Hello everyone. I am Steve Babureck, VP of Corporate Development and Investor Relations. Welcome to all of you, and thank you very much for attending Soitec 2021 Capital Markets Day. As we are gearing up for extended ambitions, we are very excited to discuss today our fiscal year 2021 results and our strategic and business outlook for the next five years. In the next three hours, we will have two 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&As. After a short break, we will be back for the second session to discuss operations, our fiscal year 2021 result, our fiscal year 2022 guidance, and our midterm financial model. This session will also end with another Q&A.
On top of the speakers from our management team, we're 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 Soitec's financial condition, results of operation, 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 Soitec has filed with the AMF and our universal registration document. Now, before kicking off and give the floor to our CEO, Paul Boudre, let's watch a short video about Soitec.
Powerful technologies change the face of our world. 5G, 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 five years, we expect people to use 100 billion connected devices around the world, more than 12 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. Soitec 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 patents, 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. Soitec: for a connected, smart, and energy-efficient world.
Thank you, Steve, and welcome everyone to Soitec 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 Soitec. Today, we are excited to share with you our refreshed outlook for the next five years and how Soitec is gearing up to deliver extended ambitions. Let me begin with three important messages. First message, our strategic visions. In the next five years, our addressable markets will keep growing at a very rapid pace. We continue our amazing journey, supported by very strong semiconductor megatrends. Second message, our business and operating models.
They are getting even stronger to deliver profitable growth, which means that by fiscal year 2026, we anticipate to triple our revenues to around $2 billion and to increase our EBITDA margin to 35%. Third message, ESG and sustainability. They are the heart 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. Let's go back to our strategic visions, which is deeply attached to the world we live in. Our semiconductor industry has transformed our lives for the last 30 years. 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. Our industry could double over the current decades to reach around $1 trillion by 2030.
We have discussed multiple times about these semiconductor megatrends, which mutually feed each other. 5G technologies drastically enhance mobile connectivity. 5G is also mandatory to enhance autonomous driving, edge computing, remote healthcare, Industry 4.0, et cetera. We will come back on these megatrends and how they impact Soitec in several presentations today. Soitec will play a critical role to enable these 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. Soitec 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 intelligent. Starting with 3G and 4G, we have established standard products for front-end modules in every smartphone. We have pursued the same ambition for 5G front-end modules, connected cars, mobile base stations, et cetera. 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.
For almost two 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. Beyond substrate, we also have Dolphin Design to accelerate our customers' System-on-Chip energy efficiency designs. 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 image 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 million wafers by fiscal year 2026, which is about 2.5 times larger than 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 three strategic end markets: mobile communications, automotive and industrial, and smart devices. Strong megatrends, fast-growing addressable markets. What does that mean for Soitec? In the next 5 years, our revenues are expected to reach $2 billion, which is 3 times the level of what we have just delivered in fiscal year 2021. 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 million wafers per year by fiscal year 2026. This is more than double the capacity we had installed in fiscal year 2021. Overall, we plan to spend EUR 1.1 billion of CapEx between fiscal year 2022 and fiscal year 2026. 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 $950 million US, and our EBITDA margin to increase to 32%.
In 5 years, by fiscal year 2026 in our financial model, we expect our revenues to reach $2 billion, and our EBITDA margin to further increase to 35%. Let's talk for a moment about sustainability, and let me be very clear on that. Sustainability is not something new or fashionable at Soitec. 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 we pursue to do so, as it is an absolute requirement of our clients for continued innovation. Substrate used in their applications have been able to save the annual carbon emissions equivalent to a city of 1 million people.
Since its creation, Soitec 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 Soitec people all over the world. I'm also really proud to have a strong management team to deploy and execute Soitec's strategy. You might already know some of them, and you will soon discover the new high-profile members that recently join us, as you can see on the slide. 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. Some friends and partners gave us the honor to share a few words with you. The first on the list is Jean-Marc Chery, the CEO of STMicroelectronics. Jean-Marc and I have known each other 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 5G. While they were already strongly influencing our industry before, they are further accelerated during the last quarters and are driving demand for the associated semiconductor products. First, smart mobility. 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 fast-charging stations for electrical cars. We have seen this trend strengthened recently with an even stronger push towards car electrification and digitalization. Second, power 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 third enabler is the Internet of Things and 5G. 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, standalone connectivity, and security solutions, and the analog and power management products needed for a complete system. These enablers are at the heart of our end market focus, covering automotive, industrial, personal electronics, and communication equipment and computer peripherals. Here, we see a very good fit with Soitec, with our focus on automotive, industrial, and smart devices. An important part of our innovation comes through the differentiated proprietary technologies for which material are often an important enabler, especially SOI.
The wafer substrates we use are the starting point of the creation of our products in our fabs. 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 work with Soitec 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 ADAS vision processing systems from our partner, Intel Mobileye. Few companies are capable of delivering these kinds of materials. We value our long-standing partnership with Soitec, and we look forward to additional opportunities to work together
Thank you, Jean-Marc. Hello, my name is Thomas Piliszczuk. I am head of the strategic office. Paul already gave you some perspective on markets and the mega trends that are crucial to our business. I would like to dive deeper into those trends, but also outline the strategy that Soitec is putting in place in order to leverage them and ensure our company's long-term growth. There are three key points that I want to address and share with you today. First, the semiconductor industry is driven by few fundamental mega trends which are changing the world and society. These trends will help to double the size of semiconductor market in the decade. Second, there's an urgent need for new semiconductor solutions to meet the challenging requirements of numerous markets. The engineered substrates are providing a unique value proposition.
The third is about Soitec's strategy to establish industry standards in engineered substrates. 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 four new economies to cope with these challenges and allow future generations to exist: digital, longevity, net zero, and sharing. These four 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 mega trends which are driving the semiconductor industry. 5G. With the ongoing deployment of the new smartphone generation, we will exceed the 1.6 billion mark of new 5G devices per year by 2030. 5G 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 Karl Benz built the first car in 1886. Connected, autonomous, sharing electric vehicles will become a new common transportation platform with over 45 million EVs rolling off the production lines each year by 2030. Let's look deeper into these three mega trends. After having surfed on the 4G wave for the last 10 years, we are now mounting and accelerating on a much more powerful wave, 5G. 5G 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 5G. The reality is 5G is clearly on its way to deliver on these promises. 5G is not more of the same. 5G will not only dramatically improve our smartphone's 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. The next generation is already on the horizon and in the making. 6G will be the next step, another 10x step, another order of magnitude. 5G is a massive step change compared to the 4G standard. 20 times more mobile data traffic will flow into 2 times the bandwidth, managed with 2 times higher frequencies and 4 times frequency combinations.
This extraordinary complexity leads to 2 times of the RF semiconductor content and requires continuous technology improvements and even disruptions, like for our filters. The main disruption is with introduction of mmWave, requiring multiple active antennas in package modules. We estimate that by 2030, 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 2030, almost as much of the processing will happen on the edge device as it is in the cloud.
