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Edited Transcript of AIXA.DE earnings conference call or presentation 25-Jul-19 1:00pm GMT

Half Year 2019 Aixtron SE Earnings Call

Aachen Jul 30, 2019 (Thomson StreetEvents) -- Edited Transcript of Aixtron SE earnings conference call or presentation Thursday, July 25, 2019 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 - VP of IR & Corporate Communication

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Conference Call Participants

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* Andrew Michael Gardiner

Barclays Bank PLC, Research Division - Director

* Charlotte Friedrichs

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Harald Schnitzer

DZ Bank AG, Research Division - Analyst

* Janardan Nedyam Menon

Liberum Capital Limited, Research Division - Technology Analyst

* Malte Schaumann

Warburg Research GmbH - Equity Analyst

* Uwe Schupp

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

* Veysel Taze

Bankhaus Lampe KG, Research Division - Analyst

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to AIXTRON's First Half and Second Quarter 2019 Results Conference Call. Please note that today's call is being recorded. Let me now hand 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 - VP of IR & Corporate Communication [2]

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Thank you, operator. Let me start by welcoming you all to AIXTRON presentation of our H1 and Q2 2019 results.

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 recorded or rebroadcasted without expressed permission. Your participation in this call implies your consent to this recording.

As with previous results conference calls, I trust that all participants have our results presentation slides, Page 2 of which contains the usual safe harbor statement. I would like to point out that this applies throughout the conference call. You may also wish to have a look at our latest IR master presentation, which includes additional information on AIXTRON's markets and its technology and is available on our website as well. This call is not being immediately presented via webcast or any other medium. However, we will place an audio file of the recording or 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, and a warm welcome from my side as well. As usual, I will give you an overview of AIXTRON's key developments in the first half of 2019. Charles Russell will then go into more detail on the financials. This will then be followed by Felix Grawert who will give you an update on OLEDs and power electronics as well as a wrap-up.

In Q2, revenues came in at EUR 63.3 million, which meant that we generated EUR 132 million in the first half of the year, which was substantially better than the EUR 118 million we generated in the same period last year. We also generated solid gross margins of 40% in the first half of the year, with an EBIT totaling to roughly EUR 19 million and net income of roughly EUR 16 million. These results and our EUR 110 million backlog gives us a good basis for the rest of the year, and as a result, we can confirm our full year guidance, which we gave you earlier in the year.

With our ongoing cost reduction measures, the expected product mix going forward and the positive U.S. dollar exchange rate, we now expect to be at the end of the year at the upper end of our margins guidance. We also had a second quarter which was a reflection of the expected reluctance by some of our customers, particularly in the area of optoelectronics to invest in new production capacities. On top, this was influenced by geopolitical economics, such as the U.S. ban towards Huawei, a major global player in telecommunication hardware, including network devices or mobile phones. With that, Q2 order intake was comparably low at just under EUR 45 million with a major contribution by power electronics. However, we see inquiry levels suggesting an order pickup in the second half of the year in particular from Asia.

Despite the weak market environment in the first half, which has been caused by the situation mentioned earlier, we still see 3 strong growth drivers in the areas of lasers, power electronics and specialty LEDs. It is important to note that our equipment enables the development and production of key end products and components for major global mega trends such as the next-generation 5G mobile networks, 3D sensing for mobile phones and power electronics for electrical vehicles and renewables as well as next-generation microLED displays.

At this point, let me now hand over to Charles for a more detailed overview of the first half 2019 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, our income statement. Total revenues for Q2 2019 were EUR 63 million compared with EUR 69 million in the previous quarter. Gross margin was 41% in the quarter compared with 39% in Q1. The continuing strong dollar added just under 1 percentage point to the improved margin, with the remainder coming from a better sales mix, which included a lower proportion of shipments for LED compared with Q1.

Operating expenses in the quarter were EUR 16.6 million, slightly below Q1 EUR 17 million. G&A expense in the quarter returned to more normal levels. Q1 included reduced project-related costs. R&D expense at EUR 12.5 million were similar to the previous quarter, the small reduction stemming from lower project material spend. Other income is mainly R&D grant income and exchange gains.

Overall EBIT for Q2 was EUR 9.3 million compared with EUR 9.7 million in Q1. Net profit for Q2 was EUR 7.3 million compared with EUR 8.5 million in Q1. The tax expense for the quarter includes a routine tax adjustment of EUR 0.7 million. We continue to expect the effective tax rate for 2019 to be in the range 15% to 20% for the group.

