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Edited Transcript of AIXA.DE earnings conference call or presentation 26-Jul-18 1:00pm GMT

Half Year 2018 Aixtron SE Earnings Call

Aachen Aug 1, 2018 (Thomson StreetEvents) -- Edited Transcript of Aixtron SE earnings conference call or presentation Thursday, July 26, 2018 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Bernd Schulte

AIXTRON SE - President & Member of the Executive Board

* Charles Russell

AIXTRON SE - CAO

* Felix J. Grawert

AIXTRON SE - President & Member of the Executive Board

* Guido Pickert

AIXTRON SE - Director of IR & Corporate Communications

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Conference Call Participants

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* Andrew Michael Gardiner

Barclays Bank PLC, Research Division - Director

* Guenther Hollfelder

Baader-Helvea Equity Research - Analyst

* Janardan Nedyam Menon

Liberum Capital Limited, Research Division - Technology Analyst

* Jürgen Wagner

MainFirst Bank AG, Research Division - Director

* Uwe Schupp

Deutsche Bank AG, Research Division - Small and Mid-Cap Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to AIXTRON's Q2 2018 Results Conference Call. Please note that today's call is being recorded. Let me now hand you over to Mr. Guido Pickert, VP of IR and Corporate Communications at AIXTRON, for opening remarks and introductions.

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Guido Pickert, AIXTRON SE - Director of IR & Corporate Communications [2]

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Thank you, operator. Let me start by welcoming you all to AIXTRON's Q2 and H1 2018 Results Conference Call.

I'd like to welcome our Executive Board represented by Dr. Felix Grawert; and Dr. Bernd Schulte; as well as our VP of Finance and Administration; Charles Russell.

As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be rerecorded or rebroadcast without express permission. Your participation in this call implies your consent to this recording.

Please note that our safe harbor statement on Page 2 of our results presentation applied throughout this conference call. You may also wish to have a look at our latest IR presentation, which includes additional and new information on AIXTRON's market and its technologies and is available on our website. We will place an audio file of the recording or a transcript on our website at some point after the call.

I would now like to hand you over to Dr. Bernd Schulte for opening remarks. Bernd?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [3]

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Many thanks, Guido. Welcome to the presentation of AIXTRON's First Half 2018 Results.

Let me start the presentation with an overview of the key developments in the quarter, before handing over to Charles Russell, who will elaborate on some important details of our financial performance.

This then will be followed by Felix Grawert, who will discuss our view going forward as well as doing a quick wrap-up before handing over to the Q&A session.

We had a solid second quarter, and as a result, we can confirm our 2018 full year guidance for revenue and profit, which we presented at our 2 recent result calls.

The order intake in Q2 continued to be strong at EUR 75 million. The major growth driver was, as in the previous quarter, the demand for our AIX 2800G4 MOCVD systems for laser and red-orange-yellow LED applications.

We continue to see very encouraging signals from our customers, with clear market preparation and positioning activity from major global players, specifically targeting 3D sensing and optical datacom application and speciality LED solutions.

In addition to those areas, we believe that the power electronics area could become a growing driver for AIXTRON in the upcoming quarters. With this positive development of the order intake, we are raising our order guidance to a range between EUR 260 million and EUR 290 million from EUR 230 million to EUR 260 million previously.

Revenues, however, at EUR 55 million in Q2 were below the EUR 62 million we generated in Q1, which is due to the scheduled shipment agreements we have with our customers, causing the usual quarter-to-quarter fluctuation of shipments. We are confirming our guidance for revenues to be around EUR 260 million, hence, revenues in the second half of the year will be stronger than in the first 2 quarters.

Gross margin in Q2 was, again, strong at 43%, which was due to a favorable product and regional mix, and supported by a strength in U.S. dollar through the course of the quarter. EBIT and net income were around EUR 4 million in Q2. Both were ahead of the same quarter last year but below Q1 due to the just mentioned lower sales volumes.

At this point, let me now hand you over to Charles for more detailed overview of the Q2 2018 numbers.

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Charles Russell, AIXTRON SE - CAO [4]

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Thanks, Bernd, and hello to everyone.

Starting on Slide 4, we had a good first half of the year with an order intake of EUR 154 million, up 20% on the same period last year.