With this trend, edge devices applications with integrated machine learning capabilities will grow from 15 million shipments in 2020 to 2.5 billion in 2030. This trend towards ever smarter edge computing devices will require more semiconductor content to support the multitude of functions and ever better user experience. For example, 3D image sensing is stopping 2D 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 5G, our devices will be more connected at ever higher data rate. Today, the acronym CASE, Connected, Autonomous, Shared, Electric, is widely used to address the once-in-a-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 2030, 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 2030, 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 EUR 1 trillion in revenues in 2030, more than double its level in 2020. Soitec is well-positioned to benefit from the trends representing 2/3 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 two 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. 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 Law 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 Soitec product portfolio and value proposition. For the time being, I would like to just give a quick example on how Soitec engineered substrates fit the equation of PPAC, time to market, and sustainability. RF-SOI, FD-SOI, and Photonics-SOI have been making great inroads and business impact. SOI and energy efficiency are linked. Energy saving is the essence of Soitec value proposition. When we consider all electronic chips built in 2020 on these three Soitec substrates, the reduction of CO2 emission at system level during the lifetime of products, thanks to Soitec wafers, compared to alternative solutions, is equivalent to carbon footprint of 1 million inhabitant cities. I described earlier how Soitec 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 forming an engineered substrates, which can provide a perfect solution to create unique value at system level related to connectivity, computing, sensing, or power electronics. Soitec has technologies and the knowhow to deploy an almost unlimited pallet of materials to enable specific performance required at system level. That's why Soitec 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 develop combination of materials which have a critical impact on their success and adoption at mass markets. I will end my presentation by summarizing Soitec's strategy. A simple way to visualize it is the Soitec flywheel. It all starts with an understanding of customers and the market needs, decoding disruption linked to mega trends. This analysis feed our annual strategic plan, which is focused on four 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 five-year horizon and supporting three key elements of the wheel, innovation, bringing new material solutions to fit 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 Soitec flywheel to turn fast and propel us to the following cycles. To conclude, three key mega trends are at the base of growth of the semiconductor industry and Soitec in the current decade. Engineered substrates play a unique role providing solutions and meeting system requirements. Soitec's strategy is to set up sustainable standards, strongly engage 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 Soitec products and business. Thank you very much for your attention.
Thank you, Thomas. Hello, everyone, thank you very much for being with us today. I am Bernard Aspar, Chief Operating Officer at Soitec, and I am very pleased to present the main driver of our 5-year 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 Chery, we will have 3 testimonial from key customers. As Paul and Thomas mentioned, we have identified 3 strategic markets.
For this market, everything start by understanding the challenges that our industry is facing and the solution that our customer need to deliver. We have developed a real customer intimacy with all our direct customers, foundries, Integrated Device Manufacturer, and even fabless customers. Thanks to this intimacy, we are designing, developing, manufacturing differentiated products, which are enabling new feature 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 billion by fiscal year 2026. Let's stop a few second on these two numbers, 2.5 times in volume and 3 times in revenue.
This trend demonstrated the value that we are creating for Soitec 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, 4G, 5G application, and whole new connectivity protocols are driving us to design different product such as RF-SOI, FD-SOI, Piezo-on- Insulator, and gallium nitride.
For automotive and industrial markets, autonomous car, infotainment, and vehicle electrification will take advantage of our current SOI product, but also of our new products under development, such as SmartCut, silicon carbide, and gallium nitride. For smart devices, they need a balance between performance and power consumption. We have designed different flavors of SOI, from FD-SOI to Photonics-SOI and Imager-SOI. Taking into account the value of our product and our capacity to penetrate this market, we have identified a 7 million wafer opportunity in fiscal year 2026. This number is 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 product, that I will explain later on, and the penetration of our product on each market. When you think about addressable market, what does that mean in terms of wafer diameter? As you can see on this slide, 200, 300 millimeter demand will continue to grow significantly by fiscal year 2026. 150 millimeter will become more strategic, with the demand coming mainly from mobile with POI and GaN, and the demand coming from automotive with SmartCut silicon carbide and GaN. In the next five 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 the case for POI, SmartCut silicon carbide, and GaN. Let's turn to our first market regarding mobile communications.
Here, we are proposing a comprehensive product portfolio based on four main product family. First, we have our RF-SOI family, which is a standard for RF front-end modules. Second, we have the FD-SOI family. FD-SOI provide a platform to integrate different function on the same die. Third, we have the POI family. We have designed a new product called POI for Piezoelectric-on-Insulator, thanks to our customer intimacy. This product is showing a very good adoption, thanks to the value proposition that it brings to filter makers. Fourth, our GaN product family is suitable for high-performance power amplifier. When you open a 4G, 5G smartphone, you can see that several parts are dedicated to cellular communication and connectivity. The so-called front-end module is based on three main block, 5G sub-6GHz, 5G mmWave, and Wi-Fi connectivity, containing several products such as switch, antenna tuner, filters, and different amplifier.
Over the last decade, at Soitec, we have designed a comprehensive product portfolio by understanding the challenge of the front-end module makers resulting from 4G and 5G 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 5G. 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 4G, and it will remain the standard for 5G. This leadership is supported by a product roadmap to cover the full range of application 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. FD-SOI offer an energy-efficient analog mixed-signal solution and System-on-Chip approach. By understanding the value of our product 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 chips using our products. Today, the total opportunity is in the range of 60 square millimeter per smartphone. This opportunity is expected to more than triple in the next five years to over 200 square millimeter. For 5G sub-6GHz, RF-SOI will remain the standard. POI wafers for filter present a very significant opportunity for 5G high-performance band and more precisely mid-high band. We are also expecting that POI to become a standard for this 5G high-performance band. For 5G mmWave, two 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 Wi-Fi 6 and ultra-wideband will also present additional opportunities. In conclusion, the cumulative opportunity in 5 years is larger than 200 square millimeters. In the world of mobile communications, Soitec and GlobalFoundries have a long history of collaboration. It is a real pleasure for me to introduce Thomas Caulfield, CEO of GlobalFoundries. Thomas?
Hello, I'm Thomas Caulfield, the CEO of GlobalFoundries. I'd like to start by thanking Paul and the Soitec executive team for inviting me here to your investor conference. GF and Soitec have a deep and strategic partnership that's immensely important to the semiconductor industry, 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. It all started with the smartphone and the connectivity it created. 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 pervasive deployment of feature-rich solutions to all things connected.
In fact, this segment represents 70% of the semi foundry TAM, which today is about EUR 50 billion and growing strong. At the heart of this feature-rich pervasive semi market is connectivity, especially, maybe more accurately, specifically in the mobility segment. The solution of choice in all the frontend modules for handsets is GF, and that solution is built on Soitec technology, and this ranges from all the frequency bands, but most important to the new and emerging 5G sub-6 GHz and the millimeter wave applications. GF has 90+% participation in this use case, and not only that, we're designed into the number one Bluetooth provider, the number one network Wi-Fi provider, and number one millimeter wave provider. Again, all of GF's unique, differentiated, sole-source solutions leverage the various types of silicon-on-insulator technology from Soitec.
Together, our companies will play an important role as the semi industry goes from about a half a trillion today to well over $1 trillion over the next 8 to 10 years. 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 PowerSOI product is used for power management and IC and in-vehicle networking. FD-SOI is suitable for microcontrollers, radar, and autonomous driving systems. We are also designing 2 new products, gallium nitride on silicon and our new SmartSiC silicon carbide to enable automotive electrification efficiency. We are expanding our product portfolio around these all 3 segments. First segment, infotainment. We are proposing several products. PowerSOI is used today in more and more applications, such as class D amplifier, in-vehicle networking. This product combines advantages to integrate low and mid-voltage IC with high reliability.
For multimedia application, FD-SOI is used for low-power application processor with strong reliability. Second segment, autonomous driving. Our FD-SOI solution allow integrate radar on a chip and flexible computing performance while improving system reliability and soft error. For the last segment, regarding powertrain, Power-SOI are addressing several application, 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 mm, Soitec's solution will accelerate the transition to 200 mm in the coming years.
