For 64% of revenue in Q4 2023. Revenue in mobile communication reached EUR 220 million. Our mobile communications business continued to be supported by ongoing growth of Soitec content within smartphones. Further adoption of 5G smartphones and Wi-Fi 6, 6E, and 7, as well as by the deployment of 5G infrastructures in the context of a global market slowdown. Compared to Q4 2022, our mobile communication revenue was up 5% excluding currency impact, essentially reflecting higher volumes. Thanks to RF-SOI product, we maintain our strong leadership in RF application for front-end modules. In the context of weaker smartphone sales globally, we continue to benefit from the significant increase in the footprint of our RF product in every 5G smartphone as compare with 4G smartphones, as well as a growing penetration of 5G high-end smartphones.
We also benefited from strong long-term agreements with our key customers. Going forward, inventory absorptions in the smartphone market supply chain for this quarter and the next one will result in lower performance in the mobile communication business. On a full year basis, we expect to offset it by continuous strong demand for automotive and industrial and smart devices. As for the sales of FD-SOI wafers for front-end modules, the momentum remained very positive. Regarding POI wafers dedicated to RF filters for 5G smartphones, we are excited to confirm the recent traction with the signature of a new partnership with SAWNICS, a high-end Korean foundry specialised in RF filters. Through this partnership, SAWNICS will deliver a process design kit to accelerate the design of high-performance RF filters based on our POI substrate, giving fabless companies better access to a powerful filter technology. We continue to work with several customers.
We have confirmed the value of our POI and are currently qualifying different module architectures. Moving now to automotive and industrial, which represents around 40% of our total revenue in Q4. Revenue in automotive and industrial reached EUR 47 million. This is a sharp 99% revenue growth year-over-year, excluding currency impact. Growth was essentially driven by volumes, but also by some price effect. Sure, we benefited from additional demand related to post-COVID recovery. Next year should go back to normalised numbers. We continue to see growing demand for automotive application driven by the increase in semiconductor content in the new generation of vehicles. Higher demand for automotive substrates is related to infotainment, to autonomous driving and functional safety, as well as to the shift to electric and hybrid vehicles.
In terms of products, growth in automotive industrial was supported by POI wafers, which continue to deliver sustained growth, FD-SOI wafers, which also had another strong quarter. We also recorded our first sales generated by our SmartSiC offering. We are progressing well on the qualification process with STMicroelectronics, and we continue to deliver SmartSiC wafer to multiple players. We are on track with our roadmap and are increasing confidence in the prospects of our SmartSiC offering, a fundamental product to accelerate the transition towards electric vehicles. Turning now to smart devices, which represent 22% of our total revenue in Q4. Revenue from smart devices reached EUR 77 million. This represents a 25% organic growth compared to Q4 2022, supported by higher volumes and also a positive mix effect.
Demand is supported by the need for more complex sensors, higher connectivity functionalities, and embedded intelligence, leading to more powerful and efficient chips for edge artificial intelligence, data centres, and cloud computing. This strong demand for smart devices applies both to consumer products and industrial sensors. The increase in FD-SOI wafer sales was particularly strong, validating the value proposition of the FD-SOI technology for ultra-low power edge AI applications. We also recorded a strong growth in Photonics-SOI wafers, which provide high speed connectivity solutions for optical connectivity in data centres and chip-to-chip, supporting ongoing artificial intelligence and machine learning developments. Finally, sales of Imager SOI, which allow for improved image performance for 3D sensing application remain at a solid level. Overall, we delivered a strong end to our fiscal year 2023 in the context of a slower smartphone market.
Let's now turn to our prospects, starting with our fiscal year 2024 outlook. As indicated earlier this month, we expect our fiscal year 2024 revenue to be stable on a like-to-like basis, with an anticipated 15% organic decline in H1, followed by a strong rebound in H2. As already mentioned, the ongoing inventory corrections in the smartphone market is going to have a negative impact on our mobile communication business, especially during H1 2024. On a full year basis, we expect to offset this weakness in mobile with strong demand in both automotive, industrial, and smart devices. Regarding EBITDA, we expect our fiscal year 2024 EBITDA margin to remain stable at around 36%. During fiscal year 2024, we anticipate significant growth in each of our three end markets.