On a quarterly basis, Q2 was similar to Q1 with order intake of EUR 75 million. Consequently, we ended the first half of 2018 with an equipment backlog of EUR 138 million, up 48% on last year, 20% ahead of Q1, and the highest backlog since 2011. This gives us a good visibility for the remainder of the year and into the start of 2019. This positive development, as Bernd mentioned, is mainly due to the high demand for equipment used for lasers and red-orange-yellow LEDs.

Revenues in the first half of the year were 3% ahead of 2017, but the improved product and regional mix produced a gross margin of 43% in both quarters and a profit at both EBIT and net income level.

EBIT for the first half was EUR 12 million compared with a loss of EUR 24 million in the first half of 2017.

Net income was higher than EBIT in the first half because of the deferred tax assets we recognized in Q1.

Moving onto the next slide. Let me go into more depth on the income statement. Total revenues recorded during the first half of 2018 were EUR 117 million, up from EUR 114 million the previous year. On a quarterly basis, Q2 revenues were EUR 55 million compared with EUR 62 million generated in the previous quarter. This reflects, as Bernd said, the scheduled shipments to customers.

The favorable product and regional mix we had in Q1 continued into Q2, with gross margins remaining at 43%. This is a considerable increase over the 25% in the comparable period in 2017 when inventories were being cleared.

Operating expenses of EUR 39 million in the first half of 2018 were 26% lower than the same period last year. The results last year included EUR 12 million in write-downs related to the frozen activities as well as the operating expenses of the ALD/CVD activity, which we sold.

In a quarterly comparison, operating cost increased slightly to EUR 20 million compared with EUR 19 million in Q1. The main reason was expense from the translation of dollar-based customer advanced payments at the quarter-end exchange rate. This will be reflected in higher revenues as these orders get recognized as sales.

Selling expenses of EUR 5 million in the first half of 2018 were down 13% year-on-year. At 4% of revenues, this is the sort of level we expect into the future.

In the first half of 2018, G&A expense reduced to EUR 8.7 million from EUR 9.4 million in the same period last year. The previous year's figure included legal and other fees related to the sale of ALD/CVD.

On a quarterly basis, G&A expense of EUR 4 million was in line with the previous quarter.

Research and development costs in the first half of 2018 were 6% less year-on-year down to EUR 27 million, mainly due to the sale of the memory business and the freezing of the development activities.

On a quarterly basis, R&D costs in Q2 of EUR 13 million was slightly lower than Q1's EUR 14 million. Our R&D cost in 2018 take into account the development work on OLED.

The sales volume, gross margin and lower operating expense combined to produce an EBIT for the first half of EUR 12 million, a substantial improvement over the first half of 2017. Net income was EUR 16 million.

Moving to Slide 6, which shows our cash flow statement. Operating cash flow was EUR 12 million in Q2 and minus EUR 9 million for the first half. This is after the payments related to the ALD/CVD sale, which we explained in last quarter's call. Overall, working capital reducing in the quarter because of an increase in advanced payments from customers. This was partly offset by an increased work in progress in receivables related to the increases in sales and regional mix of customers. We expect a positive operating cash flow for 2018.

Cash at the end of June was EUR 234 million, compared with EUR 247 million at the end of 2017.

Turning to the next slide, our balance sheet. The principal changes in AIXTRON's balance sheet this year or this period are a reflection of the improving business.

Shareholder's equity continues to improve with profitability. Inventories and advanced payments from customers have increased substantially because of increased orders, and receivables have increased in line with sales.

Now let me hand you over to Felix.

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [5]

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Thank you, Charles. Let me give you a brief outlook on our perspective, on our focused markets and target applications. We continue to have a strong order intake as well as growing equipment order backlog, totaling EUR 138 million at the end of Q2, which gives us confidence about the rest of this year. We currently see strong growth drivers in the coming quarters, especially in the areas of lasers and specialty LEDs.

Our equipment enables the development and production of key end products and components in growth areas, such as 3D sensing for phones and automobile, fine pitch displays and optical data communication. In optoelectronics, we see fast growing interest of customers for our products in the area of mini and microLED displays.

