MKS (MKSI) 28th Annual Needham Growth Conference Virtual summary

Strategic positioning and market overview

• Focused on being foundational to all advanced electronics, not just semiconductors, driving acquisitions like Atotech to expand capabilities and market share across wafer fab equipment and advanced packaging.

• Addresses 85% of wafer fab equipment and 70% of advanced packaging steps globally, with unmatched market share in subsystems and chemistry.

• AI is a major growth driver, especially in equipment and chemistry for high-layer-count PCBs and package substrates.

• Chemistry revenues from AI-related applications have doubled year-over-year, now estimated at 10% of total chemistry revenue.

• Record equipment revenue year, with strong bookings expected to drive growth into 2026.

Business performance and growth drivers

• E&P segment accounts for 28% of revenues, growing over 20% in 2025, driven by AI and demand for advanced PCB equipment and chemistry.

• Equipment sales lead to recurring high-margin chemistry sales, with $20M–$40M in annual chemistry revenue for every $100M in equipment at full utilization.

• Chemistry business has mid-50% gross margins, outperforming competitors due to R&D scale and customer proximity.

• Flex PCB laser drilling business benefits from mobile and wearable device trends, with potential upside from increased adoption of foldable phones.

• Market share leadership in chemistry and equipment, with future installations expected to further strengthen position.

Semiconductor segment outlook

• Semi segment up 15% in first nine months of 2025, aided by NAND upgrades and industry inventory normalization.

• Positioned to benefit from DRAM and HBM buildouts, with 85% exposure to wafer fab equipment and strong leverage to Dep/Etch processes.

• Historically outgrows WFE by 200 basis points through cycles, with momentum building for a potential ramp in 2026–2027.

• World-class optics revenue doubled over five years, with further share gains expected as lithography metrology and inspection markets grow.

• Customer conversations indicate a more positive outlook for a sustained ramp, especially in memory and logic, with possible pull-ins ahead of 2027.