Hello, everyone. I am Steve Baburak, VP of Corporate Development and Investor Relations. Welcome to all of you, and thank you very much for attending SOYTECH 2021 Capital Markets Day. As we are gearing up for extended ambitions, we are very excited to disclose today our fiscal year 2021 results and our strategic and business outlook for the next 5 years. In the next 3 hours, we will have 2 main sessions.
In the first session, we will be discussing about our vision for sustainable growth, our strategy, our business units and our innovation. We will close this first session with Q and A. After a short break, we will be back for the 2nd session to discuss operations, our fiscal year 2021 result, our fiscal year 'twenty two guidance and our midterm financial model. This session will also end with another Q and A. On top of the speakers from our management team, we are also thrilled to welcome CEOs from several strategic customers.
I would also like to remind you that the information presented today contains forward looking statements with regards to Soytek's financial condition, results of operations, business, strategy and plans. Actual results may differ materially from the forward looking statements as a result of a number of risks and uncertainties, risks described in the documents Soitech has filed with the AMF and our universal registration Now before kicking off and give the floor to our CEO, Paul Boudre, let's watch a short video about SOWYTECH.
Powerful technologies change the face of our world. 5 gs, the Internet of Things, And artificial intelligence revolutionize our lives and transform all sectors. Industry, Retail, energy, mobility, construction, food, health And education. In less than 5 years, we expect people to use 100,000,000,000 connected to devices around the world, more than a dozen per person. All this would not be possible without semiconductors.
The chips and the cutting edge substrates they are built on are powering this revolution. They push global high speed connectivity. They accelerate the massive adoption of new applications. They bring intelligence to our devices, drive economic growth and sustain the responsible use of our resources. Soitech is driving this revolution and accelerating the disruption.
We design and manufacture innovative Semiconductor materials. Our engineered substrates bring intelligence to the chips that surround us at home, On the move and at work, up to the cloud and down to the edge, right at our fingertips, they help us To connect and interact and become even smarter and power efficient. Thanks to our people, Our technologies and pageants, and thanks to our intimacy with customers and our role as an engineer of ecosystems, we design, We set standards. We innovate. We push boundaries.
We help create a new life Experience. Soitech for a connected, smart and energy efficient world.
Thank you, Steve, and welcome, everyone, to SOWITEC Capital Markets Day. I hope you are all safe, and we are delighted to spend the next few hours together. Our last CMD was in June 2019, and well, A lot has happened since then and in the world, in our semiconductor industry and, of course, at Soitech. Today, we are excited to share with you our refreshed outlook for the next 5 years, and how SOWITEC is gearing up to deliver extended ambitions. Let me begin with 3 important messages.
First message, our strategic visions. In the next 5 years, Our addressable markets will keep growing at very rapid pace. We continue our amazing journey, supporting by very strong semiconductor megatrends. 2nd message, our business and operating models. They are getting even stronger to deliver profitable growth, which means that by fiscal year 'twenty six, we anticipate to triple our revenues to around US2 $1,000,000,000 And to increase our EBITDA margin to 35%.
3rd message, ESG and sustainability. They are the art of our value creations and are completely integrated in our corporate strategy. This is a long term engagement. This is expected from our entire ecosystem and stakeholders. Now let's go back to our strategic visions, which is deeply attached in the world we live in.
Our semiconductor industry has transformed our lives for the last 30 years, and it will continue to shape the multiple technology disruptions That we will need in the next decades. These disruptions will require more and more semiconductor devices, And our industry could double over the current decades to reach around €1,000,000,000,000 of USD by 2,030. We have discussed multiple times about this semiconductor megatrends, which mutually feed each other. 5 gs technologies drastically enhance mobile connectivity, but 5 gs is also mandatory to enhance autonomous driving, edge computing, Remote Healthcare, Industry 0.40, etcetera. So we will come back on these megatrends and how they impact Soitech in several presentations today.
Soitech will play a critical role to enable the semiconductor megatrends for 2 main reasons. Reason number 1. We are unique in the world of semiconductor materials. We are unique because we combine our design capabilities with strong customer intimacy such as foundries and fabless. The combination allows us to understand the technological roadmap of our clients and to rapidly expand our engineered substrates product portfolio.
Reason number 2. We have built a unique collaborations network in the semiconductor value chain, where cross collaboration is key to deliver innovations at the right cost and optimize time to market. Soitech needs and nurtures all these collaborations to design and manufacture in high volume engineered substrate to make the world More connected, more energy efficient and more intelligence. So starting with 3 gs and 4 gs, we have established standard products for front end modules in every smartphone. We have pursued the same ambition for 5 gs front end modules, connected cars, mobile base stations, etcetera.
Our products also make the world more energy efficient. This is in fact very important if you think about our SOI products, which by design are products that enable a significant reduction in energy consumptions compared to traditional silicon substrates. So for almost 2 decades, we have developed products for the automotive industry, the Internet of Things, and we will continue to expand to bring silicon carbide into electrical vehicles. So beyond substrate, we also have Dolphin designs to accelerate our customers' system on chips energy efficiency designs. And finally, Our products make the world more intelligent and at multiple levels.
Very close to us when you think about facial recognitions in the smartphones in the cloud with silicon photonics for optical data centers and for a variety of smart sensors to enable safer, More secure intelligent networks like in edge computing. As a result of this strong semiconductor megatrends And our capability to design the right products for the right applications, we're able to bring more value and bring higher differentiation at the system level. Our addressable market is expected to reach Around 7,000,000 wafers by fiscal year 'twenty six, which is about 2.5 times larger and the size of this addressable market in fiscal year 2021. You will note that as of today, We will start communicating and give you more granularity on our 3 strategic end markets: Mobile Communications, Automotive and Industrial and Smart Devices. So strong megatrends, Fast growing addressable markets.
What does that mean for Soitech? In the next 5 years, our revenues are expected to reach US2 $1,000,000,000 which is Three times the level of what we have just delivered in fiscal year 2021, which means that for the next 5 years, Our revenues are expected to grow faster than our end markets. In order to deliver our revenue growth, we are planning to grow steadily our global productions capacity across all product lines. And we expect to reach beyond 4,000,000 wafers per year by fiscal year 'twenty six. This is more than double the capacity we had installed in fiscal year 'twenty one.
Overall, we plan to spend €1,100,000,000 of CapEx between fiscal year 2022 and fiscal year 2016. Our operating model is set to deliver higher value creations, and one KPI to measure it is our EBITDA margin. This was established at nearly 31% in fiscal year 2021. In Fiscal year 2022, we expect our revenue to grow more than 40% organically to US950 million dollars and our EBITDA margin to increase to 32%. In 5 years, by fiscal year 'twenty 6, in our financial model, We expect our revenues to reach US2 $1,000,000,000 and our EBITDA margin to further increase to 35%.
Now let's talk for a moment about sustainability, and let me be very clear on that. Sustainability is not something new or fashionable at Sohitek. Sustainability and ESG are part of our corporate Strategic Initiatives. Sustainability supports our business and value creations because our clients want to be more sustainable, and we provide solutions to help them meet their objectives. Let me share with you some examples.
On energy efficiency, we have constantly improved our products and will pursue to do so as it is an absolute requirement of our clients for continued innovation Beburek. In your substrate used in their applications, I've been able to save the annual carbon emissions equivalent to a city of 1,000,000 people. Since its creation, Sorytech has been very engaged with our local stakeholders, which allows us to partner with the best universities and research institutions. We attract, Develop and retain talented women and men on gender equality, we have a favorable grade of 94%. I'm convinced that the diversity of our workforce is essential to build a great company.
To go back to the fiscal year we just landed, I must say that I have been really impressed with Soitech people all over the world. I'm also really proud to have a strong management team to deploy and execute Stoitech strategy. You might already know some of them, and you will soon discover the new high profile members that recently joined us as you can see on the slide. So before moving to Thomas, I would also like to thank all of our customers that contribute To our growth and common success. Today is a special day.
So some friends and partners gave us the honor to share a few words with The first on the list is Jean Marc Chery, the CEO of STMicroelectronics. Jean Marc and I have known each Chaucer and worked together for decades, and it's an immense pleasure for me to have his testimonial today. Jean Marc, the floor is yours.
Hello, everyone. Thank you, Paul. At ST, our Strategy is driven by 3 long term enabling trends for the electronic industry. The 3 trends are smart mobility, Power and Energy and IoT and 5 gs. While they were already strongly influencing our industry before, They have further accelerated during the last quarters and are driving demand for the associated semiconductor products.
First, smart mobility. So for ST this is about helping car manufacturers make driving safer, greener And more connected for everyone. It is also about creating the supporting infrastructure such As far charging stations for electrical cars, we have seen this trend strengthened recently With an even stronger push towards car electrification and digitalization. 2nd, power and energy management. Key here is to enable the many different industries to increase energy efficiency everywhere And the use of renewable energy sources.
This is a main focus area for ST And we have made a number of strategic investments in this area. The 3rd enabler is the Internet of Things and 5 gs. Here we want to support the proliferation of smart connected IoT devices. We provide The necessary building blocks and the associated development ecosystems to device creators with a strong focus on embedded processing solutions. We also provide sensors, covering automotive, industrial, personal electronics and communication equipment and computer peripherals.
Here we see a very good fit with SOE Tech with our focus on automotive, industrial and smart devices. An important part of our innovation comes through the differentiated proprietary technologies for which materials are often an important enabler, especially SOI. The wafer substrates we use are the starting point of the creation of Baburaj. Many of our highly differentiated technologies are based on materials That have specific properties, allowing us to design leading edge solutions for target applications. A few examples where we successfully worked with SOE Tech include partially depleted SOI with high resistive substrates, which is used for demanding radio frequency applications to build switches, LNAs and amplifiers, Partially depleted SOI for radiation, hardened space applications.
Fully depleted SOI, called FD SOI for low power digital CMOS applications such as our newest family of automotive microcontrollers designed to meet the needs of the evolving car architecture and headless vision processing systems from our partner Intel Mobileye. Few companies are capable of delivering this kind of materials. So we value our long standing partnership with Esoteric and we look forward to additional opportunities to work together.
Thank you, Jean Marc. Hello. My name is Thomas Pilichuk. I am Head of the Strategic Office. Paul already gave you some perspective on markets and the megatrends that are crucial to our business.
I would like to dive deeper into those trends, but also I outlined the strategy that Soitech is putting in place in order to leverage them and ensure our company's long term growth. There are 3 key points that I want to address and share with you today. 1st, the semiconductor industry Baburay. Is driven by few fundamental megatrends, which are changing the world and society. These trends will help to double the size of semiconductor market In the decade.
2nd, there's an urgent need for new semiconductor solutions to meet the challenging requirements of numerous markets. The engineering substrates are providing a unique value proposition. The CERT is about SORTEC strategy to establish industry standards in Engineered Substrate. We are at a crucial junction today. On the one hand, our ability to leverage our technologies, Fuel growth and support societal progress to create a convenient life on Earth is at its tipping point.
On the other hand, we are facing unprecedented challenges regarding climate change, environmental protection, Energy efficiency, health and social security. These challenges demand a total transformation of our world. We must do more by consuming less, live better and longer by sharing resources and increase output while reducing waste. It seems like squaring circles. Our opposing demands are driving 4 new economies to cope with these challenges And allow future generations to exist, digital, longevity, net 0 and sharing.
