Thank you, Anna. A warm welcome to AIXTRON's Q1 2026 results call.

My name is Christian Ludwig, I am the VP Investor Relations and Corporate Communications at AIXTRON. With me in the room today are our CEO, Dr.

Felix Grawert, and our CFO, Dr. Christian Danninger, who will guide you through today's presentation and then take your questions.

This call is being recorded by AIXTRON and is considered copyrighted material. As such, it cannot be recorded or rebroadcast without permission.

Your participation in this call implies your consent to this recording. Please take note of the disclaimer that you find on page 2 of the presentation document as it applies throughout the conference call.

This call is not being broadcast via webcast or any other medium; however, we will make a transcript available on our website after the call. I would now like to hand you over to our CEO for his opening remarks.

Felix, the floor is yours.

Thank you, Christian. Let me also welcome you all to our Q1 2026 results presentation.

I will start with an overview of the highlights of the quarter and then hand over to our CFO, Christian, for more details on our financial figures. Finally, I will give you an update on the development of our business and guidance.

Let me start by giving you an update on the key business developments of the first quarter on slide 2. The important messages for Q1 are: strong new orders of €171 million driven by optoelectronics; revenues of only €59 million due to seasonality, but also limited demand for both power electronics segments.

Nevertheless, this was expected as revenues came within our guided range of €65 million plus minus 10. The gross margin came out at 18%, impacted by negative operating leverage due to low volume as well as a mid-single-digit million euro one-off cost item related to our announced personnel reduction.

Despite the weaker start into the year, we confirm our new fiscal year guidance released mid-April with revenues of €560 plus minus 30 million euros, before 520 plus minus 30. We announced a new greenfield site in Malaysia.

With investments of approximately €40 million in the next years, we will be ready for production by middle of '27. Also, after the reporting date, we successfully placed our first convertible bond in April at very attractive terms, enhancing our financial flexibility.

Christian will now provide a detailed look into our financials on the following pages before I take over with an update on our markets. Christian?

Felix and hello to everyone. Let me start with the highlights of our revenue development on slide 4.

We had a weak quarter due to seasonal effects, with revenues at €59 million, down 47% compared to the €113 million last year. This was not unexpected, as we are fully in line with the quarterly guidance of €65 million plus minus €10 million.

A breakdown per application shows that 52% of equipment revenues come from optoelectronics, 31% from LED/microLED, and 17% from GaN and SiC power, and a 1% contribution from R&D tools. The after-sales business contributed to our total revenues with €24 million.

As this business is much more stable, it only declined by 4% year-over-year. Thus, its share of revenues increased to 40%, up from 22% a year ago.

Now let's take a closer look at the financial KPIs of the income statement on slide 5. I already talked about the revenue line.

Gross profit in Q1 '26 was €11 million. That implies that our gross margin in Q1 decreased by 12 percentage points versus Q1 2025 to 18%.

Please recall this is mainly due to two factors: the negative operating leverage of the revenue decline year-over-year and the one-off expense of a mid-single-digit million euro amount in connection with the announced personnel reductions in the operations area. Both burden gross profit.

OpEx in the quarter went up 7% to €33 million, primarily driven by higher R&D spending compared to the previous year. The increase in R&D cost is mainly due to higher depreciation and higher material costs.

For the full year, we expect R&D costs to be about €10 million higher than in 2025. EBIT for the quarter was at -€22 million.

The decline in the operating result compared to the previous year is mainly due to the lower gross profit, as already discussed. Now to our key balance sheet indicators on slide 6.

Working capital was down by more than €76 million since end of 2025. Several balance sheet items contributed here.

After the strong revenue number in Q4 last year, we now collected the outstanding payments and turned trade receivables into cash. At the end of March, trade receivables were down to €84 million compared to €131 million at the end of 2025.

Advance payments received from customers at quarter-end were €79 million, up about €35 million from end of 2025, primarily driven by the increase in order intake. Advance payments now represent about 22% of order backlog.

Inventory levels were at €295 million, slightly up from the €284 million at the end of fiscal 2025. Trade payables have stabilized at €36 million, slightly up from €34 million at the end of '25.

Adding it all up, our operating cash flow improved in Q1 to €54 million, up by more than €18 million versus last year's €35 million. On the back of the improvement in operating cash flow, free cash flow also improved, came in at €49 million compared to €30 million last year.

CapEx in Q1 was fairly stable year-over-year at around €5 million. For the full year, we expect about €55 million of CapEx.

This consists of our baseline investments plus about 2/3 of the announced €40 million for the Malaysia expansion. At the same time, we have started the process of selling our site in Italy.

Our cash balance, including other current financial assets, as of March 31, 2026, increased accordingly to €270 million compared to €225 million at the end of December 2025. Our equity ratio continues to be at a very healthy level of 85%.

Now an update to the convertible bond. Subsequent to the reporting date, we successfully completed the issuance of our inaugural convertible bond in mid-April.

We placed €450 million with a 5-year maturity and a 0% coupon. This transaction is accretive to earnings from day one, as the proceeds can currently be invested in low-risk money market instruments at yields of around 2%.

We intend to use the proceeds for general corporate purposes, which may include investments into organic growth potential, M&A, and also, when appropriate, share buybacks. With that, let me hand you back over to Felix.

Thank you, Christian. I would like to continue on slide 8 and give you an update on key trends in our different markets.

