Good day and welcome to X-FAB Full Year and Fourth Quarter 2023 Results Conference Call. Today's call is being recorded. At this time, I'll now turn the call over to Rudi De Winter, CEO. Please go ahead, sir.
Thank you. Welcome, everyone, to the conference call, Fourth Quarter and Full Year Results 2023. We have in the meeting room also Alba Morganti, CFO of X-FAB. Let me walk over the most important items in the past quarter and the full year. Let's start with the quarter. In the Fourth Quarter, X-FAB recorded revenues of EUR 237 million, up 29% year-on-year and 2% quarter-on-quarter, which is in line with the guidance. Excluding the negative impact of revenue recognition over time, amounting to minus EUR 2 million, the Fourth Quarter invoice revenue came in at EUR 240 million. This is an increase of 7% quarter-on-quarter, excluding the IFRS, and year-on-year this is an increase of 31%. And this is a great result looking at the overall semiconductor industry.
Invoice revenues, in our core market, automotive industrial medical, amounted to EUR 222 million, up 38% year-on-year, representing now a share of 93% of revenues. Now let's look at the full year, 2023. We achieved revenues of EUR 970 million, up 23% year-on-year, including EUR 17 million in revenues recognized over time. Annual turnover in X-FAB key end markets totaled EUR 812 million, up 31% year-on-year, and this accounts to 91% of total revenue compared to 84% in the previous year, reflecting a successful transformation of X-FAB activities towards high-growth and long-life cycle business in automotive industrial and medical markets. X-FAB semiconductor technologies enabled sustainability and energy efficiency solutions to address today's megatrends, such as electrification of everything to mitigate climate change or the digitalization of healthcare in the context of growing and aging societies.
This is also reflected in strong demand for the broad range of specialty technologies that X-FAB is offering, including high-voltage CMOS, MEMS microsystems, and silicon carbide. Bookings in the fourth quarter came in at EUR 225 million, up 17% year-on-year, and the full year order intake was EUR 818 million, up 9% compared to 2022. At year-end, the backlog amounted to EUR 475 million. X-FAB automotive business continued to be very strong, and in the fourth quarter, revenues of EUR 152 million, up 45% year-on-year. Full year automotive revenues came in at EUR 539 million, up 38% year-on-year. This increase is mainly related to the ramp-up of the automotive business in our factory in France. The French site continued the conversion of capacities into X-FAB 180 nm automotive technologies, thus replacing capacity that has been used to produce BCD legacy business.
In the Fourth Quarter, 93% of X-FAB revenues in France was based on X-FAB technologies, against 84% in the same quarter last year. From this point on, we continue to grow the capacity in our French site to about double from where we were in the last quarter. Let's now look at the industrial. Industrial revenue in the Fourth Quarter came in at EUR 54 million, up 28% year-on-year. In the full year of 2023, X-FAB recorded industrial revenues of EUR 206 million, up 19% year-on-year. Contribution from silicon carbide was a key growth driver for the industrial business, with applications such as power inverters for wind, solar systems, industrial inverters, or uninterruptible power supply systems. Fourth Quarter silicon carbide revenues amounted to EUR 23 million, up 93% compared to previous year.
For the full year 2023, X-FAB silicon carbide business increased 33% to $73 million. The total number of silicon carbide wafers produced in 2023 shows a significant higher increase of 58% year-over-year. The silicon carbide revenue growth was partially diluted by the fact that a large portion of customers procure the raw wafers themselves and consign them to X-FAB. This applied to approximately 51% of the silicon carbide customers in the Fourth Quarter and resulted in a lower billing, whereas the pass-through of the substrates is not in there anymore. In the Fourth Quarter, X-FAB recorded medical revenues of $16 million, up 13% year-over-year, and for the full year 2023, it came in at $67 million, up 21% year-over-year.
Semiconductor technology is key for digital transformation and efficiency improvements in the healthcare sector, and X-FAB's medical business is benefiting from the increasing use of wearable medical devices as well as growing demand for testing and point-of-care. Among the growth drivers for 2023 were infrared temperature sensors as well as DNA sequencing applications. X-FAB capabilities to combine CMOS and MEMS technology as well as system integration expertise is a great value driver for innovative medical solutions, as well as a major growth driver for X-FAB medical business. Revenue of X-FAB microsystems MEMS business was in the Fourth Quarter amounted to EUR 28 million, up 43% year-on-year, while the whole 2023 it came in at EUR 95 million, an increase of 26% from the previous year.
