Good morning, ladies and gentlemen. Welcome to Comet's Capital Markets Day. My name is Ulrich Steiner. I'm the Vice President, Investor Relations. Thanks a lot that you took the time to follow our live stream from the BernExpo in Bern, Switzerland. Today's discussion will be recorded, and you can have access to the records right after the meeting today on our website. The agenda today will start in a few seconds with a presentation by CEO, followed by a short break. After that, we'll have the presentations from our division presidents, a little insight into our financials, and we'll end the day with a question and answer session. Before I hand over to our CEO, Kevin Crofton, please be reminded that during today's presentation, we'll have some forward-looking statements. You can read it here on the screen.
With that said, I hand over to Kevin, our CEO, for his presentation. Kevin, the floor is yours.
Great. Thank you, Uli. Much appreciated. Really like the introduction. First of all, I want to make sure that I thank all of you for being here. It's great to have at least another forum and get a chance to talk to you again at a capital markets day. You know, the structure of this presentation is meant to be an update or really to bring you back up to speed with what happened from a year ago versus where we are today.
Before we start, I have to say, for me, I want to say for my team, we absolutely have to thank our customers who put their trust in us to help them be successful, and then also to our employees worldwide, because you'll see later on we've been able to manage some very tricky situations successfully, and I'm quite proud of what they've accomplished, and they deserve a lot of credit for that. We must thank them for that. Okay. The other thing is, what I really want to do is communicate to you that we're on track to the ambitions that we actually said we were going to accomplish actually all the way back in the midpoint of 2019.
My objective and my team's objective is to really communicate to you that we are on track. For those of you that don't know the company well at all, I have two slides really quickly to kind of orient you to Comet at a very high level. This slide basically shows what our three divisions look like. We have two divisions that are concentrating in the X-ray industries, and we have one division that's concentrated specifically to really the semiconductor capital equipment industry. If you look at the top right-hand side of this slide, you can see that we are number one in vacuum capacitors and in match boxes that are used to provide the vital control necessary for just about any plasma-based technology that's used in the world to manufacture semiconductor chips.
Now, Michael kammerer's gonna talk about a little bit of that when he gets to his presentation. If you look at the lower right slide, you can see that our Industrial X-Ray Systems division, this is the group that makes systems for inspection of perhaps items that occur in the natural health sciences area, but of course, in the semiconductor space and in the automotive and the aerospace sector. Depending upon where we are, which sector we're talking about, that division is in the top one to top three, depending upon the end application. In the lower left, you can see our IXM, our Industrial X-Ray Modules business, clearly number one in X-ray tubes. They comprise about 13% of the company's revenue.
You'll see from the presentations later on the massive improvement, or I should say, accomplishments of that organization. All in all, we're projecting this year that we will deliver around CHF 480 million-CHF 500 million in revenue, which will represent significant growth for the company yet again. Now this slide, pretty much every company in our industries can of course show. We're a Swiss-headquartered company that does business globally. Just half of our business is generated in the United States. About 20% of our business is generated in Europe, and then about a third of our business is generated in Asia. You can see by each of these dots that we have manufacturing presence as well as sales and service presence dedicated to and regionally located with our served markets.
Yes, we have approximately 1,400 employees worldwide at this point. That's a quick snapshot of the company. Now, about our 2025 ambitions. You can see that we've actually stated that we are going to be at least CHF 830 million. We're going to have demonstrated a 25% EBITDA margin, and we're going to demonstrate a 30% ROCE, all by 2025. I can say on the left-hand side of this slide, we are executing to that plan. I hope when you walk away from this that you'll conclude we're absolutely on track and perhaps well ahead of that as well. We are tracking to our financial targets, but maybe from my view, the most important two items on this slide are the last two. We're gaining market share in our served markets. We've launched new products.
We continue to take new design wins, and I hope that we can communicate that we are extending our overall market share position in the world in each of our divisions. On the far right, yes, we've been able to adapt quite successfully to challenges in the supply chain, challenge in the trade, the trade wars that are going on, between the Western and Asian countries. So far, we've been able to navigate that stream quite successfully. Okay, what I really want to do now is then talk about our markets. The key message that you should see from this portion of this presentation is that our served markets are accelerating. The growth prospects are actually quite good.
I hope to be able to give you the update and comparison about what we said exactly a year ago to what we are projecting here today. The first real key point is that it's absolutely clear that we have entered the data age. We're only just starting into this portion of where the world is headed, the digitization of society. You can see in this dotted line where it represents where we are today. You know, if we look back into the nineties, everything was driven by, say, laptops and computer desktops. In 2005, you start to see the emergence of the social age with the advent of the smartphone, by the way, irrespective of whose brand it is. By 2020, you're starting to see the collaborative economic age.
It isn't until today that we start to see device technology able to keep up with the demand for high performance computing and to keep up with the demands that are laid on us for the industry 4.0. It's only now that we have that performance capability. As a result, you're starting to see this insatiable demand for new chips that have much, much higher performance at a relatively lower cost point. Now, what's going to happen from 2030 or is it 2030? Is it 2035? Is it beyond? Well, that's something for all of us to start debating. It's almost irrefutable about what it means on data. This chart in the lower left is actually derived from or actually has been pre-presented by Cisco Systems.
What this chart shows you is that in 2018, that's the first time that you see a crossover point where human traffic, meaning everything that we do, either by typing emails or by downloading videos or by playing computer games, it isn't until 2018 that you see the human data-driven content versus machine-driven content actually fall behind. The actual bars are showing zettabytes of data. One zettabyte of data is all of the data that was generated for the past 40 years in the internet and other communication devices. You can see when you look to the far right of that particular graph, by 2025, forecasted from Cisco, that it's going to be 157 zettabytes of data generated in that year. That zettabyte's a huge number, right? You start thinking about that.
What does it mean? When you start doing the math, what it mean is that we have this demand for silicon chips and other types of chips that is unheard of. If you look to the slide on the right, or the chart on the right, that's what's occurring in the semiconductor industry. There are on the order of 112 planned fabs going online from 2021 until 2025. That's just what's been announced. It doesn't make that much a difference whether it's memory or whether it's logic or what we call other, which is all the trailing edge technologies that are IoT related. These are the announced production starts of new fabs being put online in that timeframe, which means that the capital equipment industry and our business is going to be growing tremendously.
What this data doesn't show is what new capacity extensions are being added. According to SEMI, that's around 170-some-odd new 300-millimeter fab equivalents going on. Okay? When people ask me, "How long is this cycle going to last?" I'm quite bullish, and you can tell that from my comments. Part of that is depicted here. In the lower left slide, you can see this is the spending on wafer fab equipment in $ millions. The white bars are what we presented exactly a year ago. The gray bars are what are today's forecast according to VLSI, and you can see that jump shift in 2021 and onwards.
Then also the dotted line is the original view from VLSI on the spending of RF power subsystems, everything that drives the PCT division's business. The red line on top of that shows you today what VLSI's current projection of RF power subsystem spend is, and you can see that's a significant jump, to the point where by 2025, it's approximately a $2 billion served available market. On the right-hand side, it's sort of the same way we put this chart together. The dotted lines represent what we showed at the last Capital Markets Day one year ago. The most important point probably is on the right-hand side, the green dotted box that shows the shift upwards of yet a higher spend in the bill of materials for RF power critical systems.
It used to be last year we said it was 1.6%, but now we can say for sure that it's substantially higher than that. It's roughly 2% of the BOM. A lot of times I get asked, "Why is that happening?" It's because we're getting device technologies that require more and more plasma-based processes. As a percent of spend that goes into a fab, it's disproportionately higher to this capital equipment used for plasma. That obviously means quite good things for the PCT organization, for sure. Now, switching to our other two markets, because we really have three primary served available markets that we play in, or sectors that we play in. We have the semi space, we have the aerospace, and we have the automotive sectors. Maybe a couple of comments on the aerospace sector.
First of all, we can say for sure that passenger, I'll show you the slide in a minute, passenger air miles are definitely coming back, particularly in the domestic traffic area, whether it's domestic US or domestic European-based. But also what we're starting to see is the shift that goes, say, to hybrid styles of aircraft or the eco-friendly aircraft, which drives the need for more and more electronics and a higher level of inspection. Similarly, in the automotive space, there's the trend today to more and more EV systems, batteries, and even perhaps robo taxis. I probably should have mentioned the robo-plane as well, because that's definitely coming also. Okay. Let's talk what that means on an automotive base. This slide is actually trying to give you two pieces of information here.
First, if you forget about the colors, the magenta and the gray, and just look at the trend, this shows the production of light vehicles annually from, say, 2020 through 2025. That underlying growth is roughly 6% per annum as a CAGR. The pink or that magenta color actually is showing also the adoption of electric vehicles and the production of electric vehicles for consumption. By 2025, you can see that there's a crossover point where more than half of all the cars produced worldwide will be EV or they will be a hybrid version of EV. That kind of portends two things. The underlying growth for the Industrial X-Ray Systems and the Industrial X-Ray Modules business is clearly at least an underpinning of about 6%.
also you have to overlay on top of that, well, what happens in the EV space? Because that demands more technology, higher use of semiconductor chips, more inspection criteria for safety purposes, et cetera. We can say that in the aerospace, or sorry, the automotive sector, for sure we would expect to see this underpinning growth. Similarly, in the aerospace sector, there's three lines that are on this particular slide. One is that dark blue line, which is the increase in passenger air miles in the domestic market. Sorry, that's the total market. The green line is the domestic market. No, scratch that. The dark blue is the domestic market. The green line that you see is the total curve for domestic and international airline passenger miles.