I will start with optoelectronics, which clearly was the most dynamic and decisive market for AIXTRON in the first quarter, before we briefly touch GaN, SiC, and LED/microLED. In optoelectronics, Q1 marked a clear inflection point for the company.

We saw exceptionally strong order momentum, with optoelectronics accounting for well over 2/3 of total order intake during the quarter. This performance was primarily driven by laser-related datacom applications, where customer demand exceeded our expectations.

The catalyst for this is a fundamental shift in the datacommunication architecture of AI data centers. Until now, data in these systems have largely been transmitted via copper cables and only sporadically via optical connections, and if so, with comparatively low data rates such as 100G.

Now the industry is making a technological leap. In the future, optical connections with the highest data rates, namely 800G and eventually 1,600G, will increasingly be used there.

This is not a gradual advancement, but a genuine architectural shift. It is precisely this shift that is leading our customers in optoelectronics to massively expand their capacities.

A huge number of additional wafer starts are required for this new type of connectivity, and this in turn triggers significant investments in new and expanded manufacturing capacities. Recent multibillion-dollar investments made by Nvidia and other ecosystem players are accelerating capacity investments across the datacom value chain.

This in turn is enabling laser manufacturers to expand their epitaxy capabilities, directly benefiting AIXTRON. Therefore, we expect this wave of investment to continue over several years, extending well into '27 and beyond.

In a first step, copper connections in the AI data centers will increasingly be replaced by fiber optics, and slower optical connections get replaced by faster ones, the so-called scale-up. In the next step, the industry plans to significantly increase the number of connections within the data centers once again to enable even more powerful and intelligent AI systems, the so-called scale-out.

Finally, data traffic between data centers will also increase sharply, the so-called scale-across. This too will require additional optical connections and thus more lasers.

At product level, our G10-ASP platform continues to see very strong market acceptance and represented the majority of volume orders received in Q1. Customers are ramping aggressively to support the growing demand for EML- and PIC-based lasers used in AI-driven data center infrastructure.

From a technology perspective, most systems ordered today are initially configured for 4-inch wafers, but are already equipped with 6-inch conversion kits. This enables customers to transition rapidly as soon as larger wafers become available.

Datacom lasers are a performance-driven application where yield is absolutely critical. These devices require multiple epitaxial growth steps, meaning that even marginal improvements at wafer level can have significant multiplied impact on final yields.

This is where we clearly differentiate. Our systems control uniformity at wafer level rather than at batch level, enabling consistently superior results layer by layer.

A key reason why customers increasingly standardize on our tools for advanced photonics devices. Overall, with many multitool orders extending beyond '26, we are confident that we are seeing the beginning of a new structural growth phase in optoelectronics.

Now let me turn to gallium nitride. In GaN, demand remained stable but soft in the first quarter, contributing just under 10% of total order intake.

While near-term growth remains limited, we see customer utilization gradually improving, and we expect demand to pick up again at some point. This may be later in the year or in the first half of next year as fab utilization increases.

Strategically, AIXTRON remains well-positioned across 150 and 200, and increasingly also 300 gallium nitride, with systems installed at multiple customers. In silicon carbide, market conditions remained soft in Q1, reflecting ongoing underutilization across the industry.

Customer utilization rates in silicon carbide, however, are gradually improving. When exactly the increasing utilization converts into additional volume demand is too early to predict as of now.

Importantly, industry analyst data confirms that AIXTRON tools remained the number one choice in silicon carbide epitaxy during 2025, even in a cyclically market environment. This once again underlines that during periods of underutilization, customers prioritize tools with the lowest cost of ownership.

Looking ahead, new device architectures such as superjunction silicon carbide are expected to significantly increase epitaxial complexity and layer count, a trend that clearly plays to the strength of our batch reactor technologies. Finally, LED and microLED applications had no material impact on order intake in Q1 '26.

Investment activity remains cyclical and at low levels, with spending largely driven by Chinese end users primarily focused on AR and smart glass applications. Several customers are also working on devices for datacom short-reach applications, and we may see incremental orders later in the year or in '27, depending on the success of this technology.

During the first quarter of '26, we also took an important strategic step to further strengthen AIXTRON's global footprint by deciding to establish a new manufacturing facility in Malaysia. The site in the Penang region will focus on assembly and testing of selected 100, 150, and 200 systems for our Asian customers and will allow us to leverage a highly developed local semiconductor ecosystem.

This investment of around €40 million, with start of operation planned for '27, enhances our competitiveness, improves supply chain resilience, and brings us closer to our customers in Asia, while fully maintaining our strong R&D and production base in Europe. Importantly, this move has no impact on our financial guidance for '26.

With that, let me now move to our guidance. We confirm our increased guidance for '26 as published mid-April.

We expect revenues to come in at €560 million in a range of plus minus €30 million. At the midpoint, this is an 8% increase to our previous guidance.

We expect gross margin of about 42% and an EBIT margin between 17% and 20%. The guidance for the gross margin and EBIT margin includes one-off expenses of a mid-single-digit million euro amount in relation to the announced personnel reductions in the operations area.

The measure will lead to an annualized savings of a similar magnitude in the future. For Q1 '26, we expect revenues of €110 million in a range of plus minus.

Again, as stated before, the implications of the geostrategic turmoil are unclear. We continue to closely monitor the developments worldwide, in the Middle East, and particularly in connection with the conflict in Iran.

Potential impacts on energy prices, supply chains, financial markets, as well as investment and demand behavior are continuously analyzed. If necessary, we will respond appropriately to risks that could negatively affect our business performance.