In addition, various medical applications are up, so next to various medical applications, also the MEMS started volume production for an automotive headlamp application that positively contributed this past quarter. The X-FAB CCC business reached a sustainable level, recording now EUR 17 million in the last quarter, which is down 21% year-over-year and flat sequentially. Prototyping revenues in the Fourth Quarter came in at EUR 27 million, up 16% year-over-year. In 2023, they amounted to EUR 109 million, up 19% year-over-year. The prototyping revenues represent new business, adding up to the pipeline of new projects and supporting X-FAB future growth.
The lower revenue guidance for the First Quarter in 2024 reflects the faster-than-expected decline in demand for older 150 mm CMOS technologies due to inventory adjustments, primarily in the industrial end segment, and in the medium term this will be overcompensated by transition to growing microsystems and silicon carbide business in these, the respective factories. From an operations update, I would like to add that the Fourth Quarter utilization rate varied by technology and site. In X-FAB 200 mm CMOS and silicon carbide and MEMS systems, capacity continued to be fully loaded, while the aforementioned decline in demand for the older 150 mm technologies resulted in lower capacity utilization in our factory in Texas and as well as our factory in Erfurt in Germany. X-FAB ongoing capacity expansion programs progressing well, and they are on schedule.
In 2023, X-FAB Texas produced 58% more silicon carbide wafers than the previous year, and in our factory in Malaysia, the building construction to increase the site capacity by 10,000 wafer starts per month is expected to be completed after this summer, and it is planned to start moving in equipment in the fourth quarter of this year. Now I'd like to pass the word to Alba for the financials.
Thank you, Rudi. Good evening, ladies, and gentlemen. Now let's talk about the financial update. I would like to start this section by highlighting that the Fourth Quarter was another very good quarter. As Rudi already mentioned, we had an all-time high sales level with EUR 237.7 million revenue, which represents an increase of 29% year-on-year and 2% quarter-on-quarter. Our EBITDA was of almost $60 million with an EBITDA margin of 25.1%, which was within the guided 25%-29%.
Excluding the effect of revenue recognized over time in accordance with IFRS 15 rules, the EBITDA margin of the Fourth Quarter would have been slightly higher and would have totalized 25.4%, representing a decline of 1.4 percentage points quarter-on-quarter, which is attributable to the various factors such as higher cost of fixed assets, increased general and administrative expenses related to the business process optimization activities, but also to the planned introduction of a new ERP system, and finally also due to higher staff cost. The full year EBITDA came in at the upper end of the guided 23.27% and amounted to $245.6 million with an EBITDA margin of 27.1%, which represents a very good increase if we compare it to the EBITDA margin of 2020 of 18.2% that we recorded in 2022.
If we exclude the revenue recognized over time, the EBITDA margin in 2023 would have been 26.7%. X-FAB business continued to be naturally hedged in terms of currency exposure. As a result, the profitability is not affected by exchange rate fluctuations and at a constant U.S. dollar/EUR exchange rate of 1.02.. so, sorry, of 1.02 as experienced in the previous year's quarter, the EBITDA margin would have been 0.1 percentage points lower. Cash and cash equivalents at the end of the Fourth Quarter remained strong as they amounted to $405.7 million, which represents an increase of 4% compared to the end of the previous quarter. To conclude this financial section, I would like to share our guidance for the next quarter and full year.
For the first quarter of 2024, we forecast our revenue to be in the range of $215 million-$225 million, with an EBITDA margin in the range of 24%-27%. This means at the midpoint, a year-on-year increase of 6%. The full year 2024 revenue is expected to come in at a range of $900 million-$970 million, with an EBITDA margin in the range of 25%-29%. This means at the midpoint, a year-on-year increase of 5%. The aforementioned guidances are based on an average exchange rate of 1.10 US dollar/ EUR. Now I would like to give the word back to Rudi.
Thank you, Alba. We finished the year very successfully with above market growth rates in our core automotive, industrial, and medical markets. This shows that X-FAB, with its specialty technologies, is perfectly positioned to continue its growth path in the future. I'm pleased with the progress we have made in expanding our capacity to better serve our customers' demand, and 2024 will be a very important year for our capacity expansion programs, which runs through into 2025. The consistently strong development of our prototyping revenues reflecting new business wins gives us confidence in X-FAB's future. With this Operator, I terminate the introduction, and we can open for questions.
Thank you. Ladies, and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. Please ensure your lines are unmuted locally as you will be advised when to ask your question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Robert Sanders, Deutsche Bank. Your line is open. Please go ahead.
Yeah, good evening. Thanks for taking my question. I guess the first question would be around CapEx. I think you're the only auto industrial player, like, that I know about that is spending much more capital in the current year than they did last year. So maybe you could just walk through what gives you the confidence that there is a need for such capacity expansion in light of the inventory correction that's going on at the moment. I have a follow-up. Thanks.