These 4 economies which are transforming the world now are setting unprecedented requirements and challenges For more connectivity, more intelligence, more energy efficiency. The number of connected devices will multiply by 5 In next 10 years and the amount of the generated data will grow even faster, 5 times by 2025. The ICT, information and communication technology industry, will consume 20% of the world's electricity 5 years from now, twice as much as today. Again, it seems like squaring a circle. We definitely need major technology disruption to transform these challenges into real growth opportunities.
Behind the need for connectivity, intelligence and energy efficiency, there are 3 megatrends which are driving the semiconductor industry. 5 gs, With the ongoing deployment of the new smartphone generation, we will exceed the €1,600,000,000 mark of new 5 gs devices per year By 2,030, 5 gs will become a global communication platform far beyond just smartphones, connecting everything And everywhere at nearly any speed. Intelligent objects are entering all domain of our lives, From healthcare to security to industries and agriculture, artificial intelligence on the edge will be by far The fastest growing market and application in the coming years. Finally, the automotive market is facing the biggest transformation Since car events built the 1st car in 18/86, connected autonomous sharing electric vehicles We'll become a new common transportation platform with over 45,000,000 EVs rolling off the production lines Each year by 2,030. Let's look deeper into these 3 megatrends.
After having served on the 4 gs wave for the last 10 years, we are now mounting and accelerating on a much more powerful wave, 5 gs. 5 gs offers 100 times the network capacity, 10 times the speed And 10 times less response time, with 10 times less energy per data. These are just a few key vectors showing the quantum leap brought by 5 gs. And the reality is 5 gs is clearly on its way to deliver on these promises. But 5 gs is not more of the same.
5 gs will not only dramatically improve our smartphones performance, but it will be Also scale up in new key markets and enable new types of devices and applications. Just think about Industry 4.0, connected cars, wearable devices, healthcare and augmented reality. And the next generation is already on the horizon And in the making, 6 gs will be the next step, another 10x step, another order of magnitude. 5 gs is a massive step change compared to the 4 gs standard. 20 times more mobile data traffic We'll flow into double of the bandwidth, managed with 2 times higher frequencies and 4 times Frequency combinations.
This is extraordinary complexity, leads to 2 times of the RF semiconductor content and it requires continuous technology improvements and even disruptions like for our filters. But the main disruption is with Introduction of millimeter wave requiring multiple active antennas in package modules. We estimate that by 2,030 The front end module semiconductor market will grow by 3.5 times. In the past few years, Artificial intelligence has been implemented mostly through cloud technologies. Executing AI in the cloud has considerable weaknesses and limitations.
The key factors are energy efficiency and saving, low latency with real time computing and action, Data security in applications such as autonomous driving and data privacy. For these reasons, AI is now happening at the edge, On the device, by 2,030, almost as much of the processing will happen on the edge device as it's in the cloud. With this trend, Edge devices applications with integrated machine learning capabilities will grow from 15,000,000 shipments in 2020 To €2,500,000,000 in 2,030. This trend towards ever smarter edge computing devices We require more semiconductor content to support the multitude of functions and have a better user experience. For example, 3 d image sensing is stopping 2 d and allowing IoT devices to recognize objects, shapes, positions, motions.
With this depth of information and computing, new human machine interaction like gesture recognition and immersive experiences with Virtual and augmented reality will be introduced. Finally, by supporting a wide range of connectivity, including 5 gs, Our devices will be more connected at ever higher data rate. Today, the acronym CASE, connected, autonomous, shared, electric It's widely used to address the once in the century automotive revolution. These trends will shape the future of mobility, focusing on passenger safety, comfort and convenience, and at the same time reducing global carbon footprint. The electrification of cars is one of the most promising trends enabling major technology and supply chain disruption.
By 2,030, every second car sold will be an electrical vehicle. However, there are still tremendous challenges To be overcome to drive EV adoption, major automotive OEMs are therefore investing heavily in new powertrain platform with silicon carbide. This technology, together with battery systems, Is solving several issues at the same time, enlarging the driving range, shortening the charging time and diminishing the cost. With the implementation of stringent vehicle emission standards, the plan to reduce CO2 emission by 55% in the EU By 2,030, plug in electric or battery electric cars will be the only ones able to meet these new requirements. With that, a fully autonomous electrical vehicle will need over 10 times the semiconductor content versus a conventional gasoline car today.
Automotive innovations no longer rise from the mechanical level, but now comes through electronic systems. The growth of Level 2 and above autonomous vehicle will lead to proliferation of ADAS related semiconductor content. A fully autonomous vehicle will have more than 7 times higher semiconductor content compared to typical car today. Driven by these megatrends, the overall semiconductor market is expected to reach more than €1,000,000,000,000 in revenues in 2,030, More than double its level in 2020. Soitech is well positioned to benefit from the trends representing 2 thirds of the total semiconductor market.
The momentum is strong. All these markets are expected to enjoy double digit growth In the current decade, for almost 40 years, the semiconductor industry has been driven by one simple rule, Moore's Law, Predicting that the density of transistors directly linked to pure digital performance will double every 2 years. Today, in the era where the growth of the industry moved from supercomputers to mobile devices and connectivity, The equation to be met by semiconductor solutions is way more complex and challenging. There is a combination of factors which must be met simultaneously. It starts with PPAC, power, performance, chip area and cost.
It must take into account time to market. And finally, the new factor which is becoming essential moving forward is sustainability, considering the chip's carbon footprint Impact at system level. While the traditional Moore's slow scaling slows down, new solutions and contributors are required. We need New architectures, new structures, new materials, new ways to shrink and package. More than ever, engineered substrates Can bring decisive solutions to successfully meet the new equation for mass markets and applications.
You'll hear more later about Sohuetek products portfolio and value proposition. For the time being, I would like to just give A quick example on how SohuTech engineered substrates fit the equation of PPAC, time to market and sustainability. RFSOI, FD SOI and Photonic SOI have been making great inroads and business impact. But SOI and energy efficiency are linked. Energy saving is the essence of Sohitech value proposition.
When we consider all electronic chips built in 2020 on these 3 Soitec substrates, The reduction of CO2 emission at system level during the lifetime of products, thanks to Soetec wafers compared I described earlier how Sohitech is establishing industry standards. Let me spend next few minutes showing how this objective is key to our strategy And put it into perspective. When you look into engineered substrates, they are basically a combination of thin layers of different materials. Nature gave us a tablet of materials with nuances of properties that can be directly related to system figure of merit. Whatever type of signal to be handled by chip, electrical, acoustic, photonic, there's always a combination of materials For me, I engineered substrates which can provide a perfect solution to create unique value at system level related to connectivity, Computing, sensing or power electronics.
Soitech has technologies and know how to deploy an almost unlimited pallet of materials To enable specific performance required at system level. That's why Soitech is engaged not only with its direct customers, Foundries and IDMs, but also with end customers, system makers. By bridging the ecosystem And understanding their ultimate requirements and challenges, we developed combination of materials which have a critical impact on their success and adoption at mass markets. I will end my presentation by summarizing SOYTEC strategy. A simple way to visualize it It's the SOWYTECH flywheel.
It all starts with an understanding of customers and market needs, Decoding disruption linked to megatrends. This analysis feed our annual strategic plan, which is focused on 4 fundamentals: How to protect and expand our core business, how to expand to attractive adjacent markets and applications, How to evolve our operating model and how to reinforce global position. The outcome of our strategic plan is setting a course And priorities for the company at a 5 year horizon and supporting 3 key elements of the wheel: Innovation, bringing new material solutions to feed the system requirements product development with unique engagements with customers, both direct and end customers and manufacturing with the power of performance and flexibility. All this will expand profitable growth and accelerate the SOYTEC flywheel to turn faster and propel us To the following cycles. To conclude, 3 key megatrends are at the base of growth of The semiconductor industry and Sohitech in the current decade.
Engineered substrates play unique role, providing solutions and meeting system requirements. Soitech's strategy is to set up sustainable standards, strongly engaged with customers across the entire value chain. Finally, it is my pleasure to introduce now to the stage Bernard Aspar, who will give you the full perspective on Soyaltec Products Thank you very much for your attention.
Thank you, Thomas. Hello, everyone, and thank you very much for being with us today. I am Bernard Aspar, Chief Operating Officer at Swiatek, and I am very pleased to present the main driver of our 5 years business plan. I will show you how we position our company as leader in some strategic markets and how we are penetrating some new markets. To achieve this, it is critical to be very close to our customer.
After the message from Jean Marc Sherry, we will have 3 testimonials from key customers. As Paul and Thomas mentioned, We have identified 3 strategic markets. For this market, everything starts by understanding the challenges that our industry is facing and the solution that our customers need to deliver. We have developed a real customer intimacy with all our direct customers, foundries, integrated device manufacturers and even fabless customers. Thanks to this intimacy, we are designing, developing, manufacturing differentiated products which are enabling new features for this market today and tomorrow.
Thanks to a strong and expanding product portfolio, We are confident that we will be able to deliver solid profitable growth in the next 5 years. With our wafer shipment Expected to be multiplied by a factor of 2.5. We will triple our revenue To reach around $2,000,000,000 by fiscal year 'twenty six. Let's stop a few seconds on these two numbers. 2.5 times in volume and 3 times in revenue.
This trend demonstrated the value that we are creating for Soitech and for our customers. From today, we want to give you more color and more visibility on how we build a product portfolio for each Strategic end market. By focusing on the strategic market and by understanding their drivers. For mobile communication, 4 gs, 5 gs application and whole new connectivity protocols Are driving us to design different products such as RF SOI, FDSOI, piezoin insulator and Gallium Nitride. For automotive and industrial markets, autonomous car, infotainment and vehicle electrification We'll take advantage of our current SOI product, but also of our new products under development such as smart cut, silicon carbide and gallium nitride.
For smart devices, they need a balance between performance and power consumption. So we have designed different flavors of SOI, from FD SOI to photonic SOI and image SOI. Taking into account the value of our product and our capacity to penetrate this market, We have identified a 7,000,000 wafer opportunity in fiscal year 'twenty six. This number It's 2.5 times larger than our market in fiscal year 2021. This represents a significant opportunity ahead.
Mobile communications will remain our largest market. Automotive and smart devices are becoming significant. To estimate this addressable market, we use the content opportunity for our products that I will explain later on and the penetration of our product on each market. When you think about addressable market, what does mean that mean in terms of wafer diameter? As you can see on this slide, 200, 300 millimeter demand will continue to grow significantly, Baxfi Carrier 26.
150 millimeter will become more strategic with the demand coming mainly from mobile with POI and GaN and the demand coming from automotive with market silicon carbide and GaN. In the next 5 years and beyond, a part of this new product in 150 millimeter will move to 200 millimeter As our technology is enabling wafer size scalability and faster 200 millimeter market penetration. This is a case for POI, smart cut silicon carbide and GaN. Let's turn to our first market regarding mobile communications. Here, we are proposing a comprehensive product portfolio based on 4 main product families.
First, we have our RF SOI family, which is a standard for RF front end modules. 2nd, we have the FDSOI family. FDSOI provide a platform to integrate different function on the same day. 3rd, we have the POI family. We have designed a new product called POI for piezo electric on insulator wafer, Thanks to our customer intimacy.