With that, I will pass it back to Christian before we take questions. Christian?

Thank you very much, Felix. Thank you very much, Christian.

Anna, we will now take questions, please. For fairness reasons, I would like to ask everybody to limit himself or herself to two questions in the first round so that we get a chance to get everybody who wants to ask a question also to ask his questions.

Thank you.

Hi. Thanks for taking my question.

My first one is on opto. I understand that you have a very good visibility, and we already talk about visibility beyond '26.

I think at the last earnings call you did not fully commit to growth on that division in '27, considering the very high comps in '26, I guess maybe it has changed. Also more broadly, when customers like Lumentum or Coherent talk about more or less doubling capacity again next year, is there any reason why that would not translate proportionally in terms of orders due to improving yields or the transition towards 6-inch wafers, for instance?

I have a follow-up.

Thank you very much for the question, Martin. In fact, the transparency from customers now throughout '26 and also '27 significantly has improved.

I think the key point was the announcement of Nvidia to make those investments into Coherent and Lumentum, which we saw early March. Since then, literally many of our opto customers, not only the two names, but also the other big names, have been in very close contact with us with multitool orders for '26, also multitool orders extending well into 2027, and others sharing forecasts in '26 or across '26 and '27.

The transparency, as you're assuming, has in fact significantly increased over the last I think literally 8 weeks, yeah, and it really started only early in March, yeah. Now as we have this transparency, we have, as you hear from us, a high confidence for the '26.

We've been able, thanks to the booming market on the opto side, to increase our guidance. The power market remains soft, as I just highlighted, yeah, but the opto market is really really increasing.

That also gives us at least a very positive feeling for '27 with the customer forecasts, and from some customers already literally orders going into '27.

Okay. I know you don't give precise forecast or anything, but is it fair at this stage to assume growth in '27, or is it maybe a bit too early to say?

You ask very early [laughs] about the question. I think we're seeing a good momentum of optoelectronics extending well into 2027.

We can clearly say that. That leads me to believe that we have already a solid base for '27 from the optoelectronics.

As mentioned earlier, at some point, but it's too early now to predict the exact timing, at some point we expect the market for GaN power and silicon carbide power to come back. We don't know exactly when this is happening, whether this is at the end of '26 with revenues and orders in '27 or early '27, but I think at least there's a good probability that the power market is also coming back in '27.

If the power market comes on top in '27, yeah, if that really does materialize, then we would see a growth in '27 on top. Yeah.

Okay. Thank you very much.

The second question then, the convertible bonds. Can you give maybe a bit more color on what do you think you will do with most of the €450 million?

You talked about M&A, what do you think could be the ideal target? What can it look like for AIXTRON?

Is it to complement your existing MOCVD markets or potentially going to different materials and so on? Also when you talk about share buyback, do you aim for this to be quite a regular policy, or do you anticipate to be more opportunistic about it?

Martin, very good questions. To be honest, that wasn't really planned, the convertible, yeah?

We just saw a really great opportunity over the last weeks that we couldn't resist, yeah. We all lived together through heavy volatility over the last years, which we not always liked, yeah, but now we have been able to leverage that volatility for a really great deal.

Overall, that gives us additional financial flexibility for basically no cost, and is directly accretive to earnings. That's basically what it is, yeah?

It was just an opportunity, a ball laying there that we had to kick into the goal, to be honest, yeah? There's not too much more behind it.

There's no direct other opportunities that we are pursuing here.

Okay. Thank you very much.

On the share buyback, maybe to complete that, that is something that might become a topic in the future. Probably not at this share price level right now.

Got it. Thank you.

Hi, everyone. Thank you for taking my questions as well.

I'm just trying to understand the magnitude of the opportunity on the equipment side in opto a bit better, and I wanted to ask, do you have a sense of the installed base of AIXTRON machines used in data center and optical networking applications today if you completely exclude anything that goes into consumer VCSEL applications? That's my first question.

Honestly, that's a very difficult question. Also I don't know whether that question is helpful if you're trying to triangulate something and correlate that to demand.

Let me explain to you why. The optoelectronics market is a market which is characterized by a very high technical complexity, many layers being done, and there is many, many, many old systems of AIXTRON out there.

Some systems are running at customer sites for something like 30 years because the customers, if you think about optical communications for an undersea cable across the ocean, very long qualification and a huge hesitance by customers to change. There's many tools out there which may be just running, let's say, once a week, yeah, for a day or something like that, just to produce a few devices to keep a certain design for a certain customer running, yeah.

The installed base of tools which is out there is not really an indicator about what could be filled up, yeah. I think a certain part of the installed capacity, I would say of the more recently installed capacity, let's say capacity from the, I don't know, last 5 years, last 8 years, may now be filled and may be utilized for the current volume and for the current boom.

I think there may be many, many, many, many, many systems, yeah, from the last 20, maybe not even 30 years out there, but they will not be used now for the newer generations of devices, yeah. Also on the laser devices, the complexity of designs has significantly increased, sophistication has increased.

I would say, yes, there is a certain set of tools which now still be used and filled in terms of capacity, but also what I hear from customers in terms of demands, I would say to a very first-order approximation, a lot of the capacity which needs to be brought online needs to be also newly installed. Sorry for the long answer.

I tried to give you a bit the background of what's going on.

No, that's super helpful. Thank you.