Indeed, we are managing our business to reach in fiscal year 2026 a targeted revenue of around $2.1 billion as compared to revenue of $2.3 billion communicated in April 2022. On an EBITDA margin target of around 40% at a EUR 1.1 to US dollars exchange rate. These targets are sustained by Soitec's strong portfolio with further growth in both existing product, meaning FD-SOI, RF-SOI, Power-SOI, and Photonics-SOI, and new products, especially SmartSiC, POI, and GaN. We'll provide more information during the Capital Markets Day that we will host on the 8th of June in Paris, together with the presentation of our full year results. This ends my opening remarks. Thank you for your attention. We are now ready to take your questions.
Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll pause just for a moment to allow everyone an opportunity to signal for questions. We'll now take our first question from Aleksander Peterc from Societe Generale. Please go ahead. Your line is open.
Yes, good morning, thank you for taking my question. I just have two. Like, the first one will be, what is the level of confidence which you have at the moment on your indication of a strong rebound in the second half? I'd like to understand if this is already pre-booked or is it related to having depleted inventory by the end of the first half, which will be marred by a lot of restocking. Are there any risks to this prediction if there isn't a strong recovery in smartphones in, say, in calendar second half 23, if the market merely flatlines, would that jeopardise your guidance for the year? That'll be the first question. The second, just on POI, if you could provide us with a revised timeline for the addition of significant new customers in filters, after the announcement of your cooperation with SAWNICS. Many thanks.
Good morning, Alexander. In terms of confidence, we see today, we have a backlog today that is at a healthy level compared to the years we have experienced within Soitec. That give us a certain level of confidence. Of course, we are observing in details the bullwhip effect of within the value chain. Today we see the range of two difficult quarters and strong rebounds that will be driven by several elements. First element, a continuous growth in 5G shares within a sluggish smartphones business. Second, an extension of our contents. Because as you know, we see features, applications moving on.
Millimeter wave is of course an example, we see more and more tractions around Wi-Fi 6, 6E, and beyond 7 with a significant market share we expect to capture in these domains. If you look at, let's say, rebound within the overall smartphone industries, increase in 5G proportion and shares and extension in contents will sustain these strong rebounds. That will be, of course, accompanied by a continuous growth in automotive and industrials, as well as smart devices for FD-SOI, for Power-SOI, Photonics, but also SmartSiC, for which we expect also the starting of good revenue. The second question of POI, you know, you remember that we were expecting to deliver to you some good news before end of fiscal year 2023.
We have this good news that is framing the solidity and the seriousness of our offer that is really providing a solution open. The fact that SAWNICS that is specialised in filters industry has decided to work closely with us from a technology and product point of view has not been done by accident, by hazard. It means that behind customers are interested. We are working very actively with all these customers, many customers. We cannot disclose for the moment names. We expect by end of calendar or fiscal year 2024 to disclose one or two names that will be of course one of the sustainability of this POI. Really, after the adoption phase, we see a pickup that is extremely encouraging.
This SAWNICS news is really framing our future.
Many thanks. Can I just have a very quick follow-up on FX? Could Lea provide us with the current situation on how much revenue is hedged and the lock rate for the fiscal year 2024? Many thanks.
Okay. Hello, everyone, and thank you for your question. For FY 2024, we are still hedged about 40% of our revenue at average rate around 1.12. No significant change as compare with the previous communication last January. Of course, we are monitoring very closely the FX rate in order to adjust the percentage hedges on a monthly basis.
Many thanks.
Thank you. We'll move on to our next participant, Sébastien Sztabowicz from Kepler. Please go ahead. Your line is open.
Thank you for taking my question. Coming back to the departure of Bernard next summer, could you please help us understand how you will manage the company now that the CEO will be leaving the company? Who will you organise the team and so on? What is the mood of the executive committee today? Do you see, I would say some tension or something like this? That would be the first question. The second one is linked to the SAWNICS partnership. Should we understand that SAWNICS will be the main foundry for POI going forward? Can you please elaborate a little bit on this partnership, how it will ramp in the coming months? Thank you.