You can see that international travel is lagging behind what's happening in the domestic side. Nevertheless, what we have been able to say, as we said we expected last year, we can say that the aerospace industry and the businesses in IXM and IXS are growing because of that pull from domestic passenger air miles. It's a facsimile for what we can see in our businesses. Also, the rapid expected increase in air traffic for the international sector would imply that we'll actually should see an acceleration of our growth in the out years through 2025. Hopefully that was clear.
When I sum all that up, what that means is for our served available market, if I can draw your attention to the bottom of this slide, we can say that today our SAM is approximately $900 million, just under $1 billion. We can also project forward and say by 2025, based on those three previous sets of trends that I discussed, we should see that our served available market is actually about $2.5 billion. Of course, the majority of that is going to be in the semi and the electronic space, but overall, we'll see a Swiss franc value increase. The overall situation, you can see that we're outgrowing or outpacing how the TAM itself, we think, is going to evolve. That's something like 2x the growth rate. Okay.
That's enough about the markets, and maybe we'll get back to that in a few minutes. I think the next thing I want to talk about is what's our overall track in terms of progressing on our journey. I'll remind you; we had three main pillars that we really said we have to go and do as a team, and the first is we have to accomplish growth. It needs to be profitable growth. I should make sure I always say that it needs to be good quality business that's growing relative to our other potential served markets. We have to strive for operational excellence, and we have a number of initiatives that particularly Michael and me acting as the IXS head will talk, as will Stefan.
We have this major redesign of our culture as an overall organization. We've got to do all of that despite all of the pressures that are associated with the business, with the pandemic, for the trade, competition, et cetera. Three pillars to our success. We wanna grow, we wanna grow profitably, we wanna concentrate on operational excellence, and of course, we want to concentrate on our overall culture. I have three slides to talk about each of the divisions, because I'll let the division heads talk exactly through their business for a few minutes.
I think what I can say for the Plasma Control Technologies group, PCT, this is a division, as most of you know, is completely concentrated on the semi and to a degree, some of the electronic space as well. Primarily, it's a semiconductor-driven organization. You can see on the left that there's substantial growth going on, whether it's higher sales in Asia, particularly with the top-tier Asian capital equipment suppliers, or how we are increasing our share of wallet within our customers. You can see on the lower left that we've doubled our business year-over-year with our top three customers. That's to kind of give you an idea of what we think is gonna happen from 2019 versus our estimate this year for 2021.
On the right-hand side of this slide, you can get a taste for what our investment in R&D is. As a company, you know we spend between 11% and 13% of our revenue goes to R&D. You can see here in this case, with the PCT organization, already to date, we have had 61 patent applications that have been generated this year as compared to nearly 40 last year or only 17 in the entire period 2012 to 2019. You can see that we're accelerating our technical advantage, our technical competence. Now, the middle of this slide talks about all about operational excellence. Rather than me talk about Penang or our vacuum capacitor ramp, Michael will give you a taste of that.
I think it's most important for me to emphasize how important this RF generator that we are taking to market this year in beta site. It's so important to the growth of the company. You'll hear more, a little bit more about that from Michael, I suppose. For us, it's opening a brand new serviceable addressable market for us. We have multiple customers that have this unit in beta test right now, and we have new variations of this RF generator that are in the R&D environment right now, to the point where we should have a broad product portfolio for RF generators very much in the near future. Okay, that's a taste of PCT. Now, I wanna talk a little about the Industrial X-Ray Systems business. This is IXS, this is our business that's based in Hamburg.
Many of you that have been on the Comet journey for a while have really wondered when are we gonna get that division to a point where it can be successful for the long term. The column here that says FY 2019 basically is where were we at the end of FY 2019 versus where are we today, which is the middle column, versus where are we headed by no later than 2025. You can see that first row says that we had something like 13 different customized products that we were offering to our various customers. When we say customized, that means one-off, very low volume, extremely high mix, which equals not profitable. It's very hard to be successful in that sort of operating environment.
You can see that right now we're down to two customized products that we still offer, primarily because we can make money for those. By FY 2025 or before, we will be completely out of that customized solutions business. Our standard products, we had 14 products at the end of 2019. We're down to six. We expect we'll have eight by 2025 because we are creating a new product set that goes into the semi and the electronic space. Our software platforms, we have seven software platforms. We're down to three. When we get those two products launched, we'll be down to one. One software product platform across all of our products by 2025. Then finally, what was our relationship and our go-to-market strategy?
Where you can see that we had over 300 agents and distributors in the IXS business portfolio alone. We're down to 50 already. We'll be less than 50 before we get to 2025. The result of all of that is that we have returned this business to sustainable growth and to sustainable profitability. It's not finished. You can see from this slide there's still quite a bit more to go. I have to give the team their compliments. They've done an extraordinary job in resizing a business in a downturn. Lastly, the IXM division. This division is really important to us. It provides huge technology across the company, but also, I can say it's a really nicely profitable 13% or 14% or 15% of our overall revenue. Again, this team did an extraordinary thing.
They launched new products in a downturn. They continued to launch new products in maybe a soft upturn. That's really the key to being successful long term, launching new products, getting them qualified in a downturn, so that when your customers see their own ramp coming, you're designed in, and they are just gonna perpetuate their purchase orders with us. You can see that here, the third blue bar from the left, you can see that FY 2021, you can see the adoption of these new products to the point where they're between 10% and 15% of this division's revenue. You can see by 2022 and beyond how much that jumps again.
There are a number of new products that I know that Stephan is gonna talk to you about in just a few minutes. I'm pleased with how each of the divisions have performed and what they've been able to accomplish, and they deserve a lot of accolades for that. Now, if I switch now, let's talk about our geographical footprint. A year and a half ago, approximately, we announced that we were going to move into Penang, create a production facility in Penang, Malaysia, and get that up and running, and that's the middle bullet here. This is a product, an operational excellence productivity enhancement program. It's well on track, and it's primarily dedicated to the assembly of match boxes. That's happened.
We launched a brand-new facility in Taiwan so that we have direct boots on the ground doing sales, service, support, and applications engineering, primarily for the semiconductor companies. While we've invested in Korea for an applications and a design competence, watch this space because next year you'll start to see that we are actually going to have a full sales and marketing capability that crosses all the divisions in Korea as well. We're strengthening that overall footprint in Asia, and we're making good progress there.
Before I start talking about our numbers, I wanna say the other thing that we're doing is we're spending quite a bit of time as a management team to make sure that we are driving a culture where we are fully customer-oriented, where we are challenging our teammates, but empowering them to make decisions, and that we are learning to trust each other. Remember that, you know, we all come to work every single day wanting to do a good job. We want to trust people want to do that. You don't come to work thinking, "Oh, man, I can't wait to screw things up." In this case, we want to make sure that everybody understands, let's trust each other. I know what I'm good at. I think my team knows what I'm good at.
I think we feel the same about what Michael or Stephan or the people within their organizations, Lisa, we need to trust each other that we're gonna do the job, okay? That whole collaboration is absolutely key, and we have to do it in a teaming environment. We're making that transition. It's still a long journey, but we're a year and a half, 2 years into it, and we're making a lot of progress. Okay, about our outlook. Well, I already said I'm bullish, so I'm quite confident in what our outlook is for the company. It's quite strong. When I think about what challenges that we face versus what our opportunities are, our opportunities far outweigh the challenges in my opinion.
Probably the biggest challenge that we face as a company long term is, are we able to recruit and retain and reward successful employees in our company? That's not just a Comet problem. That's a problem with any company that's involved in STEM-oriented businesses. Recruitment and retention, absolutely key for us for the future. You know, we'll manage the trade conflict, and so far, we've been able to navigate that environment quite successfully. Similarly, on the supply chain, as a company, I gotta touch wood here. As a company, we've been able to manage the supply chain successfully. That doesn't mean it won't fall apart tomorrow, but we manage it on a daily basis, and I think that we've been able to demonstrate that ability to do it better than many of our competitors. I think that we've...
Maybe I should also say while we look like ducks on the water, you know, nice and calm and swimming nicely, we're kicking like hell underneath. We're managing that supply chain challenge. So far so good. On the other side, the opportunities are enormous. We are involved in growing markets. We've got good financial performance, not great, and we're in the middle of the process of changing our mindset overall as a company. I see nothing but upside from my perspective. We're well on the way to meet the ambitions that we stated in 2019. We reaffirmed those in 2020. You can see from this chart, the middle line, we're looking at 580 to.
Excuse me, CHF 480 million-CHF 500 million in top-line revenue. We said that we're going to demonstrate between 18% and 20% EBITDA margin. Now, we don't guide ROSI. Maybe we'll start doing that in the future. I don't know. If you just run the numbers, you can see that we're quite on track to meet CHF 830 million in top-line revenue, at least 25% EBITDA, and to at least be at 30% or higher on a ROSI perspective. Okay, I know that that's a drink from a fire hose. I recognize that I'm just, you know, kind of giving you information, and you gotta assimilate it. We have a 10-minute break schedule, but we're a little bit ahead of schedule, not much.
If there's any questions on what I presented right now, I'd be happy to take them. Otherwise, we can take a break and then move on. If there's any questions, please feel free to ask. Okay. I guess there is none. Am I missing one, Uli? Ian? Sorry, there is a question, apparently. Yeah. My screen doesn't show it. Uli, maybe you can read it to me. Looks like we don't have any questions. I thought you said one was coming up. No. No. Okay. If there are none, then let's take a 10-minute break. We'll start at 10 minutes past the hour. Thank you very much for your attention. Cheers.