Since we presented to you this new technology two 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 milestones with customers. Taking into account all these inputs, we have evaluated the opportunity in square millimeter corresponding to the die size of the chips where our products are bringing value and differentiation. The outlook over the next five years is highlighting that this opportunity will grow significantly, mainly thanks to our new products such as SmartSiC and gallium nitride on silicon suitable for vehicle electrification, and also thanks to Power-SOI and FD-SOI. This opportunity will reach around 2,500 square millimeter, which is a huge increase compared to our opportunity today.
As a reminder, the size of the addressable market is linked to the opportunity of the die size and 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 customers, and it is a great honor to have Kurt Sievers, 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 Soitec 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 four major end markets: automotive, industrial and IoT, mobile, and communication infrastructure. NXP's relationship with Soitec 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.
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 Soitec 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 5G transition of communication infrastructure by building upon our L-DMOS leadership position and with the recent opening of our new gallium nitride factory in Arizona. Gallium nitride on silicon carbide is used by NXP to enable the 5G transition.
With Soitec's acquisition of EpiGaN, I believe Soitec is well-positioned to capitalize on the growth within this emerging market segment. In closing, Soitec is NXP's largest SOI substrate supplier and a true partner to us. Thank you. I wish you continued success. 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 these applications. Artificial intelligence at the edge with our FD-SOI products, 3D sensing with image sensor based on Imager-SOI for improved performance in near-infrared, healthcare 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 flavors supporting the silicon photonics roadmap. For smart devices, I would like to focus on FD-SOI.
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. FD-SOI is providing a real platform allowing System-on-Chip combining performance and lower active consumption. The development of ultra-low power IP design capability offered by Dolphin Design allow performance on demand. Furthermore, FD-SOI platform can integrate other functions such as communication. With all this figure, you understand all the potential of this technology for wearables, IoT, and edge computing, which represents the largest opportunity for FD-SOI. We have the pleasure to share testimony from Shimizu-san, CEO of Semiconductor, which was a pioneer in adopting SOI for consumer electronic. Shimizu-san.
I'm 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 enrich society through the power of technology. We are involved in various semiconductor devices, including the world number 1 CMOS image sensor. Soitec 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 RF improvement required for high-frequency switches, improvement of the quality including yield, and cost reduction. 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, it is very important to continue our collaboration with Soitec, 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, Shimizu-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 2026, five years from now. First, comparing to our fiscal year 2021 revenue, we are planning to be in the range of $2 billion. This is three times our revenue of fiscal year 2021, meaning a CAGR of roughly 25% per year over the next five 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. Léa will present later today more details of our financial model.
This expected revenue of EUR 2 billion will come from our 3 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 2026 expected revenue. Smart device will grow in line with the rest of the business. Our strategy to focus on these 3 markets, leading to a more balanced business exposure with different cycle in term of product lifetime, growth driver, and customer exposure. Taking into account the upside and downsides, we are anticipating for fiscal year 2026, a low case and a high case.
If the 5G adoption is lower than expected, and if the penetration of our new product such as POI, SmartSiC is lower than expected, then we can have a low case around $1.7 billion revenue. On the contrary, if the 5G adoption is higher than expected, a strong adoption of our new product, and a faster penetration of FD-SOI in China, we can reach a high-case scenario with an expected revenue of $2.4 billion. In conclusion, you see by focusing on three strategic markets and with a strong customer intimacy, we have designed new product, and we are expanding our portfolio of differentiated product. We are now expecting a profitable growth of $2 billion in fiscal year 2026. We are planning a significant growth, and you will hear from both Cyril and Christophe that we will be ready for that. Thank you very much for your attention.
Thank you, Bernard. [Foreign language] Bonjour a tous. Hello, everyone. I am Christophe Maleville, and I am Chief Technology Officer of Soitec. 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, engineered substrates 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 that we continuously improve and evolve with more and more materials. A compelling example of this evolution is SmartCut silicon carbide. Finally, agility and speed are driving our innovation and influencing the unique collaboration models we are implementing. 5G, artificial intelligence, battery life, all are evidence of the impact of semiconductors on our daily lives.
6G, 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 is critical to design best-engineered substrates. We now clearly see two 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. 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 achieve the right differentiation.
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 and 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 substrate. Let's come back on SmartCut. It's been almost three decades since the first successful SmartCut of a perfect 100-millimeter SOI wafer. SmartCut is now clearly established as the reference process for thin 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 eight 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 donor wafer, which is sometimes considered a more expensive option initially, but which is rendered cost-effective through multiple use. We SmartCut it to the most effective substrates with regards to overall PPAC. Finally, we incorporate intermediate layers to bring more functionalities. I already referenced 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 world or compound layers onto a silicon or other active substrates. Over the past decades, we carried R&D 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. Silicon carbide is an excellent example. Two years ago, we told you about our SmartCut 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, CEA-Leti 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 killer defects. We reduce resistivity on handle wafer to achieve the optimal energy efficiency for vertical devices. Joining these two 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 size further. Let's now discuss our innovation assets, people and partnerships, and how this enhances efficiency in our innovation. In a nutshell, Soitec'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%-15% of our annual revenue to grow R&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&D management process.
Setting up clear priorities for our actions is another critical focus area for us. We are globally driving a 80/20% baseline between the mandatory support of our 5-year 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 material science. 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, is seen as the best material for multiple strategic applications, such as RF devices, 6G, long wavelengths, laser sources, image sensors, and so on.
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&D demonstration. 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 millimeter or even 300 millimeter in the coming years. We talked about visibility and 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 Leti, imec, and A*STAR, and developing new links worldwide with two key objectives in mind: gaining access to new ideas and expertise, and creating extensions to our internal R&D teams to be in position to deliver high-quality prototypes early in the product life cycle. Our substrate innovation center in Grenoble, within the Leti facilities, is a best-in-class example of advanced collaboration implementation. This is a unique hub hosting the Soitec 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 Soitec 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 two 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 for our engineered substrate to optimize PPAC for our customers. We design our best products aiming to deliver the best active layer on the best substrates. We have implemented a unique innovation model to deliver quality and optimize time to market. Thank you very much.
Thank you, and we are now going to start our first Q&A session. In this first Q&A session, we will be focusing on the first part of this presentation at CMD today, meaning that we will take questions regarding strategy, business, and our innovation. Operator?
Thank you. If you would like to ask a question or make a contribution on today's Soitec CMD, please press star 1 on your telephone keypad. You will be advised when to ask your question. On the web, please submit your question by clicking on the dedicated button in the bottom right-hand corner of the player. We will now start with web questions. Thank you.
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? I think we will start to address this question with Bernard.
Thank you for the question. Thank you, Steve. Regarding silicon carbide, today you see in our presentation that it will represent is in the automotive and industrial part, and which will represent 20% of our revenue, and the silicon carbide part is a part of it. Okay. A significant part of it. We are planning to have the first sales end of FY 2023, with a ramp-up in FY 2024, and then progressing across the year. 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 EP and we are confident on the results, and we have several customer who are qualifying this product and this technology. The milestone will be in the next month to be in line with our ramp end of fiscal year 2023. Thank you, Bernard. Is there a question operator on the line? If not, we can build up with question from the web.
Yes, we do have a couple of questions on the phone line. The first question comes from the line of Alexsandre Peterc from Credit Suisse. Please go ahead.