Okay. For the first, for the first question, the next setup is quite, it's quite simple. As you know, all the executive committee was part of the same team, and Bernard was taking care of supply customers and divisions. These leaders with will directly report to me then, we will have a cohesive and current executive committee after Bernard's departures, for which I would like to thank him because he has bring, you know, 15, 18 months as a whole for a transition in leadership, a smooth transition that has been very helpful, for me, of course, to enter into the complexity of the company.
Also to meet each other and to connect with everyone including, of course, CEO, partners of our customers and suppliers. It's extremely important to have benefited from the experience of Bernard, and I will ask him to perhaps to make a comment afterwards. In terms of mood, we worked all together on building, you know, our business plan with a target to reach $2.1 billion revenue by fiscal year 2026. I can tell you the whole team is fully dedicated and concentrated to this target. I have a, you know, a cohesive organization around me, very strongly dedicated, very good professionals at ExCom level, but also underneath.
Thanks to these smooth transitions, I have discovered incredible talents in this company. I'm very confident for the futures of the management and the drive of this company to reach our targets to fiscal year 26 and beyond, and to deliver different type of products towards different type of customers and markets. Perhaps, Bernard, you can tell us so few words from you.
Yeah. Thank you, Pierre. Hello, everyone. I will give you a few comments, yes, on my, on my departure. You know that, after 30 years of working on engineering substrates, including SOI, and after 17 years at Soitec, I think that, first of all, I am very proud about what I realised with all Soitec employees in term of value creation for the company through growth of our product portfolio, which is now very comprehensive on a different market segment, on our strategic positioning across the value chain and on profitability. Again, this result of fiscal year 23 in a, in a complicated year demonstrate again, this. I believe that, in Soitec we have built a very powerful machine. To deliver added value engineering substrate.
We have, as Pierre highlighted, just a strong team. I am very confident on the future of Soitec. However, I have decided to leave the company and to move for the next step for my career and to take new challenges. I would like to take this opportunity also today, to thanks all of you who are supporting Soitec for many years. Thank you. We continue to do that.
Yeah, sure.
Thank you very much, Bernard, again. For your question, Sébastien on SAWNICS. Engagement of SAWNICS is a significant step on, because it's a first specialised foundry providing offerings to the market. This foundry, SAWNICS, is well-recognised in serving SAW filter market, SAW market. They serve several major and many smaller RF fabless companies. We cannot disclose the name, you will find by yourself. This engagement will accelerate adoption of POI for sure. The last point, we need to keep in mind that many of the key players are vertically integrated. Of course, we are engaged with all of them.
Okay. Thank you.
Welcome.
Thank you. We'll move on to our next participant, François- Xavier Bouvignies from UBS. Please go ahead. Your line is open.
Hi. Thank you very much. I have two quick ones, if I may. The first one is, coming back to the, to the, recovery that you expect here, Pierre. Like strong recovery, and you said in the release that's gonna last two quarters. I mean, if you look at the, you know, the current environment for smartphone, it actually last more than two quarters. I mean, for all the kind of products you started to see, after a few, other products. I wanted to know, like how do you evaluate the risk that it would last more than two quarters? I mean, do you take also into account in your guidance the fact that, you know, two quarters and that it's over?
I mean, you see the strong quick recovery straight away or, you know, if it lasts more than two quarters, I mean, what kind of the risk to your guidance it is? I mean, just trying to evaluate how aggressive you are in your assumptions. In other words, you can maybe give more details on the underlying assumptions you have in your guidance. The second one is on silicon carbide. You mentioned that you had some revenues coming through for the first time, which is I guess, a key milestone, especially with STM. Can you provide an update on the discussion you have with other customers potential? Any timeline you could provide? You have been sampling for some time now, and should we expect some announcements in the near future?
Thank you very much.