Good morning, ladies and gentlemen, and welcome back to the second part of our Capital Markets Day, in which we will provide you further insights now into the opportunities of all our three divisions. I am very happy to welcome first Michael kammerer, President, Plasma Control Technologies, to the floor. Michael has been with the company since 2008. Michael, please, the stage is yours.
Thank you, Ines. Good morning, everybody. Also from my side, very welcome to the Capital Markets Day 21. As a refresher, I would like to start with a video showing how chips are being manufactured and the importance of RF power.
Technologies have significantly improved our daily lives, making us more efficient. We require electronics with ever more power, storage capacity, and speed at an ever-decreasing size. Producing the high-performing microchips needed for this requires most advanced manufacturing processes. How is a microchip built? Microchips are produced out of silicon wafers, very thin plates of purified, shaped silicon, an ideal material for making transistors. After various treatments of the wafer, a photoresist coating, highly sensitive to light, is applied on the wafer. The UV light of extreme intensity is directed towards a mask and onto the wafer at an extremely small size. This causes a chemical change in the coating that is exposed to the light. The soluble resist coating is washed away, cleaning the wafer surface to start most precise chip building processes.
It's when creating the 3D structure of the chip that our expertise in plasma control is crucial. In the vacuum chamber, the wafer is placed on a pedestal. The chamber is first pumped and then flushed with different possible gases. We then ionize these gases with RF power to ignite various species of plasma. To build the chip structure of the wafer, plasma ions react on the wafer surface to selectively remove and deposit material. This is done hundreds of times until the 3D structure of the chip is created. To enable that at nanoscale, this process requires a highly precise control of the RF power, which is produced by a high-frequency generator.
When connecting the generator directly with a coaxial cable, the RF power is reflected, which is why it requires a so-called match box to transform the RF impedance of the chamber to the coaxial cable. Since the impedance of the chamber is changing during the process, variable vacuum capacitors are used in the match box for automatic tuning.
Precise plasma control is really required to master challenges in etch and deposition processes. Here you can see an example of a typical 3D NAND layer stacked architecture. Here, connecting the different layers must be very precise and accurately pulsed by sophisticated RF power to process the holes through the entire structure in a proper way. Comet PCT plays a vital role in the global chip giant's value chain with critical RF power subsystems and components. On the left-hand side, you can see our addressable market of around $1.5 billion in 2020, but that's definitely a growing market into 2021 and the following years, driven by the wafer fab equipment market. Here, we're talking about $64 billion market in 2020, and it is forecasted to grow into a $100 billion market in 2022.
Here you can just imagine what kind of growth we're still dealing with and will deal with into the next year to serve then finally a total semiconductor market of around $500 billion into the future. Of course, these growing markets create great opportunities for Comet PCT to expand and gain certain market shares. What we're gonna do for that? I mean, Kevin already mentioned we are working on operational excellence, and one dominant element in this game is the Penang factory. As he said, we opened the factory about one and a half year ago, and today we are at around 20% capacity utilization. We will go on. You see below on the left-hand side below you see our transfer plan from transferred products from San Jose to Penang, combined also with ramp-up of new products.
This will give us a capacity utilization of around 60% or more by end of 2022. With the actual product range, match boxes and VacCaps, we see an average CAGR of around 9% into 2025. That's the existing business. Now we still have a pretty high growth rate ahead of us with the existing business, but we also want to expand our business with new products, as you all know, with the RF generator and combined with the new generation match control, the so-called gen 3 match control. There, we have started this year with 4 substantial customers to start the beta version tests. All tests have been done so far successfully, and now we go into the next round. The next round is very important. The next round is to go with the next version.
This is the so-called gamma version. Beta version is a test version where we wanted to find out if we have or if we had, still had some major design issues or whatever to find out for the mass production version, that we do not have to deal with some failures when we go into production. The next version is the gamma version. That is the improved beta version. With all the learnings we got out of the tests with our customers is now into the next version. Hopefully we can start to build the gamma versions in January. It really also here depends a bit on the supply chain situation, but so far, from today's perspective, we should be able to start in January. To first test the gamma version internally. Is everything working?
What we improved, what we changed, and then go out to a broader base of customer, new customers we already identified and selected and are in the plan to test and qualify. This is now very important, not only test. We also go for customer qualification with the gamma versions. That's all so far from my side. Of course, I'm also very open to questions after the session.
Thank you very much, Michael kammerer. Speaking of questions, would you mind to come over for a couple of Q&A?
Yes. Thank you.
Thank you. Great. You are really in a thriving environment of the data age. Kevin said we entered the data age, and he also said we are navigating the supply chain issues quite successfully so far. What really are you focusing on in terms of challenges in your business right now?
Thank you for the question. Yeah, that's a great question, absolutely. There are a lot of challenges, and our ongoing challenge is to keep up the flexibility and responsiveness to exceed our customer expectations. The Lam and NAURA Supplier Excellence Award proves that we have been successful in doing so. To further shorten delivery times and optimize our global supply chains is an ongoing task. For example, we just introduced a PCT supermarket for vacuum capacitors and inventory for high runners working with the pull principle. This will help us to keep up our capabilities to deliver also in case of unexpected demand. That's very importantly. Also, in a high ramp, it's still possible that you can see unexpected peaks coming from unexpected demands.
If you can serve these peaks without disruption, then you really win the game. No question that we must keep up our pace of innovation high. We must offer our customer the technology leading RF subsystems products that they need to be successful.
Well, thank you, Michael. Let's talk about the RF generator for a while. Provided that this RF generator will be successful, will this result in cross-selling opportunities with your match boxes and your vacuum capacitors? Are you planning to sell just bundles or what's the plan here?
It's both of it, but let me explain it. First of all, I'm very confident the generator will be a success. As I said before, we have first substantial results, what makes us all very, very confident to get a successful product to the market very, very soon. No doubt about that. Don't forget, it's not just about the generator. We are also developing a new generation of match control. If our customers want to achieve optimized results, it's clear that they should buy a perfectly matched Comet RF subsystem consisting of a generator, match, and vacuum capacitor. We will see the impact when we go into the next round of generator tests by expanding our test and qualification base in 2022, just as I said before in my presentation.
Thanks. Last question to you. When we look at what's going on in the semiconductor industry, from your perspective, is there a next big thing that you believe will help you to grow even further?
I only can remember of one or two next big things. That was the iPod and the iPhone, what changed the world. Today, it's not about one next big thing for me. It is all about many things coming together. Think of AI, think of AR, autonomous driving. 6G is coming. 5G is already the past. 6G is coming. The entire digitalization and the new technologies and processes in chip production, it is about evolution and saving resources. As a critical supplier in this development, we at Comet want to stay ahead of the curve and help to make this happen.
Thank you very much. What a nice closure. We will see you in the Q&A session again later. Ladies and gentlemen, with this, let's move to the second of our divisions, X-Ray Systems, and welcome Kevin Crofton, our CEO again, who is heading this division on an ad interim basis. Kevin, the floor is yours.
Thank you, Ines. Nice job, Michael. Thank you for that as well. All right, everybody. Now I'm changing gears here, and I'm going to speak to you really as the President of IXS. What I've already communicated to you is about the progress that we're doing in repositioning this organization. I can assure you that you'll see some nice results this year. This business is growing. I know there might've been some folks that might've been skeptical, but it's quite a growing business, and we're going to see that continue on in the future. Again, this work isn't over yet. It's a work in progress, and we've got a couple more years in front of us. Coming out of the back end of that process, we will have quite an interesting business. I'm sure of that.
Mainly, I'm going to talk about a couple things. First of all, I'm going to really talk about the product portfolio. You know that we're deadly focused on making sure that we have the best cost possible. I'm talking about cost of operations but also cost of product to our customers. We're rapidly trying to develop products and bring them to market early as opposed to waiting for the perfect product. I really want to concentrate right now on the left-hand side, this whole idea of product portfolio for growth. I'm going to kind of ask you to imagine with me for a few minutes.
I've got a couple of videos in here that I hope will resonate with you as at least as curious human beings, but also to try and give you a fabric for what we're trying to do here as a company. What this video is going to show you is that we've been approached by an owner of a T-Rex skeleton. The ultimate goal was to find out, is this T-Rex male or female? We get a nice specimen. You can see how big it is on the left-hand side of this picture. We put it into our FF85 computed tomography system. We do a scan on it. We're scanning it all and actually putting it back together in 3D. Now we're doing slices.
When you see the marrow cavity here, when you look up at the two o'clock position, the arrow will come in here, and you'll see this bridge of bones that you see here. This is called medullary bone. Medullary bone is filled with calcium. Calcium is used, this is used as a source for eggs in today's birds that we see. Was it a female? Absolutely, it was. We were approached to do this because when other companies that specialize in CT tried to be able to inspect this particular metatarsal bone, they didn't have the system big enough, didn't have the competency to do the renderings, couldn't really get focused down into the area of interest to actually determine whether it's female or male. As you saw, definitely a female.
Now think about what does that mean for a business, a high-tech business like IXS or Comet in general. The thing is that right now, advanced packaging techniques. When the industry talks about advanced packaging, what we're talking about is the ability to put substrates on top of a circuit board with a Ball Grid Array. On top of that would be, say, perhaps a standard packaging or a Redistribution Layer. On top of that, it then becomes do you have a base die, or do you have memory, or do you have logic? Or on top of that, do you have these really small through-silicon vias that are associated with current high bandwidth memory?