Yes, hi, good afternoon. Thank you for the question. Can you hear me all right?
Yes, Alex. We can hear you well. Thank you.
Yes, thank you. Thank you. My question is essentially, regarding your fiscal 2026 outlook. It seems to me there's a big element of a higher ASP there, about 20% higher than currently, because you have revenue growing times 3 and volume times 2.5. Is that the bulk of the upgrades of your outlook today, or do you also plan to build new fabs in this part of this planning? Compared to what you presented in the 2019 PMV, you gave us a full fab, fully loaded model at EUR 1.6 billion. Is this to be an also a fully loaded fab concept and which fab is included there? Thanks.
Okay, thank you, Alex. As a reminder, this is the first time we give an outlook for our financial model in fiscal year 2026. The previous model for was for full fab around fiscal 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 session number two. Bernard?
Okay, regarding the revenue, we have tripled our revenue with 2.5 times growth in volume. This means that the product mix essentially 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 revenue. You see that with this number, as I highlighted in my talk, it's very focusing on providing added value product and increasing our margin and profitability.
Thank you, Bernard. Maybe just hold on a second, operator. Two questions from the line. One is from Robert Sanders at Deutsche Bank about millimeter wave penetration in smartphones behind our assumptions. Maybe a quick clarification from Thomas regarding how we see millimeter wave evolving over the next few years.
Okay. Maybe first, the perspective on overall 5G smartphones growth. We are expecting this year to be in the range of 500 million-550 million units in 2021 calendar year. This is for sub-6 GHz. The millimeter wave module, we expect to be in the range of 60 million-70 million of these phones on top of sub-6 GHz. We expect this trend to continue probably for another couple of years, and with acceleration likely in 2023, where the combination of sub-6GHz and mmWave will be more present across multiple regions, not just as it is today in the U.S.
Thank you, Thomas. Maybe from a product standpoint, product exposure standpoint, Bernard, if you want to continue on the mmWave exposure.
On the millimeter wave exposure, we have two solutions today. Okay. We are offering two solutions depending on the architecture that our customer want to choose. The solution first based on RF-SOI, where you can also have the gallium nitride for power amplifier and a more integrated solution with FD-SOI. With these two platforms, we believe that with the challenge that this industry will have in terms of power consumption, we are very well positioned to have this product, and we are expecting some revenue starting fiscal year 2023 on that.
Thank you, Bernard. Operator, I'll take one last question, then we can move on to the audio line. From Ken Rumph at Jefferies. A question, I think when you mean GF GW, I believe it's on GlobalFoundries and GlobalWafers capacity expansion and standard millimeter entry. If this is the right time to ask if our figures imply a smaller capacity. Maybe, Paul, you can give some context, and Bernard, you can follow up.
The context, you have seen the positions we have taken, the ambitions we have, and the way we, I would say, characterize the evolutions of the RF market. It's going to continue to be a very large market. We welcome our licensees to really engage more in capacity. That's one thing. They see the same thing, we basically enjoy to have these kind of reactions of the market, but also our licensee as well. Talking about where we stand in terms of this, I would say maybe, Bernard, you can talk a bit about the relationship that you have built with customers across the value chain. What is important for you to look at is that you mentioned a little bit as part of the value creations.
We are the technology leader, and we are really bringing this new capability for 5G across the board with multiple type of products. This is where these connections, this relationship is built on, and it will continue for a long time. Bernard, you want to add something?
No, you covered-.
I'm done? Okay.
it pretty well.
Good.
Thank you. Operator, any question on the line?
The next question comes from the line of Jerome Ramel from BNP Paribas. Please go ahead.
Yeah. Good afternoon. Two quick question. What is the market share assumption you have in your model? Because we saw the news between GlobalWafers and GlobalFoundries. Do we still think in term of 70/30 or 75/25% in the range? Second question is concerning the fastest value versus volume. Is it due to price increase or just a mix? Purely the mix.
Okay. Yeah, I'll continue maybe on the first one, and then Bernard, you can go on the second one. In fact, if you think about our positions today, our market share range between 60%-90% plus. Why? Because depending on the segment and product, we are bringing new product to the industry and to our customers. At the beginning of the cycle, we normally have a very large market share, and we normally go down to the 70%, 75% type. This is basically the model we have built, and we don't see a reason this change on the horizon.
Yeah. Regarding our ASP, we need to have in mind, as Paul highlight, that with the new generation of product, we are bringing new value. We are able to offset the price decrease on one generation, but the new generation appearing and that we are proposing on the market.
Thank you. Next question, please.
Next question. The next question comes from the line of Sébastien Sztabowicz from Kepler Cheuvreux. Please go ahead.
Yeah, hi everyone, and thanks for taking the question. Looking at 6G, do you have any idea of the evolution of the substrates that could be used for the RF front-end module and moving to 6G, and what could you offer for this specific generation for the RF front-end module? Coming back to the opportunity on the compound semiconductor, 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, Sébastien. I think on 6G and new engineered substrate, we will let Christophe respond, and then on the market, we will have some comments on the market size by diameter and market, but we will leave that maybe to Bernard.
Thank you for the question on 6G, which is a difficult question. 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. Of course, we are looking also at continuously improving the solutions we have in hand, and on the other end, going to descriptive solutions like bringing these new materials. Of course, selection is not made yet. We are bringing any best materials we can from our engineering substrates, and we'll see which solution is the best.
Maybe I just wanted to add one comment on the 6G, to put it in perspective, we're just starting 5G, and this after 10 years, a decade of 4G. We'll have multiple generations of 5G with new materials and solutions, which will boost our business for really the whole decade. Just keep it in mind that 6G is maybe towards the end of this decade where this will become our first trials.
Regarding the volume, when we are talking to a compound today, we are mainly talking about 150 mm, and you will see with the presentation of Cyril, how we are planning to expand our 150 mm capacity, both on a gallium nitride in Hasselt on a silicon carbide, in a place that we need to define. We have also to consider that with our technology, we are enabling the transition also for 200 mm. When we are using SmartCut is enabling the transition for 200 mm diameter. This is something that we are looking for, and we have already started in 200 mm of gallium nitride in Hasselt.
Thank you, Bernard.
The next question comes from the line of Dominik Olszewski from Morgan Stanley. Please go ahead.
Yes. Hi, everyone. Thanks for taking the question. A first question is around your envision timeframe of 2026. Does the POI or FD-SOI, in your perspective, have a greater chance of becoming the second largest growth driver there after RF? Obviously you've shown that the POI seems to be ramping faster than prior technology generations. The second question is just if you could update us on this very useful video that you provided from GlobalFoundries, where are we on the 12 nanometer product there? Is that still a 2023-2024 timeframe? Thank you.
Thank you, Dominique. I think, Bernard, you can take the first question. On the 12 nanometer, either Paul or Christophe, you can comment.
On POI, we are ready at the stage that we are working to make a standard. Our mission is really to make a standard with the POI. Today we are starting with a mid to band product, and then to enlarge this. POI is not only 1 product, it's a real product family with a product roadmap covering a different range of application. Our ambition is really to have this product a standard for 5G high-performance filters.
Yeah. Regarding the roadmap for FD, 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 Chery talking about his own products. We believe today that, first, there is a huge market in the range of 28 to 18 nanometer that is going to materialize between now and fiscal year 2024. Clearly, we are still working with all the parties and specifically also with GlobalFoundries on how do we and when do we activate 12 nanometer as part of the next generations of product.
Thank you, Paul. Next question, please.