This product is showing very good adoption, thanks to the value proposition that it brings to filter makers. 4th, our GaN product family is suitable for high performance power amplifier. When you open a 4 gs5 gs smartphone, you can see that several parts are dedicated to cellular communication and connectivity. The so called front end module is based on 3 main blocks: 5 gs Sub-six gigahertz, 5 gs millimeter wave and Wi Fi connectivity. Containing several products Such as switch, antenna tuner, filters and different amplifiers.
Over the last decade, at Soitech, We have designed a comprehensive product portfolio by understanding the challenge of the front end module makers resulting from 4 gs and 5 gs requirements. You can see on this slide that our comprehensive product portfolio covers the majority of the need. Whatever the architecture that is chosen by the front end module maker, this is a strong statement confirming our leadership in engineering substrate for 5 gs. I will not go into detail, but the value of each product is described in the package. However, we can highlight that RF SOI is the industry standard today for 4 gs, and it will remain the standard for 5 gs.
This leadership is supported by a product roadmap to cover the full range of applications from high end to low end products. POI wafers have been designed to allow superior thermal stability, larger bandwidth And to integrate multiplexer, EPiGaN structure offers strong power amplifier efficiency and power density. FDSOI offers an energy efficient analog MIGS signal solution and system on chip approach. By understanding the value of our products for each device and by knowing the size of this device, we have been able to evaluate the content opportunity of our product for this market. The content is the aggregate die size of All RF ships using our products.
Today, the total opportunity is in the range of 60 square millimeter per Smartphone and this opportunity is expected to more than triple In the next 5 years to over 200 square millimeter. For 5 gs, sub-six gigahertz, RFSO will remain a standard. POI wafers for filter presents a very significant opportunity for 5 gs high performance band and more precisely, mid high band. We are also expecting That POI to become a standard for this 5 gs high performance band. For 5 gs millimeter wave, 2 solutions are available.
Either the architecture will be based on RF SOI for RF front end And by the way, GaN could be used for power amplifier. Or the architecture will be based on FD SOI to add more integration such as power amplifier and part of the transceiver. In addition, the WiFi 6 and ultra wideband We'll also present additional opportunities. In conclusion, the cumulative opportunity In 5 years, he's larger than 200 Square Millimeter. In the world of mobile communications, Soitech and GlobalFoundry have a long history of collaboration.
So it is a real pleasure for me to introduce Tom Caulfield, CEO of GlobalFoundries. Tom?
Hello. I'm Tom Caulfield, CEO of GlobalFoundries. I'd like to start by thanking Paul and the Swaytech executive team for inviting me here to your Investor Conference. You know, GF and Sohitech have a deep and strategic partnership that's immensely important to the semiconductor industry and then by extension the world economy. About 15 years ago, our semiconductor industry began this transition from a compute centric focus To a pervasive deployment of semiconductor technologies, bringing new features to a host of applications.
And it all started with the smartphone And the connectivity it created. And this connectivity gave rise to the Internet of Things that is now evolving To not only all things connected, but connected with intelligence. Now, GF provides unique and critical solutions to this For evasive deployment of feature rich solutions to all things connected. In fact, this segment represents 70% of the semi foundry TAM, Which today is about $50,000,000,000 and growing strong. Now at the heart of this feature rich pervasive semi market is connectivity, Especially, maybe more accurately, specifically in the mobility segment.
And the solution of choice in all the front end modules for handsets is GF, and that solution is built on Soh Tec technology. GF has 90 plus percent participation in this use case. And not only that, we're designed into the number one Bluetooth provider, the number one network WiFi provider and number 1 millimeter wave provider. And again, all of GF's unique, Differentiated sole source solutions leverage the various types of silicon on insulator technology from Swaytech. And together, our companies will play an important role as the semi industry grows from about a half a $1,000,000,000,000 today To well over $1,000,000,000,000 over the next 8 to 10 years.
So here's to our partnership, Paul, and to the next 10 years as we enable this industry that changes the world. Have a great conference.
Thank you very much, Tom, for this very supportive message. For the automotive market, the demand for semiconductor devices is strongly increasing and we are enlarging our product offer in order to cover a broader range of applications. For autonomous driving, infotainment and vehicle electrification, Our historical Power SOI product is used for power management and IC and in vehicle networking. FDSOI is suitable for microcontrollers, radar and autonomous driving system. We are also designing 2 new products: gallium nitride on silicon and our new smart gut silicon carbide to enable automotive electrification efficiency.
We are expanding our product portfolio around these all three segments. 1st segment, infotainment. We are proposing several products. Power SOI is used today in more and more applications such as Class D amplifier In vehicle networking. This product combines the advantage to integrate low- and mid voltage IC with high reliability.
For multimedia application, a DSOI is used for low power application processor with strong reliability. 2nd segment, autonomous driving. Our FDSOI solution allow integrated radar on a cheap and flexible computing performance while improving system reliability and software. For the last segment, regarding powertrain, Power SOI are addressing several applications such as gate driver, battery management system, power management IC. However, the challenges in electrification require us to develop a new solution for silicon carbide using our technology.
Christophe, our CTO, will present in detail later this development. And you will see that our solution will improve device yield, improve performance and will allow larger dies. While the silicon carbide ecosystem is dominated today by 150 diameter, Soitech solution will accelerate the transition to 200 millimeter in the coming years. Since we present to you this new technology 2 years ago, We have made a lot of progress on the technology side, on the product development and roadmap, and we are working on Business Milestone with Customers. So taking into account all these inputs, We have evaluated the opportunity in square millimeter corresponding to the die size of the ships, where our products are bringing value and differentiation.
The outlook over the next 5 years is highlighting That this opportunity will grow significantly, mainly thanks to our new product, such as smart cut silicon carbide and gallium nitride on silicon suitable for vehicle electrification. And also thanks to Power SOI and FD SOI. This opportunity will reach around 2,000 500 Square Millimeter, which is a huge increase comparing to our opportunity today. As a reminder, the size of the addressable market is linked to the opportunity of the die size An estimation of the penetration rate of our product. Who else than NXP to talk about Automotive Engineering Substrate?
NXP is one of our oldest strategic customer and it is a great honor to have Kurt Schieber, CEO of NXP. Let's welcome Kurt's message.
Thank you to Paul and the team for inviting me to speak with you all today. With our long standing history between Sohitech and NXP, it is truly my pleasure. NXP enables secure connections for a smarter world, advancing solutions that make our lives easier, better and safer. We also have strong and leading market share positions within our 4 major end markets: automotive, Industrial and IoT, Mobile and Communication Infrastructure. NXP's relationship with Soitech started in the mid 90s when and then still Philips Semiconductors, when we designed devices on thick SOI technology for high voltage applications, which was very unique at that time.
Now fast forward to today. SOI is used in several of NXP's key products. And as you know power SOI is used for high voltage applications. And with the growing demand in battery management for electric vehicles, in vehicle networking and secure car access. NXP does expect to see significant growth In demand for power SOI in the coming years.
At the same time fully depleted SOI Is used in NXP's Edge Processing and Automotive Processing business lines where we have partnered with Samsung and Soitech on 28 nanometer FDSOI to create NXP's I. MX family of applications processes. Looking into the future a key part of our strategy is to drive the 5 gs transition of communication infrastructure By building upon our LDIMOS leadership position and with the recent opening of our new Gallium Nitride factory in Arizona. Now Gallium Nitride on Silicon Carbide is used by NXP to enable the 5 gs transition. With Soitech's acquisition of Apigen, I believe Sorytech is well positioned to capitalize on the growth within this emerging market segment.
In closing, Soitech is NXP's largest SOI substrate supplier and a true partner to us. Thank you and I wish you continued success and hopefully we can all be together in person very soon. Thank you.
Thank you very much, Kurt, for your message. Let's move now on the smart device market where, by the way, NXP is also a strong player. Smart devices are used in many different applications, and in many cases, Our products are enabling this application: artificial intelligence at the edge with our FDSOI product 3 d sensing with image sensor based on image Soi for improved performance in near infrared, Health care monitoring for wearables with new technology based on silicon photonics. High speed data center with silicon photonics where our product is a standard today and where we propose different flavor supporting the silicon photonic roadmap. For smart device, I would like to focus on FDSOI.
When you think about wearables, one of the critical features is about power consumption for devices which are always on and ready to capture and compute the data. FDSOI is providing a real platform allowing system on chip combining performance and low work active consumption. The development of Ultra low power IP design capability offered by Dolphin Design allow performance on demand. Furthermore, FDSOI platform can integrate other functions such as communication. So with all these figures, you understand All the potential of this technology for wearables, IoT and edge computing, which represents the largest opportunity for FDSY.
We have the pleasure to share testimony from Shimizu san, CEO of Semiconductor, which was a pioneer in adopting SOI for consumer electronics. Shimizu san.
I am Shimizu from Sony Semiconductor Solutions. Thank you for this opportunity to talk at your important event. Our Group's mission is to spark imaginations and In the society through the power of technology, we are involved in various semiconductor devices, including the world's number 1 CMOS image sensor. Soitech is a partner in the high frequency switch business. Since we started this business in 2012, We have collaborated together on various challenges such as ROF improvement required for high frequency switches, improvement of the quality including yields and cost reduction.
Also, we have continued to receive support in terms of the Stable supply of high resistivity silicon substrates. In response To expanding wireless device market, mainly for mobile, we are planning to expand our business. Therefore, we are it is very important to continue our collaboration with Soitech, including new devices. The high frequency switch business is an important business for our mission to contribute to society through technology. For that, we appreciate your continued support and cooperation.
Thank you very much.
Thank you very much, Himizus san, for your testimony. I believe that now you understand better How we build our business case and some of the key assumptions which are behind it. Let's move on the financial model and the outlook for our expected revenue in fiscal year 20 26, 5 years from now. First, comparing to our fiscal year 2021 revenue, we are planning To be in the range of $2,000,000,000 This is 3 times our revenue for fiscal year 2021, meaning CAGR of roughly 25% per year over the next 5 years. This growth is based on a wafer volume increase of 2.5 times.
I would like again to highlight here Our focus to increase our margin and profitability with more added value product providing differentiation to our customer. Lea will present later today more details of our financial model. This expected revenue of $2,000,000,000 will come from our three Key strategic market, where our main business will remain mobile communications. This business is solid and growing strongly. Thanks to a broader product offering, we are targeting to increase our revenue coming from Automotive and Industrial to 20% for our fiscal year 'twenty six expected revenue.
And smart device will grow in line with the rest of the business. Our strategy to focus on these Three markets leading to a more balanced business exposure with different cycles in term Product lifetime growth driver and customer exposure. Taking into account the upside and downsize, We are anticipating for fiscal year 'twenty six a low case and a high case. If the 5 gs adoption is lower than expected and if the penetration of our new product Such as POIs, smart cut silicon carbide, is lower than expected, then we can have a low case around 1.7 $1,000,000,000 of revenue. On the contrary, if the 5 gs adoption is higher than expected, A strong adoption of our new product and a faster penetration of FDSY in China, we can reach a high case scenario with an We have expected revenue of $2,400,000,000 In conclusion, you see by focusing on 3 strategic markets And with a strong customer in SIMACY, we have designed new product and we are expanding our portfolio of differentiated product.