Then just the last follow-up from me. Based on what you know today, how much do you think the tool and equipment market needs to grow in order to meet the upcoming demand for the next couple of years?

Are we talking about a doubling of the number of equipment needed, a tripling of the number of equipment needed? Just anything ballpark-wise would be very helpful to understand.

Thank you.

That's a very good question. I think in the end it depends.

It's, unfortunately, in our area always a bit difficult to say, right? Because there's questions of yield, of wafer size, and many other variables, right, which go well beyond what we can influence or what we do influence directly with our equipment, but many elements which lie more in the hands of our customers and their processes and process flows after our tools, yeah, and things which are not in our hands, we can only take guesses, yeah.

I would say if you assume a market on the optoelectronics side somewhere in the range, my first guess, 80 to 100 tools for the laser communications, I think that might be a good approximation of order, and maybe it's 1/3 less or 1/3 more, but as to give you a house number.

That's 80 to 100 of needs to be installed or is already installed?

That needs to be installed every year.

Super. Thank you very much.

Good afternoon, guys. Thank you.

[clears throat] Thank you for taking my questions. Firstly, just a clarification on the previous answer you gave, 80 to 100 tools that need to be installed.

Are you talking about G10 tools or are they G4 equivalent? If you could just clarify that, that would be helpful, and then I've got a question.

It was talking about G10.

G10, okay. Essentially, give or take €4 million, so that alone, you're looking at €300 to €400 million opportunity per year.

Is that the right way to think about it?

Not too far off.

Then maybe just following on from another question that was asked previously. You said earlier that your order intake from optoelectronics was €118 million in the quarter.

Visibility is rising. Clearly, if you listen to Lumentum, Coherent, Applied Opto, and the others out there, they'll all be deploying more next year than what they're going to take this year.

If I take the 118, call it 120, nice round numbers, I can work my brain around easier mathematics. 120, if you assume it stays flat, is there any reason why your optoelectronics revenue next year can't be at €480 million next year?

What would be your pushback to that argument?

Honestly, you are thinking further into the future and in more precise detail than I have been. Thanks for asking the question.

Honestly, my thoughts haven't evolved so far that I could give you a credible answer.

Okay. Then just a quick clarification on the second quarter.

When I think about the Q-on-Q increase, you talked about opto coming in and contributing, but would opto be the biggest driver of the sequential increase in revenue, or is there a significant chunk also coming from GaN?

I think for the year 2026, what we see at this point in time, opto is clearly the driver. Please also take into account opto has many subsegments, right?

We are currently talking about the lasers for the datacommunications, yeah. We also still have some customers doing some work on VCSELs.

As I mentioned in my prepared notes, we have some customers playing at this point in time on a lower level on LED/microLED, which now has turned more to AR glasses, right? Very small displays, also with the vision to say let's move to AI, yeah, just voice input rather than keyboard input, right, and use the AR glasses.

There still is a market on plain vanilla red LEDs, yeah, which also typically takes quite a number of tools, quite some wafer area. This is then on gallium arsenide.

The opto overall is the biggest part. Lasers is a subsegment of that, currently the booming and fast subsegment, but the other markets are also there.

Let's not forget that. Very clear, come back to your question.

In '26, opto is by far the strongest segment, yeah, very very clear. As said before, also the question from Martin earlier on, gallium nitride and silicon carbide will come back on top of that at some point.

We don't know exactly at which point in time and also we don't know exactly in which order of magnitude. This was also the reason for us to add the strategic flexibility with our plant in Malaysia.

At some point, big volumes may be coming, and then we want to be ready with a flexible supply chain to really catch the wave when the next wave is coming. Our strategy is we always want to prepare for a wave, we want to be ready to catch the wave in full, yeah.

We want to catch a good market share. We don't want to disappoint any customers, yeah.

We really want every customer who wants to order, want to give the customer a tool when exactly he wants it, yeah. This is also a big and important capability.

Therefore, we cannot predict the future, we can just prepare to be ready when the future comes.

Got it, very clear. Since you mentioned microLED, can I ask a follow-up or I can rejoin the queue if you want me to?

Please rejoin the queue, be fair to the others, but you will have to take your question at the end again.

Thank you.

Thank you.

Hi. Thanks for letting me on.

My first question was on gallium nitride. Specifically, you mentioned that utilization rates have been improving in the quarter.

I was wondering, have you been getting any sort of feedback from gallium nitride customers as to if the timings have improved, as you mentioned, sort of second half this year, first half next year, on orders? Are you getting any increased visibility on that end from your customers?

Unfortunately, not yet, yeah. As said, we see some tools and utilization improving, but we don't know exactly, the one thing is we see how tools are filling, yeah, but the question is then is it just the capacity installed at the customer good enough, yeah, or is the customer preparing for a ramp because the customer of our customer is coming with big orders, yeah, where the customer needs an expansion, yeah?

Normally things don't just linear improve, but normally we know in our industry, right, at some point somebody has a big design win, somebody then has a big contract to fulfill, and then if such a big design win and contract has to fulfill, that's the trigger point for next stage of a capacity expansion, yeah. This is kind of how it works.

Our transparency and visibility into this dynamic, which happens again besides our customers, yeah, on their customer of customer side, to say, is quite limited, yeah. We don't know.

That's super helpful. Then my follow-up is on sort of your inventory levels.

In the previous upcycle in silicon carbide, we saw that your inventories in 2023 increased by roughly €150 million. As you mentioned, you're sort of now preparing for the growth where you're expecting to come in the medium term from both opto and GaN.