In power electronics, we observed a beginning volume ramp in the area of silicon carbide MOSFET, while we expect for gallium nitride power switches the tipping point from R&D stage to volume production to be reached within the next 1 to 2 years. We see strong customer interest in our next-generation equipment solution for these areas, which gives a good assurance around our technology roadmap.

In OLED, our first pilot product is currently tested by the customer, and we expect fab-in into the customer facility soon. We are still in discussions with potential joint venture partner. These discussions have not materialized to a point of conclusion yet, but we expect this in the near future.

In summary, Q2 was a strong quarter in terms of continued high order intake and revenues within our guided expectation. With a strong order book and continuing solid interest from customers for our solutions, we are confident about what we expect will be a strong second half of the year. Based on these results, we refine our 2018 full year guidance for revenue and profit and increase our guidance for orders. We expect revenues to be around EUR 260 million, with order for 2018 between EUR 260 million and EUR 290 million, up from the EUR 230 million to EUR 260 million range we had previously expected. We expect gross margin to be around 40% of revenues and EBIT margin to be around 10%, both being at the top end of the originally guided ranges. We also expect to achieve a positive operating cash flow for the year.

With that, I will pass back to you, Guido, before we take some questions.

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Guido Pickert, AIXTRON SE - Director of IR & Corporate Communications [6]

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Thank you, all of you. Operator, we'll now take the questions, please.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And the first questioner is Andrew Gardiner from Barclays.

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Andrew Michael Gardiner, Barclays Bank PLC, Research Division - Director [2]

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I was interested in understanding a little bit more within the optoelectronics side of things. Clearly, that's driving a lot of volume at the moment. I was just wondering if you could talk about the breadth of customers that you're seeing taking the tools there? Clearly, one of your high-profile partners, IQE, has talked about their own sort of production ramp about the installation of tools. But away from there, I'm wondering, are you seeing others sort of still in preproduction qualification phase, and so therefore, sort of taking 1 or 2 tools here or there? Or are there signs of other parties in this part of the market preparing for much more high volume production ramps? Do you have a better visibility into those ramps beginning?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [3]

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Yes, thank you for the question. This is Bernd. Yes, certainly, I think we published our close collaboration with IQE, and that we have shipped tools into their new factory, which they currently have build up. So this is ongoing as we speak. And certainly, the numbers of customers who increasing their volume in terms of manufacturing capacity is also increasing. So there are, I would say, 3, 4 other customers who are in the range. And we published about company in Taiwan, VPEC, who comes in this arena. Where they stand in detail with the qualification with the end customer? That is certainly not clearly known to us. But one can expect if customers are ramping significantly that they have high confidence in their qualification.

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Andrew Michael Gardiner, Barclays Bank PLC, Research Division - Director [4]

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Also, just a quick one on the comment you made, Felix, on OLED and APEVA. Just -- I understand it's sort of a bit uncertain, but if you could brought a bit more clarity around the statement, it would be helpful. So from what you described there, the customer is in the process or sort of ready to install the machine in their own fab. Do you actually have orders for that? Is there indeed an intent now for actual sort of production level tools? And therefore, the discussions you alluded to with the JV partner, that is more a question of sort of commercial and sort of practical terms rather than a go-, no-go type decisions.

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [5]

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Yes. No, I think very good question. Let me clarify. So as we have discussed in this place in previous quarters, currently, we test a product together with the customer. So it is installed in a facility in Asia, and together with engineers of the customers, this product is being tested. However, this product, which currently is being tested, is a smaller scale R&D prototype of Gen2, what it is called. Think about A4 page paper, writing paper, printing paper, this kind of the size, which the customer will then take it to a factory test see to develop OLEDs on that one. And after that, the next step would be that the customer or that a larger upscaled prototype would be built, would be developed, also would be tested. And if such large scale prototype also is successful, then customer could think about moving towards a volume production. So in the end, the OLED development is a multistep development together with the customer. And we talk here about the first step still on smaller samples of laboratory side, as we have stated in this place in previous call.

