The conference is now being recorded. Good afternoon, ladies and gentlemen, and welcome to AIXTRON's conference call regarding the Q3 2023 results. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions following the presentation. Now, I hand the floor over to Guido Pickert, VP Investor Relations at AIXTRON, for opening remarks and introduction.
Thank you, Frau Brunner. Welcome to AIXTRON's presentation, our first nine months of 2023, and Q3 2023 results. I'd like to welcome our CEO, Dr. Felix Grawert, and our CFO, Dr. Christian Danninger. As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be recorded or rebroadcast without permission. Your participation in this call implies your consent to this recording. Please take note of our safe harbor statement, which can be found in our results presentation slide deck, as it applies throughout the conference call. This call is not being immediately presented via webcast or any other medium. However, we will place an audio file of the recording or a transcript on our website at some point after the call. I would now like to hand you over to our CEO, Felix, for opening remarks. Felix?
Thank you, Guido. Let me also welcome you all to our results presentation. I will start with an overview of the highlights of the quarter, and then hand over to Christian for more details on our financial figures. Finally, I will give you an update on the development of our business and on our full year guidance. Let me now give you an overview of our operational highlights, Q3 2023, on slide 2. Order intake in Q3 was at EUR 118 million. Like in the past years, Q3 was lower than Q2. We expect, nevertheless, very strong orders in Q4, and so we are well on track to realize our full year guidance, all backed up by specific customer projects. The demand for wide bandgap power electronics again drove our orders with GaN power, having been slightly stronger than SiC power in Q3.
Our latest member of the G10 family, the G10 GaN, was launched in September and perfectly complements our G10 SiC, as well as our G10- AsP. Our all-new product portfolio is being greatly perceived by our customers. Our Q3 2023 revenues of EUR 165 million was up 86% year-on-year, reflecting the high demand for our systems. Revenue-wise, we are also well on track to achieve our annual guidance. The situation around export licenses is continuing to work. However, the process as such generally takes a bit longer than in the past. Overall, we continue to see strong demand from our customers without any sign of structural weakness. Our equipment order backlog remains to be very solid at EUR 386 million. Now, I will hand over to our CFO, Christian Danninger. He will take you through the Q3 2023 financials. Christian?
Thanks, Felix, and hello to everyone. Let me start with the financial highlights of our income statement on slide 3. Orders were lower this quarter, but as Felix mentioned, we remain well on track to achieve our annual guidance with a very strong Q4 ahead of us. This underpins our view on continuous strong demand from our customers. Revenues at EUR 165 million were up 86% compared to EUR 89 million last year, and we are well on track to achieve our annual guidance here as well. Gross profit in Q3 2023 was at EUR 76 million, up 94% year-on-year. EBIT for the quarter was at EUR 45 million, up by 180%, and net profit at EUR 40 million, more than doubled year-on-year. Gross margin was at 46%, compared to 44% the year before, driven by an improved product mix.
OpEx in the quarter went up to EUR 31 million, predominantly driven by higher R&D spending compared to the previous year. Now, to our balance sheet on slide four. Inventories at the end of September increased to EUR 381 million, from EUR 224 million at the end of 2022, as we are preparing for very high expected shipments in the coming quarters. Trade receivables at the end of September were EUR 107 million, compared to EUR 120 million euros at the end of 2022, mainly being a result of the recent business volumes in comparison to the very high business volumes at the very end of 2022. The advanced payments received from customers at quarter end were EUR 125 million representing about 34% of our order backlog, just like in the last quarter.
Our cash balance, including other current financial assets as of September 30, decreased to EUR 210 million from EUR 325 million end of last year. This was mainly due to the mentioned inventory build-up, in combination, of course, with our dividend payment of EUR 35 million earlier this year. Out of our quarter end cash balance, EUR 133 million were invested into funds, where we continue to follow a very conservative diversification strategy. Just a quick word on free cash flow on the next slide before I turn back to Felix.... Free cash flow in the first nine months was -EUR 82 million, compared to EUR 20 million last year, mainly due to the previously mentioned build-up of inventories to prepare for the very strong output in the quarters to come. And with that, let me hand you back over to Felix.