As we look through 2026, do you think that you'll be then taking the steps to increase your inventory levels through the year so that you're ready for the growth in 2027 and 2028? No,

we are changing our model. We have done a lot of work on operations in the soft years, in the last two soft years.

The last upturn we were not prepared for. We've done now in the last 2 years done a lot of work on our operation side.

We've improved our internal processes. We've closer worked with our suppliers.

Yes, at some point when our shop floor is full of machines because we are shipping more in a quarter, yeah, due to the simple WIP, yeah, there may be some certain increase. We have changed our operations from a build-to-inventory, build-to-stock, yeah, to a build-to-order model by reducing throughput times, reducing build times, and so on and so forth, yeah.

The next ramp, I don't want to go to such high inventory levels as we have seen in the past, yeah. This was not healthy, yeah, and we rather want to work with a stronger, more streamlined operations on this side, yeah.

It's too early to quantify the effect in the details, yeah, but from a direction, I do not want to repeat the mistakes of the past.

Okay. Thank you.

Thank you very much for taking the question. I had one related to that last point.

It's just around your production capacity as things sit today, what you're preparing for over the second half of this year and into the first half of next year, and in particular, as the Malaysia site starts to ramp, what will that mean in terms of the incremental capacity? If you're at mid-500 to 600 million euros of revenue for this year, what is the, given the change in business model that you've just described, Felix, and the new site being added, what's the theoretical uplift in terms of your annual revenue capacity?

Oh, it's very very far far far up. Think of us to first order from where we are today that capacity is not a limit.

Okay. That's good to hear.

I suppose, maybe asking it another way, was this something that had been in the works for some time and it's just a coincidence that the announcement is happening just as we're also seeing this huge ramp in terms of opto demand, or have you been able to react quite quickly to the change in market dynamics and find the site and get moving in terms of the capacity expansion?

Oh, thanks a lot. Very good question.

The trigger point for the Malaysia side is not the opto demand and the spike in opto demand is not the trigger point for the Malaysia site, yeah. This is uncorrelated, if you want to say so.

What we have seen is rather we have seen and got signals from customers that they see over the next 2, 3, 4 years more on a strategic level that they see potential upsides for the power electronics in particular, but also for some segments on the optoelectronics. Customers came and said, "Look, AIXTRON, if you're able to serve markets at a lower price point, well, there could be much, much, much and very significant upsides on this one," yeah.

We've been asking ourselves, "Well, we clearly want to take those upsides in terms of additional volumes. How can we come to price points that the customers have been asking us, that they said, 'Well, this is what they need such that they can address this and open up these new market segments'?"

We have then looked around the globe what we could do, yeah, what we need to do in order to meet such price points. We found the answer in the very strong Southeast Asian ecosystem, which allows, on the one hand, lower cost for the assembly of the products, but also has a very strong supply chain, a very cost-efficient supply chain, especially for more mature and older components, yeah.

That was for us from a strategic point, not from a short-term tactical point, the reason to say, "Let's open this plant in Malaysia in order to fully participate in the upcoming probably 2-, 3-, 4-year wave of power electronics volumes that is also set to come, as I mentioned, on top of what we see in optoelectronics now." It's a strategic move.

Understood. Thank you for that detail, Felix.

Good afternoon. Thanks for taking my questions.

Starting with a shorter-term one, you still need €185 million of orders for the midpoint of your guidance, and that essentially to be in the second quarter. You're also talking about longer-term contracts, obviously.

That sounds like order intake in Q2 might be 200-plus or even well above 200. Is that a realistic way to think about it?

Honestly, I didn't do the math on the numbers yet when exactly the orders are coming in, yeah.

Okay. Let's say the logic, 185 that is still needed in terms of orders to get to this year's guidance and that this should happen in the second quarter, I think that logic is right, or let's say until early Q3?

Exactly. I think round about you could say so, yeah.

All right, understood. Then once back to capacity, because you just said capacity is not a limit.

My understanding always was that there is still some limit. Still, let's say you're let's say getting flooded with orders now, north of 200 each and every quarter, would you be able in today's setup without having Malaysia yet be able to, let's say, generate sales of 800 or well above 800 or let's say where is the physical limit right now in terms of how many tools you can ship in a certain quarter, for example?

We always need a little bit of time to prepare our supply chain and to prepare everything and get ready for it, yeah. We cannot go from €59 million in the first quarter to 200-something in the second quarter, right?

Something like that would not work overnight, yeah, because it would be just inefficient to have people sitting around and waiting for the orders to come, yeah. However, as I mentioned, it's not the premises or the space or whatever that is limiting.

Out of our footprint, manufacturing footprint, with enough ramping time, we are currently, for example, working out of a one-shift model. We can go to a two-shift model, we can go to a three-shift model, we can go to a three-shift model plus Saturday work, three shifts plus Sunday work, yeah.

We could significantly increase the working hours, yeah, the effective working hours out of our existing premises if then the orders are there, yeah. Coming back to your concrete questions, €800 million in a year means 200 per quarter, no problem.

We have demonstrated 200, I think 220, 230, or something like that recently in the fourth quarters, I think of '24 was the last time we did it, yeah. If you just say, "Well, AIXTRON can do 250 in a quarter," yeah, multiply by 4, then you're at 1,000, yeah.

That's still all in a one-shift model. If you then go to a two-shift model or would include weekends and so on, then you understand very easily why I say it's not a limit, yeah.