We are now expecting a profitable growth of $2,000,000,000 in fiscal year 2026. So we are planning a significant growth. And you will hear from both Cyrille and Christophe that we will be ready for that. Thank you very much for your attention.
Thank you, Bernard. Hello, everyone. I am Christophe Melville, and I am Chief Technology Officer of Soitech. It's my pleasure today to provide you with Some insights of our approach to innovation and to spotlight results of that innovation. Before going into detail, Let me highlight a few key points.
Today, Engine and Substrate incorporate best in class materials to sustain semiconductor innovation and leverage material science to trigger performance, power and cost optimization. This is made possible thanks to our technologies, technologies that we continuously improve and involve with more and more materials. A compelling example of this evolution is smart cut silicon carbide. Finally, agility and speed are driving our innovation and influencing the unique collaboration models we are implementing. 5 gs, artificial intelligence, battery life, All are evidence of the impact of semiconductors on our daily lives.
And 6 gs, quantum computing, Virtualization, healthcare will all contribute to further expanding the place of our semiconductors in our future. Our technologies and engineered substrates are bridging material science with applications, allowing electrons, photons, electromagnetic waves or the piezoelectric effects to make our lives better. In order to achieve this, the development of advanced technologies It's critical to design best engineered substrates. We now clearly see 2 families: our well known SOI products portfolio that we are continuously improving and the emerging so called anything and anything solutions, including non silicon active layers for semiconductor device benefits. Indeed, Adding value to our customers and our customers' customers' devices is driving our innovation.
We are engaged in a dialogue with all the parties along the supply chain to identify what performance improvements, power consumption requirements and budget are needed to intercept the market and achieved the right differentiation. And of course, time to market is also critical. We summarize these drivers in a PPACT indicator. We have listed here a few examples of performance benefits, Power Savings and Cost Contributions. Let's now move on, discuss our technologies, the link between materials and applications.
SmartCut is, of course, a pillar of our technology portfolio, but we have much more in our toolbox: Epitaxy, process layer transfer, substrate and material expertise, wafer reuse and advanced process steps Are all decisive when it comes to create new engineered substrates. But let's come back on SmartCut. It's been almost 3 decades since the first successful SmartCut of a perfect 100 millimeter SOI wafer. SmartCut is now clearly established as the reference process for FIN SOI manufacturing. Oxidation, hydrogen implantation to define cutting plane, Bonding of a stiffener and splitting is now a classical sequence we routinely use with very mature yield for millions of wafers.
Finishing options have been implemented to drastically improve uniformity and quality. Of course, We use wafer 8 donor wafer as many times as possible via refresh as a key contributor to generating cost efficiencies. I'd like to take a moment to describe how we generically think about SmartCut today in designing our product. We select or prepare the best tonneau wafer, which is sometimes considered a more expensive option initially, but which is rendered cost effective through multiple use. We smart cut it to the most effective substrates with regards to overall PPAC.
And finally, We incorporate intermediate layers to bring more functionalities. I already reference anything on anything when talking about new engineered substrates. This is a way to describe all these examples where our aim is clearly to deliver the best active layer on the most convenient substrate. As you know, this could be achieved through bringing a piezoelectric thin layer in silicon, whirl, or compound layers onto a silicon or other active substrates. Over the past decades, we carried air ended demonstration of the multiple material layers transfer.
As you can see on this slide, every wafer that you see is a real demonstration of our capabilities. Thanks to that unique experience, we can now move much faster in initial phases of development and engineering our new substrates. And silicon carbide is an excellent example. 2 years ago, we told you about our smart cut silicon carbide concept for power devices. This innovation is a reality today.
And since the end of 2020, we have been able to gather electrical data from our prototypes. In 2020, we have built and kicked off our pilot line in collaboration with our partners, CRL80 and Applied Materials. From a technology standpoint, how do we do it? We have adapted the SmartCut process adjusted for silicon carbide, as shown here and running in our pilot line. We prepare the highest quality active layer So that our customers can grow their Epitaxy device layer with no kilo defects, we reduce resistivity on Handel Wafer to achieve the optimal energy efficiency for vertical devices.
Then joining these 2 wafers, Wafer bonding is adjusted for conductive bonding, which is a must for vertical devices. Let me now summarize our value proposition. Here you see a key benefit of our SmartCut silicon carbide. It is ready for epitaxy process. When using a conventional silicon carbide substrate, a conversion Buffer layer must grow to eliminate killer defects in the crystal before growing the device active layer.
Epitaxy ready for our substrate means that our substrate is ready for drift epitaxy without the need of a costly buffer layer. This is our approach of best active layer, which is our focus for this year, 2021. Looking ahead, in 2022, we will focus on lowering resistivity of the handle wafer to further improve energy efficiency at system level and Shrink Shrink dies further. Let's now discuss our innovation assets, people and partnership, And how this enhances efficiency in our innovation. In a nutshell, Soitech's global innovation team is made up of European, U.
S. And Asian talents. A total of some 200 researchers and inventors, 25% of them Being PhDs are pushing the limits and are at the origin of more than 3,500 patents to date. To give you a sense of just how dynamic our innovation capabilities are, you will see on the right hand side graph that we filed almost 1,000 new patents in the last 3 years. We should note that in order to do so, We typically spend 10% to 15% of our annual revenue to grow R and D.
And for instance, in fiscal year 2021, we allocated 13%. We want our innovation to meet time to market, solving gaps and challenges that our customers are facing in their roadmaps. This is always a matter of innovation speed versus visibility of the future needs. Agility, Efficiency, cycle time are all critical items in the innovation dashboard and the R and D management process. Setting up clear priorities for our actions is another critical focus area for us.
We are globally driving 80%, 20% baseline between the mandatory support of our 5 years business plan and the long term technologies incubation to capture future opportunities, future product lines or create future business units. Our short term incremental innovation delivers next generation for SOI, POI and silicon carbide. Turning to disruptive innovation. We are considering new materials and new approaches, pushing once again the limits in materials science. Well, let me give you an exciting example with tiling that will break substrate diameter limitation for future usage of any material in any diameter.
Indium phosphide that we call INP. It's seen as the best material for multiple strategic applications such as RF devices, 6 gs, long wavelengths, laser sources, image sensors and so on. But and there is a major but. Indium phosphide is very expensive and limited to 100 millimeter substrates, not allowing proper design to cost efficiency innovation. When involving tiling combined with our SmartCut, we are able to deliver indium phosphide in 200 millimeter, as shown via this R and D demonstration.
And of course, we can reuse the donor wafers multiple times and dilute the initial cost of indium phosphide. There is still some work to do, but we expect to bring key materials in 200 millimeters or even 300 millimeters in the coming years. We talked about visibility in technology needs or changes, speed of innovation. This is where collaboration is needed to amplify and accelerate learning. We are benefiting from our unique collaborations with Letty, iMEC and Astar and developing new links worldwide with 2 key objectives in mind: gaining access to new ideas and expertise and creating extensions to our internal R and D teams to be in position to deliver high quality prototypes early in the product lifecycle.
Our substrate innovation center in Grenoble within the Lettie facilities is a best in class example of advanced collaboration Plantation. This is a unique hub hosting the Soitech lab and daily joint innovation work with Leti employees. The silicon carbide pilot line has been implemented there with the addition of Applied Materials employees. Having this lead semiconductor equipment supplier joining our hub clearly gives credit to our model. We will continue leveraging this hub for new products and further collaboration with suppliers, customers and academics.
To summarize what our innovation model can deliver, this graph shows you how Soitech is able to capitalize on years of knowledge to accelerate time to market for our new engineered substrates. It has been an amazing journey to bring SOI products to market standard. We are now leveraging these rich learnings to accelerate the maturation of our new products and meet time to market required by our industry. POI learning curves has been quite fast. We discussed major progress on silicon carbide in less than 2 years, and we will maintain this momentum when innovating for next generation technologies and products.
In conclusion, 3 key points to keep in mind. We bring the best of material science through our engineered substrate to optimize PPACT for our customers. We designed our best products aiming to deliver the best active layer on the best substrates. And we have implemented a unique innovation model to deliver quality and optimized time to market. Thank you very much.
Thank you. And we are now going to start our first Q and A session. In this first Q and A session, we will be focusing on the first part of this presentation and CMD today, meaning that we will take questions regarding strategy, business and our innovation. Operator? So if we start with the web question, the question we had from Varun at JP Morgan relates to the silicon carbide.
How much will it contribute to our top line in the next 5 years? What are the key decision points for us? And I think we will start to address this question with Bernard.
Thank you for the question. Thank you, Steve. So regarding silicon carbide, today you see in our presentation that you will represent It's in the automotive and industrial part and which will represent 20% of our revenue. And the silicon carbide part It's a part of it, okay, a significant part of it. We are planning to have the first sales End of fiscal year 'twenty three with the ramp up in fiscal year 'twenty four and then progressing across the year.
So this is for the question regarding the revenue. Now if you look at the Confidence level that we have. Today, we have demonstrated that on this wafer, we have made some IP and we are dividend on the result. And we have several customer who are qualifying this product and this technology. So, Kim Mike Stone will be in the next month to be in line with our ramp end of his career 23.
Thank you Bernard. Is there a question operator on the line? If not we can build up with questions from the web.
Yes. We do have a couple of questions on the phone line. The first question comes from the line of Alexander Peterk from CUK Generale. Please go ahead.
Yes. Hi, good afternoon. Thank you for the question.
Can you hear me alright?
Yes, Alex, we can hear you well. Thank you.
Yes, thank you. Thank you. So my question is essentially regarding your The fiscal 'twenty six outlook, it seems to me there's a big element of a higher ASP there, about 20% Hi, but currently because you have revenue growing times 3 and volume times 2.5. So is that the bulk of the upgrades Of your outlook today or do you also plan to build new fabs and is this part of this plan? And compared to what you presented in the 2019 CMV, you gave us a full fab fully loaded model at €1,600,000,000 Is this €2,000,000,000 also fully loaded fab concepts and which fabs are included there?
Thanks.
Okay. Thank you, Alex. So as a reminder, this is the first time we give an outlook for our financial model in fiscal year 26, the previous model for full fab around fiscal year 2024, 2025. Regarding the Underlying assumptions of this model, I think on the high level, I will let Bernard respond. But on the CapEx and capacity side, I suggest we will address these points in the Titti side.
I suggest we will address these points in the session number 2. Bernard?
Okay. So regarding the revenue, with our we have Triple our revenue with 2.5x growth in volumes. So this means that the product mix Essentially, linked to this is linked to the product mix and the value of the product that we are providing to our customer, which is making the main difference in this avenue. So you see that with this number, as I highlight My talk is very focusing on providing added value product and increasing our margin and profitability.
Thank you, Bernard. Maybe just hold on a second operator, maybe 2 questions from the line. One is from Robert Sanders at Deutsche Bank About millimeter wave penetration in smartphones behind our assumptions. So maybe a quick A clarification from Thomas regarding how we see millimeter wave evolving over the next few years.
Okay. So maybe first the perspective on overall 5 gs smartphones growth. We are expecting this year To be in the range of 500,000,000 to 550,000,000 units in 2021 calendar year. And this is for sub-six gigahertz. The millimeter wave module, we expect to be in the range of 60,000,000 to 70,000,000 of Phones on top of sub-six gigahertz.