The next question comes from the line of Adithya Metuku from Bank of America. Please go ahead.
Yeah, good afternoon, guys. I have about four questions. Firstly, just on the POI traction, 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 feels like your solution could become the industry standard here, given the cost benefits, et cetera. Am I thinking along the right lines? If it's not going to become the standard, what would be the hindrances? Any color there would be helpful. 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 reiterate the value proposition and differentiation versus other existing technologies.
Yeah. On the POI, beyond our leading customer, we are several customer. When I say several, is all across the world on the different leaders around the world are at the different phase, qualification, evaluation, ramping. We are really seeing a lot of traction of the different player with this new POI wafer.
Yeah. Regarding the value proposition of silicon carbide, we select best substrates to grow a high-quality layer on the donor wafers, and then cutting and closing all the defects, allowing our customers to grow defect-free epitaxy directly on our wafer. This is number one advantage we will bring. Second advantage is this low resistivity-based substrates that is allow less energy loss during the operation of the transistors, and to also to gain on the die size. Clearly, two advantages. 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 next year.
Thanks, Christophe. Adi, you had some follow-ups?
Thank you. On the silicon carbide, would it be fair to say that your solution could become the industry standard for silicon carbide substrates? Or would that be something I need to keep in mind before jumping to that conclusion?
In fact, I would 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. As Christophe said, basically also low resistivity is also an issue, and we can improve the functioning of the system. 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 jump because our technology is compatible with what they are using today, and that's very important.
They can switch, and they can integrate a lot of what we do in their current supply chain.
Understood. Very clear. 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? Finally, just on Imager-SOI, I couldn't help but notice the Sony CEO talking about their imaging products. I just wondered if you have had any success with Imager-SOI with any other customers beyond your lead one. Any color there would be helpful. Thank you.
Bernard?
Regarding gallium nitride, we are mainly considering the opportunity for 48-volt DC-DC converter in the automotive market. 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 48 DC-DC. This is for the first part. The second question was related to?
Imager-SOI.
Yeah. On Imager-SOI.
Sony. Sony. This is the Sony discussion.
Okay, yes. Here, perhaps, Christophe, you can more answer to that on this approach on the development side.
On Imager-SOI, yeah, we had a first win with our materials. Of course, we follow the same story, the same effort, trying to bring the best material into the active layer and on the selected substrates to make sure that all the signal-to-noise efficiency is bringing to the maximum to our customers. Difficult to disclose more, but there's a lot happening right now, and we keep default.
Thank you, Christophe.
Thank you.
There are currently no further questions on the phone line.
Okay. Thank you, operator. Well, we have 2 questions on the business side again, on POI and related to silicon carbide. Maybe another one from Rob regarding filters. Is the long-term goal to enable SAW filters, so surface acoustic wave filters, to replace more expensive BAW filters across all bands, or is there a limit to what POI can deliver?
This is a good question. Today, the more we are progressing and, again, the more we are developing different kinds of POI, the more we see the value for this product and addressing more and more bands. Is there a limitation today? We don't know. We are at the starting point of this, and we are developing a different product to address the different bands.
Thank you. Another question related to connectivity for UWB, ultra-wideband, from Harrison Barrett at Arete Research. Are you designing with any of your engineered substrates on the devices ramping today, or do you expect to be designing more as the technology matures and optimizes? Is it designing today or for tomorrow?
I think that today with Wi-Fi 6, we have already some customers using our product for that.
We are in.
We are in, yes.
We're in. Thank you. Another question regarding FD-SOI. Can you share your thoughts on FD-SOI 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.
On this, on the FD-SOI, you see that with FD-SOI, we can combine all the properties related 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. You see that there is a lot of application covered by FD-SOI for automotive. This will continue to grow in the next year.
Okay. Thank you, Bernard. Operator, any follow-up questions?
I don't have any other questions in the queue.
Okay. Well, we still have almost four minutes for this first Q&A session. I will continue with some questions on the webcast. A follow-up from Alex regarding micro LEDs. You haven't talked much about micro LED and InGaN. Is this product opportunity now no longer on your roadmap, or is it too small to be mentioned?
Small.
InGaN, 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 deliver that to the customers. They need that to look at the value, prove the value, and we are in this cycle. We'll see from their feedback where we can go with this option.
Thank you, Christophe. Other questions following from Emmanuel Matot at Odo regarding FD-SOI ecosystem in China. Maybe, Paul, if you can give us an update.
I can, maybe-
Thomas, yeah.
Thomas, you can start to maybe share a bit what you see in China.
China ecosystem is slowly but surely increasing and reinforcing related overall semiconductors. FD-SOI, it's also 1 of the key technologies where the Chinese industry is looking to design in and to build the whole ecosystem there. You know about VeriSilicon. You know about Rockchip. Rockchip, 1 of the leading Chinese fabless companies specialized in artificial intelligence chips. There's multiple projects related to FD-SOI foundry. 1, which is fully public, it's related to Hua Li Foundry in Shanghai. We see from R&D to fabless to design IP, to system, the whole ecosystem is strengthening up.
Thank you, Thomas. Any follow-up, Paul?
No, clearly this is 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, we continue to see the resilience of the Chinese to really engage and develop this technology on their soil. This is a positive sign. It takes time.
Thank you. Another follow-up from Adi at Bank of America. Maybe a 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?
Well, 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. 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. What I'm really looking at is bringing this material in 300 millimeter to benefit from the best of the materials, but in a design and on an under substrate that's designed to cost friendly, and then to enable a lot of exciting applications. That's the way.
Thank you, Christophe. Time is up for this first session. We will conclude here, and we will be back after this short break. Thank you.
Thank you.
Welcome back to the second session of Soitec Capital Markets Day. It is now my pleasure to introduce Cyril Menon to discuss our operations. Cyril, the floor is yours.
Thanks, Steve, and hello, everyone. Let me introduce myself. I'm Cyril Menon, in charge of operation, IT, and engineering for Soitec. I'm very glad to present Soitec operation and introduce our next challenges. Our operation must continue to support our business growth across multiple product diameters and geographies. Actually, we already double our fab outputs from fiscal 2018 to fiscal 2020. A great challenge in front of us to tackle, scaling up our capacity by 2x beyond 4 million wafer by fiscal year 2026. Three 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 Bernin for POI as well as in Singapore for 300 mm 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. Where are our fabs located? In the French Alps, we have three high-volume manufacturing fabs for SOI and POI. In Singapore, we have a SOI fab. In Belgium, we build compound semiconductor epi wafer. 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.
In fiscal year 2021, we are at around 2 million wafers, and we will continue to expand our capacity to support our business growth beyond 4 million wafers in fiscal year 2026. As explained previously by Bernard, the main drivers of this capacity increase are 300 mm, as well as POI, for both 150 mm and 200 mm to meet customer demand. For 200 mm, the strategy relies on three different time horizons. One, Bernin 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 700,000 wafers per year in Bernin, which is 50,000 higher than our previous model. Two, Singapore is ramping up, and capacity installation is ongoing. We have a large investment plan this year to accelerate the ramp for both RF-SOI and MDSI products.
Finally, three, additional capacity will be necessary to go beyond 1.7 million wafers per year in fiscal year 2026. Our Bernin 3 fab has been transformed from a pilot line to a high-volume manufacturing fab and is supporting an aggressive acceleration to support POI adoption. With a lot of engineering effort, clean room optimization, and synergy with Bernin 1 asset, this fab will be able to go up to 750,000 wafer per year. Note that 750,000 is 250,000 higher than what we communicated last November. We are implementing a very agile production model to produce either 150 mm or 200 mm POI substrate in our Bernin 3 fab to better respond to our customer demand. Bernin 1 is running at full capacity and is able to deliver 950,000 wafer per year, while SiMW capacity will be gradually upgraded up to 450,000 wafer per year.