The things that are allowing us to actually stay on Moore's Law, but also to allow us to feed the industry demands that Michael mentioned. 6G, artificial intelligence, machine learning, DL, all of that needs this closely combined functionality. Technically in the industry, we do optical inspection. It's looking at devices or packaged devices on six sides, top, bottom and of course, around the sides. The trouble is that today's optical capability doesn't give you the interior. Think now if you could actually look at the interior of a packaged device. On the right-hand side of this slide basically shows you the ability to inspect the package balls that connect a substrate to a circuit board. That's item one. On item two, we're showing actually the balls themselves.
Then on item three, we're showing the ability to inspect micro bumps that go between devices down to a Redistribution Layer. That's where we are as an industry at the moment, and it's the very early stages of that right now. Here's an example. Hopefully, this video runs successfully as well. Today's environment is on the left, where you do optical inspection for voids in a Ball Grid Array. You can see those little imperfections at the top of these balls. The reason these things are important is that they could create a situation for an incipient failure, in particular in your car. Think, Michael mentioned autonomous drive vehicles. Think about if you start to see failures of a device in an autonomous drive vehicle. On the right-hand side of this slide, I hope. Yes.
Keep your eyes focused on this. Now we're actually going layer by layer through the device, looking for the detection of defects, and we're literally going through it at a monolayer through the device. Quite phenomenal. You get to the bottom, and you can see, here's some solder balls that probably have too many voids in it and probably would create a failure mode. So this is an opportunity for customers to look at the efficiency and the effectiveness of their process flow as they are running devices down their line. Now, in the future, what's going to happen is. By the way, all that inspection that we're talking about is we're taking slices by X-ray, and we're manually looking at it.
Now, if I had a tough time last night with my significant other, and I'm inspecting the same device today, you know, I can make a lot more mistakes cause of that emotional situation that I'm in. Think about if you now can do that inspection using artificial intelligence and take the human out of the train of making decisions. Here's that same Ball Grid Array assembly. We have to then generate images. We then have to do a reconstruction. That means take the data and then reconstruct those individual balls in 3D. Then we need to actually be able to visualize and inspect those balls. Green being good, yellow being we're not sure, purple saying, "Hmm, that's probably not a good device," as an example.
Customers need to be able to inspect these balls to ensure product quality, to ensure product safety. Obviously, they want to improve yield cause that stacked device that we're talking about is extremely expensive when you get to the end of a line. To be able to advise on product and production flows and enhance a yield condition means money to our customers. Why would they go to an analytics solution? Well, you get repeatable results, you get a reliable result, and you get a much, much faster result, to the point where you're able to decide what's good, what's bad, or do you need to have something that goes through a further inspection. All of this comes from, say, image acquisition that comes from our software platform. Remember, we're down to three. We're getting down to one.
That one is going to be Geminy for every product within the IXS family. Then do the analytics using all of the AI that we have from when we bought Object Research Systems last year. Object Research Systems doing AI for us in the semi space. What that ends up doing for IXS is that opens quite a substantial growing market. You can see on the left-hand side that this market is growing at something like 8% compounded annual growth rate through 2025. My personal view is it's likely to grow at a faster rate after that point, and the reason is that's when you're starting to make decisions on putting these types of products in production, not just as product flow advisory, okay? At that point, it could be either an inline or an at-line inspection technique.
That's gonna be the challenge for IXS for the long, long term. It's nothing to joke about. It's a $33 billion business. If you look at the middle slide, you can see companies like ASE and Amkor and JCET and of course TSMC, which is the world's largest foundry. They are also now, because of their integrated fan-out device, Info, they are now a market leader, number 3 player to date, maybe more, as a leader in flip chip packaging. You can see on the right-hand side regionally that it's currently dominated by Taiwan. More than half of all the packaging work is done in Taiwan. You can see that the US...
I'm sorry, that China and then followed by Korea, hence why we've also made the investment in Taiwan, as I mentioned earlier, but also the investment that we plan to take into Korea during 2022. That gives you an idea of what the path forward is for IXS. I'm going to stop there, and I'm going to-
Please join me, Kevin.
Thank you.
Well, thanks a lot for your presentation. You talked about the growth opportunities for IXS in the advanced packaging market. What do you think is really key to leverage this opportunity? What do we really have to get right, and how long will it take for us to really get a foothold in this market?
Okay. There's a lot that has to happen to be successful here, but I think I can summarize it really in three points. This is an emerging application, so the truth is our customers don't know exactly what they want either. They're just not sure. We have to be able to collaborate successfully with the largest companies that are in this space. They'll end up defining the product to us. It's going to be a challenge for our product management and our R&D teams to filter what is absolutely necessary for our customers to be successful. As an organization, not IXS, but as an organization, we need to be better at extracting what is the real problem our customers are trying to solve, and how do we help them do that?
That's first, absolute specificity on what the product has to be, not what we believe it must be. That's one. The second thing, our team needs to be comfortable with asking questions that potentially show a lack of knowledge. And that's because, well, we're still learning to be successful in that space. It's an information pull activity that we're going on. Then I think the last thing is the team at IXS needs to be absolutely focused on what they do well. Don't get diverted back into working the way we might have done in the past. I'm completely confident in where the management team sits on that. They know the drill. They know where we're headed, and it's really semiconductor and electronics. It's really to be focused on the proper applications in automotive and aerospace.
The days of doing custom solutions is behind us. That's a total mindset change that's going on right now. That's how I would answer that question.
Well, yeah, thank you. Let's maybe briefly talk about the repositioning of IXS. You mentioned the progress you are making in the first part of today's capital market presentation. When you now look ahead, what's ahead of you, what challenges are there you have to face and how you will address them?
Well, I think the biggest challenge right now is for me to get a replacement for the president of this particular division. That's well underway. I expect that we will deliver on that this year still. That's fundamentally important for the long-term success of IXS. I think beyond that, we need to continue to focus on our operational excellence. It's an organization that's moving from handcrafted, hand-built systems to an operational organization, so the use of lean principles where it makes sense. The idea of outsourcing beyond a 100 km radius of the current business, be open to looking at alternative low-cost regions for manufacture, as well as dual sourcing where it makes sense. It's gonna end up being ultimately an operational focus for the team there, quite quickly, actually.
Yeah. Last question. ORS. Last year we said we would introduce a new workflow in collaboration with ORS. What's the status here, and what can customers expect from us going into 2022?
Yeah, that's a great question. I'm really proud of where ORS sits within the organization. Ines's question is, where are they in releasing workflows? We said they would release one. In fact, actually we released two this year over the last month or so. They have to do with void calculation, which is part of the videos that I showed you. But also looking at through hole vias. We've got two applications that are out there quite quickly. More importantly as well is the participation of ORS in becoming a consultative service for, say, PCT and even for IXM to analyze data to assess the production capability within our organization as well. That investment is definitely paying off.
At the same time, that business continues to grow on its baseline per plan, and we wanted to make sure we kept that entrepreneurial fabric that's associated with ORS and make sure that they are still really, concentrating on the things that they do well also. Yeah, it's moving. It's actually a little bit ahead of our plan and, quite a successful situation for us right now.
Many thanks, Kevin. With this, ladies and gentlemen, let's move to the third presentation, and let me welcome Stephan Haferl, President of the X-Ray Modules Division. Stephan, the floor is yours.
Well, thank you, Ines. Yes, IXM has plenty of opportunities. IXM is small, yet in terms of served markets, it is presumably the most diversified division of the group, serving NDT, electronics, security, and plenty more. IXM is smart in leveraging its technologies into these vastly different applications, and IXM is on a successful trajectory growing its market share, but also its served available markets. The following movie clip is giving a partial taste of IXM.
Precision is paramount in the inspection of parts and materials in their exact measurements. Minute defects can have big consequences for the safety of components. That's why every truck tire is X-rayed to make sure it's roadworthy, and every turbine blade intended for jet engines is examined inside and out. Our technology is used to screen the luggage of millions of passengers, and soon this inspection will also quickly and reliably identify what types of fluids travelers are carrying. It makes me proud to know that the largest and most successful companies in the world rely on our technology. Whether it's in the automotive sector or the aerospace industry, in electronics or medical equipment, the applications are practically endless. I'm excited for the future. I'm eager to see what new worlds our technology will bring into focus next.
Successfully navigating and growing our market share rests at IXM on three pillars. First and foremost, we invest into the expansion of our product portfolio, better addressing the needs and trends of electrification and miniaturization. Miniaturization is manifold and ranges from the use of X-ray for the purpose of metrology in new and classical industries and applications to the inspection of batteries, PCBAs or advanced packaging solutions in the semicon industry. Secondly, speed. Speed or time to market, so on the right side on your screen, time to market is of the essence in our quickly changing markets. Investments into a more agile organization, new ways of working remains a top priority. At the center, last but not least, the third cluster of activities is aiming at focusing at further improving our cost bases. Designing out costs from products and processes.
Designing and manufacturing more smartly using the full arsenal of existing or and newly developed digital tools. Directly driving top line and profits, the most important activity is, needless to say, the expansion of our product portfolio. Over the past year, we have launched and added many new products. Now, being the clear number one for industrial metal ceramic X-ray tubes, we continue with our forward integration, not only providing our customers with X-ray tubes, but rather with full X-ray modules, while continuously pushing over to the right into products achieving the highest detail resolution. New products in the area of MesoFocus, microfocus and nanofocus, achieving those highest detail resolutions, have been added and continue to be added as the trend of miniaturization is continuously pushing mission-critical structures, product safety relevant structures to ever smaller dimensions.