Yeah. Sure. Thank you, Bob. The fact of the expansions that we're doing are based on our long-term agreements that we have with our customers. And so the forecasts going forward in 2024, 2025, 2026, they still require these CapExes, so there's no fundamental change. And so the weakness so we still are fully utilized, and demand is still higher than what we're able to produce. And the expansion, well, why this year is much higher than the previous year and it will be also higher than 2025 is the fact that in our factory in Malaysia, the building will be ready for equipment move-in to just after the summer. So in the fourth quarter, we will have a peak in equipment that is then all moved in.
It will continue a bit in the first quarter in 2025, and then it's all about ramping up these equipments and ramping up the capacity.
Got it. And on the industrial slowdown, when do you think the worst of the correction will be over? Do you still think it's the second quarter? Do you have any visibility into which parts of the industrial market are really suffering at the moment? That would be interesting as well. Thanks.
Well, in the industrial market is very fragmented, and what we do see it is across the board, in all these customers. A lot of our industrial business is also very long life cycles, and therefore is still a lot of it is in the 150 mm in the 6-inch factories where we saw this really dropping demand or this signal from the market, in the Second Quarter last year. But with the large backlog that was still there, yeah, we continued our shipments, and so I expect then the bookings came down. We see this effect now, and I expect that maybe ordering will start again somewhere in the Second Quarter. But that means then also with revenues rather in the Second Half of this year, to pick up again.
Okay. Thanks a lot.
Once again, ladies, and gentlemen, please press star one to ask for a question. We'll pause for another quick moment to allow everyone an opportunity to signal for questions. We have no further questions. Apologize for that. We will take our next question from Robert Sanders, Deutsche Bank. Your line is open. Please go ahead.
Yeah, just a quick follow-up. On your largest customer, they were talking about qualifying new foundries. I mean, on their conference call, I just wanted to understand, given that the specialty foundries out there are, you know, very underloaded when you look at the Chinese and UMC, they're all significantly underloaded, is there not a risk of some opportunistic, you know, qualifications from your customers of these foundries, who may be offering lower pricing than you have agreed under LTA? Thanks.
Mm-hmm. Well, first of all, it's very important to note that in the automotive, the industrial, the business we're in is based on specific technologies, and for our customers to switch is a very big burden. So typically, this is then done on new projects, but if you look the life cycle of the projects is, and also if you look at, for instance, X-FAB, in our business portfolio, the majority of products are actually is the revenue generated with products that were designed that launched production a year or more ago. And so actually, in one year, there is very small business, so then the capability of maneuvering is very limited.
So it typically is done on brand new products, and yeah, typically, well, there's not a big change possible in a couple in a year or two or three years. But for sure, in the longer term, it's something that, yeah, we need to take into account. And that is part of the planning, and so, yeah, we know about that.
Okay. Thank you.
We will take our next question from Guy Sips from KBC Securities. Your line is open. Please go ahead.
Yes. Thank you. Two questions from my side. First, you were highlighting that you were implementing a new ERP system. Is that finalized, or is there some spillover in the first quarter of this year? A second question is on the CapEx in Malaysia. So the bulk will be done in the fourth quarter, but then you will have some period of testing. How long do you expect this period to be, and when will be the first, let's say, full-fledged production will be ready, as from what date? Thank you.
Yeah. So first, with respect to the ERP, unfortunately, this is not something that is done in a couple of months. It's a project of a couple of years. So also just like the previous implementation of the ERP, this is activated. The costs related to the implementation and then are written off once the ERP becomes live. Now I believe we expect it to be live in 2025, beginning 2026. So there is still some work to be done on that. So but there are some costs that are associated to the implementation that we according to our audits cannot be activated, and so therefore they are taken as costs. And another portion of those costs are activated. And then you had a question with respect to the ramp-up in the factory in Malaysia.
So it's in the, that is a period of, the majority of the equipment will be moved in, in the Fourth Quarter and beginning of the First Quarter of 2025. Then there is a period of qualification, and some equipment, it takes longer than others. So it is not, it's not a sudden ramp-up of the capacity. It's more gradual. And we will be seeing an increase of the output and revenue generation of these capacities gradually increasing, starting the Second Quarter 2025, up to the First Quarter 2026. There will be more or less a linear increase of the outputs over that period.
Okay. Thank you.
Final reminder, ladies, and gentlemen, please press star one to ask for a question. We'll pause for a quick moment to allow everyone to signal for questions. We have no further questions on the line, and I would like to turn the call back over to speakers for additional or closing remarks.
Well, thank you very much, everyone, for joining the call today. I'm looking forward to speak to you again, on the 25th of April, to explain the First Quarter results. Thank you very much, and have a nice evening.
Thank you for joining today's call. You may now disconnect.