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Operator [6]

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And the next questioner is Janardan Menon from Liberum.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [7]

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I have a couple. The first one is, the shipment, the levels seem to have come down in Q2 versus Q1. Did you attributed that to the scheduling by customers? Was that a rescheduling? Did you see any pushouts at all of customers who had originally said, I want in Q1, I mean, Q2 has taken it to Q3? Or was that as part of the initial contract itself? And in -- just as a follow-up with that, when you look at the second half, you said, second half will be higher in revenues than the first half. Can you give a little bit more linearity there? Do you expect Q4 to be higher than Q3 based on your current scheduling with customers? Or would it be more flattish profile? And I have a brief follow-up.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [8]

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Yes, Janardan. Thank you for your question. The shipments in second quarter, the EUR 55 million being slightly below the first quarter, has only originated by the contracts we made. The order income in Q4 last year was pretty much pushed towards the Christmas time. And with that, some of those stores shipments have been shifted to Q3. So there is -- I want to say very clear, there is no request for pushout. It's simply what's the contractual agreement we have with customer.

Regarding the order of the second half, we're seeing probably an increase from second to third quarter, and we'd also expect a slight increase from third to fourth quarter.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [9]

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Understood. And also on the order level, you've raised your guidance to EUR 260 million to EUR 290 million for the full year. But you've taken EUR 154 million in the first half, which sort of suggests that even at the high end, you will see a slight decline in orders in the second half. Is that you just being prudent because you don't have full visibility on what kind of orders you could get towards the latter half of the year? Or is there anything specific there which makes you think that your orders could decline in the second half of the year?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [10]

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There is nothing specific, I mean, mathematically, it's very simple to understand what you're saying here. So the difference between EUR 290 million, if you take the upper end, and what we already have is less. Certainly, we're seeing a good momentum, but visibility is 4, 5 months ahead, is always somewhat limited. And with that, we -- certainly, been in that sense, we have to take this into account, but we feel very confident with the EUR 260 million, EUR 290 million. And we really see this guidance as realistic. And there is nothing what we say -- there is a change in the market or some specific things may happen. It is just you have to keep in mind also that the first half was very, very good.

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Operator [11]

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And now we come to the next questioner, it is Uwe Schupp from Deutsche Bank.

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Uwe Schupp, Deutsche Bank AG, Research Division - Small and Mid-Cap Analyst [12]

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Two questions, please. First is on prepayments. We are obviously seeing some very credible signs out of the Chinese LED market now for the first time in many years. And it has been a long time since -- yes, since you received larger LED orders or frame contract. Could you maybe briefly remind us about your bookings policy for such larger orders, if received. Reason I ask is, obviously the 90% or so increase in prepayments, 9-0, right, if I saw it correctly. You've shown in Q2 versus Q1. In the quarter, where you showed order flattish quarter-on-quarter or even slightly down. So any color you could give us here would be highly appreciated. And then secondly, Bernd, just on your earlier comment, is the impression correct that you are incrementally seeing more business for edge-emitting lasers rather than VCSELs in the second half? Or do you think that the activity is actually quite similar and remains high for both technologies as regards of 3D sensing? And then, maybe where you think those deployments would be going, whether this is indeed for Android in 2019, as, I think, you previously indicated at the Capital Markets Day.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [13]

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Yes. Thank you, Uwe. Let me start with the second question, the edge-emitting. As we elaborated, I think, in earlier calls, it's very hard for us to distinguish whether a tool in the end will be used for edge-emitters as also for vertical-cavity surface-emitting lasers. Simply the tools are almost the same or pretty much the same, so you can use the same tool for both devices. And you have to look more in the applications. So if you ask me straight, do we see edge-emitting lasers coming stronger in use for the 3D sensing? We do not see this right now in the moment. But we cannot exclude that because we are certainly not involved in all the product development of the end customer. We just want to highlight with -- also with respect to my comments that it's (inaudible) when we send a tool, it's a VCSEL and the edge-emitter. Regarding the prepayments, I mean, Charles may also comment to that a little bit more, but just the talk about the booking policy. So we book orders when we have security in terms of the payments, and depending on the customer and the history of the customer, typically, we do that, if we have received down payments, if we have the required documentations to ship the tool. Or if that we have no concern that these documentations will be issued, I'm talking about export license. We need certainly a clear -- we need a contract and we need a clear shipment date. And that -- I mean, that policy we have since, I recall, working here, and it has not been changed. So the increase of cost or the change in the prepayments varies from various sectors. It depends how much you ship in the quarter because then the prepayments get reduced by the amounts of the prepayment of the shipped tool. And it depends on the order intake and it depends exactly when does the down payment arrive because customers with very high, with a long history, with a good history in payments, we also take the order intake without having necessarily the money in the bank. But Charles, you may add to this.

