Axcelis Technologies (ACLS) 27th Annual Needham Growth Conference summary

Export controls and market impact

• December 2024 U.S. export controls are expected to impact revenue by $20–$50 million, mainly due to a small number of customers added to the Entity List and new process requirements for export licenses.

• Prior strategic withdrawal from advanced logic and memory in China has limited the overall impact of these controls.

• Domestic Chinese competitors face similar restrictions, but significant technology barriers and ecosystem dependencies limit their global reach.

Silicon Carbide and power semiconductor trends

• Silicon Carbide (SiC) is in early adoption stages, with electric vehicles as the primary driver; only 22% of EVs use SiC, dropping to 6% excluding Tesla.

• Falling SiC prices are expanding its use into data centers, HVAC, and industrial applications.

• Substrate cost reductions and transition from 6-inch to 8-inch wafers are improving yields and lowering device costs.

• Chinese wafer quality is now comparable to Western suppliers, accelerating global adoption.

Technology competition and AI opportunities

• Gallium nitride (GaN) is seen as a niche competitor to SiC, with SiC favored for reliability in automotive and data center applications.

• AI growth is expected to drive demand for memory, storage, and sensor technologies, with significant second-order impacts on foundational and mature device markets.

• High Bandwidth Memory (HBM) is boosting tool utilization and driving incremental demand in memory segments.