Thank you, Christian. Before giving you some more details on our reiterated guidance for 2023, I would like to share with you some highlights of our new tool generation. As stated at the very beginning, we continue to see very strong momentum for our products. This is also owed to the fact that we now have our new generation of tools out in the market, and those tools are being very well received by our customers. The G10 family of products marks a very important milestone to our growth path. All members of the G10 family offer a significant step in terms of performance, both particle performance and uniformity performance. At the same time, these products offer a step forward in terms of productivity, that is, in wafer output per month and in terms of wafer output per cleanroom area.
This allows our customers to realize their volume ramp with the most efficient tools for high volume manufacturing. With that, our customers can address more and more market segments with compound semiconductors, be it in the area of power electronics or in the area of optoelectronics and displays. In the past quarter, we have launched our G10 GaN as the successor of the market-leading G5+ tool. The G10 GaN has been designed to support the high volume ramp of GaN power electronics. The G10 GaN allows the separation of the support infrastructure from the process-relevant parts of the equipment, which means that the pumps and power suppliers can be located in the gray room, whereas only the process-critical components will have to be situated in the clean room.
With this, three process modules can be attached to one wafer handler, such that the G10, G10 GaN can offer more than 2x the wafer output per clean room space. In addition, the G10 GaN offers big steps forward in terms of uniformity and particle performance. We have further refined the carrier design and temperature control, and based on this, we can achieve a large improvement of uniformity in thickness and composition for the critical layers. Supported by these improvements, we get very strong demand from customers for the G10 GaN. Many of our existing high-volume customers have switched from the G5+ to the G10 GaN as soon as the new tool became available, such that in 2024, the year right after the launch, we already expect more than 50% of our GaN tool shipments to be the G10 series.
With the G10 GaN, we are also convincing new customers that have not been producing on Planetary technology to choose AIXTRON as their equipment vendor. Also, for the G10 SiC, our new tool for the silicon carbide material system, which we had launched last year, we received a continuous strong flow of orders. From all our existing high volume customers, we have received repeat orders in the past quarter, and we have strengthened our competitive position by making further progress in terms of uniformity performance. We are now achieving uniformity on par with, and in some cases, better than single wafer tools. In 200 millimeter, we had reached this already earlier, and in the past quarter, we have fully closed the uniformity gap, also in 150 millimeter wafer size.
Based on this, we can now fully focus on the advantages of our Planetary Reactor on productivity and cost. The batch offers inherent advantages in these two dimensions, and we continue to win new accounts for our technology. This will turn into revenue in the quarters to come. Last but not least, with our G10- AsP, the last member of the G10 series, we win new customers, and we are seeing customers switching over from the proven G4 platform to our new G10. Here, our customers can produce the most sophisticated lasers in volume, be it for optical datacom or for upcoming Li applications, as well as high-quality Micro LEDs for future display applications.
The platform is the only fully automated MOCVD system for advanced gallium arsenide and indium phosphide-based materials, and comes with in-situ cleaning and a SMIF interface, which is common in highly automated production environments, both enabling ultra-low defect epi epi layers that are needed for the volume manufacturing of these new applications at lowest cost. We can say that overall, we are very happy with the market traction that our G10 series is experiencing. We have invested into significant amounts of R&D, and as of today, we expect that the return of invest is coming even faster and even stronger than expected. This confirms our strong focus on technology and innovation, which we will also continue in the years to come. In May of this year, we have announced that we will be expanding our facility in Aachen with a new innovation center.
Last quarter, we have completed the planning for building and facilities and have received all permits and have signed up the contractors. Construction has started with groundwork ongoing. In this place, I would like to comment briefly on the export situation. AIXTRON is not affected by the tightened export controls that the U.S. government has issued last week.... With this, our business with China will continue unchanged. However, AIXTRON, as well as other German equipment and industrial companies, is still affected by the slow speed of export license processing within the BAFA. We hear that from BAFA itself, and from many other, exporting companies in Germany, that a temporary staffing bottleneck is the root cause for this, and we hear that BAFA is working on resolving this. Again, this is an operational topic, completely unrelated to the China export restrictions of the U.S., just for clarification.