Yeah. François, thank you. Thank you. Good morning. For the assumption, as you know, we worked really in details on different, let's say data, giving us this view of around 2 quarters of let's say, difficult markets and inventory digestions. It's linked to the fact that calendar year 2023 for smartphone industry is sluggish after a big drop last year. Calendar 2024, meaning Q4 fiscal year 2024, is supposed to be quite strong with the rebound in the smartphone business. Taking into account that the penetration of 5G will continue to increase. What our assumption is 60% this year will be 70% next year.
We see an increasing volumes by hundreds of million of 5G smartphone. That is as you know, fuelling a lot our sales and appetite for our products. Taking into account that the adoptions of new features is making us confident on the increase in content. That's the reason why we see around two quarters by mitigating this risk. As I said, we have a healthy level of backlog as it is today compared to the years we have experienced within Soitec. Of course, it's a hard work. Again, in the same times, we need to keep in mind that we need to continue pushing hard the sales of other products within the mobile communication.
We were mentioning POI, FDSOI, and also pushing hard and continuing to increase in automotive, industrial and smart devices that is full of hope and promises. This is really our assumption and the observations top-down, bottom-up of the market as it is today and our situation and positioning in this market. Talking about SiC, you're right to mention that this first revenue generated is a good signal. It's something that is also showing that, and this is what I've been saying for the last beginning, is that we are delivering on plan from a technology point of view, from a supply chain and manufacturing point of view, and from a customer point of view.
The fact that we are delivering to our customers-First elements, first wafers, is making us let's say also confident to continue to step by step increase our positioning and our revenue in this industry. Giving you a precise whatever date of even quarter for announcing another customers is a bit too early. What we can tell you and repeatedly is that further to the signature of our first agreement with STMicroelectronics on December, we have really a momentum around the SmartSiC and a huge tractions.
I can tell you that many, many players in the Silicon carbide worlds is calling us, is working with us, and it's quite encouraging and exciting. Now, we are working out, and we expect as soon as possible to give you one or two names additionally to our portfolio.
Great. Thank you, Pierre. Very clear.
Thank you. We'll move on to our next participant, Jerome Ramel from BNP Paribas. Please go ahead. Your line is open.
Yeah. Good morning. Maybe a more general question, Pierre. What do you think gonna be the main challenge for Soitec in the coming years and for you as a CEO to run this company and to achieve the fiscal 2026 guidance and beyond? After a little bit less than a year of the new CEO, what do you think is the new challenge or the main challenges that you see for Soitec going forward? Thank you.
Thank you, Jerome. Good morning. The challenge that this company is growing very fast. We are entering into stability for fiscal year 2024, under the stability, there are a lot of changes because we have up and down and offsetting of some decrease, it's a lot of work under the stability. Behind, we need to prepare a big rebound H2 and also strong growth in 2025, 2026 and beyond. Of course, it's this high power growth means that we need to be agile, flexible. We need to address new type of customers, logos, by entering in SmartSiC. It's a new world of automotive. By developing POI, it's also a new world.
By working on next features in GaN also it's opening new horizons. We need to keep flexibility and agility while structuring the company to be bigger and bigger. We are no more, you know, a mid-sized company. We are becoming a small, big group. It means that the management, the processes, the structures needs to accompany this growth and needs to make us strong in any products we are addressing, any customers we are addressing, but also in any regions where we need to expand. This is really what's at stake. It's like, you know, turning on several engines at the same times while keeping a high growth and keeping this flexibility, agility, I would like to say startup spirits of Soitec.
At the end of the day, we might be 3,000, 4,000 in the coming years. It's, of course, quite small, but it's a doubling of the population. It's a lot of changes. It will be a doubling of our revenue to fiscal year 2026. Of course, beyond, we expect to continue to grow rapidly because after all these products we delivered, you will see on the CMD that we have a lot of things in our card box that are making me extremely positive and confident for the long-term future.
Thank you. Maybe a follow-up. You mentioned GaN opportunities. Could you update us on what kind of opportunities? Do you feature the infrastructure, or do you see opportunities now in the handset as well? Thank you.
Well, we see both. What I propose is that during the CMD, we will be more accurate and precise in what we see and what the opportunities around GaN.
Thank you.