This journey, as Kevin has alluded to previously, is enabling us to roughly double our business until 2025. As a proof point of our successful work from a well-established application at IXM, coming from the energy and aerospace industry, turbine blades provide thrust as well as driving electrical generators. Turbine blades are of paramount importance, determining efficiency, fuel consumption, emission. With our most recent product launch of the MesoFocus module, IXM has enabled the X-ray inspection and metrology in the design of such turbine blades, in the manufacturing of such turbine blades, and provides a real quantum leap. Here on the left-hand side, you see the part of an X-ray shot of an area of a turbine blade using state-of-the-art technology. Image is okay, but rather blurry. On the right-hand side, you see the exact same X-ray shot using a MesoFocus module.
The result, sharp, crisp, revealing more details than even a trained NDT eye can grasp at first. That's what we're working on. This is what makes us successful and provides further impulse for future growth. Enabling decisive and meaningful progress by revealing the details that matter in an ever-more technologically complex world. This is our mission. Be it batteries, be it turbine blades, be it PCBAs, be it advanced packaging solutions in semiconductor or 3D-printed medical implants. That's what we do. Thank you for your support, thank you for your attention, and thank you for your interest.
Thank you very much. Stephan Haferl, please come over to me.
I would like to.
Q&A as well. You talked about the product portfolio expansion as one of the key pillars in your strategy, and you were talking about the technological advancements that you bring to your customers, for instance, through the MesoFocus. What are the challenges in your business doing so?
Well, clearly, being at the forefront of technological development, the challenges are always having the right people. Ultimately right now, the biggest challenge, and you'll hear that everywhere is the supply chain crunch. We have been exceptionally successful with our people, and they've been working day and night, literally around the globe in order to secure materials so that we can meet demand, on time and in quantity, not only for our customers, but also for the R&D team.
Let's briefly talk about your goals. One of the main goals is to enter the semi electronics and batteries market, new applications for you. How successful have you been so far, and what is the midterm potential that you actually see in these applications?
I would personally say that we've been very, very successful. Kevin early on mentioned that the plethora of the new products were launched end of 2019 and then within 2020. Already in 2021, we will see in excess of 10% of our revenue coming from these products. Moving into an adjacent market where we haven't been before and then within such a short time to reach the 10% and plus seeing a growth rate that exceeds anything that we have in the other markets tempts me to say that we're very successful. As mentioned, we anticipate without being too optimistic that we will be able to double our business by roughly 2025.
The lion's share, it's not gonna be the largest market segment, but a lion's share of the growth and then a substantial part of our revenue will come from the world of electronics inspection or in general, anything that has to do with miniaturization and the trend of electrification.
Thanks a lot. Let's last but not least talk about advanced packaging. Kevin has shown the opportunities for Comet in this market. Now from a tube perspective and from a resolution perspective, are there any limits you see given that, you know, the structures are getting smaller and smaller?
That is a hard question with a not really definitive answer. What I can say is that today, on an industrial scale, you can reach safely resolutions on the order of 200 nanometers. That is smaller than the wavelength of visible light. That is possible and from everything that we have seen so far, we are absolutely capable to meet the requirements of the semicon industry, especially the requirements that come from inspecting advanced packaging solutions. Now, we know obviously the semicon industry is pushing those scales further and further down. Probably within the next 5 to at max 10 years, we will see that the resolution requirements will be at 100 nanometers.
That's a challenge that we love and that we are absolutely sure that we will be able to meet, not only on the X-ray modules side. It also requires a lot of effort. Tens of nanometers rather easily. Whether that can be then transferred into industry, that is going to be sort of the next challenge after the current challenge, which is to provide, let's say, the 100 nanometer resolution in the industrial space.
Well, thanks a lot for your answer. We will see you in the Q&A section as well. Ladies and gentlemen, with that we come to the last presentation of our investor day, and I'm very happy to welcome Elisabeth Pataki, CFO of the Comet Group, to the stage. Lisa will talk about the financial priorities now. Lisa, the floor is yours.
Thanks, Ines, and I'm glad that we saved the best for last. Makes me feel good. Good morning, everyone. I'm really happy to be here today. It's a good opportunity for me to have the floor and to give you a little bit of my perspective on where I see the business financially and what I've been up to for the last year. Many of you know that I joined Comet one year ago, so this is now my second Capital Markets Day. Within the past year, I really spent a lot of time, obviously, interacting with all of you, talking to the investment community, in addition, some of our other financial suppliers, vendors, banks, et cetera.
Some of the most fulfilling things I really have been able to do in the past year is actually to talk to our R&D teams, to meet with our manufacturing heads. I've been able to spend time at our operations in Hamburg, Germany. I've spent time in our IXM and our PCT facilities in Switzerland, in Flamatt. I also did have an opportunity to visit part of our US operations. Hopefully this year, the world will open up a little bit more, and it would be a great priority for me to be able to go and see how we're growing in Asia. The third major thing has really been able to meet with our employees, really understand what are some of the processes that are driving our business.
With all of those inputs and then understanding the market, it's really culminating into how do we think about the financial model and where are our priorities then for finance. Let's jump into a quick overview on what our key financial messages are. As you know, I think it's really important to point out that Comet is really a story about change and a story about growth. If I wanna really think about things in a very simplistic way, I like to think about things in really four main key areas. The first one is growth. Are we outperforming our markets? Are we executing to what we said we were going to do? The second is profitability. Are we growing in a sustainable way? Are we generating profit? Are we expanding margins? The third is, are we doing that efficiently?
Are we really looking at our operating model? Are we generating leverage? Are we providing a good return on capital employed, a good return on investment? Then fourth is, how are we using our cash? Like I said, we are a growth story, and so the priority for us is to generate cash and to invest it back into the business. We do that through investing in research and development, and we do that through investing in CapEx. It is a priority for us to make sure that we are returning a dividend for shareholders, and I'll talk a little bit more about that as we go through the presentation. One thing I kinda wanted to just point out is you heard from each one of our division presidents, and they talked really about three things.
The first was that, do we have the right product portfolio? Is it optimized? The second thing is best cost, and the third is time to market. I think those are really key, three key threads that we want to make sure is infiltrated into our DNA, and therefore our financial strategy is supported. Let's take a look at each of these four key areas in a little bit more depth, and then obviously happy to address any of these topics further in the Q&A. Accelerating sales growth. As you heard Kevin say, each of our served available markets are accelerating. We have a terrific opportunity to perform not only in semi and electronics, but also in automotive and in aerospace. I want to give a little bit of a flavor for each...
How we're going to get from where we are today. The benchmark here is FY 2020 performance. We ended the year at about CHF 400 million in revenue, and the expectation is that we are at CHF 830 million by 2025. How do we do that? Our plan is to get there organically. Let's talk a little bit about PCT. As you heard from Michael, we were expecting the growth of the market over that time to really grow at about 9%. We are expecting that our PCT division will provide on average about 19% growth until 2025. How do we do that? Well, first of all, we know that we need to introduce the RF generator to the market. We know we need to continue to grow market share in Vac Caps.
We know that we need to continue to enter with the 3rd-generation technology platform. I think if you look at our X-ray systems, we have tremendous amount of opportunity there as well. The underlying growth of that market is 6%, but on top of that, we know that we have opportunity with electric vehicles. We are also pointing more and more of our X-ray systems to the semi and electronics market, and that provides us with opportunity for growth. We expect that our X-ray divisions will contribute about 13% of our CAGR towards our ultimate goal for the group of 16%, and that helps us get to the 830. All of that said, again, we have to outperform the market, and we need to continue to deliver strong execution.
We need to deliver products that are solving highly complex technical problems for our customers. I feel very confident about where we are today, given the underlying economic conditions. All right. Now, with all of that said, we need to make sure that we are growing profitably and in a sustainable way. The way we really look at this is we look at EBITDA margin performance, and we also look at our return on capital employed. First of all, when we talk about expanding the margin and creating profitable growth, we really need to look at how are we actually performing in our production environment. One of the things that we need to focus on is lean manufacturing principles.
The second is, if you look at our X-ray divisions, it's really about how do we standardize the technology that we have? How do we ensure that we are not customizing as much as we had in the past, and that we are pointing that division towards profitable markets. Third, the last thing I wanted to say is one of the key things that we're doing, as Michael talked about, Kevin's talked about, I've talked about in the past, is the ramp-up of our Penang facility. The Penang facility, as of now, is operating at about 20%.
We expect that to be at closer to 60% at the end of 2022, and then we'll continue to invest and add in capacity using our asset-light approach to CapEx to get to where we want to go by 2025. The next thing I wanted to just touch on is really the concept of operating leverage and having a flexible, sustainable business model. We are a growth company. We are in a process of a lot of change. We do need to also focus on our processes. We need to focus on our infrastructure. We need to focus in our cybersecurity. Obviously, it's no secret to anyone that cybersecurity and making sure that we have a secure environment is very important, especially to a tech company.
We will continue to look at those things and invest it accordingly. I'll talk a little bit about how we think about R&D and CapEx on the next slide, and talk about a little bit how do we think about where we deploy cash. What I wanted to do here actually is just give you a historical perspective about where has our cash gone over the past five years. The reason I'm doing that is because actually our trajectory will not change significantly from what we have here, and I think that's important to note. We will always prioritize investing back in the business. On average, we have invested about 12% in R&D. We continue to see that go forward. On average, on capital expenditures, we have invested about 4% of sales in CapEx.