And we expect this trend to continue probably for another couple of Years and with acceleration likely in 2023, where the combination of sub-six gigahertz and millimeter wave We'll be more present across multiple regions, not just as it is today in the U. S.
Thank you, Thomas. And maybe from a product standpoint, product exposure standpoint, Bernard, if you want to continue on the millimeter wave exposure.
So on the millimeter wave exposure, we have 2 solutions today, okay? And this we are offering 2 solutions depending on the Architecture that our customer want to choose. The solution is 1st based on RFSOI where you can also have the gallium nitride for power amplifier and a more integrated solution with FDSOI. So with these two platforms, we believe that with the Challenge that this industry will have in term of power consumption, we are very well positioned to have this product, and we are expecting seeing some revenue starting fiscal year 'twenty three on that.
Thank you, Bernard. And operator, I'll take one last question, and then we can move on to the audio line from Ken Ramf at Jefferies. A question, I think when you mean GF, GW, I believe it's Entries and Global Wafers. Capacity expansion and 300 millimeter entry. How does that If this is the right time to ask if our figures imply a smaller capacity.
So maybe, Paul, you can give some context And Bernard, you can follow-up.
Yes. The context, you have seen the positions we have taken and where And the ambitions we have and the way we, I will say, characterize the evolutions of the RF market, it's going to be to continue to be a very large market. And we welcome our licenses to really Engage more in capacity. That's one thing. I mean, they see the same thing.
And we basically, We enjoy to have this kind of reactions of the market, but also our licensee as well. So Talking about where we stand in terms of this, I would say maybe, Bernard, you can talk a bit about the Relationship that we are you have built with customers that across the value chain. And And what is important for you to look at is that you mentioned a little bit as part of the value creations. We are the lead the technology leader, and we are already bringing this new capability for 5 gs across the board with multiple type of products. And this is where this connections, this relationship is built on, and it will continue for a long time.
Bernard, do you want to add something?
I think you covered it. Good. Thank you. Operator, any question on the line?
The next question comes from the line of Jerome Rommel from BNP Paribas. Please go ahead.
Yes. Good afternoon. Two quick questions. What is the market share assumption you have in your model? Because we saw the news between Global Wafer And GlobalFoundry.
So do we still think in term of 70%, 30% or 75%, 25 Percent in the range. And second question is concerning the fastest value versus volume, is it due to price increase or just a mix, Curious mix.
Okay. Yes. So I'll continue maybe on the first one. And then Bernard, you can go on the second one. So in fact, if you think about our positions today, our market share range between 60% to 90 Plus 90 plus percent.
Why? Because depending on the segment and product, you know, we are bringing new product to the industry and to our customers. So at the beginning of the cycle, we normally have a very, very, very large market share. And we Normally go down to the 70% to 75% type. But this is the model we have built.
And we don't see a reason this change for the on the horizon.
Regarding our ISP, it's we need to have in mind, as Paul highlighted, that with the new generation of product, we are bringing New value. So we are able to offset the price discrete on 1 generation, but the new generation peering and that we are proposing on the market.
Thank you. Next question, please.
Your next question comes from the line of Sebastian Shabowitsch from Kepler Cheuvreux. Please go ahead.
Yes. Hello everyone and thanks for taking the question. Looking at 6 gs, do you have any idea of the evolution of the substrates That could be used for the Air France 10 module. Moving into a 5 gs and what could you offer for this Specific generation for the RF front end module. And coming back to the opportunity on the compound semiconductor, Could you have could you give us please a little bit of visibility on the potential addressable market in terms of wafers For both silicon carbide or gallium nitride, let's say 5 years from now and where we are standing right now.
Thank
you. Thank you, Sebastien. So I think on 6 gs and new engineered substrate, we will let Christophe respond. And then on the market, we'll have some comments on the market size by diameter and market, but we'll leave that maybe to Bernard. Yeah.
Thank you
for the question on 6 gs, which is a difficult question. But typically, we are working with the leaders to see how to accelerate the performance of the devices, which means going into the high mobility type of semiconductors. In the presentation, I mentioned indium phosphide as one possible option, but of course we are looking also at continuously improving the solutions we have in hand and on the other hand going to disruptive solutions like bringing these new materials. So Of course selection is not made yet, but we are bringing any best materials we can from our engineered substrates and we'll see how which solution is the best.
And maybe I just wanted to add one comment on the 6 gs, to put it in perspective. We're just starting 5 gs, And this is after 10 years, a decade of 4 gs. So we'll have multiple generations of 5 gs with new materials and solutions, which will boost You know, our business for really the whole decade. So just keep it in mind that 6 gs is maybe towards the end of this decade where this will become our first trials.
So regarding the volume, when we are talking to compound today, we are mainly talking about 150 millimeter. And you will see with the presentation of Cyrille how we are planning to expand our 150 millimeter capacity, both on Gallium Nitride in NACEL, on silicon carbide in a place that we need to define. And we have also to consider that with our technology, We are enabling the transition also for 200 millimeter. When we are using SmartCut, it's enabling the transition for 200 millimeter diameter. So this is something that we are looking for.
And we are already starting in 200 millimeter of Gallium Nitride in Assert.
Thank you, Bernard.
The next question comes from the line of Dominique Ochszewski from Morgan Stanley. Please go ahead.
Yes. Hi, everyone. Thanks for taking the question. So the first question is around your Envision timeframe of 2026. Does the POI or SDSOI in your perspective, have a greater chance of becoming the 2nd largest product driver there after RS, because obviously you've shown that the POI Seems to be ramping faster than prior technology generations.
And then the second question is just if you could update us on a very useful video that you provided from GlenFoundries. But where are we on the 12 nanometer product there? Is that still a 2023 24 timeframe? Thank you.
Thank you, Dominique. I think Bernard you can take the first question. And on the 12 nanometer, either Paul or Christophe, you can comment.
So on POI, it's we are ready at the as I say, that We are working to make a standard. Our ambition is really to make a standard with a POI. Today, we are starting with mid- to high band product and then to enlarge this. In fact, POI is not only one product. It's a real product family with a product roadmap covering the different range of application.
So our ambition is Really to have this product a standard for 5 gs high performance filters.
Yeah. Regarding the road map for FD, I mean, you know that it starts from 28 nanometer today Down to 22 and 18 nanometer. And you have seen some major customers engaging their new product portfolio. And you heard about Jean Marc Sherry talking about his own products. So we believe today that, First, there is a huge market in the range of 28 nanometer to 18 nanometer that is going to materialize between now fiscal year 2024.
And clearly, I mean, we are still working with All the parties, and specifically also with GlobalFoundry, on how do we and when do we activate 12 nanometer as part of the the next generations of product.
Thank you, Paul. Next question, please.
The next question comes from the line of Adithya Majukwu from Bank of America. Please go ahead.
Good afternoon guys. I have got four questions. Firstly, just on The BEI fraction, I just wondered if you could give us an update on what's happening beyond Qualcomm. I know you expect it to become a standard and I believe in that too, but I'd be keen to get any color you can give there. Secondly, on silicon carbide, again, it's brief like your solution could become the industry standard here, given the cost benefits, etcetera.
It says, am I thinking on right lines or if ethnic is not going to become the standard, What would be the hindrances? Any color there would be helpful. And then I have a couple of follow ups.
Thank you, Adi. Maybe on POI, Bernard, you can comment. And on silicon carbide, it would be interesting to hear Christophe maybe iterate the value proposition and differentiation versus other existing technologies. Yes. So on the POI, Beyond our leading customer, we are several customer.
And when I
say several, it's across the world From the different leaders around the world are at the different phase qualification, evaluation, ramping. So we are really seeing a lot of traction of the different player with these new POI wafers.
Yeah and regarding the value proposition of silicon carbide, we select Best substrates to grow a high quality layer on Adorno wafers and then cutting In closing all the defects, allowing our customers to grow defect free epitaxy directly on our wafer. And this is number one advantage we want to bring. 2nd advantage It's this low resistivity based substrate that is a low less energy loss during the operation of the transistors and to also to gain on the die size. So clearly, 2 advantages. And regarding the milestone, as we said, just to remind you, We are focusing on the defectivity part in 2021 in this year and we will focus our effort on the base wafer lowering the resistivity in next year.
Thanks, Christophe. Adi, you had some follow ups?
Thank you. Just on the silicon, would it be fair to say that Your solution could become the industry standard for silicon carbide substrates? Or would there be something I need to
In fact, I will say that it depends What product and what system you are talking about? I think that what we are really targeting is to in the automotive system to improve Really, the current dynamic and trends that we see in silicon carbide, because Clearly, yield and defectivity at customers' level is a problem. And as Christophe said, basically also low resistivity It's also an issue, and we can improve the functioning of the system. So as we demonstrate this, it will be clear that We will become a standard for some very specific applications. I cannot predict if this will go across the board.
But when you start to fix customer problems and if customer realize that this is a lot of value for them, It's an easy day an easy jump because our technology is compatible with what they are using today. And that's very important. I mean, They can switch and they can integrate a lot of what we do in their current supply chain.
Understood. Very clear. And just a couple of follow ups. First on the GaN and use In automotive, would this be for fast charging or would this be for some other applications that you have in mind? And finally just on SOI image, I didn't help but notice the Sony CEO talking about their imaging products.
I just wondered if you have had any success with Image SAWY with any other customers beyond your lead one. Any color there would be helpful. Thank you.
Bernard? So regarding Gallium Nitride, it's we are mainly considering the opportunity for 48 volt DC DC converter in the automotive market. Okay. This is the main focus and we know that GaN can go also to a higher voltage. But the main part is linked to the 48DCDC.
This is for the first part. The second question was related Okay. Yes. So here, perhaps, Christophe, you can more answer to that on this approach on the development side.
On Image Energy SOI, you know we had a first win with our materials. And Of course, we follow the same story, the same effort, trying to bring the best material into the active layer and on the safety substrates to make sure that all the signal to noise efficiency is bring to the maximum to our customers. And so Difficult to disclose more, but there's a lot happening right now and we keep default. Thank you, Christophe.
There are currently no further questions on the phone line.
Okay.
Thank you, operator. Well, we have a couple of questions on the business side again on POI and related to silicon carbide. Maybe another one from, from Rob regarding filters. Is the long term goal to enable SAW filters, so surface acoustic wave filters, to replace more expensive BAW filter across all band or is there a limit to what POI can deliver?
This is a good question. Today, it's we are more we are progressing and again, more we are developing From kind of POI, more we see the value for this product and addressing more and more ban. So is there a limitation today? We don't know. We are the starting point of this, and we are developing a different product to address the different bands.
Thank you. And another question related to connectivity chief for UWB, Ultra White Band from Harrison Barrett at Arete Research. Are you design in with Any of your engineered substrate on the devices ramping today? Or do you expect to be designing more as the technology matures and optimizes? Is it a design in today or for tomorrow?
I think that today with WiFi 6, we have already Some customer using our product for that.
So we are in?
We are
in, yes.
So we're in. Thank you. Another question regarding FD SOI. Can you share your thoughts on FDSOI applicability in automotive beyond MCUs and dedicated accelerator products like Vision Processor into larger SoCs? I think we addressed that during the automotive part, but maybe if we can refresh.