Thank you. We will move on to our next participant, Didier Scemama from Bank of America. Please go ahead. Your line is open. Hi there, Didier.
Yeah, sorry. Was on mute. Apologies. Yeah, good morning. Didier Scemama from Bank of America. A question just on the POI business and filters specifically. How long do you think it'll take for this JV and all the efforts you've had over the last few years to bear fruits? Is that a fiscal year 2024 event, or is that further out? Thank you.
Bernard being there till August, I would like him to answer this question.
It will go, we will continue to penetrate on the POI, we will see the first impact on fiscal year 2024 and then moving forward. Here is again with the SAWNICS is opening a new thing because most of the filters, the company are doing it internally. To have some foundries proposing now this is also an acceleration. It will help us to accelerate and to get to enlarge the customer base.
It will be a step-by-step that we will see the growth.
Okay. Thank you. On SmartSiC, maybe going back to FX question earlier. Don't mean to put undue pressure on you, at least on a public call, but any sense as to the timing of the second customer, believe will be on a hybrid business model like ST Micro or on you know other part of the business which people will buy just wafers from you guys. Any sort of timing you think around new customer announcements?
w we cannot give you precisely when we are going to disclose names of one or new customers to come. What we can tell you is that there is clearly a big traction and a momentum around Smart SiC. And regarding the model, as we always said, we are open, but what we need to keep as a kind of basics, as a foundations, is that we are delivering Smart SiC wafers first, and then we can be open to any type of models. This is clearly, if we want to, and we want to become a standard, we want to make all the electrical vehicles with the Smart SiC in the coming decade, okay?
If we have this ambition, we need to be quite open in the model. The foundation of Soitec is to manufacture and to deliver wafers first. That will be, I would like to say the first missions of any models we're gonna engage with the next customers.
Obviously. Maybe just one final question. Can you tell us on your fiscal year 2026 revenue guidance, I'm talking about the SmartSiC portion of it. What's the implied sort of number of electrical vehicle you could support in terms of production? Is there any number you can share with us?
Yes. On fiscal year, we're gonna enter more into details during the CMD. We expect around 10% of our revenue by fiscal year 2026 coming from SmartSiC business. In terms of number of electric vehicles, well, we're gonna talk about few millions at the beginning. What we expect at the end is, if you remember our target for 2030, that remains, the world might let's say see 45-50 million of electric vehicles in 2030. That gives you a playground for the SiC world and business. We expect to take 30% market share of the SiC market with SmartSiC. This is our ambition.
The trajectory of sales of electrical vehicles seems to be confirmed, if not uplift a bit. Even if we have more electrical vehicle, we're gonna keep this perspective and ambition of 30% market share of SmartSiC within the SiC market.
Okay. Sorry, just one final question. Last night, ST signed a licensing agreement with Atomera, for their mesh technology. Is that complementary to what you do with ST, or is it completely unrelated to the best of your knowledge?
Well, really no comment on that point. It's, well, it's something that shouldn't have any specific impact for us.
All right. Thank you.
Thank you. We'll move on to our next participant, Adithya Metuku from Credit Suisse. Please go ahead. Your line is open.
Good morning, guys. Thank you for taking my questions. Maybe, just on SAWNICS. I just wondered if you could give us some idea of who the major customers are in the filter space for SAWNICS and what sort of market share they've got, just to give us some idea of how material this, you know, sign up of SAWNICS could be in the medium term. Secondly, on Atomera. I'm a bit surprised because I would have expected ST to move to PowerSOI for smart power devices, and they already use smart PowerSOI in some of their smart power products in the BCD products. So it seems to me like, you know, they're not entirely moving their portfolio to SOI substrates, which I would have expected.
It feels like, you know, what Atomera is announcing is essentially increasing competition to SOI substrates. Would you agree with this characterization? Maybe more generally, how do you see Atomera as a competitive threat? Thank you.
Adi, thank you for your question. Regarding your first question on SAWNICS, we don't disclose, as you can guess, any information from our partners. The best thing to do is to ask them their customers, their footprints, and the way they operate. It's what I can tell you and that you know already, that it's a major players in the filtering, so foundries. You can guess that this company is hitting the best-in-class customers in this domain.
