Aixtron slumps as outlook disappoints, client issues warning

By Mateusz Dobrzyniewski and Amir Orusov

(Reuters) -Aixtron's shares fell as much as 22% on Thursday after the German semiconductor tools maker forecast a 2024 margin below expectations and a client reported the unexpected cancellation of one of its own major contracts.

Swiss sensor maker AMS Osram, which uses Aixtron's equipment to make displays used in smart appliances like phones or watches, said on Wednesday it had lost a "cornerstone" microLED contract with an unidentified client. Its shares plunged 40% in early Thursday trading.

Aixtron said the news would not impact its revenues for 2024 and 2025, as it was not part of the company's plans for that period.

"We are working with all parties in the industry and therefore have high confidence that AIXTRON will be involved in potential Micro LED projects from major customers," it said.

At 1025 GMT, Aixtron shares were down 14.4% at 27.01 euros.

The company, whose end-markets also include e-mobility, renewable energies, and infrastructure such as data centers, forecast revenue of 630-720 million euros ($683-780 million) for this year.

It expects an operating profit margin of between 24% and 26%. That's below analysts consensus forecast of 27.1%, Jefferies said in a note, adding the mid-point of the sales guidance also lagged expectations.

Aixtron's revenues increased 36% to 629.9 million euros last year, driven by growing demand for its new deposition technologies used in the production of compound semiconductors.

In September, the company introduced new G10-GaN technology, which it said would reduce production costs by more than 25% per wafer compared with previous products.

For the first quarter, it sees revenue of 100-120 million euros, compared with 214 million in the fourth quarter and 77 million in the first three months of 2023.

($1 = 0.9230 euros)

(Reporting by Mateusz Dobrzyniewski and Amir Orusov in Gdansk; Editing by Milla Nissi and Mark Potter)