With a bit of ramping time, we can also out of today's production footprint and facilities generate significant upswings. Maybe that gives a little bit of light on your question.

Absolutely, very clear. Thank you.

Operator Anna, we'll take the next question then.

Okay. Sorry.

Go ahead.

Sorry about that. That's fine.

Thanks for taking my question. I wanted to circle back on the 80 to 100 G10 opto tools Felix gave.

How should we frame that exactly? Is this sort of the demand that you're seeing in coming years?

Should we think about it as in perhaps in this or next year, closer to the lower end of that and perhaps towards '28 more at the higher end of that, and is there upside to that number? Thanks a lot.

The line quality was very bad. Let me try to repeat the question as I have gotten it, and then you please correct me if I'm mistaken the question.

What I've understood is that you were asking about the 80 to 100 tools, how we should see it, what needs to happen more on the upper versus what needs to happen more on the lower. Is that question correct?

That's it. Thanks.

Okay. Honestly, I think you ask for a level of precision that we do not have.

I think 80 to 100 somewhere is a ballpark number, and please also take that I said I expect the number to be around that level, yeah, maybe 1/3 less, maybe 1/3 more, yeah. You could say also 90 plus minus 30%, yeah, you could say 60 to 120, yeah, if you want to say so, right, to really really be clear what I said earlier, yeah.

Just to give a rough indication on the size of the opportunity. Now to your question, what needs to happen whether this comes more to the lower end or what needs to happen for this to come out more on the higher end.

Honestly, we don't know, and also our customers don't know. The interesting point is we had many discussions now in the last 8 weeks with all the major laser producers, and many say that even they don't know how much volume and output is needed because there's still many architectural questions of the network evolution which are not so clear.

We see now that agentic is shifting the model again a lot, yeah, with much more CPUs needed in front of the GPUs of the network, yeah, also agentic creating much more data traffic. On the other hand, the predictions of the industry apparently have been wrong until now, yeah.

One customer explained to me that he said, "Look, all the data points have been derived essentially from the phase where all the LLMs were just being trained. Now we are seeing now that the AI is so good, yeah, that people really start using the models at scale.

Now as the models are being used, we see that it's a completely different loading pattern of the network compared to the training phase." I think there's a very big error bar, as I understand, also from our customers, yeah.

I had customers who said, "Look, on our long-term plans, I need 30, 40 additional tools, but honestly, Felix, I don't know whether I need them in the first half of 2027 and the second half of 2027 or maybe only in the second half of 2028," yeah. That's the answers I get from the customers.

I like to pass that on to you, yeah. There is a big market, yeah.

We give you a rough quantification on it, but I think anything for detailing and out, at least when I talk to my customers and ask them, "Hey, give me a precise forecast," my customers tell me, "Felix, I would like to, but I don't know it myself."

Got it. It's very helpful.

Thank you. My second question is, I was wondering if you could give a bit more color on the mix of your customer base for optos.

Obviously, you have the two major indium phosphide players in the US. They're ramping up capacity significantly.

Do you see sort of a broadening out of the customer base in optos? Perhaps we've been hearing about Chinese laser manufacturers that they're also ramping up capacity.

Just wondering kind of how you see that?

Good question. As always, we never give names, right?

We always preserve customer confidentiality. I think that is clear.

What I can share is that today already, yeah, from the orders that you have seen and the market opportunity that I was describing, our customer base is truly widespread and truly global. Let me give you some examples.

There is multiple big names from the United States. I think throughout this call, many of those names have been put out.

We have very big names of the opto demand from Europe or some US players producing in European sites, yeah. We have very strong demand with many big multitool orders, multi-year, multi-tool from Japan.

We all know that there's a very strong, very very innovative optoelectronics industry grown over many, many years in Japan. The same holds true from very well-established customers and producers from Taiwan, yeah.

We know Taiwan has a very strong ecosystem. In fact, also as you have indicated in your question and earlier in this call, China has a very strong optoelectronics production base, and we have also strong multitool orders from China.

We can say at this point in time that the opto demand that we are seeing is truly global. I think it happens also truly global in all parts of the world at the same time, yeah.

That's not like a wave staging or one part has started, the others are behind. I think the whole industry at the same point is now waking up and starting the ramp.

This is the picture that we have.

Got it. It's very clear.

Thanks so much.

Hi, good afternoon. Thanks for taking my question.

Just the first one on optoelectronics. Just wondering from your discussions with customers, what are the main bottlenecks or constraints that they're talking about to receiving your tools?

Are they talking about cleanroom capacity and so on? How do you see sort of facility or cleanroom capacity through the next couple of years?

Then the second question I had was just on the middle lines of the P&L, obviously talking about pretty huge revenue numbers coming through from opto, and just wondering what needs to go into the middle lines of the P&L to sort of capture that opportunity and to service that opportunity? What kind of degree of operating leverage should we expect from this large revenue number you've put out?

Thank you. Hey,

let me take the first question and I pass the second then to Christian, yeah? In terms of the bottleneck, I think it really varies customer by customer.

Some customers have existing fab capacity and cleanroom space. These guys can go directly order tools, install the tools, and start the ramp.

We see from other customers, and as I have highlighted with a previous question from Oliver, right, some customers it's global, yeah, it's truly global. Some customers don't have enough cleanroom space, some customers are now chasing cleanroom space or building new greenfield cleanrooms or buying brownfield sites and retrofitting them.