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Charles Russell, AIXTRON SE - CAO [14]

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Yes, just to say that, I mean, I would compare the advance payments received with the order backlog rather than with the order intake. Because those are the, I think, the more relevant metric. And over the last 12 months or so, the ratio of one to the other has been between 42% and 25%, and it's currently 38%. So there is nothing particularly unusual about the level of customer deposits we have relative to the order backlog at the moment. And earlier in the year, when it was perhaps a lower proportion, maybe we had a higher proportion of orders from the larger western companies, which we don't necessarily take so many deposits from.

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Uwe Schupp, Deutsche Bank AG, Research Division - Small and Mid-Cap Analyst [15]

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That's very clear. And I would have a follow-up, if I may. Felix, you indicated in your prepared remarks that indeed the -- I mean, I think you spoke particularly about the silicon carbide opportunity coming nearer and potentially being a growth opportunity, I think you said for the next quarters, is that -- did I get you correctly? And then maybe if that is correct, what would be the some of the visible signs that we should be looking for that indeed this is a reality that is, yes, becoming or that's something that is becoming real for you guys? Is it more cars in the market? Is it -- how can we get comfort basically that your new machine is really indeed receiving the receptance that you would hope for it to get?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [16]

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Yes, I think, Uwe, I had 2 questions got of that, right? So the one is really the timing question, and then -- about the market, and demand that we would see in the second question, as I got it right about the growth drivers behind this, yes. I think that part is in our product. So as far as the timing goes, we do expect over the next quarters, in fact, quarters on -- quarters and years, meaning in the near term, demand picking up for silicon carbide because the industry is preparing for a ramp. We all know that -- is the silicon carbide starts from a relatively small base today, however, with very significant high double-digit growth rate. And it remains to be determined how many tools that relates to, I would not want to quantify that opportunity right now here, yes. In terms of what growth drivers, what end market? We do see in the initial phase, the growth of silicon carbide being strongly driven by industrial applications within -- at a later stage, especially electric vehicles kicking in. And if you look to a time frame, maybe 3 to 5 years out, I think longer into the future, there is no visibility. There is strong indications that automotive applications will take as much as 40% or 50% of the total market. And of course, automotive -- the automotive industry has certain requirements in terms of quality, in terms of standards, and we are preparing accordingly in order to satisfy the demands of these customers. Relating to our products, we have -- and that we have already previously announced, we have a new range of products under development with significantly higher throughput, meaning significantly improved cost of ownership for our customers. The product is in the development stage, but according to the specification, the target specification and the results we have in our laboratories, we see very strong customer interest. And over the next half year to 1 year, we would then see that confirmed from customers, and within the time frame of the year, we should see that construct.

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Operator [17]

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And now we come to the next questioner, it is Jürgen Wagner from MainFirst Bank.

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Jürgen Wagner, MainFirst Bank AG, Research Division - Director [18]

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I have a follow-up on OLED. You mentioned that it's a multistep process. And what are the total costs you carry in your P&L at the moment? And what will that be in 2019? And the second question would be, how much is, yes, edge-emitting VCSEL laser equipment in your current order guidance for the full year?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [19]

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So yes, we mentioned it's a multistep, yes, from a small substrate to scaling at a later stage then becoming a volume line from a customer. We are expecting, for the year 2018, a cost to get for OLED in our P&L around EUR 25 million, as we have previously said. For 2019, it would be too early for us to give an exact number. However, for 2019, we expect a significant reduction of this number, and it is too early to quantify how much that would be, yes. And the reduction would simply be due to the fact that certain elements of the development have been completed, and we would see 2019 also, beginning of revenue stream against that.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [20]

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And let me comment on your question regarding our backlog and how much is attributed. Let me call it to laser applications because as I elaborated, we cannot really distinguish what is the -- in the end, final use of the tool. But in terms of laser application, our backlog is between, I would say, 35% and 45% in that range is our backlog dedicated for this laser application.