With that, let me now give you the update on our iterated, reiterated full year guidance for 2023 on slide 6. Sorry for that. As said before, we continue to see strong momentum for our products, giving us the confidence of being able to fully reach our upgraded annual guidance in all metrics. On all metrics, we are fully on track, which is why we have reiterated our guidance as follows: We expect total orders for the year in a range between EUR 620 million and EUR 700 million. Our total revenues are expected to range between EUR 600 million and EUR 660 million. We have not narrowed the ranges of orders or revenues due to the unpredictable factor of the exact timing of export licenses, and also of some customer projects, as we have explained earlier in this call.
We continue to expect a gross margin of around 45% and an EBIT margin in a range of 25%-27%. With that, I'll pass it back to Guido before we take questions.
Thank you, Felix. Thank you, Christian. Operator, we will now take questions, please. Frau Brunner, we would now like to take questions, please.
Oh, I'm very sorry. My mistake, I was on mute. So, ladies and gentlemen, thanks for your patience. We are now starting with the Q&A session. If you would like to ask a question, please press nine and star on your telephone keypad. In case you wish to withdraw your question, please press nine and the star key again. Please press nine and star now to register for a question. So one moment until we take the first question. So, thank you for waiting, and we start with Gianmarco Bonacina from Equita. The floor is yours.
Good afternoon. Thanks for taking the question. I have a couple. The first one is on the guidance, especially on the order. So you reported EUR 120 million in Q3, and the midpoint of your guidance is indicating a EUR 220 million order intake in Q4. So we are at the end of October. I understand there is a lot of uncertainty, but can we expect that you will be able to reach the midpoint of the guidance in terms of order intake? The second question is on 2024. Clearly, it is early. You will provide a more quantitative guidance probably in early next year.
But just, given the interaction with your customers, can you indicate if you expect to grow in 2024? And, let's say on a qualitative basis, if you expect single-digit or double-digit growth. And the last one, on the new tools you are introducing. So just to understand, do you expect this to be margin accretive for 2024? Thank you.
Thank you very much for your three questions. Let me just start with the first one. We definitely expect to reach our order intake guidance. This implies a very strong Q4, and we expect, you can do the math, to achieve revenues in the Q4 such that it equals up to the full year range of EUR 620 million-EUR 700 million, as we have indicated. For 2024, meaning for the next year, at this point in time, it's our policy to never give an outlook or like a quantitative number, as you've been asking for. We've never done that in the last years, and also we are not planning to. However, I can confirm to you that the growth drivers that drive our business are all intact.
Both in terms of the market, the applications, as well as our market share. And that, with that, we look very confident into 2024, just to give you a qualitative, strong indication, forward already. Last but not least, you were asking for the margins realized with our new tools. Yes, of course, our new tools support the margins. That's why also we've been invested into R&D for these new tools. And, let's see how it develops in the overall mix. Again, we are not giving a guidance for 2024, yeah. At some point, in our February earnings call, we will give the guidance, and let's see how it plays out as for the total margin.
But I can tell you, the new tools, given that they are differentiated, given that there's new features, new benefits, new customer benefits, meaning new customer value for our customers, of course, that's also reflected in the commercials.
Thank you.
Next up is Michael Kuhn from Deutsche Bank. Over to you.
Good afternoon, thanks for taking the question. My questions. Firstly, I'll ask number one. On client wins, that one is for Mr. Grawert. In the Q1 call, you said, "Give me another two quarters to give you a more comprehensive update on client wins in silicon carbide." So the two quarters have passed, and I think it would be highly appreciated if you could give us an update on that topic now.
Very happy to do so. Yes. We're continuing to gain traction. As I mentioned in the call, we have received repeat orders from all our large customers in this quarter. We have been winning new customers. We continue to see new entrants in the market. And with that, we are on a very, very good path to further expand our market share in silicon carbide.