It's truly diverse, yeah, on that one. The other topic is what we hear across all customer base is wafer supply is a shortage.

I think the topic is very well known across the industry, yeah. Indium phosphide wafers are scarce because nobody was expecting this.

However, of course, as always, the semiconductor industry, once there is a bottleneck, takes a lot of resources and resolves the bottleneck, yeah. I'm not concerned that this is going to cut off the boom or anything, yeah.

I think investments are being made, money is available there, and we know that a lot of activities are ongoing. I think that's the two main topics, yeah, literally cleanroom space and wafer supply.

Apart from the normal challenges of growth, right? Ramping significantly, I think everybody's quite busy, and also the operations team of our customers are very, very, very, very busy these days, I think.

That's clear. That's normal in a ramp in our industry.

Understood. Thank you.

Then

taking over the question to the margins, the opto tools are in general running at the upper end of our margin profile. All of that development is fully reflected in our guidance, yeah, and in the bandwidth of the guidance that we have put out.

Fully reflected. No surprises coming from there, yeah.

Please don't forget, yeah, in the guidance is reflected the one-off expense, so that's about 1 percentage point that is dragging down the margin, yeah. We have repeated that several times, but just to not forget that.

Just on the middle lines of the P&L, maybe you're not expecting sort of huge amounts of investment needed to sort of capture this opportunity?

What do you mean with the middle line of the P&L? Sort of

like SG&A, R&D, etc. No, no,

no, no, no, no. There's no impact on the OpEx.

Of course, we are running the R&D. In the SG&A anyway not, yeah.

In the R&D, we are running our program. We've given you the number of around €90 million.

That's the number that we expect this year. No additional R&D expenses now expected from the opto boom.

That's fully reflected in that.

Understood. Thank you.

Hi. Good afternoon.

Thanks for taking my questions. I just have two quick ones.

The first one is also on opto. Based on your new guidance, the opto business would probably more than double this year.

Can you just disclose what is coming from tool sales and how much is coming from ASP or price? Should this ASP effect also last into 2027 as you grow the share of G10 tools in the mix?

That's the first question. This

I didn't get it in full because the complete upswing comes from tool sales. I didn't get it with ASPs.

Can you repeat?

I guess my question is basically what is the mix between G10 and G4? Basically, what is driven by sales price this year and next year, by ASP mix as you sell more G10 versus G4 tools?

I would say probably around 70% G10, 30% G4, maybe something like that. Now the G4s, some of the G4s go into the laser segment, yeah, because laser customers are still producing on the older series.

Some of the G4s go into the what I mentioned earlier, red LED segment, yeah, which is a very cost-sensitive segment. The G4 has a can have very different margin profiles, and you can have a G4 which is kind of, let's call it, minimum and base configuration.

If you open it up, yeah, it's almost empty, yeah, and then you can have a laser G4 and it's just full, yeah. Think of a whatever, put put a 150 horsepower versus a 400 horsepower into a car, yeah, is a different different looks different under the in the car, yeah.

A bit of a of a variety on that one. In terms of mix effect, I think going forward it will have a a positive mix effect.

Again, right, the the G4 is going into the LED segment, they are quite a drag, yeah, because that's a margin-weak segment. Honestly, I don't have the full transparency to answer the question in real granularity, I just recognize.

All right. No worries.

Maybe just to follow up on competition, right? Given there's quite a strong growth in the opto area, what's your view on competitors there?

I think Veeco has recently announced a few orders for the MOCVD tools for indium phosphide. I guess so of that kind of market number you mentioned, the 80 to 100 tools, what is your expected market share there also over the next couple of years?

Do you see any players getting stronger, maybe also from China?

Yeah. We take competition always very serious and we make sure that we watch all the steps of competition.

In the orders being placed in the starting of the boom, we have not seen the competition yet. We're aware of two competition tools that got ordered.

We are not aware of more orders, yeah. We take them serious, but we really take care of our customers to make sure that we have a high market share.

Got it. Thank you.

Oh, thank you, guys, for fitting me in. Just one question really.

Felix, you always give very technical answers, which I like. You talked about datacom applications for microLEDs.

Can you talk a bit about what the use cases will be for microLEDs as opposed to lasers? Where will lasers be used?

Where do you see microLEDs being used? How does this affect tool demand from your perspective?

If you let's say, for a 1.6 terabits per second link, I don't even know if microLEDs can be used, but assuming they can be used, does it mean one machine you sell an equal number of microLED machines and if the laser was replaced by microLEDs when compared to laser machines? Any color around what it means for you from a tool perspective would also be very helpful.

Thank you.

Very happy to take the question. As always, technical evolution and innovation continues and things change over time.

I think that's part of our industry. I think in a first order, I would see microLED and the lasers, what we are seeing now, the EMLs and the PICs and the co-packaged optics, I would see it as complementary.

Let me explain why. Right now, what we are seeing for the scale-up and for the scale-across is that we see the lasers being used to connect multiple GPUs, multiple racks in a data center, yeah, multiple servers in a data center.

We talk about slightly longer lengths of kind of optical cables, if you want to say so, yeah. We can all imagine that, yeah.

We know the pictures how it looks inside, and you know the hundreds or thousands of cables going to the backside of the rack, yeah. Now, to our understanding, and also these EMLs and PICs are being used, it's indium phosphide what we are talking, yeah, indium phosphide wafers.

It's arsenide phosphide tools, the G10-ASP that's being used for that. The microLED efforts for data communications that we are involved with is mostly gallium nitride-based, completely different material system, completely different tool, yeah.

