Besi Projects Unexpected Sales Decline in Q1 2025 Amid Weak Traditional Markets

AI-related demand grows, but automotive and smartphone sectors struggle / Reuters

Dutch semiconductor assembly equipment supplier BE Semiconductor Industries (Besi) has announced a surprising forecast of a sales decline for the first quarter of 2025, citing ongoing challenges in its core markets. Despite increased orders for advanced packaging solutions driven by artificial intelligence (AI) applications, weakness in the automotive, smartphone, industrial, and Chinese end-user sectors is expected to weigh heavily on overall revenue.

The company predicts a quarterly revenue decrease of up to 10% compared to the €153.4 million ($159.9 million) recorded in the fourth quarter of 2024. This projection sharply contrasts with analyst expectations, which estimated first-quarter revenue to reach €170.2 million, according to LSEG’s IBES data. Following the announcement, Besi’s stock plummeted by 10% on Thursday, positioning the company at the bottom of Europe’s STOXX 600 index. If the downturn continues throughout the day, it would mark the steepest single-day decline for Besi’s shares since October.

Market Analysts Express Concern Over Disappointing Guidance

Market analysts responded with concern to the lower-than-expected first-quarter guidance. Michael Roeg, an analyst at Degroof Petercam, remarked that the figures came in well below market expectations, while the company's fourth-quarter results also fell short. A key metric for future growth—order bookings—was particularly disappointing. Besi reported fourth-quarter bookings of €121.9 million, far below the Visible Alpha consensus forecast of €171 million. This significant gap suggests a slower recovery in Besi's core business segments, particularly in mainstream assembly markets.

Besi’s management acknowledges the difficulty in balancing the positive momentum in AI-related technology with declining demand in more traditional sectors. CEO Richard Blickman noted that while there is strong interest in the company’s advanced die placement solutions for AI applications, the persistent weakness in automotive and smartphone-related chip production continues to present significant challenges. He added that the company is approaching 2025 with "cautious optimism," relying on innovative hybrid bonding technology to drive future growth.

AI and Advanced Packaging Drive Future Hopes Amid Market Uncertainty

Despite the current downturn, industry analysts remain hopeful that advanced packaging solutions, including hybrid bonding technologies, will become a significant growth engine for Besi. As AI adoption accelerates across industries, the demand for cutting-edge semiconductor packaging is expected to rise. Besi’s first-mover advantage in hybrid bonding solutions could position the company to benefit from the increasing complexity of AI-driven chip architectures.

However, the recovery in Besi’s core markets remains uncertain. The automotive and smartphone industries—both critical consumers of semiconductor equipment—have faced a prolonged slump due to global economic pressures and overcapacity. Many manufacturers are delaying new equipment purchases as they manage excess inventories. Besi anticipates that a meaningful recovery in these mainstream assembly markets will not occur until the latter half of 2025. This timeline is contingent on improvements in end-user demand and the easing of international trade restrictions.

Investors Await Q1 2025 Financial Results for Clearer Outlook

Investors and analysts will be closely watching Besi’s performance in the coming months, particularly its ability to sustain growth in AI-related orders while navigating ongoing weaknesses in traditional chipmaking sectors. The company’s first-quarter 2025 financial results, scheduled for release on April 23, 2025, will provide further insights into whether Besi’s strategic focus on advanced packaging technologies can offset declines in its legacy business areas.

As the semiconductor industry remains highly sensitive to global economic shifts and technological advancements, Besi’s ability to adapt to changing market dynamics will be crucial for maintaining long-term growth. For now, the company faces a challenging road ahead as it seeks to balance short-term market weakness with long-term opportunities in AI and advanced packaging.