On, let's say, big names, anything to mention here, or maybe an update over the next few months?
Well, you know, we only speak about names when we have the press releases together with the customer, yeah. So, let's see whether within the next quarter, we will be able to issue one of those.
Okay, thank you. And then, it's again on 2024, I'm not really asking for an early update here, but just to confirm whether the thinking is right here. If you deliver on your guidance, your equipment order backlog should be close to EUR 400 million by the end of the year. I think it's realistic to assume like EUR 100 million services sales, at least into next year. By when would you have to receive orders next year to still be able to deliver them next year? So should we still think about lead times of 9-12 months, i.e., order intake latest in Q1, to still get the deliveries out in the same year?
That's a very good question. We do see the supply chain situation relaxing a bit. If you recall, the whole industry was coming out of COVID, yeah. Post-COVID, there was a global supply chain shortage in all dimensions, yeah. Lots of fab construction has started. Overall, shortage of components, which was also the reason for us to build big amounts of inventory. Luckily, we did, because we could ship, we could satisfy all customer needs, all customer wishes, on time. That was very good. However, we now see that the supply chains worldwide are relaxing. With that, we are expecting to see two effects. The one effect is that the lead times will be shortening a bit.
It would be for me too early to give now a quantitative indication. You know, it's more like a trend that I give you qualitative, yeah. And secondly, with that, gradually, yeah, we expect also to reduce the inventories, yeah, sometime throughout 2024. Again, it's a bit too early to quantify when exactly that's going to happen, just to give you a trend indication, yeah. So in short, throughout 2024, the lead time should go down.
Okay, excellent. Then one more on the Micro LED/LED sales. Relatively small numbers throughout the quarters this year. My understanding was you didn't ship Micro LED tools this year, so I guess that is mostly LED legacy tools. How do you see both the LED and the Micro LED market currently and into next year?
Well, no, we did ship Micro LED tools this year. It's about 10% of revenue. I'm just looking here my numbers. Yeah, so it's something, but it's not big, yeah, and we expect that to pick up next year again.
All right. Thank you. Last question, promised on R&D spending, surpassed EUR 20 million in a quarter for the first time. Is that like a temporary high, or should we think about north of EUR 20 million at the run rate now?
I think north of 20 is a good indication.
All right. Thank you very much.
The next question comes from Olivia Honychurch, from Jefferies. Over to you.
Hi, thanks for taking the question. On the Q3 order number, I know you've said, not necessarily in your comments on the call, but in other conversations, that that may have been because you saw some customers delaying shipments temporarily in the quarter, and that you'd expect a lot of those to come back in Q4. Just want to get a bit more color on, on what gives you that confidence that those orders will come back and drop into Q4? And, linking to that, have you actually seen some of them dropping through into Q4 in the 25 or so days you've already had of the quarter so far?
Exactly. That's what we are observing, yeah. Some customer topics have been shifted from Q3 into Q4. And this is a funny effect, yeah? Because I mentioned that earlier when I was speaking about the G10 series, everybody, all our customers, are currently looking at the G10 series. So we had the funny effect that the launch of the G10 series actually has been depressing the Q3 order intake a bit, yeah? Because we had many repeat customers coming, but instead of just placing the next G4 order or G5 plus order, where they have, whatever, a bunch of tools already and they know what they're getting, they said, "Oh, you have this new thing. I really want to experience that. I don't want to get like, it sounds so great, I don't want to just get another one of the old ones.
Can I please come to the AIXTRON lab? Can I do a demo? Can I do a test of this one, yeah? Because maybe then, you know, I take the next one just as a new one, yeah? So, the launch of the new product has been pushing some orders from Q3 into Q4. So there's a bit of a backlog, yeah? On the other hand, that supports the confidence we have for the Q4, yeah, because these customers need new units for their production ramp and launch, yeah? And we spoke about the lead times just earlier when Michael was asking that question. So, they do need to place the order, and that's also what supports our strong confidence in the Q4 order intake.
Just to clarify, have you already received some of those delayed Q3 orders in Q4 and in the month of October?