Finally, some new great opportunities are growing, we are ready to accelerate. In Belgium, our GaN epi wafer fab is now qualified for high-volume manufacturing for 150 mm, we are preparing qualification for 200 mm. This fab in Belgium will cover both RF and power applications. Regarding silicon carbide, our pilot line has been deployed in the substrate innovation center in Leti and in Bernin. We will prepare additional capacity to be ready by fiscal year 2024 to support high-volume manufacturing and able to support up to 500,000 wafers per year. For the next 5 years, between this fiscal year, fiscal year 2022, until fiscal year 2026, we are planning to spend EUR 1.1 billion 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 POI factory in Bernin for both 150 mm and 200 mm. 10% will be spent for emerging activities such as gallium nitride and innovation projects, 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 mm capacity. If we now focus on fiscal year 2022, we plan to accelerate our capacity expansion plan with EUR 240 million to support 300 mm growth by expanding Singapore and POI capacity expansion in Bernin 3. Large initiatives have been deployed to strengthen our factory business. State-of-the-art application to deploy industrial standard across all production sites. Artificial intelligence to support pattern recognition, smart sampling, or advanced run-to-run to improve our production yield. Some new features to improve our team efficiency. Here are ETSET or real-time asset performance.
Our initiatives have been awarded by the French industrial magazine, L'Usine Nouvelle, as Factory of the Year. To illustrate the benefits of all these initiatives, you will find here some operational KPIs. Singapore fab will match Bernin 2 effectiveness within two years. We are able to rapidly industrialize innovation into HVM, delivering high-volume manufacturing yield in less than a year in Bernin 3 as well as in Singapore. Finally, both skills and methodologies enable further capacity acceleration. As an example, the volume manufacturing in Bernin have increased sixfold 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, 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 2024.
We are engaged in reducing our carbon emission, we join the Science Based Targets 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 Celsius. 100% of our energy used in Bernin will be renewable this year, in fiscal 2022, our plant in Singapore is aiming 50% by fiscal 2024. Over 80% of our wastes are recycled or recovered. Finally, attracting talent is key for Soitec today and for the future. We are engaged in a program to hire young people in our industry and more females. The quality of life has improved by 5 points over a year, reaching the best score ever in such an environment. Finally, safety on site have been dramatically improved, leading to an injury rate reduction from 10 down to 4.
As a conclusion, here are the three 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. Ultimately, we are delivering a sustainable growth. Thank you for your attention, and I will now leave the stage to our CFO, Léa.
Hello, everyone. I am Léa Alzingre, Soitec 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 FY 2026, thanks to our value-added products and our ability to financially support this growth. 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 his introduction, we are happy to report that the group performance is in line with our annual guidance. Despite the current difficult environment, we reach a flat revenue with an EBITDA margin of around 30%. We were able to maintain an EBITDA margin above 30% while strengthening our efforts to structure our group to support the growth expected in FY 2022 and beyond. We significantly improve our cash flow generation. Our operating cash flows increase from EUR 100 million in FY 2020 to EUR 174 million in FY 2021. We disclose our annual revenues in April, no surprise there. Let me just refer to several important item from that report. We achieved a small growth in revenues at constant exchange rate as we reported a full year organic growth of plus 1%.
By type of products, our revenue for RF products remains strong and is flat as compared to last year. We enjoyed an increase in POI products and imagers. This was offset by the decrease in FD products, power products due to the automotive economic situation, as well as photonics products. Overall, we achieved sales of EUR 584 million in FY 2021. We had a 3% negative currency impact due to the weakening of the U.S. dollar. This means that our FY 2021 sales are down 2% on a reported basis. We enjoy a quarter-over-quarter sequential growth. Royalties and other revenues are mainly related to Dolphin Design and Soitec Belgium. The increase during FY 2021 is mainly due to a strong growth of Dolphin Design business. Our group reached EUR 183 million of gross profit, which represent a 31.4% gross margin.
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 growth margin. Depreciation grew faster than sales due to the investments plan implemented in the last few quarters and years. Our Bernin 3 factory for POI product is still in its early stages of ramp-up, and our Bernin 1 and Bernin 2 factories were less loaded than last year. Finally, as expected, we had an unfavorable exchange rate effect.
When you look at the growth margin history, please keep in mind that since FY 2020, we have two more fabs, Singapore and Bernin 3. From this EUR 183 million of gross profit that I just mentioned, the group generated EUR 90 million 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 2022 and beyond. For this reason, we continued to invest in R&D and expanded our staffing in multiple areas. Growth R&D costs increased by EUR 7 million, representing an 11% increase compared to last year. Indeed, we boosted our efforts to maintain leadership in our SOI business and to further develop for our POI and SiC roadmaps. If we consider flat R&D grants and tax research credits as well as lower prototype sales, net R&D increased by EUR 12 million as compared to FY 2020. Regarding SG&A, we continue to reinforce the group, which is now more diverse in terms of geography, customer profile, and products in order to prepare the group for the growth.
Consequently, SG&A expenses increased by €4 million compared to last year due to a rise in employee expenses. These expenses included new hirings 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 million to €73 million for FY 2021. Last year, we had a positive non-recurring impact of €1.8 million related to the disposal of a building. Regarding our financial results, we reported a loss of nearly EUR 15 million. This is explained by the financial expenses, mostly related to the non-cash interest of our 2018 and 2020 convertible bonds, and we had a foreign exchange loss of €4 million. Finally, our income tax continued to benefit from tax loss carryforwards. We reached 30.7% 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 of the R&D cost and of SG&A expenses, as well as unfavorable FX rate effect. 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 better management of the working capital that decreased by EUR 9 million after an increase of EUR 59 million 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 EUR 100 million in FY 2020 to more than EUR 174 million in FY 2021. The free cash flow are positive at EUR 38 million.
CapEx amounted to EUR 137 million and were mainly used for industrial capacity investments, both in Singapore for SOI and epitaxy capacities, as well as in France for POI production in Bernin 3. This amount also includes IT investments and capitalized R&D. We had a strong increase in the cash position from EUR 191 million in March 2020 to EUR 644 million at the end of March 2021. As explained just before, the free cash flows are positive at EUR 38 million.
Investing flows are positive at EUR 417 million, thanks to the EUR 321 million for our new convertible bond net of transaction cost. The EUR 95 million first drawn on the EUR 200 million long-term loan granted by the Banque des Territoires as part of the Nano 2022 plan. The EUR 39 million 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 reinforced during this year, with equity up EUR 124 million, thanks to the year result and the equity part of the 2025 convertible bonds. Net debt decreased from EUR 54 million to EUR 4 million, 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 Banque des Territoires that will secure our future development plans. FY 2021 was a transition year. FY 2022 will be the year of the rebound, with significant growth and profitability. We'll now move to the outlook for FY 2022.
