MKS (MKSI) The Citigroup Global TMT Conference 2024 summary

Company transformation and strategic vision

• Over the past decade, transformative acquisitions expanded the business from vacuum-based semiconductor equipment to advanced electronics, including Newport, ESI, and Atotech.

• The vision centers on enabling advanced electronics, with a focus on advanced packaging as critical for next-generation chip performance.

• Early moves into advanced packaging positioned the company ahead of industry trends, especially as packaging complexity now rivals that of semiconductors.

• The company now provides major components needed for advanced electronics, leveraging a 60-year history in semiconductors.

Market outlook and business performance

• Second half 2024 is expected to be flat with the first half, as recovery in NAND and DRAM is slower than anticipated.

• Visibility is lower due to shorter lead times, but Q2 saw upside from book-and-turn orders.

• Current end-market exposure is about two-thirds logic and one-third memory, with DRAM dominating memory exposure.

• NAND recovery is not expected until 2025, with inventory burndown ongoing and muted demand.

Competitive positioning and growth drivers

• The company is present in 85% of wafer fab equipment (WFE) tools globally, providing broad exposure and early insight into industry inflections.

• Growth is driven by innovation in RF power for V-NAND and a world-class optics initiative targeting lithography, metrology, and inspection.

• Revenue in lithography, metrology, and inspection has outpaced WFE growth, offering more stable CapEx revenue.

• Competitive advantage comes from a broad portfolio, deep customer relationships, and the ability to invest and innovate quickly.