Some are, some are coming, yeah.
Okay, that's great. On silicon carbide, you said today, and I know that you said it at a silicon carbide conference last month or month before, that you're now achieving, in some cases, market-leading yields with your G10 tool, which should help you grow your share materially. Can you talk about how exactly you've achieved that? I know in the past you've mentioned that it was due to a design tweak. And if there's any way we can, I guess, validate that statement, given that we are in a market where everyone seems to be saying that their tool is the best and that their share is growing significantly.
How to explain that? I would say it's another modification to the tool, let's put it this way, yeah? Some new ideas played out, experienced in our lab, tried out, verified. First roll out going on at one or two pilot customers, also confirming that one. Another technical twist, so to say, to the reactor, yeah? Let's put it like this. Now, how can you verify that? I think the best is, at some point, you ask some customers who have it in real life, yeah, and the customer confirms it to you. You probably talk also to customers of ours. At some point, there will be, again, a silicon carbide conference where we publish results.
I think then it will also be visible, or you come to our lab and see yourself. Be invited.
That's great, thank you. And then finally, one more, if that's okay. Just on the Micro LED, you said earlier in response to a question that that should grow again in 2024. What's going to drive that, given that I was under the impression that shipments to your major customer will have almost completed by the end of this year?
Yeah, I mean, the good thing is that there's more than one customer, right? And we know that the research and the work has been going on throughout the industry. And we hear, and probably you also hear, and we, of course, see it much more concretely, that now some customers are planning, so to say, for certain products, the first launch, yeah, in a decent size that we will see as a percentage of revenue, and that's what's giving us this confidence.
That's great. Thanks, Felix.
Sure.
The next question comes from Andrew Gardner, from Citi.
Good afternoon. Thank you for taking the question. I've got a couple as well, too. Firstly, another one on silicon carbide. You've expressed your confidence in terms of the performance of the tool and the customer feedback that you're getting, Felix. I'm just wondering or I suppose trying to sort of square the circle, as it were, with the fact that competitors are also sounding very positive. I think, you know, Olivia just mentioned that in her question as well. How can we sort of square that?
Are you seeing this as a winner-take-all in terms of the customers, or are some customers actually saying, "Well, we've got enough of a ramp happening here that we'll take some extra on tools, and we'll take some other tools," even though the architectures might be significantly different, or your approaches are different, in terms of multi-wafer versus single wafer? You know, is there dual sourcing happening, on the, on that front? And then I've got one on the export licensing too.
I would say that there's two topics ongoing right now. I think the one topic is that, we see that, the generation of tools to secure the revenues in the next 2-3 market, is going to be different companies than the ones who have realized the revenues in the last 2-3 years. Yeah? I think that's the one trend which we are observing, yeah. So there's a, is a change on, so to say, who's, who's receiving the new orders versus, who has the lion's share of the installed base. I think that's the first one, which is ongoing.
The second one, which is ongoing, given that now there is two fundamentally different principles out, in terms of tool on the market, and both these two different principles are achieving excellent results, yeah, and competing with each other on who is the best. The customers are trying out both of these. They do, so to say, what Olivia was asking for, but they don't only want to get, like, some data or some PowerPoints, but they rather want to see it on their shop floor in production. So they have a look, yeah? And I think based on that look, we will then see how it comes out, which is then an overall decision based on the relevant competitive metrics, yield, throughput, cost, you know, the usual, the usual topics.
It's a technical competition, so to say, yeah? As you heard, we feel very confident in taking on this competition.
Okay, that's clear. Thank you. And then just a clarification on the export licenses. You mentioned other German companies facing this, yeah, there's another one last night, sort of warning on it. But from your point of view, nothing has changed in terms of the technical scrutiny of the tool. It's purely a paperwork issue, that is the case?
Exactly. It's purely a topic around operational execution. We hear that the team currently responsible for all of Germany is very small, so it's an operational issue, apparently inside of the authorities. They lost some members, they have staffing issues, so they have a big backlog of stuff that needs to work down. We hear that from a large number of other equipment companies. Of course, we have reached out and consult and discussed with our peers. On the other hand, we also know and hear that it's being addressed, and after some time it will be resolved. So we expect that at some point, we will be completely back to normal.
