Nova (NVMI) BofA Securities 2024 Global Technology Conference summary

Strategic focus and market positioning

• Operates in semiconductor process control, supplying equipment across memory, leading edge, trailing edge, and advanced packaging segments.

• Holds strong exposure to AI-related semiconductor applications, including HBM, advanced packaging, and hybrid bonding.

• Differentiates from major competitor KLA by focusing 40% of business on materials metrology tools and unique Optical CD technologies.

• Nova PRISM offers advanced measurement capabilities for deep structures, enhancing competitive edge.

Market environment and growth outlook

• Wafer fab equipment (WFE) market expected to grow mid-single digits in 2024, with China strong in H1 but moderating in H2.

• TSMC, Intel, and Samsung's major investments in the US and abroad are set for 2025 and beyond, driving future WFE growth.

• Nova has consistently outperformed WFE market growth, averaging 20% annual growth over five years versus industry’s 10-12%.

• Advanced packaging is projected to grow 50% in 2024, with upside potential as demand broadens.

Segment and regional trends

• Trailing edge exposure is mainly in China, with investments expected to remain stable or slightly higher dollar-wise in 2024.

• China’s share of revenue is expected to remain stable this year, with a reduction likely in 2025 as other regions ramp up.

• Advanced packaging now represents 15% of revenue, up from nearly zero three years ago, driven by adoption of front-end tools in back-end processes.

• Memory investments are focused on HBM, with regular DRAM expansions starting in H2 2024; NAND investments expected in 2025-26.