Turning to the balance sheet on the next slide. Inventories of EUR 82 million include around EUR 10 million of prototype systems, which include systems at customer sites. Receivables stand at EUR 28 million, which is 32 days sales outstanding. Advance payments from customers are EUR 39 million, down from $53 million at the end of 2018. The change reflects the low order intake in the first half of the year. Advance payments are 35% of the order backlog.

Moving to Slide 6, which shows our cash flow statement. We had a healthy free cash flow of EUR 13 million in the quarter, and we expect this to continue into second half to meet our guidance of a positive free cash flow between EUR 15 million and EUR 25 million. We ended the quarter with EUR 259 million in cash.

With that, 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. I would like to give you some perspective on recent developments in OLED and power electronics before concluding with the outlook for the rest of the year.

Turning to the update on our development projects on Slide 7. With regards to OLED, our Gen (sic) [Gen2] tool has been -- had been installed in the customer facility earlier this year. The tool is jointly operated by a team of engineers of our customer and of our subsidiary APEVA. The tool is running stable and its process performance is currently being fine-tuned. It is undergoing an in-depth evaluation with respect to OVPD technology and the performance of OLEDs produced on that tool. As a result, we are making good progress in the qualification of our technology.

In the power electronics area, we continue to gain momentum. In gallium nitride power electronics, we have solid and growing customer base. We have been able to win new customers, and we see orders both driven by the 5G buildup in GaN RF and from capacity expansion in the GaN power markets.

In silicon carbide, we made good progress with our fully automated high-throughput system. We have obtained orders for this tool from several customers already, and performance demonstrations to additional customers have been scheduled. Market feedback is very positive, which gives us confidence that we are on track to successfully address the multiyear market opportunity in power electronics.

Let me now come to our outlook for 2019 on Slide 8. We have had a slow start to 2019 in terms of orders, but we are seeing a broad customer interest in our technology offering and especially our solutions around lasers for telecoms and 3D sensors as well as for power electronics. Despite the weak market backdrop, we can reconfirm our guidance for 2019 that we initially issued in February and confirmed in April. We remain confident that we can achieve our goal of between EUR 220 million and EUR 260 million in new orders for 2019 with an expected increase in demand, particularly from Asia. However, we do have to recognize that there remains an element of risk around those anticipated orders given the current environment.

We expect revenues to be between EUR 260 million and EUR 290 million. We now expect gross margin to be around 40% of revenues and EBIT margin to be around 13% of revenues, both being at the top of the originally guided ranges. Additionally, we expect to generate between EUR 15 million and EUR 25 million of free cash flow this year.

Finally, let me assure you that although there is weakness in some of our markets, we have an excellent product portfolio with growing interest from a broad range of customers, all of which give us confidence around our strategy, business model and the growth opportunities in front of us.

With that, I'll pass it back to Guido before we take questions.

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Guido Pickert, AIXTRON SE - VP of IR & Corporate Communication [6]

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Thank you very much, Felix and Bernd and Charles for your speech. We will now take questions. Operator, please open the Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And the first question comes from Andrew Gardiner calling from Barclays.

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

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I just had one on the points you were making there in terms of the order outlook, Felix. You mentioned the -- you're sticking with the guidance for EUR 220 million to EUR 260 million in new orders for 2019. And just the increasing demand that you're seeing from Asia, can you give us any sense as to what segments that's coming in, LED, optronics? And then just sort of the -- I can understand sort of customer interest in the technology, but what's giving you the conviction that they're going to come through and indeed place the orders given the backdrop that you've talked about? Are they particular -- are those discussions particularly advanced and you're close to closing them? Just trying to sort of gauge the level of conviction around that.

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

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Yes. Andrew, this is Bernd. Let me give you an answer to your question. What gives us the confidence is indeed the discussions we're having with customers with quotations and basically ongoing negotiations of our contracts. That gives us the confidence. And what is the driver? Well, I mean, we have said clearly that the reason for the reduced order intake in the second quarter has been really the backdrop in optoelectronics, mainly in 3D sensing but also some telecommunications related. This seems to be now coming back, in particular from countries in Asia, mainly China, Taiwan.

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Operator [4]

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(Operator Instructions) The next question for today comes from Veysel Taze calling from Bankhaus Lampe.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [5]

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First one would be on the VCSEL business you mentioned in Asia. But as far as I see in Q2, your VCSEL shipments have increased Q-on-Q. So the question is how much capacity is really needed there still for the H2 ramp-up for higher penetration of 3D sensing in smartphones. Or are there are any other points which needs to be considered here?