Back in June 2020, we were expecting revenue at around €800 million for FY 2022 or $900 million based on FX rate at 1.30. Last November, we updated this guidance to above $900 million. Based on our analysis of end market trends, especially in terms of smartphones, and based on the customer demand dynamics, we are now targeting revenues to be around $950 million in FY 2022, meaning an organic growth of around 40%. As a reminder, several tailwinds should fuel our revenue growth in FY 2022. We target a strong boost coming from 5G, which will impact many product lines, as discussed before: RF-SOI, POI, FD-SOI, and GaN. We also target a recovery in automotive and consumer IoT, mostly impacting FD-SOI and Power-SOI. This recovery began in Q3 FY 2021. This revenue of around $950 million will convert into €800 million.
We are almost fully hedged on our FY 2022 net exposure at a EUR/USD rate of around 1.20. We expect an EBITDA margin of around 32%, meaning an improvement of more than 1 point as compared with FY 2021, resulting from operating leverage, thanks to our fully loaded Bernin 1 and Bernin 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 EUR 240 million, which can mainly be explained by investments in our Singapore factory for 300 millimeter SOI ramp-up and refresh. As mentioned by Cyril, the target is to reach a capacity of 1 million wafers within 5 years.
Investment in our Bernin 3 factory for POI product ramp-up, but also various investments in capitalized R&D, IT, and innovation. This strong growth in FY 2022 is expected to continue in the following years and beyond. We now move to our midterm outlook. As Bernard explained a few minutes ago, we have several very solid growth drivers focused on value-added products. Our revenue is expected to triple from FY 2021 to FY 2026 to reach around $2 billion, with a low end at $1.7 billion and a high end at $2.4 billion. Our profitability will benefit from this increase in activity, and we expect to reach an EBITDA margin of around 35% in FY 2026. Our profitability will benefit from a full loading of our current factories, Bernin 1, Bernin 2, Bernin 3, and Singapore.
We'll still be in the ramp-up phases for our SiC fab and our 3rd 300 millimeter SOI fab. Our EBITDA will more than triple in value from FY 2021 to FY 2026. In addition to the operating leverage, we'll benefit from more value-added product. We will continue to invest both in capacity investment and in R&D. As Cyril presented, we will invest around €1.1 billion, mainly for capacity investments outside of building costs. CapEx will represent 18% of revenue on average on the FY 2022-FY 2026 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 will clearly benefit from this strong growth. Our EBITDA in 5 years' time will 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, Léa. Let's move to the second Q&A session, where we will be focusing on operations, finance, and maybe some remaining questions you might have regarding our strategic vision. Maybe operator will take a first question on the website regarding the CapEx plans. One of the questions that was asked from Emmanuel Matot at ODDO BHF, "In your previous long-term model described mid-2019," so that was two years ago in our capital markets day, "you were speaking about a budget of EUR 700 million of CapEx to deliver $1.6 billion of annual sales." You are talking about EUR 1.1 billion of CapEx to deliver $2 billion of annual sales. This is what we mentioned for fiscal year 2026.
How do you explain this inflation of the CapEx on sales ratio?" Maybe the first part of the question for Léa to discuss the capital intensity, and then we'll leave the floor to Cyril to complete.
Thanks, Steve. On average, over FY 2022 to FY 2026, we are expecting a CapEx on sales ratio around 18%, which is totally in line with our expectation and what we did in the past. No surprise there. Maybe I can give you the floor, Steve?
Yeah. Sure. Thanks, Léa. Thanks, Steve. Basically, as you have seen in the presentation, we have detailed our CapEx. The first step for sure is the growth of Singapore, the fab of Singapore, and we plan to equip the Singapore fab 300 mm on SOI and as well refresh in order to go to 1 million wafer SOI, and this represents 25% of our CapEx. Second, POI. POI will drive a significant part of the CapEx as well due to the fact that the growth will equip the fab up to 750k wafer on the horizon, and this is so 20%. On top of that, we have the emerging activity where we do include both innovation and gallium nitride, which does represent 10%, and finally, 5%, which is linked to maintenance and NIT, basically what we call recurring CapEx, to sustain our industrial footprint.
As a whole, this is 60% of the overall CapEx, which is EUR 1.1 billion. On top of that, we discussed today that we will need on the horizon 2 additional industrial assets, one which is associated to a 300 mm SOI growth. We will need a 3rd fab by the end of this 5-year horizon, beginning of fiscal year 2026. Decision is not for today for sure, but associated to a business milestone. We will most probably take this decision in the coming 3 years. 2nd, SiC. We'll need an additional fab of SiC, which represent as well 20% of the CapEx, and this is linked to business milestone as well. This decision will be taken before the end of fiscal year 2022, and is associated to the demonstration of the product value as well as the traction of the ecosystem.
Thank you, Cyril. 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 Cyril. Can you provide some color on, A, the revenue phasing in fiscal year 2022, and CapEx phasing in fiscal year 2022 and beyond?
Okay. On the revenue side, we expect a growth quarter after quarter. The sequential growth as we will have a quarter after quarter. Regarding the CapEx, we expect a higher amount during first half of the year. If you want to complete it.
Yeah, definitely. We have EUR 240 million CapEx this year, which is a substantial increase, basically associated to additional business. You have seen our growth for this year and the coming years. This EUR 240 million, 50% of it is associated to the growth on 300 mm in Singapore, which will drive the biggest part of the CapEx. As well, we have 25% of our CapEx, which is associated to our growth in Bernin 3, in POI, as you have seen in the presentation. We had a pretty steep growth over there because last year we had a six-fold growth in this plant, which is a pretty aggressive product adoption, and we continue to support the growth of this product.
Thank you, Cyril. Just on the CapEx on sales ratio, as Léa mentioned, around 30% this year, and then if you do the math, it will trending down to low double digit by FY 2026. Operator, do we have a question on the line? Otherwise, I have a few on the website on my end.
We do have a couple of questions on the phone line. Before we go to the next question, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. First question is from a Hugh Crunch in the line and Alexandre Peterc from Exane BNP Paribas. Please go ahead.
Yes, hi there. Thank you for taking my question. I just have a couple. First one is your $2 billion revenue guidance for 2026 contingent on generating business in silicon carbide in particular, and therefore that means that you need to meet operational milestones in your business to hit the revenue targets? Then a second question on POI. Your increase to 750 kilowatts per year versus 500, is that related to winning more filter customers beside the existing one, or it is what you see with this existing customer? Just a side question on that, can you tell us what is your current run rate in Bernin 3?
Okay. Thank you. Alex, I think the 2 first questions are for Paul, SiC business milestones and on POI.
Yeah, as Cyril was saying, and Bernard previously, we have a series of business milestones that we are engaged with. 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, clearly we will go into manufacturing starting the end of fiscal year 2023 and significantly ramp in fiscal year 2024 and again on the following years. That's the plan today. You have seen that we have a base case, and we have a low case and a high case. 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. This is not only just on silicon carbide. This is about 5G speed of adoptions. It's about the number of smartphones.
It's about mmWave. Is it going to be in H1 or H2 in fiscal year 2023? We have modeled all this to give you a very solid statement on where we believe our model drives us. That's maybe the best I can answer right now.
Thank you. On current Bernin 3 capacity?
Regarding Bernin 3, as you have seen, we will significantly invest, since I was talking about 20% on the full horizon of CapEx for Bernin 3, which is around EUR 200 million. This year, we will invest 25% of our CapEx of EUR 240 million, which is around EUR 60 million. 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, Cyril. Operator, any follow-up?
Yes, our third comes from the line of Varun Rajwanshi, Banshee from JP Morgan. Please go ahead.