Thank you.
The next question comes from Gustav Robert, from Berenberg. Over to you.
Good afternoon, everyone. Thank you for taking mine also. I just have two, please. The first is around Q4, and I guess the start of 2024 as well. You mentioned that, you're seeing strong order intake, or at least expect strong orders, in Q4, and that all of this is backed by specific customer projects. Could you share some light on what these customer projects are, and perhaps give us some examples? Just to back that up a little bit. And then I have a question on export licenses, which follows from the last question, really. Because again, reading from other companies in Germany, elsewhere in the semiconductor supply chain, saying that the authorities have increased their scrutiny and work starting from August this year. Is that something that you are seeing as well?
Does this go hand in hand with the, the labor issue that you have outlined previously?
Mm-hmm. Thank you. First, the first question about what composition, I took it, what is the composition of orders in Q4? I would call it very simply more of the same, kind of a bit like we have seen the Q1s of the year. I would say the current trends are continuing, and I would not see, we are not expecting a significant change in the mix and the composition of the orders, yeah? More of the same, however, much more, if we just add up the numbers, yeah, to the full year, full year numbers, of course. Now, to the second question, I think you are referring to the press release that ZEISS was giving out, right?
I think we all have read it, yeah, otherwise you can find it on the website under the investor relations section. And ZEISS had a statement out there about what you were just referring to. Yeah, I just assume that this is what you mean. So I explicitly refer to that document, which is in public space, yeah? Which is a question, maybe you can hand it over to me, I have it printed out here. They were saying that the authorities, the German authorities, have intensified certain things for their tools. That situation is different for us. We have not experienced that the authorities have intensified the scrutiny.
In our case, it is simply that whatever has been done already before now is taking longer, and on that one, we have investigated, and we have also found that with other companies, equipment companies, which are in the same situation like AIXTRON. So, to say that it's the staffing issue, this bottleneck issue in personnel in the relevant department of the authorities that I was referring to. So, yes, in terms of the delay, it's similar, however, in the root cause, the ZEISS situation is a bit different from ours and that of many other equipment makers.
Super. Thank you for clarifying, and it was exactly the passage I was referring to, so thank you for that.
Sure.
The next question comes from Malte Schaumann, from Warburg Research. The floor is yours.
Good afternoon. First question also on silicon carbide. Do you see larger customers, major accounts, potentially moving to a dual source?
Technology platform going forward? Or if not, until when? I mean, we are not that far away from when really technology decisions for a certain platform has have to be made, given the expected strong ramp from 2025 onwards or so. So until when would then be the timeframe until customers could potentially take or have to make these the decision to finally go with one vendor?
So, I think silicon carbide is going to be, as we all are aware, a very high-volume business, because in the end, we all are working to replace all combustion engines on this planet with electric energy, preferably out of renewable sources. Yeah, so this is a big endeavor, meaning many, many fabs, many, many tools, and many, many hundreds of millions of wafers being produced. So, I think this is going to be a continuum of fab ramp up capacity build out over many years to come, over the next years. I think to put that up front. So based on that, there will not and we are not expecting there is the point in time, and on this one, it's like a bit flip, left or right, yeah, or between three or four vendors.
We rather expect this is a multi-year opportunity, and customers will allot their volumes, whomever they deem most productive, or maybe there's also topics around supply chain risk mitigation. I think we just come from the COVID crisis, and we saw how difficult it can be if you're stuck with one vendor and that vendor can't ship, and so on. I think it's just a very normal process, but I would not expect that it's a left or right one winner gets all in this big silicon carbide market. And with that, silicon carbide is very clearly different, to highlight that also, from other segments in the compound industry, because the silicon carbide layer is a relatively simple layer, yeah? So you can qualify two different vendors, or three, or four, or five, I don't know, yeah.
Compared to other parts of the compound industry, where you speak a very, very complex, very delicate vendor, and just from the complexity also of your product portfolio, it's just not efficient to qualify multiple vendors.