Yeah. So on the FDSOI, so you see that with FDSOI, we can combine all the property related to the low power consumption, to to the low power consumption, to the reliability for the MCU and so on, but also for RF performance with everything linked to the radar, so and ADAS. So you see that there is A lot of application covered by FDSOI for automotive, and this will continue to grow in the next year.
Okay thank you Bernard. Operator any follow-up question?
There are no questions in the queue.
Okay. Well, we still have almost 4 minutes for this first Q and Session, so I will continue with some questions on the webcast. So a follow-up from Alex regarding MicroLEDs. You haven't talked much about MicroLED and in GaNOS. Is this product opportunity now no longer on your roadmap or is it too small to be mentioned?
Well in Ganos we worked hard on it. We bring it to the most advanced level we could by ourselves. So taking some options onto the material and then we delivered that to the customers. They need that to look at the value, prove the value and we are in this cycle. So we'll see from their feedback where we can go with this option.
Thank you Christophe. Another question following from Emmanuel Matou at ODDO Regarding FD SOI ecosystem in China, maybe, Paul, if you can give us an update.
I can. Maybe, Thomas, You can start to maybe share a bit what you see in China.
But China ecosystem is Slowly but surely increasing and reinforcing related to overall semiconductors, but FD SOI, it's also one of the Key technologies where Chinese industry is looking to design in and to build the whole ecosystem there. You know about Verisilicon. You know about Rockchip. So Rockchip, one of the leading Chinese fabless companies specialized in artificial intelligence chips. There is multiple projects related to FDSOI Foundry.
1, which is fully public, it's related to Huali foundry in Shanghai. And we see from R and D to fabless To design IP, to system, the whole ecosystem is strengthening up.
Thank you, Thomas. Any follow-up?
No. I mean, clearly, this The good, the positive things about China is that despite all the situations with COVID where we couldn't really travel there. And all the situations and We continue to see the resilience of the Chinese to really engage and develop this technology on their soil. So this is a positive sign. It takes time.
Thank you. Another follow-up from Adi at Bank of America, Maybe tough one for you Christophe. You talked about anything on anything. In addition to INP, so indium phosphide, what other substrate excites you the most?
That's a tough question. Well, the compound materials, I think being able to bring the compound materials Onto the easiest substrates and the one I can think is silicon. So being able So INP is very exciting, but what is very exciting is to really break the barriers from the diameter and the limitation from the diameter of any material. And what I'm really looking at is bringing this material in 300 millimeter to make to benefit from the best of the materials, but in a design and on the substrate that bring it designed to cost friendly and then to enable a lot of Exciting Applications. So that's the way.
Thank you, Christophe. So time is up for this first session. So we will Clued here and we will be back after this short break. Thank you. Thank you.
Welcome back to the 2nd session of SOYTEC Capital Markets Day. It is now my pleasure to introduce Cyrille Menon to discuss our operations. Cyrille, the floor is yours.
Thanks, Steve, and hello, everyone. Let me introduce myself. I'm Sir Emmanuel in charge of operation, IT And engineering for Soetec. I'm very glad to present Soetec operation and introduce our next challenges. Our operation must continue to support our business growth Across multiple product, diameters and geographies.
Actually, we already doubled our fab outputs from fiscal 2018 to fiscal 2020. A great challenge in front of us to tackle, scaling up our capacity by 2 weeks, beyond 4,000,000 wafer by fiscal year 26. 3 of our plants are running at full capacity since the beginning of calendar year 2021. We will continue to maximize overall equipment efficiency In order to further increase our operating leverage, speed is everything in such a high growth business demand And ramping up both our fab in Berners 3 for POI as well as in Singapore for 300 millimeters Strong demand will bring substantial operating leverage. Finally, capacity optimization is ongoing as well as yield improvement to further Increase our efficiency.
Last but not least, we are engaged in numerous sustainable growth initiatives to reduce our resource consumption and build an attractive and inclusive workplace. So where are our fab located? In the French ARP, we have 3 high volume manufacturing fab for SOI and POI. In Singapore, We have a SOI fab. In Belgium, we build compound semiconductor AP wafer.
And finally, in China, near Shanghai, we have our partner, Simgui. In addition, we are planning capacity expansion for further SOI capacity and silicon carbide, subject to business milestones. So in fiscal year 2021, we had around 2,000,000 wafer, and we will continue to expand our capacity to support our business growth beyond 4 million wafer in fiscal year 20 6. As explained previously by Bernard, The main drivers of this capacity increase are 300 millimeters as well as POI for both 150 millimeter And 200 millimeter to meet customer demand. For 300 millimeter, The strategy relies on 3 different time horizon.
1, Bernard 1 is running full, and our teams are focusing to extend Our capacity at minimum investment in the same building. We now anticipate a capacity at 700 ks wafer per year in Bernon, which is 50 ks higher than our previous model. 2, Singapore is ramping up and capacity installation is ongoing with a large investment plan this year to accelerate the ramp for both RF SOI and MDSOI product. Finally, 3 additional capacity will be necessary to go beyond 1,700,000 wafer per year in fiscal year 20 6. Our Barents 3 fab has been transformed from a pilot line to high volume manufacturing fab and is supporting an aggressive acceleration to support POI adoption.
With a lot of engineering effort, cleanroom optimization And synergy with Bernard 1 asset, this fab will be able to go up to 750 ks with a payer. Note that 750 ks is 250 ks higher than what we communicated last November. We are implementing a very agile production model to produce either 150 millimeter our 200 millimeter POI substrate in our burner 3 fab to better response to our customer demand. Dana 1 is running at full capacity and is able to deliver 950 ks with a per year, while SimWhip capacity will be gradually upgraded Up to 450 ks wafer per year. Finally, some new great opportunities are growing, and we are ready to accelerate.
In Belgium, our GaN AP wafer fab is now qualified for high volume manufacturing for 150 millimeter and we are preparing qualification for 200 millimeters CICEFAB in Belgium will cover both RF and power application. Regarding silicon carbide, Our pilot line has been deployed in the substrate innovation center in Letty and in Bernal. We will prepare additional capacity to be ready by fiscal year 24 to support high volume manufacturing and able to support up to 500 ks wafer per year. For the next 5 years, between this fiscal year fiscal year 2022 until fiscal year 2016, We are planning to spend €1,100,000,000 to support our business plan. 25% of this total CapEx will be used to complete the expansion of our Singapore plant.
20% will be spent to support our PY factory in Bernal for both 100 and 200 millimeter. 10% will be spent for emerging activity such as Gallium Nitride and Innovation Project And 5% to upgrade our facilities, maintenance and IT. Finally, pending business milestone. 20% will be spent developing silicon carbide capacity and 20% will be spent to further expand 300 millimeters capacity. So if we now focus on fiscal year 2022, we plan to accelerate our capacity expansion plan with €240,000,000 to support 300 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters growth by expanding in Singapore and POI capacity expansion in Berners Re.
Large initiatives have been deployed to strengthen our factory raw business. State of the art application to deploy industrial standards across all production sites. Artificial intelligence to support pattern recognition, smart sampling or advanced run to run to Improve our production yield and some new features to improve our team efficiency, headset or real time asset performance. Our initiatives have been awarded by the French industrial magazine, Lusignueil, as Factory of the Year. To illustrate the benefits of all this initiative, you will find here some operational KPIs.
Singapore fab will match Bernardo's competitiveness within 2 years. We are able to rapidly industrial Innovation into HVM, delivering high volume manufacturing yield in less than a year in Bairnestry as well as in Singapore. And finally, both skills and methodologies enable further capacity acceleration. As an example, the volume manufacturing in Bernasuri have increased 6 fold over a year. Last but not least, we are committed to remain a reference in our sustainability initiatives.
Doing more with less resources is key for our competitiveness and for our environment And ultimately, enable our sustainable growth. We have substantially reduced our resources consumption over the last few years. Additionally, we are committed to double our water recycle by fiscal year 2024. We are engaged in reducing our carbon emission, and we joined the science based target initiative to drive a sustainable growth According to the most challenging criteria, which are in sync with the climate change limited to 1.5 degrees C. 100% of our energy use in Bernard will be renewable this year in fiscal year 2022, And our plant in Singapore is aiming 50% by fiscal year 'twenty four.
And over 80% of our wasties Are recycled or recovered? Finally, attracting talent is key for Soetec today and for the future. We are engaged in a program to hire young people in our industry and more females. So quality of life Has improved by 5 points over a year, reaching the best score ever in such an environment. And finally, safety on-site I've been dramatically improved, leading to an injury rate reduction from 10 down to 4.
So as a conclusion, here are the 3 operation takeaway. We are ramping up capacity with scalable and agile operation footprint. We are improving our operating leverage through execution excellence and Industry 4.0. And ultimately, we are delivering a sustainable growth. Thank you for your attention.
And I will now leave the stage to our CFO, Lea.
Hello everyone. I am Lea Alsangue, SOI Tech CFO, And I am very happy to be here with you today. As you have seen in the previous presentations, we have a lot of exciting projects. One key message on my side, and I will come back to that at the end of my presentation. Our EBITDA will more than triple in value Between FY 2021 and FY26, thanks to our value added products and Our ability to financially support this growth.
But let's begin by taking a look at the FY 2021 financials. As expected, FY 2021 was a transition year. As Paul told you in this introduction, We are happy to report that the Group performance is in line with our annual guidance. Despite The current difficult environment will reach a flat revenue with an EBITDA margin of around 30%. We were able to maintain an EBITDA margin above 30%, while Shunning our efforts to structure our group to support the growth expected in FY 'twenty two and beyond.
In addition, we significantly improved our cash flow generation. Our operating cash flows increased From €100,000,000 in FY20 to €174,000,000 in FY2021. We disclosed our annual revenues in April, so no surprise there. Let me just refer to several important items from that report. We achieved a small growth In revenues at constant Tech Tangerine, as we reported a full year organic growth of plus 1% We enjoyed an increase in POI products and images.
This was offset By the decrease in SD products, power products due to the automotive economic situation, as well as photonics products. Overall, we achieved sales of €584,000,000 in FY 2021. We had a 3% negative currency impact due to the weakening of the US dollar. This means that our FY21 sales are down 2% on a reported basis. But we enjoy a quarter over quarter sequential growth.
Royalties and other revenues Are mainly related to Dolphin Design and Soitech Belgium. The increase during FY 2021 is mainly due to a strong growth of Dolphin Design Business. Our group reached €183,000,000 of gross profit, Which represents a 31.4 percent gross margin. As expected, we benefited From more favorable raw material purchase prices, thanks to our long term agreements with our key suppliers. On the other hand, a few headwinds impacted our gross margin.
Depreciation grew faster than sales Due to the investments plan implemented in the last few quarters and years, our burners refractory for periodic product He's still in its early stages of ramp up. And our Bernard 1 and Bernard 2 factories We are less loaded than last year. Finally, as expected, we had an unfavorable exchange rate effect. When you look at the gross margin history, please keep in mind that since FY 2020, we have 2 more fabs, Singapore And Bernard Srich. From this €183,000,000 of gross profit That I just mentioned, the group generated €90,000,000 of current operating income, Which is just above 15% of our revenue.