I let you, I let you ask them directly. Regarding the deal with Atomera, with STMicroelectronics, again, we have no specific comments and what I suggest is to ask STMicroelectronics people for specific questions. What we see today is that there is no specific impact.
Okay. Thank you.
You're welcome.
Thank you. Once again, ladies and gentlemen, if you would like to ask a question, please press star one. We'll move on to our next participant, Olivia Honeychurch from Jefferies. Please go ahead. Your line is open.
Hi. Thanks for taking the question. I've got a couple, if that's okay. Firstly, on silicon carbide, SmartSiC. You just called out the 30% market share target that you've kept in place for 2030. I was just wondering if there's any upside to that target, specifically if you were gonna ramp up your capacity on SmartSiC, more extensively than you're currently planning for, I guess maybe through setting up a second facility. The second question is on 5G millimeter wave. You've previously called that out as a growth driver. It does feel like rollouts there are going slower than expected globally, particularly in markets that were meant to see high growth like China and India. Have your expectations around 5G millimeter wave changed? I guess, what sort of level of adoption are you expecting in 2026? Thank you.
Okay. Thank you. Thank you for your for these questions. Regarding SmartSiC, we'll give more details on the market shares and the manufacturing capabilities for the futures. As you know, the assumptions we put in place to reach 30% market shares of the SiC market with our SmartSiC solutions, directly or indirectly, is linked to clearly our investment and CapEx capabilities, especially the what is called the Bernin 4 capabilities. We put in place in close to Grenoble. It's in line and it's current with the capabilities. More to come, we will give you more details again during the CMD.
Regarding 5G contents for the millimeter wave, we are keeping our assumption that millimeter wave will be around 15% of market shares within 5G smartphones. This is the assumptions that seems to be more and more confirmed with countries that are going for these adoptions. There are some possible like millimeter wave like technology, maybe in China to come. That will be of course something to contemplate in the coming years. Keep in mind that millimeter wave is a part of the content expansion we are betting on. Wi-Fi 5, Wi-Fi 6, 6E, Wi-Fi 7 is also a very interesting features and applications. That should be also a good drivers for extending our millimeter square footprint within the next generation of smartphones. Again, more to be precisely disclosed during the Capital Markets Day.
That's great. Thank you.
You're welcome.
Thank you. We will now take a follow-up question from Sébastien Sztabowicz from Kepler. Please go ahead. Your line is open.
Yeah, thanks for the follow-up. On the prices, can you help us understand how the prices are trending right now, both on your own product, RF-SOI and so on, and on the bulk wafers that you are buying from your suppliers? Any kind of indication there? Thank you.
On the bulk we are buying, as you know, we signed several long-term agreements, and we have a quite stability in the prices. We are, let's say, monitoring any inflation elements thanks to this long-term agreement. That's the first key point. After, you know, difficult years for getting the right level of supplies, very recently, we have now something that give us a visibility and solidity in the supply. Regarding the price for the wafers from outside, as you know, there is a clear trend we are inducing to move from a higher scale, higher size from 200 to 300, from 150 to 200.
That is providing, of course, a better yield in terms of, in terms of prices impact. We continue to invest big time in R&D. More than 11% of our revenue is spent in research and development to enrich and enable our roadmaps. We sell also more and more innovations, and we are versioning our products. It is helping us to resist to price erosions, and better to sell, sometimes features at a better price. We don't see erosion in prices, thanks to our innovative spirit on the permanent roadmaps.
Okay. Thank you.
Thank you. It appears there is no further questions at this time. I'd like to turn the conference back to the host for any additional or closing remarks. Thank you.
Okay. Thank you. Thank you to all. Thank you for your interest and all these, the questions, you have asked. As you know, the next date in our agenda will be the release of our fiscal year 2023 results, on the 7th of June after market close. As already stated, we will hold a Capital Markets Day on the 8th of June in Paris. We expect to see you numerous. This ends our call for today. Thank you very much. Bye-bye. Have a good day.
Thank you for joining today's call. You may now disconnect.