Just a note for you that this does exclude the facility in Clamart that we spent about CHF 52 million on. On average, 4% of sales is how you want to think about this going into the future. Providing an annual dividend to our shareholders is important. Over the past 5 years, we have provided a dividend of above CHF 1 at the minimum, and on average, about CHF 1.20. I think you can expect that we'll continue to think about a dividend payout ratio around 25%-45% going forward, and we will work with our board of directors to provide guidance on that on an annual basis. Overall, really the story is on the capital allocation side. We want to make sure that we are maintaining a strong balance sheet.
We want to make sure that we are flexible, and we want to make sure that we have the cash to do what we need to do to meet the ever-evolving technical needs of our customers. As a quick wrap-up, we Comet again, it's a story of growth. It's a story of change. We're focusing a lot on the culture. We're focusing on outperforming our markets. We're focusing on best cost. We're focusing on making sure that we are prioritizing our investments in the right areas, in research, in development, in our employees, and in an asset-light approach to capital expenditures. Overall, we feel that we are very well positioned to capitalize on the opportunities that we have available in the market to us by 2025 and beyond. Looking forward to the Q&A.
Thank you very much, Lisa, for your explanation on the financials. May I ask you to please join our round for the question and answer session? We have a lot of time. We have ample time for question and answers, for two reasons. First, due to the discipline of my colleagues to the right and to the left as they stick to the timetable. Secondly, and apologies for that, looks like we had some technical issues in the short Q&A session with Kevin before. If you did not come through after that, please ask your questions right now. Your lines should be open. If I ask the operator, can we start with the first question that's coming from the audience? Just unmute yourself and ask a question. Your lines should be open now.
Good morning, everyone. It's Michael from Stifel, if I can start.
Hi, Michael. Hello.
Hi. Good morning, everyone. Thanks for the interesting insights. I just have a bit more of a broad question maybe to all of you, but it's mainly focused around semi business. I mean, you were showing the growth opportunities that you have in that business. Match box, you want to win further market shares, Vac Caps the same. Generator as well, and also in advanced packaging, the IXS. You're entering kind of new markets as well as with the generator, for example, and also with advanced packaging market. Can you give us a bit of an overview how the market currently is structured generator-wise and also packaging-wise with your competitors? What makes you so confident that you can really gain market share, particularly in these, those two areas?
Thank you.
Less than.
Thank you, Michael, for that question. Who wants to start, Kevin or Michael?
I can start with the generator, no problem.
Okay, Michael.
Thank you for the question, Michael. We're entering, not new market with the generator. We are entering existing markets with the new product, and that is the challenge here. Of course, the competitor structure is about two main competitors in this RF generator market. It's AE, MKS, and then followed by some Japanese guys. What we see and what we're hearing and what we're seeing is that there is additional capacity and technology needed with this market growth. As I explained, the processes get more and more narrowed down. You have to be more and more precise accurately to accurately process the different layers of what you have seen in the video or different structures through the layers. That needs also new features, new combined technologies.
As I said, not only the RF generator, it's then a combination with the new control, what then is really able to process as fast as it is required then from the OEMs.
Yeah.
Yes.
If you don't mind, I'll add a couple of comments to that as well. Michael hit the nail on the head. It's going to be a technology play that's important for the industry. It's going to be more and more about precise control of plasma that we believe with the architecture and the design of the product that we have, that we will hit this out of the ballpark. I think it's quite a compelling argument. There are two competitors that are serious between MKS and AE. They're 70%-80% of market share right now. There's a lot of smaller companies that play in the rest. But we have the right. If this generator does what we say it's going to do on the tin, it will be an absolute gangbuster product.
When you combine that with the team that Michael has in both vacuum capacitors as well as RF match and the proven increase in market share that we have, we're quite confident that we're now providing a portfolio that really helps companies like Lam Research or Applied Materials or TEL, et cetera, that are in this industry sector. On the other hand, Michael, the other part of your question is: What about IXS and what about this 3D architecture and the ability to get into that? We are very fortunate to be tied right now to the leader in developing advanced 3D architectures, actually doing those combined package versus substrate versus RDL versus chips. Because of that position right now and because they are pulling us, it's a situation of privilege, and they trust us.
I'm certain that that customer is going to be the bellwether customer defining what's necessary in the industry. There'll be variants of it, but they are absolutely the company that you must have in your trusted portfolio. I have to say it like that. As I showed you, it's growing at an 8% per year sort of situation, but I would not be surprised if you don't see that number be revised again a year from now and three years from now. Cause that's when you really start seeing a whole range of advanced package devices in production. How big is it? Truth is, it depends on whether it becomes at line or in-line inspection using X-ray, and that's a non-trivial exercise.
Big opportunity, one that we have to stay focused on, and we need to make sure that we satisfy the partners in this space. Hopefully, Michael, that gives you some context there.
Yeah, that was great. Thanks very much. Can I just add one more question, Willie, if I'm not stretching it too much? Great.
Sure.
I'm just referring to page 13 in your presentation where you talk about your addressable market. I was just wondering, maybe I'm getting something wrong, but when we look at your addressable market in 2020, you're talking about CHF 900 million, and looking at your revenues this year, you would grab more than half of that market. In 2025, you're talking about CHF 2.5 billion, and your revenue goal is CHF 830 million. Can you explain a little bit why that wouldn't be? I mean, I'm taking it and I'm doing it a little simplified here, but why wouldn't the goal be CHF 1 billion, for example? Because either some markets are growing where that you don't take part or you're losing market shares.
How can you explain that difference, if I can say so?
I think it's quite simple, Michael. It really depends upon whether this RF generator gets into the market space and is qualified in the way that we expect it to. As you know, our aspirations were to get to 10% market share by 2025, and it's still too early for us to go beyond that ambition at this point. You're right. Let's assume this product works as we say it's going to do, and let's assume that we're able to get the right variants out in the right timeframe. Yes, you're right. We should be at a substantially higher revenue line. Right now, I'd say it's too early to tell. As Michael said, you know, we're in beta site right now.
We're gonna have to do a bunch of beta sites in all of 2022 for the other variants, and it all becomes a situation of market adoption and market pull. So I guess I'd have to say, watch this space at this point. Michael, would you have anything else you want to say on that?
No, it's okay. Yeah. This is exactly how it's going forward. Yeah.
Michael at Stifel, I hope that answers your question satisfactorily.
Yeah. No. That was great. Thank you very much. I'll hang on for some other questions, of course.
Cheers. Thanks for leading the charge.
Thank you.
We appreciate that, Michael. Who's next?
Hi. This is Michael from Tobu.
Hi, Michael.
Hello, Michael.
Hi. Hello, everyone. Two questions just from me. The first one, sort of, yeah, similar to what Michael just asked is, you know, thinking about your midterm targets, in particular the target growth. That's still basically unchanged from what you communicated two years ago, and yet you have said that the bill of materials in PCT for your products has significantly changed. The outlook has significantly increased from last year to this year, and yet your targets are unchanged. Maybe you can provide a little bit of a framework or perspective of the moving parts there and what the thinking is in keeping those midterm targets unchanged. Probably a bit similar to what Michael just asked.
The second question is regarding that slide where you show the patents that you have from the number of patents that you've filed in PCT. My question would be, how much of that is in the existing VC and match box market, and how much of those patents are really in the generator market so that we get a feel of the dynamics there. Thank you.
Michael, thanks for those two questions. I suggest that maybe Lisa and I tackle the first question, and then we'll have to ask Michael kammerer to answer the breakdown in percentages on the patents that we've applied for. On our midterm targets, I guess my first comment would be that we're approximately 2 years or a year and a half into a 6-year ambition. As a new management team, I would want to make sure that we have a few more proof points before we get out there with increasing our guidance. Of course, increasing our guidance, we also need to make sure that the board is in line with doing so.
Our ambitions are, remember, we want to show greater, at least greater than or equal to 15%, at least greater than or equal to 25% EBITDA, and at least greater than and equal to 30% ROCE. That's what we said our targets are. I think that to go into the investment community to say something beyond that at this point might be a little early because we do have greater than or equal to in that thought process. For us to change that guidance, honestly, it has to be meaningful change. A few points here and there, I would question whether or not that's important. I think I'd leave it to you all to help us manage that idea and beat me up and say that's wrong.
Lisa, if you want to add something to that, great.
Yeah. I mean, I think the first thing I would add is that, you know, first of all, we are outperforming the market, and our projections to 830 and beyond assumes that we will continue to outperform that market growth. We've talked a lot about the PCT side. I know we already answered the question with respect to how we're thinking about the RF generator and how that's contributing to our 2025 growth target, but let's talk a little bit about X-ray as well.
I mean, I think we know that in the X-ray systems business, we went through a you know a fairly substantial realignment process last year, and that's going to take a couple of years too to make sure that we're on track with that we have the standardized approach that we need to in the products that we're issuing out of there, that we have the software platforms that we need, that we're working the ORS workflows in appropriately, and that we're properly pointing that to the semi-electronics markets in a way that's actually productive for our customers. So, I feel comfortable with our growth story at this point. Of course, I think as things change and we start to realize opportunity, we will update that guidance.
Thanks, Lisa.
Michael, a question about IP.