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Operator [21]

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(Operator Instructions) And we come to the next questioner, it is Guenther Hollfelder from Baader-Helvea.

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Guenther Hollfelder, Baader-Helvea Equity Research - Analyst [22]

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Just 2 brief follow-up questions. One was on the structure of your order intake. Is -- do you expect a change this year in -- looking into the second half in terms of the share of opto LED and power compared to the first half?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [23]

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We -- there are always changes. I mean, this quarter, for example, we had more impact by red-orange-yellow LED order intake and the quarter before. But still we had a relative high area for intake for lasers, but probably weaker on power electronics. I would think that going forward, in the rest -- for the remainder of the year, we expect the power electronics to slightly increase. But definitely, the level is lower than the opto part. But within the power part, we will see just, if you compare power to power, a significant increase.

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Guenther Hollfelder, Baader-Helvea Equity Research - Analyst [24]

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Okay. Which is serving by gallium nitride at the moment or...

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [25]

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Both, gallium nitride and silicon carbide. But gallium nitride is definitely, maybe from the short term -- the shorter term, probably you are right, it's -- will be coming slightly sooner.

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Guenther Hollfelder, Baader-Helvea Equity Research - Analyst [26]

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And second, last question, the order of backlog, it's -- everything shippable in 2018, what you currently have?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [27]

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No, not everything. The majority is shippable, but not everything.

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Operator [28]

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And a follow-up question comes from Janardan Menon from Liberum.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [29]

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Yes. I just had a follow-up on the OLED comment that you made that your OpEx, your R&D would reduce materially next year. Is that -- so even if you were to get another order for a larger size development tool during the course of the next few quarters or would it be dependent on that? And on a separate topic, on microLED, has your view changed at all because -- in terms of the timing of that, the introduction of, say, microLED TVs, there has been some noise from people like Samsung on that, I mean, they're probably not exactly microLED, they're probably more mini LED. But has there been any change in your view of that market in the last 3 to 6 months in terms of how the potential customers are developing the technology?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [30]

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So let us get started. Thank you for the question. Let us get started with the OLED topic, right? Yes, we would expect lower OpEx. Also, if we receive another order -- and I would put it the other way around, which is, as we have declared previously, we will only continue our OLED activities if we get another order, yes. Because receiving now a follow-on order for gradually scaling, yes, from the small-scale laboratory prototype to a larger prototype, and then later on moving toward volume, that is the prerequisite for this business at some point reach a breaking even and then turning into profit. And if we would not get a follow-on order, as stated previously, we would then not continue the OLED activity because that we will not accept that this would continually just be a cash in the cost drain. However, we have no signs that things may not develop as we expect them to develop, yes. But just to reiterate, what would happen in case a follow-on order should not be coming.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [31]

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And Janardan, let me try to answer your questions on the microLED. Let me make a maybe a general statement and then a little bit more detail to it. Generally, we do not see that the timing of microLED into, let's say, a volume market has changed, meaning that I think this is still something between 3 to 5 years out. What we see in the moment, definitely, and this is very interesting and we're watching this, of course, there are quite some positioning activities of end customers or end companies to the end customer, like Samsung and also other display companies are enhancing their activities into microLED. But you have to understand all the products you see there in the market, these are really positioning products. They are far, far, far away from being high-volume manufacturable. So this is all areas we want or we need to develop. But I think in terms of this positioning activities, and the supply chain of these companies become -- has become, I would say, in the last 3 months, more active and getting more pushed by the end customer. And so our activities in this areas has also increased because we are providing a essential -- yes, essential production step to the microLED. And it is also essential to the cost basis and the performance. So our activities internally here with customers, who are in the supply chain for microLEDs, have indeed increased over the last months. Nevertheless, I think the overall time line until this gets in high-volume manufacturing and getting really into a larger volume, this is definitely, I would say, unchanged, meaning 3 to 5 years.

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Guido Pickert, AIXTRON SE - Director of IR & Corporate Communications [32]

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Thank you. This concludes our results conference call. Please get in touch if you have any follow-up or additional questions. Thank you, and bye-bye.