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [6]

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Veysel, it's Bernd speaking. I think the main driver for basically return -- moderate return of demand for VCSEL tools really comes still from the cellphone market. I think it is expected that we will see the Android comes really now in 2020, coming in the use of 3D sensing devices, I don't -- for Face ID but also maybe on the world side and also speculate that there will be a new model from Apple, which also offers more 3D sensing applications. And I think the supply chain is starting to preparing for this potential additional demand.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [7]

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Would you say that the overcapacities in VCSEL are now fully digested?

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

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This is hard to say on a global base. I think this is really depending on customer to customer. There might be customers still having some overcapacity and others who had additional RAM strategy. They still need additional capacity.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [9]

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Okay. And then on -- a follow-up on the power business. The shipments in Q2 were still maybe 1 tool more than in Q1. But I guess, it's more in the backlog, right, the power business. Any chance to get a split for the backlog in terms of the different applications and products like you do that for the sales?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [10]

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Well, I don't have number for the backlog for you. But in Q2, the power order intake was very strong. It was close to 50% of the order intake. So we clearly see there's a rising and a growing demand on the power side.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [11]

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And then a brief update on your tool. It's supposed to be in the market end of this year, right? So is it still on track?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [12]

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You mean the silicon carbide tool, correct?

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [13]

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Yes, yes, yes.

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [14]

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Yes. The silicon carbide activities are fully on track. We have tools for beta testing at the ground, several customers. We're making good progress. We have received additional firm orders from further customers beyond the betas, and our lab is very busy in doing demos for even additional customers. We are fully on track.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [15]

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Okay. And then, I don't know if you can actually give any color around the recovery you expect in the orders for the second half of the year. I mean, what type of recovery would that be? Is it more the 70-plus quarterly run rate we have seen in 2017? Or is it rather 60-plus range for -- in 2017? Any insights there would be really very helpful.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [16]

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Veysel, I mean, certainly, the numbers have to support our guidance figure, which is EUR 220 million to EUR 260 million. And I think much more detail, I think we are not prepared here now to give.

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Veysel Taze, Bankhaus Lampe KG, Research Division - Analyst [17]

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Okay. And then final one, on the other operating income, so it's FX and plus the subsidies you receive. H1 was already above the level what we have seen for the full year of 2017. Any split there what drives exactly that between FX and subsidies?

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Charles Russell, AIXTRON SE - CAO [18]

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No, not really. I think it's an increase in both.

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Operator [19]

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(Operator Instructions) Next we have Uwe Schupp calling from Deutsche Bank.

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Uwe Schupp, Deutsche Bank AG, Research Division - Small and Mid-Cap Analyst [20]

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Just a question for me. Firstly, on the trade war and really rephrasing a question from Andrew earlier. The potential implications for you here, if I remember back at the conferences and also roadshows that you did in May and June time frame, you were actually pretty cautious back then on the business development because you saw some nervousness on the back of the Huawei ban. And today, you come out and say, basically, that business should be picking up materially from here. Whether it will be 60 or 80, I mean, I guess, it remains to be seen. But is it correct to say that the nervousness has vanished mostly and you are still -- or you are by now a net beneficiary maybe even from this whole trade conflict because China is building up an own supply chain? And then secondly, just for Felix. On the -- did I get you correctly? Power was 50%, that's 5-0, of the mix in Q2. Would be interested if that is not related to the new silicon carbide tool, it must be related to gallium nitride. And then the follow-up would be, whether that is for some initial fast-charging business that one of the U.S. semiconductor companies has been talking about apparently potentially supplying to a major smartphone launch in this coming autumn.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [21]

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Yes. Over the -- this is Bernd speaking. I mean, definitely, what is potentially happening is that due to the political threats, which is going on that there are now more interest inside of China to develop a local supply chain. Certainly, this doesn't come overnight. This takes time. But I think it's quite -- it's not unlikely that this is going to happen. And on the other side, we are seeing definitely increasing demand for telecom laser tools as well as VCSEL tools from that region, I would say, from Greater China. And -- but whether this has a one-to-one relation, we certainly don't know. But everybody can draw his own conclusion, but we see -- we're seeing definitely increase in quotation activities and customer discussions and contract negotiations from that area.

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [22]

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And with that, let me come to the second part of your question relating to the power electronics. So that 50% of the order intake, power electronics was a mixture of different factors. First of all, it was a combination of orders relating to the established gallium nitride tool, but also orders for the new silicon carbide automated tool. And within gallium nitride, once again, a diverse mix, part of that related to the 5G build-out, again, very diverse from multiple regions around the world. And the other part within the GaN related to power electronics and also there is diverse picture, some repeat customers, some new customers, some on high voltage, some on low voltage, so I would call it it's a relatively broad, diversified takeout -- take-up or pickup of the order intake rather than a one particular, one specific segment driver here.