We talk about a G5+ for example tool, yeah, not the G10-ASP. What we see is that some customers, multiple startups, yeah, are working on this microLED communications, comma, however, for very short lengths.

We are not talking about connecting one rack to another, let's say a couple of meters away or a couple of hundred meters in a data center away, but we rather talk about connecting, let's say, a high-bandwidth memory with the GPU, yeah. Literally things that are co-packaged on an interposer, yeah, with some, for example, a glass substrate.

People also are trying to put 300 silicon carbide substrates to etch some waveguides into this, yeah, literally semiconductor manufacturing techniques that's being deployed here, co-packaged things, yeah, for the very short range, in the end to have a higher bandwidth connect, for example, from a high-bandwidth memory to the GPU, yeah. Higher bandwidth means more speed, or also benefit less energy consumed, yeah, because the connection by optical can have less energy than if you do it by copper, yeah.

To a first order, I would say the aspiration for microLED in this is the very short haul versus what we talked now, the indium phosphide is rack-to-rack, server-to-server, data center-to-data center. It's longer haul, means meters, hundreds of meters, kilometers, yeah, through optical cables.

Again, I think that's the starting point, yeah, and we all know that then over time innovation continues and boundaries blur and boundaries get shifted and things change. I think at least that's the activities that we are aware of now in the first quarter '26.

Understood. Do you have any timeline around when this might happen, microLED connections between chiplets?

No,

it's exploratory. I think, unfortunately, probably it's going to happen like it happened now.

Sometime it happens overnight, and then we have a ramp. [laughs] I'm afraid it's going to happen like that.

[laughter] But I think it's not

going

to happen within this year. [laughter]

Of course. Great, thank you very much.

Hi, good afternoon. Thank you.

Hate to say, but I'd also want to follow up on the opto outlook and the 80 to 100 tools or 60 to 120. I can imagine that range being quite wide on an annual basis, but perhaps it's then good to talk about some of the underlying assumptions, I guess in terms of form factor, is there any difference between EML CW?

I think we've discussed this before, but it will be good to just get your latest views. Maybe more important, I can only imagine that these numbers include a full scale-up opportunity rather than sort of the situation where we're in today.

I guess maybe to add to that, I could imagine that 80 to 100 number to be maybe not completely applicable yet to the very near term, but more towards the end of the decade. I'll leave it there because there's a couple of questions in there already.

I do get your question, but unfortunately, I can only repeat and shine some more light on what we've indicated earlier on, that it's too early to predict, yeah, because it depends on so many factors, yeah. The one factor we've outlined is, yeah, what happens on the scale-up versus the scale-across, right?

The other factor is on the tool side literally, what speeds are the linkages happening, right? If you go to higher speeds, for example, you need stronger lasers, yeah, because then the modulation consumes more energy, yeah.

If that consumes more energy, you need to pump more light in. To pump more light in, you need a bigger laser chip.

For a bigger laser chip, you need more wafers. Look, there is so many variables.

I think we are probably just aware of a number of these variables. The error bars on each of these variables is adding up.

I think we can only guess, yeah, make a rough assumption, yeah, to give an order of magnitude. That's my attempt, to give an order of magnitude.

To put it in precise numbers, I think it's too early. It depends on too many factors.

No, no, I totally get that. That's why I was a bit surprised, because 80 to 100 is actually a pretty narrow range.

This makes sense. I guess, yeah, scale-up environment, scale-across, and the speeds necessary, I guess those will be the most significant drivers from an end-market perspective, and then on the supply side, it's more about yield, etc.

I think you've said before that the industry is really good at solving bottlenecks. Today, it's more, as you said, cleanroom and especially the wafer substrates.

Have you been doing a lot of work over the last, I guess, 8 weeks and maybe beyond that? I can imagine of sort of working with customers or customers coming to you to see how they can improve yields in the process?

Is that something you can provide a little bit more visibility on in terms of, in the past, I think there were a view that yields are quite low in that sort of indium phosphide space. There is a view that those can improve.

Has there been sort of a push relatively recently where you guys are involved to make that happen?

Not so much. I think in the end, the processes that our customers are run have many, many, many, many, many, many steps, yeah.

Sometimes not only one epi process, but sometimes multiple epi processes. I think at this point in time, most of our customers are really focused on getting the ramp done, yeah, to really achieve that.

I think at some point, additional work will go at doing yield. I think the yields are less a topic of the epi tools.

Our tools are helping our customers to produce the best yield that's available in the industry. That's the reason why they chose the AIXTRON tools, yeah.

I think when you talk about the yield or the line yield, yeah, which is all the process steps one after another, that's not only about the epi tool, but that's literally the connection of all the hundreds of process steps that are running within a customer factory, yeah. Normally, especially the opto side, customers are running very different recipes, yeah.

They all have their process secrets why they differentiate. I would say especially our opto customers are very, very secretive and are very keen on preserving their process recipes for themselves.

Understood. Thank you very much.

Thank you very much, Anna. Thank you all for listening and for the very good questions.

If there are any questions still open, the IR department is at your disposal, please give us a call. We will be on the road the next couple of weeks, hopefully I'll see a lot of you in person.

For those we do not see, we'll talk to you at the latest on our Q2 call, which will take place end of July. Have a great weekend for those at least who have the 1st of May holiday, and for the rest, a nice Friday.

Goodbye for now.