As we said before, this fiscal year is a transition year. We were flat in terms of revenue, but at the same time, we needed to prepare for the growth Expected in FY 'twenty two and beyond. For this reason, we continue to invest in R and D And we expanded our staffing in multiple areas. Gross R and D costs Increased by €7,000,000 representing an 11% increase compared to last year. Indeed, We boosted our efforts to maintain leadership in our SOA business and to further develop for our POI and SIC roadmaps.
If we consider flat R and D grants and tax research credits, as well as lower prototype sales, Net R and D increased by €12,000,000 as compared to FY20. Regarding SG and A, we continue to reinforce a group which is now more diverse in terms of geography, Customer profile and products, in order to prepare the growth the group for the growth. Consequently, SG and A expenses increased by €4,000,000 compared to last year Due to a rise in employee expenses. These expenses included new hireings And higher employee free share plans, essentially because of the increase of the share price. At the net income level, our net profit decreased from €110,000,000 to €73,000,000 for FY 2021.
Last year, we had a positive nonrecurring impact Of €1,800,000 related to the disposal of a building. Regarding our financial results, we reported a loss of nearly €15,000,000 This is explained by the financial expenses, mostly related to the non cash interest of our 2018 2020 convertible bonds. And we had a foreign exchange loss of €4,000,000 Finally, our income tax continued to benefit from tax loss carry forwards. We reached 30.7 percent EBITDA margin, in line with last year and with our expectations. We were able to maintain almost the same EBITDA margin as last year, even with the increase Moving on to take a look at the cash and the balance sheet.
We can see a strong improvement in the group's operating cash flow. With a slightly lower EBITDA, the cash improvement has been driven by a better manager management, of the working capital that decreased by €9,000,000 after an increase Of €59,000,000 last year. This decrease is explained by an increase in other payables, Which was partially offset by a slight increase of inventory. Combined with lower taxes paid than last year, Operating cash flows improved from €100,000,000 in FY20 to more than €174,000,000 in FY2021. The free cash flow are positive at €38,000,000 CapEx amounted to 100 and €37,000,000 And we are mainly used for industrial capacity investments, both In Singapore for SOI and Epitaxy capacities, as well as in France for PY production in Berners Sui.
This amount also includes IT Investments and Capitalized R and D. We had a strong increase in the cash position from €191,000,000 in March 2020 to 644 at the end of March 2021. As explained just before, The free cash flows are positive at €38,000,000 Investing flows are positive at €417,000,000 Thanks to the €321,000,000 for our new convertible bond, net of transaction costs. The €95,000,000 first drawdown on the €200,000,000 long term loan granted by the Bong d'Eterritoire as part of the NANO 2022 plan, the €39,000,000 of a new Singapore loan in order to finance tools. These amounts were partially compensated by the reimbursement of credit line and leasing agreements during FY 2021.
This new financing fully reflects the confidence of our investors. Now let's move directly to the financial structure. We see a few KPIs to underline the strength of our balance sheet. All in all, our balance sheet structure has been reimbursed during this year, With equity up €124,000,000 thanks to the year results and the equity part Of the 2025 convertible bonds. Net debt decreased from €54,000,000 to €4,000,000 thanks to the cash generated from operating flows during the period.
Liquidity is at high level and further facilitated By unused credit lines and the long term loan from the bank debt to EBITDA that will secure our future development plans. FY21 was a transition year. FY22 will be the year of the rebound with significant growth and profitability. We'll now move to the outlook for FY20 Back in June 2020, we were expecting a revenue at around €800,000,000 For FY 2022 or US900 $1,000,000 based on FX rate at 1.13. Last November, we updated this guidance to above $900,000,000 Based on our analysis of hand market trends, especially in terms of smartphones, And based on the customer demand dynamics, we are now targeting revenues to be around $950,000,000 in fy22, meaning an organic growth of around 40%.
As a reminder, several tailwinds should fuel our revenue growth in FY22. We target a strong boost coming from 5 gs, which will impact many product lines as discussed before. Air FSOI, POI, FDSOI and GaN. We also target a recovery In automotive and consumer IoT, mostly impacted FD SOI and Power SOI. This recovery began in Q3 FY 2021.
This revenue of around $950,000,000 will convert Into €800,000,000 We are almost fully hedged on our FY22 net exposure At a euros dollar rate of around 1.20. We expect an EBITDA margin Of around 32%, meaning an improvement of more than one point as compared with FY 2021, Resulting from operating leverage, thanks to our fully loaded Bernard 1 and Bernard 2 and improved loading Of our Singapore and POI factories. But also, in the continuity of FY 2021, a favorable effect from our raw materials long term supply agreements. This effect should be partially compensated By a negative FX rate effect. Cash out from CapEx is expected at around €240,000,000 which can mainly be explained by investments in our Singapore factory For 300 millimeter S wide ramp up and a refresh.
As mentioned by Cyrille, the target is to reach a capacity Of 1,000,000 wafers within 5 years. Investments in our Bernard's refractory for PY product ramp up, But also various investments in capitalized R and D, IT and Innovation. This strong growth in FY 'twenty two is expected to continue in the following years And beyond. If we now move to our mid term outlook. As Bernard explained few minutes ago, We have several very solid growth drivers focused on value added products.
Our revenue is expected to triple from FY 'twenty one to FY 'twenty six to reach around $2,000,000,000 with the low end at $1,700,000,000 and the high end at $2,400,000,000 Our profitability will benefit from this increase in activity, and we expect to reach an EBITDA margin of around 35% in FY 'twenty six. Our profitability will benefit from a full loading Of our current factories, Bernard, Bernard 2, Bernard 3 and Singapore. But We'll still be in the ramp up phases for SIC fab and our 3 third 300 millimeter SOI fab. Our EBITDA will more than triple in value from FY 2021 to FY2026. In addition to the operating leverage, we will benefit from our value added product.
We will continue to invest both in capacity investment and in R and D. As Cyrille presented, we will invest around €1,100,000,000 mainly for capacity investments Outside of building costs. CapEx will represent 18% of revenue on average on the FY 2022, FY26 period. On the financing side, We will be able to generate sufficient cumulative operating cash flows to finance our high CapEx level. In addition, on the balance sheet side, our financial structure is robust.
We have available liquidity tools, if necessary, such as credit lines or the possibility of drawing of our loans. We have multiple growth drivers that will allow us to triple our revenue in the next 5 years and our profitability We'll clearly benefit from this strong growth. Our EBITDA in 5 years' time, which equal our current revenue. Our mission is to continue to structure our group in order to support this growth. And This is exactly what we have been doing over the last few months and we will continue to do.
Thank you for your attention and Steve back to you.
Thank you, Leah. Now let's move to the second Q and A session We will be focusing on operations, finance and maybe some remaining questions you might have regarding our strategic vision. Maybe, operator, we'll take a first question on the website Regarding the CapEx plans, one of the questions that was asked from Emmanuel Matot at ODDO. In your previous long term model described mid-twenty 19, so that was 2 years ago in our Capital Markets Day, You are speaking about a budget of €700,000,000 of CapEx to deliver 1 point about €1,100,000,000 of CapEx to deliver €2,000,000,000 of annual sales. This is what we mentioned for fiscal year 2026.
How do you explain this inflation of the CapEx on sales ratio? So maybe the first part of the question for Lea to discuss the capital intensity, and then we'll leave the floor to Cyrille to complete.
Thanks, Steve. So on average, over FY 'twenty two to FY 'twenty six, we are expecting CapEx and sales ratio Around 18%, which is totally in line with our expectation and what we did in the past. So no surprise there. Maybe I can give you the floor.
Yeah, sure. Thanks, Lea. Thanks, Steve. So Basically, as you have seen in the presentation, we have detailed our CapEx. So the first step for sure is the growth of Singapore, The fab of Singapore.
And we plan to equip the fab Singapore fab 300 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters on SOI and as well refresh in order to go to 1,000,000 wafer SOI, and this represents 25 percent of our CapEx. 2nd, POI. POI would drive a significant part of the CapEx As well, due to the fact that the growth, we will equip the fab up to 750 ks wafer on the horizon. And this is also 20%. On top of that, we have the imaging activity where we do include both Innovation and Gallium Nitride, which does represent 10%.
And finally, 5%, which is linked to maintenance and IT, basically what we call recurring CapEx to sustain our industrial footprint. So, as a whole, this is 60% of the overall CapEx, Which is €1,100,000,000 And on top of that, we disclaim today that we will need On the horizon, 2 additional industrial asset, one which is associated to a 300 millimeter SOI growth, we will need a 3rd fab by the end of this 5 year horizon beginning of fiscal year 2026. So decision is not for today for sure, but associate to Business Maison. We will most probably take this decision in the coming 3 years. And second, SIC, we'll need an additional fab of SIC, which represent as well 20% of the CapEx.
And this is linked to Businessmaxone as well. This decision will be taken before the end of fiscal year 'twenty two, and is associated to Attrition on the product value as well as the traction of the ecosystem.
Thank you, Cyrille. Maybe just a quick follow-up on this revenue and CapEx trends for the next few years. I think we can split the question also between Lea and Cyrille. Can you provide some color on, a, the revenue phasing in fiscal year 2022 and CapEx phasing in fiscal year 2022 and beyond.
Okay. So on the revenue side, We expect a growth quarter after quarter. So the sequential growth As we add as we will have a quarter after quarter. And regarding the CapEx, we expect Higher amount during first half of the year. If you want to
Yes, definitely. I mean, we have 2 €240,000,000 CapEx this year, which is a substantial increase, basically associated to additional business. And you have seen our growth for this Here in the coming years. This €240,000,000 50 percent 50 percent of it is associated to the growth on 300 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters in Singapore, which will drive the most the biggest part of the CapEx. And as well, we have 25% of our CapEx, which is associated To our growth in Bernard 3 in POI, as you have seen in the presentation, We had a pretty steep growth over there because last year we had a 6 fold growth in this plant which is a pretty aggressive product adoption and we'll continue to support the growth of this product.
Thank you, Cirey. So just on the CapEx on sales ratio, as Lael mentioned, around 30% this year. And then if you do the math, it will trending down to low double digit by fiscal 'twenty six. Operator, do we have a question on the line? Otherwise, I have a few on the website on my end.
Sandra Peterck from Societe Generale. Please go ahead.
Yes, fine. Thank you for taking my question. So I just have a couple. First one is, is your €2,000,000,000 revenue guidance for 26,000,000 Contingent on generating business in silicon carbide in particular and therefore that means that you will need To meet operational milestones in this business to hit the strategy targets. And then the second question on POI.
Your increase to 7.60 kilowatt hours per year is versus 500. Is that related to winning more So the customer beside the existing one or if this what you see with this existing customer? And just a side question on that, can you Tell us what is your current run rate in Bantam III?
Okay. Thank you, Alex. I think 2 first questions are for Paul. SIC Business Milestones and on POI.
Yeah. As Cyrille was saying, we have And Bernard previously, I mean, we have a series of business milestones that we are engaged with. And clearly, We will be in a position to make decisions by the end of the fiscal year on how do we go in terms of manufacturing. If things goes well, I mean, clearly, we will go into manufacturing starting the end of fiscal year 'twenty three and significantly ramp in fiscal year 'twenty four and again on the following years. So that's the plan today.