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Uwe Schupp, Deutsche Bank AG, Research Division - Small and Mid-Cap Analyst [23]

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Just a brief follow-up, Felix. On the gallium nitride, low power is in your pipeline. Do you see a bigger order or potentially bigger orders coming from the fast-charging opportunity?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [24]

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Not from a particular single opportunity. It's rather a broad trend across the entire market.

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Operator [25]

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The next question comes from Harald Schnitzer calling from DZ Bank.

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Harald Schnitzer, DZ Bank AG, Research Division - Analyst [26]

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I've got a question on the OLED project. How has it developed since Q1 in terms of likelihood that you will receive the order in the second half maybe? And secondly, on the silicon carbide, you mentioned, Dr. Grawert, that you would have some new orders from customers. Are there completely new customers for AIXTRON?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [27]

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Yes, thank you for the question. So on the OLED topic first. Our tool is currently being operated by our engineers and the engineers of our customers. They are together executing test runs. They're producing OLED in a small laboratory format on the tool to complete OLED devices, which are then being rigorously tested for specifications like brightness, lifetime, color saturation, all types of technical parameters. We expect that evaluation to be lasting throughout summer, early fall, yes? And once those tests are being fully completed and all the technical and engineering results of those tests are available, and of course, testing always means also some fine-tuning and some optimization of finding the right set points of such a brand-new tool. Then, when that is completed, we will really know about the technology potential and then we can talk about the customer order. So in a nutshell, at this point in time, it would be too early to comment or to give any directional input. But I think we are well on track with respect to executing the testing phase. Maybe that gives you an idea what the status of that project is.

And with that being said, I would like to turn over to the silicon carbide topic. Yes, in fact some of the orders that I was mentioning come from completely new customer, yes, for AIXTRON and of course also for silicon carbide. So we have been able to broaden our customer base here, which is a very positive result.

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Operator [28]

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The next question comes from Janardan Menon calling from Liberum.

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

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I just wanted a clarification on the silicon carbide. These -- you said you've recorded some more orders for customers beyond the beta tools. Are these also for additional beta tools? Or have you taken orders for a production tool at this stage already?

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

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So some orders go beyond beta tools where -- but at some orders about the tool and the automation capability is then later to be proven once the betas are completed.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [31]

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Okay. So I mean, just to know how we can sort of figure out how your progression of silicon carbide orders will go through, I mean, is it that getting 1 or 2 orders now, but once your -- the larger silicon carbide chip companies out there finish their qualification, you will see a substantial pickup in orders and that could be by around Q4. Is that the way we should think about this?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [32]

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I would not want to give an exact timing on this. It's clear that all the customers are first getting one tool on their shop floor, be it in form of a beta, be it in form of some order. The tool is then being brought into all the full specifications being tested. Then the tool is being run for a certain period of time by the customer, where the customer is gaining full experience what the tool can deliver not only in the laboratory test environment but really in a regular high-volume production environment. And once that phase within our customers is completed, then we are targeting to expect larger volume orders from the customer, yes? And I think if you add these steps, I think, some maybe the Q4, others maybe in 2020, yes? It really depends on the high-volume qualification process of the customer.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [33]

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Understood. And just going to 3D sensing. AMS in their results talked about strong momentum that they are seeing from the Android side on 3D sensing both front and world facing, they were talking about. I was just wondering, I mean so far, your -- the customer base of 3D sensing, especially at Apple, has been quite consolidated. IQE has been a major customer of yours as well. Are you seeing a fragmentation of that in the Android side? Are you seeing many Chinese, Taiwanese companies get into that market? Or is it being fairly -- is it remaining quite consolidated even as the Android momentum picks up? And I have a last follow-up, if I may.

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Bernd Schulte, AIXTRON SE - President & Member of the Executive Board [34]

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I don't think we can call this fragmented. I think the players here providing epi for the 3D sensing applications are the known suspects. And you can imagine that most of them are AIXTRON customers. So I think the customer base has not changed significantly, in particular, for the well-known supply chains over the last 12 months. However, we are seeing certainly new players -- still seeing new players starting this developing VCSEL products in terms of epi particularly in Asia and particular in China. But I would say, for the time being and when we speak about potential product ramps of next year, I think it's very likely to be the known suspect.

