European Tech Darling Brought Down to Earth in Two-Day Slump
(Bloomberg) -- A seemingly unstoppable rally in BE Semiconductor Industries NV has come to an abrupt halt in just two days.
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Shares of the Dutch chip equipment maker fell almost 9% on Monday, extending Friday’s 16% drop that was caused by worries over delays in the uptake of a key technology. That erased nearly the entire year-to-date gain in a stock that more than doubled in 2023.
The stock’s drop was triggered by a report on Friday from Korean news website ZDNet, saying chipmakers plan to relax the standard that determines the thickness of next-generation memory chips.
At stake is BE Semiconductor’s hybrid bonding equipment, an emerging technology used to connect chips and enhance their performance. While the technology may be essential in future chip packaging processes, analysts said it’s expensive and its adoption by memory chip producers — including Samsung Electronics Co. and Micron Technology Inc. — probably won’t happen until after 2026.
BE Semiconductor “performed well when hybrid bonding adoption in processors became increasingly visible,” said Redburn Atlantic’s Timm Schulze-Melander. “This optimism is now challenged,” he said in a note, while downgrading his recommendation to neutral.
Should the industry standard be relaxed as the report indicated, chipmakers could afford to sit out on BE Semiconductor’s most advanced tools until newer technology standards come in, according to analysts.
BE Semiconductor was the best-performing technology stock in Europe last year, soaring 141% as its hybrid bonding tools gained traction. Prior to the two-day slide, it had been among the sector’s top gainers in 2024.
For Stifel analyst Florian Sager, the violent swings in the stock underscore its vulnerability, as any bad news — even just conjecture on a delayed adoption of its technology — can be a big negative.
“That is why we continue with our hold rating,” Sager said. “The stock is priced for perfection.”
(Updates with closing share move)
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