Michael, to your question to the IP, to the patents, yeah, the majority and greater than 80%. 80% are coming from the new RF generator architected technology and the new gen three control. Does not mean that we do not patent in the other areas as well. In the Vac Cap business, it's most important that we
That we keep our trade secrets secret.
Thank you, Michael.
Okay. Thank you.
Thank you, Michael. Who's next on the line?
Okay. I'll try. Serge from Credit Suisse. Good morning, gentlemen.
Hey, Serge.
Hello, Serge.
Well, hi. I have the same issue like my predecessor before as well with the guidance and the serviceable addressable market. I always had the impression that the story is front-end loaded because of the super semi cycle. You always also said, Kevin. Now I have the impression it goes from front-end to back-end loaded. Is this correct? If so or not, can you go more into the detail between the traditional PCT business, the generator business, and the X-ray business? Because also X-ray said that they want to double their sales, what I didn't expect it so far.
Yeah. Thank you, Serge. Thanks for participating in today's conference, by the way. We appreciate it. I think that we've been quite. I hope that we've been pretty consistent that the actual revenue growth, in particular for PCT itself, is somewhat back-end loaded because of the time that it takes to get the generator out qualified, getting first revenue and then interesting revenue and then substantial revenue, which we've always said is going to be in that 2023-2025. That entire timeframe when you'll start to see that growth occur. That market entry opens up approximately $1 billion served available market to us. That's why the back end of this 830 bogey is where it is.
The other divisions, IXS and IXM, are going to essentially double in the same period between now and 2025. But that's off of a smaller served available market, of course, and a smaller base as well. It's going to come down to do we exceed our overall targets appreciably? It's going to come from the generator.
Okay. With that, the follow-up in margin then, you mentioned or your team mentioned that Penang plant will be 80% utilization next year. Will this lead to a margin hike already going into next fiscal? We are now between, let's say, midpoint 19%, target is 25%. Here we should see the faster deviation out of sort of the more broad deviation.
Just to clarify, we said that the Penang's facility will, by the end of next year, under its current capacity situations, will be loaded by about 60% by the end of the year. If the market pull continues, then yes, we'll have to pull forward our investment. That'll be up for Michael and his team to actually go and propose to us. We're staying on top of it. The good news is that factory is imminently expandable. I don't see that as a risk for the company at all. Of course, that's important for our margin expansion in the company and to get our generator into the market. The fact is also that our two divisions, you know, of course, I'm running IXS for the moment.
The two divisions that Stephan and I run, it's really important that we continue to stay focused and disciplined about capturing high quality, high margin business where we can absolutely differentiate ourselves. It's gonna end up being ultimately a mix scenario for us along with operational excellence.
Yeah. Maybe I can add a little bit of color on the margin story. You know, I think what we said in the past too is that we're expecting to even see a minor pickup in the second half already of 2021 coming from the Penang facility, and that's only ramped at, like, 20%. We're not guiding yet on 2022, but obviously what we did say on 2022 is that we're expecting the Penang facility to be ramped at about 60%. You have to assume that we have included into our margin story a best cost solution going into 2022, and we'll continue to work with that through 2025.
Okay. Probably the last one, and then I will hand over to my colleagues. Sorry for that. Can you tell us something about the pent-up backlog you have currently? You know, I have the impression that you could grow faster this year. Is this true, and can you give us any flavor on that due to bottlenecks or whatever, or trade limitations or yeah?
Yeah. Serge, thanks for that. Of course, we're watching the pandemic situation quite carefully. It ends up becoming a problem on the supply chain. You don't know if you'll get isolated shutdowns of our facilities worldwide or our supply chain. We also need to be observant to what those effects might be to our customers. Because if they're not able to deliver or accept equipment, then that also would, by definition, potentially delay our ability to ship. In an ideal world, Serge, of course, we could be well above our guidance for this year. The supply chain constraints currently, which are not just pandemic related. Remember, the automotive industry went through a structural and cyclical resizing. They took chip capacity offline, which ultimately was redirected to other industries.
Now you've got the automotive industry fighting for chips. That's just the capacity is just not there. You know, we got to be in a situation where we have to plan that Stephan and Michael and my team within the IXS group, that we're going to be fighting tooth and nail probably all of next year. Probably. Now, I hope I'm wrong, but it's going to be micromanagement all the way through, I believe, 2022. Now, some people say first half of next year, but irrespective of that, we're in a situation where we have to manage this quite carefully. We can also point to what our main competitors are. You're welcome to go look at them. I would refer you to their recent earnings announcements. They've missed revenue. They missed revenue on their guidance.
One of them missed revenue guidance three times in a row and had to re-guide within the quarter. That all has been due to their supply chain problems. I think if you look at Comet's performance, we've been right on the line. We've been executing down the line and, you know, we're trying to make sure we don't take our eye off the ball. That's how I would position Comet as a company at the moment. Execution, execution.
Thank you, Serge. Does that answer your question?
Yes. Sorry, please hand over to the next,
Sorry, and apologies again for not taking your questions before.
No worries, Willy. I love you.
Okay. Perfect. I think we have Sebastian on the line, huh?
Yeah, hello. Can you hear me?
Yes. Hi, Sebastian.
Yep. Hi.
Sebastian.
Hey. Perfectly. I got three questions. I would ask them one by one if possible. The first one would be, on the RF generator. Can you quickly remind me by when now you expect the first sales coming in with the beta phase when the gamma phase is going on?
With the beta, we are still expecting some minor sales this year, but we are still on the expectation mode. What I can say is that the four customers we now tested the beta or still be testing the beta are all very happy about, and they want to qualify the product next year. This is what I said, that the determining target and game is next year with the gamma versions to qualify design into projects. That is what is the main targets next year, to win first projects with the gamma or ultimately the gamma should be the high volume version then finally.
Understood. The next one was-
Sebastian, sorry, just to make sure that's consistent. You know, we've said we're not going to have appreciable revenue this year on RFG. I've always said multiple times, if we sell one, that qualifies as we sold one. Don't have high expectations for what's happening this year. It's all about getting the product into customers that are interested in qualifying it and bringing it to market. Okay? We're on track.
Got it. Many thanks. The next one would be on the guidance. If I was putting it correctly together, you said you want to plan to go, like, by 9%, on PCT with the match boxes and so on. So, if I take a starting point, the CHF 225 million of last year, and I calculate 9% over the next couple of years, I get to a level of around, like, CHF 340 million-CHF 350 million, in terms of top line then for 2025 for this sort of existing business. If I look at the other slide, it looks like you planned for, like, CHF 540 million of revenues for PCT overall in 2025.
I have a delta of around, like, CHF 195 million. Can you explain that a little bit, where is this delta? Or, like, you can sort of split it into pieces where this delta is really coming from.
Yep. Absolutely. Thank you for the question. If you look to the past, I could show you a graph or statistics that we always grew over proportionally in PCT over the market. The 9% CAGR is the estimated market growth in our addressable segment. As usual, we will win additional share of wallets with our customers and additional market share. We have a very good example this year with our top Chinese OEM, NAURA. In there, we substantially increased the revenues from last year to this year. It's all about almost 3 times.
This means we own, I would say 70% to 80% of their share of wallet because they just want to work with us with RF power supplies, match boxes and VacCaps at the moment, but also in future generators and are very dedicated to us and we are their strategic key supplier for this stuff as we are with Lam. That gives us really the opportunity to win over proportionally shares in their wallets or in the market if we can lock us in as their strategic RF power or match supplier.
Understood. Then a quick follow-up on the other guidance slide. If I was seeing it correctly, you plan for, like, a PCT CAGR of around, like, 19% over the next couple of years. If I was looking at the slide two years ago, you were planning for 15%. This 4% delta, I assume the points that you just outlined were applicable already, like, two years ago. What has changed to sort of explain this 4%?
The demand. I mean, this is simply demand-driven. Two years ago, we haven't seen that strong ramp and heavy demand into the next years, and that increased, of course, also our CAGR.
Yeah, Sebastian, I would refer you back to the slide that talks about the percentage of the BOM, wafer fab equipment BOM, that is currently today spent on plasma-based equipment and therefore RF technology. We've had an incremental increase from roughly 1.6% to 2%. You run the math on that's at least a 25% in the available spend against RF critical subcomponents. The shift in CAGR for the division is pretty much what we're expecting, that's going to be in line. As Michael just said, we're going to gain share, you know, touch wood, as long as we keep execution.
Mm-hmm.
Understood. One very last one on the margins within PCT and to get a chance to correct there. With regard to Penang, I mean, how much of your production, I mean, I don't know if you want to share that or can share that, but just a little bit of a ballpark thinking there. How much of your PCT production is currently there or will be there or that at least we have a sort of a better sense than we don't know how much sort of capacity and volume is over there. That would be the one side on the profitability of PCT. The other one, sorry, also related to the same topic, therefore I would just add it on.
What is the sort of margin potentially what you see with the RF generator once everything is rolled out? That, of course, is then also playing into PCT's overall profitability.
Yes. Maybe I'll start, and then I'll hand it over to Michael. We're not going to. I don't want to give, you know, percentages of how much production we're doing in one place versus the other. I think it's safe to say that what we are trying to do is we are trying to produce our match boxes in Penang. We are working through a plan right now to transition that from San Jose, California, to Penang. The plan is that we will continue to manufacture our vac caps from Switzerland. That's kind of, you know, from match boxes and from vac caps, that's kind of how we're thinking about things. On the RF generator side, the plan is to produce those in Aachen.
That should also become a best cost solution for us. That's kind of the macro view of that. I don't know, Michael, if you want to add any additional color.