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Janardan Nedyam Menon, Liberum Capital Limited, Research Division - Technology Analyst [35]

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Got it. And last question is on the OLED side. The date for when we might see an order for a larger GenX system has slipped a little over the last year or so. There was an expectation that, that could have come in earlier. You're not saying before the end of the year. Can you give us some a feel for where you are in that process? Is there an ongoing negotiation on the size of the machine and the price which we paid, et cetera, that has already started? Or is that something that is yet to start at this point in time, and it'll depend on the ongoing testing that the customer is indulging in?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [36]

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The latter is correct. As I mentioned, it's first about evaluating and completing the technical performance evaluation and fully understanding the capabilities of the tool. And if that is positive, then after that, it comes to the discussion about the customer, yes? It's true, and our overall program, as you know, has been delayed. But now we are well on track. Nevertheless, what exactly the dates for that is, that would be -- it's not clear, yes? It's really the steps mentioned and after the steps, the next phase of customer discussion negotiation will start.

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Operator [37]

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The next question comes from Charlotte Friedrichs calling from Berenberg.

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Charlotte Friedrichs, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [38]

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Just one follow-up. I think we've covered most of my questions by now. Could you tell us how much in R&D expenditure you had in the second quarter towards APEVA and how you see this going forward? Also, as you said, you are going for the testing phase. You may receive the order. How should we think about that?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [39]

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Yes. Thank you, Friedrichs. So as you know, in the last year, in 2018, we spent about -- the OLED activity had a bottom line impact of about EUR 25 million for us. As we commented earlier, in 2019, we expect the bottom line impact of the OLED activity to be less. We would not comment exactly how much that breaks down by individual P&L items, but it will be a little softer of an impact on the P&L. And the exact number, of course, determine or depend largely on the discussed timing sequence of the technical evaluations, the starting point of the project for the GenX. And therefore, it would be too early now to give out exact numbers. But the overall trend decline is intact.

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Charlotte Friedrichs, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [40]

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Okay. And then one more question. You said that 50% of the order intake in Q2 was power related. Could you give us a split very roughly of how much of that was done and how much of that was the beta silicon carbide tools?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [41]

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I would -- don't have the numbers exactly in front. Just by...

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Charlotte Friedrichs, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [42]

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Very Roughly.

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [43]

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Investment, maybe 2/3-1/3, 50-50, something between that, something in that range.

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Charlotte Friedrichs, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [44]

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Okay. So that would be 2/3 GaN and 1/3 silicon carbide, right?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [45]

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Somewhere between 2/3 GaN, 1/3 silicon and 50-50, somewhere in between. Don't have exact numbers in front of me.

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Operator [46]

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The next question comes from Malte Schaumann calling from Warburg Research.

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Malte Schaumann, Warburg Research GmbH - Equity Analyst [47]

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The first one is on carbide again. How long does it take for your customers to tune or qualify their process on your tools? So how -- what -- how many months are required then before the customers -- new customers could place more volume like orders?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [48]

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Very significantly, yes? We have some customers would have -- will take on a very diligent, very rigorous qualification and quality control approach, where you can say it can be in the process of 5, 6, 7 months, yes, very diligent. We also do have some customers which follow a much more aggressive risk taking approach, running some stress tests within literally a single-digit number of weeks and then starting to come to tool decisions in order to be -- and aggressively grab market share, yes? So it's a very diverse data, yes? So therefore, if you think about potential order, follow-up orders, it will be a mixed picture, vary by type of customer. And you can imagine some of the established German automotive supply chain lean much more towards the one side, other customers, then, of course, on the other end of the spectrum.

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Malte Schaumann, Warburg Research GmbH - Equity Analyst [49]

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Okay. And then do you see other customers, new customers in your company to be close to also place orders within the next month? So would you expect to maybe have kind of relations to all the major players within a few quarters?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [50]

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So we are in discussion. We are currently in discussions with all the big players of the market, and we are in demonstrations in our laboratory. And it's clearly our target, our objective to win a major share of this customer base. At this point, we cannot comment yet because the demos are still outstanding with many of them, which often we will eventually win over for our tool.

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Malte Schaumann, Warburg Research GmbH - Equity Analyst [51]

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Okay. And do any of your customers provide some kind of indications for potential ramp schedules? Or do you have some kind of idea how potential ramp in 2020 might look like? Will it be one by one or there the potential for multiple orders or multitude of orders?

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Felix J. Grawert, AIXTRON SE - President & Member of the Executive Board [52]

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Sure, but it would be too early to discuss yet at this stage, yes? The technical mass production experience of our customers comes first, and then we enter the ramp phase. This is -- would be too early to discuss.

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Guido Pickert, AIXTRON SE - VP of IR & Corporate Communication [53]

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Well, thank you. Thank you, everyone. This would conclude today's call. Thanks for your interest and your participation in this call. You know where to find us and me in case you still have any questions. For that, thank you all, and bye-bye.

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Operator [54]

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The conference is no longer being recorded.