. Thank you.
Thank you everyone for joining today's conference. You may now disconnect. Hos, if you can please stay connected for a moment. Thank you.