No, that's the correct view. What is very important to know is that it is a shift of the match box production from high-cost region, very high-cost region, to a low-cost region. This is what you can estimate then or guess about what the numbers are or what we can save with this shift. That we really have done on purpose for capacity, but also of cost. That's it.
Very sorry, one very last follow-up on the answer to this one. Is it then fair to assume with the profitability on the RF generator, if you take the sort of the operating leverage from the PCT segment as a starting point of what the margin can be achieved for this dedicated RF generator business?
Yeah, that's fair.
That's a fair statement.
That's fair.
Yeah.
Completely fair. Got it. Many thanks.
Thank you, Sebastian, for these interesting questions. Do we have somebody else in the line for an additional question? Also probably to Stefan for IXM. If that's-
Hi, this is Michael.
Okay, Michael.
Michael.
Please go on.
I have a few follow-ups. Sorry, it's not for IXM, directly, but-
He will start crying soon, I tell you. Yeah, very sensitive.
A few follow-ups. The first one would be regarding the dynamics with tier two customers. I think you had plans to, you know, address tier two customers sort of more proactively. The question would be, where do you stand there, both in terms of progress and the generator in terms of market introduction? Then on IXS, if I remember correctly, two years back, you had also the intention to enter services in IXS more aggressively and provide services to customers. Eventually, you even talked about software as a service for some applications. If you could give us an update on what the status is there, please.
To the tier two customers, yes, they're growing substantially, too. As I said before, the example of Mora, 3 times the sales as last year we are expecting here. This is all about also investing in the right tier two customers, not in all tier two customers. We have to pick the right customers here, too, where we see the growth potential into the next years that they are also able to grow their business technology-wise and also capacity-wise. So far we are on a good way here.
For the generator, what does it mean for the generators is that some of the tier two customers today are really suffering from bad or no support, not getting generators because the top competitors are really focusing on the top business with the tier one customers. The tier two are really suffering-
On the debt. This is why I'm expecting a pretty fast qualification around next year. They need stuff, they need generators, and they want generators to get more independent from the big ones and have us as also here as a key supplier for the entire RF stuff. This is exactly the strategy we're running here. Also with the matches. As I said, we need to select the right ones.
Yes. I can maybe make a comment on matches and PCT, Michael kammerer, and then I'll talk about IXS for your question. I think it's quite clear that Michael kammerer and his team, they have shifted the intent for qualification to the tier twos for the generators. That's been successful this year, and they're actually the ones that are pulling. Changing our focus to move into the tier twos is absolutely the right call because they're the early adopters, and we're already seeing that as the potential. Had we still been focusing solely on the tier ones, which have been named earlier on today in today's session, we'd still be outside looking in on a generator opportunity. That strategy is doing what it's supposed to do, and I think Michael kammerer's team is executing tremendously well to go make that happen.
That's my comment on the tier two generator qualification. On the match side, we're already the market leader in matches. By definition, we're engaged with the tier ones and the tier twos. As Michael's chart showed earlier today, we're taking share in that space. I think I can say with comfort that the execution there is great. That's my follow-on to that question, Michael. The second question you had about IXS was specifically about service. Is it a focus? And then also software as a service. First of all, the service business, don't quote me on the exact percentage, but it's in that range of 25% to 30% of revenue today for IXS.
That's really in line with what you would see from the very large capital equipment providers, with the exception of the company that has the initials KLA. It's quite a bit higher. Other than that, we are making really great progress in making service a significant percentage of the business. Of course, it's at very, very high margin. Underlying that, of course, is software as a service. In my presentation for the IXS division, I showed you a slide that shows the ORS contribution already to, not in numbers, but the work streams that have already been developed by ORS. Those work streams are also salable across several thousand systems in our installed base. You can imagine that being a growth opportunity.
The automated defect recognition capability that IXS internally has developed also is a software opportunity to sell. Now, I have to also be clear, we still need to learn as a company on how to sell software as a service. That's an organizational development activity that we need to go forward with, and that's not an equipment business. That's a different business in its entirety, and we need to learn how to go, extract that. That's probably for another day, Michael. Hopefully that answers your question. Service is a significant part of that business. It's growing. Big part of the margin play for IXS. Yes, we believe software as a service is an opportunity, and we're just starting that adventure.
Thank you. Thank you very much.
Cheers. Thanks for that.
Do we have somebody else with a burning question or even a another good question for the audience? A small one.
Well, I don't have a burning one. That's probably a nasty one. I don't know.
Okay, then. Go ahead. We love this time.
Is that for Stephan?
Yes.
Yes. Probably yes. On module in 2019, you had CHF 65 million sales and probably will be at this level already this year. In 2019, the EBITDA margin was at 28%. Can you help me to understand how the margin is improving now as we had a 16% in H1? What happened in second half, and what does this mean for next year when we are on the sales level seen in 2019? Are we back down on 28% or what are you doing wrong compared to 2019?
Before we answer completely, let's be careful. We're not in a position to be able to give guidance for next year at this point. We'll give you know, a taste, but we're not in a position to be able to say, "This is what we're going to finish this year at," and we're not going to be able to say what next year looks like until we get to our annual review in April.
March.
Sorry, in March. With that exception.
I tried. Sorry.
Well done. Somebody had to ask. Thank you, sir.
Very, very nice try. Let me try to answer that question. Up until 2019, we had a, let's call it a rather sleepy business, where we were optimizing on top of the pyramid, so ahead of the pack, our business just incrementally growing. Obviously, we were able to max out quite extensively on profitability. What has happened sort of behind the curtains already back in 2019, but not to the extent that we've seen in 2020 and 2021, is that we were already investing and preparing our move into this adjacent market of electronics inspection, semicon inspection.
Which is happening right now, but also requires quite substantial investment, not only into R&D, but also to bring the entire organization, sales as well as operations and marketing product management onto a new level into new playing fields. That is what you're seeing, basically.
Okay. Got it. That's very helpful. Then, probably the second one. Well, I think in one month we have Christmas, so probably you will ship the last products in about one month. Not sure whether you will work up to the 31 of December. That said, your visibility should be really great, you know? We have now a deviation of CHF 20 million in on your sales guidance, those CHF 480 million-CHF 500 million. When I make my math on average, you make CHF 40 million sales and we have a deviation of CHF 20 million. This shows a high uncertainty. We're going into November, being November and going into December. What has to happen that you will reach 480? What has to happen to reach 500? The same then on the margin level.
What are the drivers of that that impacts your cautiousness at the moment?
You want to go first or shall I?
Yeah, no, I can start and then you can pick up where I fall short. I don't think there's any reason for us to increase or decrease guidance at this point. I think that we feel fairly comfortable with where we are in that trajectory. I think that, you know, we're always needing to watch about the supply chain, and specifically if there's any logistics constraints going in December that would affect any factory acceptance tests on the X-ray side, any deliveries to Asia. Those are things that we're, you know, trying to model out. I'm very confident in the guidance that we've given for year-end.
Yeah, I just have to echo what Lisa just said. I'm very confident in the guidance that we've given. You could probably take that as bullish for the range if you want to like shade it a bit there, Serge. I have no fear of being in the lower end of the range at all. I think if you look at the consensus that is out there, we're probably going to perform to expectation or slightly above, hopefully. We do have some risks. We do have to go manage it. Lisa just hit one of the key ones. Are we going to be able to ship our product, particularly out of IXS, successfully because it's highly reliant on ports and in some cases, through shipping lanes.
That's a pressure worldwide, as you know. It's also incumbent on being able to do factory acceptance tests. That means installs, which means we have to be able to deploy our field service engineers and our customers need to be willing to allow that installation to occur because they have other priorities as well. Today, the install might be scheduled to start tomorrow, but then they come back tomorrow and they say, "Oh, we've got another piece of equipment that is kind of more urgent for our needs, and so we'll take a back seat." We're moving pieces of a puzzle around. Is our biggest customer supply chain in the industry gonna be able to be satisfied by the rest of their supply chain? We think so.
If that's the case, we're ready to deliver. If they're not going to be satisfied by their supply chain, then that proposes a risk for us because they won't pull inventory ahead. Those are sort of the jigsaw puzzle pieces that we have to be able to manage in providing our guidance. Today, right now, very confident of where we are. It's very likely very much in line with the current consensus. Maybe there's a little leg there, but I can't say anything beyond that.
Okay, thank you much. It's a very fair answer. Thank you.
Thanks.
Thank you, Serge. Not nasty questions, but good question, I have to say. I see that there are probably some follow-ups from Michael or Sebastian. If not, there's somebody else in the line who wants to ask a question. I'll ask the directory, are there any questions that came in over the web? If so, could you please display them on the screen? No questions arriving, so therefore I'd say a last chance to ask a question to the management team here. If not, thank you very much again for participating. Thanks to my colleague for presenting and answering. I think the best to conclude today's presentation is to hand over to Kevin for a final statement.
Great.
A goodbye.
Okay, thank you. I'll try to make this very, very quick. First of all, thanks to the team here. Y'all done a really great job. I hope we've communicated to you our excitement for what's happening in the businesses. I think you've seen that we're quite confident in how we have continued down this path of reorganization, restructuring, new products, new product launches, new market entry in some respects. I'm quite proud of how Comet has managed to go through this pandemic safely. We've been able to protect our employees, and we've been able to protect our customers safely, and that's probably the most important thing, is their health. Thank you for your trust and thank you for your participation today. We really appreciate it.
Let's go off and conquer. Cheers.