And you have seen that We have a base case and we have a low case and a high case. And obviously as part of the Embedded risk that we have into our business model. We also have diminished totally the risk on the low case. And this is not only just on silicon carbide. I mean, this is about 5 gs speed of adoptions.
It's about the number of Smartphones, it's about millimeter wave, isn't going to be in H1 or H2 in fiscal year 20 3. So we have modeled all this to give you A very solid statement on where we believe our model drives us. So that's maybe the best I can answer right now.
Thank you. And on current Berlin 3 capacity?
So basically regarding Berlin 3, I mean as you have We will significantly invest since I was talking about 20% on the full horizon of CapEx for Bernhard III and which is around €200,000,000 And basically this year, we will invest 25% of our CapEx of €240,000,000 which is around €60,000,000 So basically you have an idea about how much we do invest in order to be prepared by the end of the year for the next step.
Thank you, Cyrille. Operator, any follow-up?
The next item comes from the line of Varun Rajwanshu from JPMorgan. Please go ahead.
Hi, thanks for taking my question. First question is on your EBITDA margin guidance for FY 'twenty six. I'm just trying to understand what drove the upgrade and guidance compared to your prior midterm full path financial model of 32%. Just trying to understand, are you is this a function of product mix? Are you assuming lower margin dilutive products like FPSOI in your overall revenue mix, which is driving this upgrade?
And the second question is on again the margin assumptions for the new capacity that you will be adding over the course of The next few years, for example, you talked about adding new silicon carbide capacity. Are you assuming these new capacities to be margin accretive by FY 'twenty six? Thank you.
I think the two questions are for Julia.
Yes. So first question regarding The comparison between our current guidance, the current outlook, I will say for FY 'twenty six With an EBITDA margin at 35%. In 2019, We said in the full fab model, the EBITDA margin will be at 32% Based on 1.13 FX rate, we are now expecting 35% At 1.20 FX rate, so this is really a strong improvement. Yes, the revenue is higher, so we have an operating leverage, but this is also due To the value brought by our product and the product mix.
If we can add on the fact as well that we'll have 2 fabs which were we will be not fully loaded As we were presenting the full fab model and despite the fact that this fab will be not fully loaded would be at the beginning of the round for both this fab. Finally, still we will we target an EBITDA margin at 35% with this exchange rate, which gives some perspective about operating leverage for the future.
And the second one, I don't remember.
The new capacity by fiscal year 'twenty six for silicon carbide when we will start to be accretive on the overall business. Is that correct, Varun?
Yes.
I mean, like and maybe Cyrille, you can complement. But The first two years when you start a factory, and Cyrille showed that example, I mean, We are now able to really capture this overall efficiency of a factory within the 1st 2 years, 2.5 years. So maybe you can complement on this.
Yes, yes, for sure. I mean, first of all, all this is modeled in our picture today, both EBITDA and top line, we consider The fab at the loading at that time and for sure still we will have operating leverage in order to fill this fab. And we believe That we are able with such a loading to generate value and even further increase with the operating leverage To go full fab on these 2 new assets in our industrial footprint.
Yeah. Maybe before we move on to the next question operator, A question from Ken at Jefferies. So you exclude the cost of new buildings from the capex, expecting some government help for the 300 millimeter new SOI and silicon carbide fabs from wherever you choose to cite them?
So, yeah, basically we have several options in order to finance the building and The main assumption here is that we will go into a lease option. So that's the first point. And the second point is in our model, We have considered the depreciation, which is associated to this lease. So it's including in our margin and our gross margin, But it's not part of our capex since we will go through release.
Thank you, sir. Operator, any follow-up question?
We do have another question in queue. This comes from the line of Sebastian Stavovich from Kepler Cheuvreux. Please go ahead.
Yes. Thanks for taking the question. On FD SOI, could you help us understand how do you see The business building up on FDSORI in the coming quarters, do you see an accelerated traction as we move Into the back half of the year or it is already starting right now. And looking at the revenue, I would say Profile beyond 2022 will be a very strong year of organic growth. How do you see the revenue evolving From 2023 to fiscal year 2026, we expect something rather, I would say, linear.
And lastly, on the fab loading, could you tell us a little bit what was the fab loading of the different fabs in 2021
So maybe Paul will take FD SOI and beyond fiscal 2022 organic growth. But you mentioned linear growth and I think this is what we are going to confirm. And for the fab loading Cyrille with answer.
Yeah, I mean clearly on FD SOI, I mean I told you last year that we were on a plateau And we were really expecting this 2nd wave of products coming from Different things. But the first one that we are exercising right now that we were expecting is around this more intelligent object. And this is really what is happening. So this is clearly happening now, okay. We are not going to wait the end of this year.
We have basically accelerated our manufacturing for FD SOI. And the second wave We'll come in different angles. You have seen that millimeter wave will be part of the 2nd wave, you see it in some object also and that will fuel some of the new systems like automotive and radars, Regarding, you know, above and beyond FDS, so I think that Bernard gave you the full pictures. But clearly 5 gs will continue to drive many of our products because it's not just RF SOI, it's POI, it's GaN, It's also FDSOI. The automotive and industrial is going to Also, fuel us with several products, including FD SOI, but not only.
I mean, we are talking about A power SOI. We are talking about PD SOI. We are talking about GaN as well. So we see that And smart devices, obviously, have DSOI. So this is the beauty of the next 5 years, I mean, we are indispensable in these 3 market segments that are really touching a lot of our product portfolios.
Yeah thank you Paul and regarding the fab loading so as you know last year was a real special year during this year of COVID and I think that the whole organization of Soetec has really focused in order To perform this consolidation and to be there stronger to take the opportunities that we have in front of us right now. So basically, I will give you an average because thing has not been linear over the year in fiscal 2021. And first as an average The loading was in between 80% to 90% in Berndon 1, Berndon 2. Our Plant which are now fully loaded since beginning of calendar year. And the additional point For sure, is, Bernhard 3 and, and Paziris.
And Bernhard 3, every single Tool, which is getting in, is fully loaded the very next day. So here the traction is high, is huge And the same now on in Singapore. So I would say that 80% to 90% for Bernard 1 and Bernard 2 And 100% now on since the beginning of calendar, so since the last quarter. And every single day is important to further increase I will speak to feel the growth.
Thank you, Cyrille.
And what was the CapEx spend In November 3 in 2021, how many weight loss did you had?
So I would say in fiscal year 2021 below 100 ks.
Okay, thank you.
Welcome.
Thanks, Sebastien. Operator, any follow-up question?
We currently have no questions on the phone line.
Okay, thank you. So I've got a couple in the queue here, one from Trion at Berenberg. How much conservatism He's there in the EBITDA margin guidance for fiscal year 2022 fiscal year 2016. With such strong organic growth, Isn't there likely to be more operating leverage than implied by the guidance? Thank you, Trion.
So, the question is for me. So, obviously, our guidance is reflecting our Our best estimate as of today based on this level of revenue. I will say I will not use the word conservative. Really it's our best estimate. Maybe it's an opportunity for me to say that on the FX aside, which is a very important topic for us.
We are fully hedged For almost fully aged for FY 2022 in term of net exposure. Junit is on it. As a reminder, the main tailwind We will have for FY 2022 regarding the EBITDA margin is improvement Of the raw material supply, the fab loading as explained by Cyrille Just before, but in terms of headwind, we'll have a Product mix a little bit less favorable than this year. And regarding the second part of the question for FY26, I will say yes The main topics having an effect on the EBITDA margin will be for sure The variation in the bulk price and the loading of our fab and the FX for sure.
Thank you, Leah. And maybe just to follow-up, when you think about our the cost of our raw materials, maybe Cyrille you can
complete the Yeah, for sure. I mean, we announced that already 2 years ago. We decided to perform a make strategy in Singapore on top for sure of our SOI capacity to add on some capacity on refresh and EBITAxi. This first help in term of operating leverage for sure, even if we have A part of our CapEx is dedicated to this strategy that we have put in place. It helps For sure, for this operating leverage.
But as a second point as well, it does help to secure the supply chain By having this APE and refresh strategy in the current environment to be sure that raw material won't be an issue To our growth in the coming quarters and years.
Thank you, Cyrille. So we have a bit more than 3 minutes left, maybe moving away from profitability and CapEx topics. There's a question regarding M and A from Emmanuel Matot. Maybe Paul this is for you. Is M and A part of the growth story of SOWYTECH in the coming years?
And Emmanuel is asking this question because he Feel that we have a huge amount of cash on our balance sheet. Maybe then Lea I Thank you.
Thank you, Steve, and thank you, Emmanuel, for the questions. I mean, on the M and A side, I mean, You know that we have already, I mean, started to look at and execute on some of the M and A. And clearly, The things we have done are doing well. So we are not excluding within the horizon to really continue to look at External options or opportunities. It can be different options.
It can be to acquire technology that we don't have. It Could be to strengthen our supply chain. It could be to develop or accelerate some of the product that we have already and we will have within the horizon. So this is in the play, but what we are presenting today is really based on organic growth. And yes, we have cash, so maybe I can give you the floor for that.
Yes. Thank you, Paul. So yes, we have a little bit more than €645,000,000 of cash At the end of March 2021, we have to keep in mind that the world changed, our group Change and is now bigger as we really and we really need to have sufficient Even I could say comfortable level of cash in our balance sheet in order to be able To manage and to catch up business acceleration if needed or business slowdown, But we believe this is a good strategy to have a sufficient level of liquidity.
Thank you, Leah. Operator, any follow-up question on the line?
No questions on the phone lines.
Okay. Thank you. So I've got a couple of questions online going back To maybe capacity and profitability, just maybe some clarification regarding the silicon carbide fab question from Jerome Arment at Exane. Is it 6 or 8 inches and what will be the wafer capacity?
Okay, So basically as you have seen first of all The 6 inches or 8 inches is a real question and we believe that we can create industrial assets Which are compatible 150 and 200 millimeter. So we have done it basically in EpiGAN, on Epitexi. We have done it. We are doing it on POI in Bairnhaus 3. And this is what we're going to target In the additional plant on SIC.
So and after a second question about timing and capacity, What we foresee today as explained is to take the decision before the end of fiscal year 'twenty two. Once again, if all business milestones are there and to implement a capacity on the horizon before the end of fiscal 20 6 of 500 and 500 ks wafer, so half a 1,000,000 wafer, 150 and 200 millimeter.
Thank you, Cyrille. I see that the timing is up, so thank you very much for all your questions. There are still plenty of questions that have not been answered Today, we'll be happy to see you virtually on the road over the next few days weeks and answer all these remaining questions. Before leaving the floor to Paul for wrap up remarks, I would like to thank you very much for attending this event and we wish you well. Thank you.
Thank you, Steve. So today we are the one of the most exciting moments of the history of Soitech. This is again a new chapter with extended and unprecedented ambitions. So we are gearing up. There is one thing that I want to say.
I mean, you can count on me and you can count on this team on my team to really deliver on this commitment. By fiscal year 'twenty six, We will triple our revenues. By fiscal year 'twenty six, we will significantly increase our profitability. And we continue to build a sustainable business for our clients, for our employees, for our investors. With this, I would like to thank you for your time today.
And hopefully, we will be seen we will be all together soon, face to face in the coming months. Thank you very much.