Hi, thanks for taking my question. First question is on your EBITDA margin guidance for FY 2026. I'm just trying to understand what drove the upgrade and guidance compared to your prior midterm full fab financial model of 32%. I'm just trying to understand, is this a function of product mix? Are you assuming lower margin dilutive products like FD-SOI in your overall revenue mix, which is driving this upgrade? 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 2026? Thank you.
I think the two questions are for you, yeah?
Yes. First question regarding the comparison between our current guidance, current outlook, I would say for FY 2026, 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. This is really a strong improvement. Yes, the revenue is higher, so we have an operating leverage. This is also due to the value brought by our product and the product mix. Yeah, maybe if you go.
If we can add on the fact as well that we'll have 2 fabs, which we will be not fully loaded as we represented in the full fabs model. Despite the fact that these fabs will be not fully loaded, would be at the beginning of the ramp for both these fabs. Finally, still we target an EBITDA margin at 35% with the section rate, which gives some perspective about operating leverage for the future.
The second one, I don't remember.
The new capacity by FY 2026 for silicon carbide, when we will start to be accretive on the overall business. Is that correct, Varun?
Yeah.
Yeah. Maybe Cyril, you can complement, but the first 2 years when you start a factory, and Cyril showed an example. We are now able to really capture this overall efficiency of a factory within the first 2 years and a half. Maybe you can complement on this.
Yeah, for sure. First of all this is modeled in our picture today, both EBITDA and top line, we consider the fab at the loading at that time. For sure, still we will have operating leverage in order to fill this fab. 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.
Maybe before we move on to the next question, operator, a question from Ken Rumph at Jefferies. 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 site them?
Yeah. Basically, we have several option in order to finance the building, and the main assumption here is that we'll go into a lease option. That's the first point. The second point is in our model, we have considered the depreciation which is associated to this lease. It's including in our margin and our gross margin, but it's not part of our CapEx since we will go through a lease.
Thank you, Cyril.
You're welcome.
Operator, any follow-up question?
We do have another question in the queue. This comes from the line of Sébastien Sztabowicz 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 FD-SOI 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? 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 FY 2026? We expect something rather, I would say, linear. Lastly, on the fab loading, could you tell us a little bit what was the fab loading of the different fabs in 2021? Bernin One, Two, Three, Singapore, please. Thank you.
Thank you, Sebastian, for this overview. Maybe Paul will take FD-SOI and beyond fiscal 2022 organic growth. You mentioned linear growth, and I think this is what we're going to confirm. For the fab loading, Cyril will answer.
Yeah. Clearly on FD-SOI, I told you last year that we were on a plateau, and we were really expecting this second wave of products coming from different things.
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. 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. The second wave will come in different angles. You have seen that millimeter wave will be part of the second wave. You see it in some object also, and that will fuel some of the new systems like automotive and radars, for example, but also in smartphones, and we are already engaged in these qualifications, so that's also another wave.
Regarding above and beyond FD-SOI, I think that Bernard gave you the full picture, but clearly 5G will continue to drive many of our products because it's not just RF-SOI, it's POI, it's GaN, it's also FD-SOI. The automotive and industrial is going to also fuel us with several products, including FD-SOI, but not only. We are talking about Power-SOI, we are talking about PD-SOI, we are talking about GaN as well, and smart devices, obviously FD-SOI. This is the beauty of the next five years. We are indispensable in these 3 market segments that are really touching a lot of our product portfolios.
Yeah. Thank you. Regarding the fab loading, as you know, last year was a real special year during this year of COVID, and I think that the whole organization of Soitec 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. Basically, I will give you an average because things have not been linear over the year in fiscal year 2021. First, as an average, the loading was in between 80%-90% in Bernin one, Bernin two, our plant, which are now fully loaded since beginning of calendar year. The additional point for sure is Bernin three and Pasir Ris. Bernin 3, every single tool which is getting in is fully loaded the very next day.
Here the traction is high, is huge, and the same now in Singapore. I would say that 80% to 90% for Bernin one and Bernin two, and 100% now on since the beginning of calendar, so since the last quarter. Every single day is important to further increase our speed to fuel the growth.
Thank you, Cyril.
What was the capacity installed in Bernin three in 2021? How many wafers did you add?
I would say in fiscal year 2021, below 100,000.
Okay, thank you.
Welcome.
Thanks, Sébastien. Operator, any follow-up question?
We currently have no questions on the phone line.
Okay, thank you. I've got a couple in the queue here. One from Trion at Berenberg. "How much conservatism is there in the EBITDA margin guidance for fiscal year 2022 and fiscal year 2026? With such strong organic growth, isn't there likely to be more operating leverage than implied by the guidance?" Thank you, Trion.
First, the question is for me?
Yeah.
Obviously, our guidance is reflecting our best estimate as of today based on this level of revenue. 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 side, which is a very important topic for us, we are almost fully hedged for FY 2022 in term of net exposure. We don't see any significant risk or opportunities 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 Cyril just before. In terms of headwind, we'll have a product mix a little bit less favorable than this year.
Regarding the second part of the question for FY 2026, 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, Lea. Maybe just to follow up, when you think about the cost of our materials, maybe Cyril, you can complete the follow-up.
Yeah, for sure. We announced that already 2 years ago. We decide to perform a make strategy in Singapore on top, for sure, of our SOI capacity to add on some capacity on refresh and epitaxy. 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. As a second point as well, it does help to secure the supply chain by having this epi 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, Cyril. We have a bit more than three minutes left, maybe moving away from profitability and CapEx topics. There's a question regarding M&A from Emmanuel Matot. Maybe, Paul, this is for you. Is M&A part of the growth story of Soitec in the coming years? Emmanuel is asking this question because he feel that we have a huge amount of cash on our balance sheet. Maybe, Lea, you follow up.
Thank you, Steve, and thank you, Emmanuel, for the questions. On the M&A side, you know that we have already started to look at and execute on some of the M&A, and clearly, the things we have done are doing well. 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. This is in the play, but what we are presenting today is really based on organic growth. Yes, we have cash, so maybe I can give you the floor for that.
Yes. Thank you, Paul. Yes, we have a little bit more than EUR 644 million of cash at the end of March 2021. We have to keep in mind that the world change, our group change and is now bigger, we really need to have sufficient, or even I could say, a 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. We believe this is a good strategy to have a sufficient level of liquidity.
Thank you, Léa. Operator, any follow-up question on the line?
No question on the phone line.
Okay, thank you. 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 Ramel at Exane. Is it six or eight-inch, and what will be the wafer capacity?
As you have seen first of all, the six-inch or eight inches is a real question, and we believe that we can create industrial assets which are compatible 150 and 200 millimeter. We have done it basically in EpiGaN on epitaxy. We are doing it in POI in Bernin, and this is what we're going to target in the additional plant on SiC. After second question about timing and capacity, what we foresee today, as explained, is to take the decision before the end of fiscal year 2022, once again, if all business milestone are there, and to implement a capacity on the horizon before the end of fiscal year 2026 of 500,000 wafers, so half a million wafer, 150 and 200 millimeter.
Thank you, Cyril. I see that the time is up, so thank you very much for all your questions. There are still plenty of questions that have not been answered today. We will be happy to see you virtually on the road over the next few days and 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. Today, we are at one of the most exciting moments of the history of Soitec. This is, again, a new chapter with extended and unprecedented ambitions. We are gearing up. There is one thing that I want to say, and you can count on me, and you can count on this team, on my team, to really deliver on this commitment. By fiscal year 2026, we will triple our revenues. By fiscal year 2026, we will significantly increase our profitability. 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 all together soon face-to-face in the coming months. Thank you very much.