Right. Okay. Then on the order intake range you provided for the Q2, I mean, this is still pretty, pretty large. Is that reflecting a great number of, a high number of projects, or is that dedicated to maybe just a few customers, one or two, who then make a decision for larger orders? So what would drive the order intake to the lower end or to the higher end of the guidance?
First of all, for the large range, well, our numbers have grown, our total number has grown, and we traditionally have, towards the end of the year, about, the range is about 10% of the upper part. Yeah, if you look for all the last years, right, we typically had a 10% of the upper range. If you do the math this year, 10% from 700, that's the upper range which we have out there, would be 630. Now, given that we left for those export stuff, temporary, topic, timing topics, we left the revenue unchanged. We said, "Well, let's not change from 620 to 630, just a single number, but let's leave the range where it is." Yeah? Just on that one, yeah.
So it's just a larger number than you are used from us, which is the growth path that we are on, and that we also are planning to continue.
Okay.
Now, for your question on the composition, this is not a single customer or a large order or a volume order, yeah, kind of the one which makes it or breaks it. It's in fact a broad split of customers, a broad set of orders, multiple geographies, quite well all over the place, which is also giving us the confidence that you hear from us in this call today.
Okay. Got a quick one on the order backlog. I think a year ago, you had about EUR 50 million in orders that were dedicated for 2024. Do you expect more or less a similar number at year-end going then into 2025, or should that come down to the easing supply chain situation?
Backlog? Sorry, I think we have. I'm not sure we fully got your question.
I think last year, you said from the 350 in order backlog, you expected 300 to be delivered in 2023, so EUR 50 million were scheduled for 2024. So, will there be a kind of a similar number then, at the end of this year, scheduled for 2025, or is that going to come down to shorter lead times?
Honestly, I have to pass on your question. We would need to drill a bit into the numbers. I'm also not sure. Christian, can you help?
Yeah, no, I mean, that would be too difficult to predict now, yeah? Because, I mean, it depends then on what will the order backlog be at the end of the year, yeah, having the big ranges. And then on top of that, we have the, as you explained, the change in delivery times potentially next year. It's just too much variables to predict it.
Okay, that's fair enough. Thanks.
The next question comes from Simon Coles, from Barclays. Simon, the floor is yours.
Hi. Thanks for taking the question. I was just wondering on geographic mix, if we're seeing more of a shift to more either Western markets or a change as China has been coming down over the last couple of years, whether we can continue to think that comes down, because we've seen some press articles suggesting some other countries could be about to spend a lot of money on silicon carbide and even gallium nitride. I was just wondering if you have any thoughts on that.
Mm-hmm. Mm-hmm. I think the product, the geographic mix that you see, and I think you're referring to the fact that the composition or the share of Europe and U.S. has been going up quite a bit. That's driven by our application mix. You have seen that. I think year to date, we are around 80% from power electronics, GaN and silicon carbide. Traditionally, historically, GaN and silicon carbide, so the power electronics, is a domain of companies producing in Europe and the U.S., yeah? That's what we've seen continuing.
At the same time, we now see, and I think everybody sees in the market, that also there is companies, new entrants, in other regions of the world, entering the domain for silicon carbide chip making, for gallium nitride chip making. I think when those projects get realized, we'll also get for power electronics a more diversified global distribution. I think that will drive, just from the power electronics. I mentioned before, we're expecting a rebound, both of the optoelectronics, but especially also micro-LEDs. Traditionally, the optoelectronics, the optics, the LED industry, of course, had a strong footprint in Asia, in Taiwan and Korea and China, not to forget.
So, I think there will be clearly a rebound of those countries in the geographic mix over the quarters to come. When exactly? Where exactly? Too early to predict, yeah, but I would not extrapolate from the effect that you see right now.
Okay. Very helpful. Thank you.
Okay. Thank you, all. With this, we will close today's call. I hope to see many of you on one of the upcoming conferences or events over the coming weeks, and, bye-bye.
The conference is no longer being recorded.