Half Year 2022 VAT Group AG Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : I have a few questions. I will go through them one by one. One relates to inventory again. Some of the increase in inventory in the finished products, does that relate to the consignment stocks that you have? And is that in your book still, just for me to understand? And do you see a risk that uptake of those inventories could slow down if the memory CapEx cycle slows? That would be my first question.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : How big is consignment as a percentage of your inventory, if there is such a number?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Yes, just a number, just for me or as an absolute number, something that I can work with.

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : My next question is on the guidance, CHF 290 million to CHF 320 million, I think it was. And you say it's FX neutral. The FX neutral, is this based on the Q3 2021 exchange rates or on current exchange rates? Because that would imply the dollar has gained like 4%, 5% gain against the frank in the last year. So that will be -- present some tailwind for you on...

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : If it's -- basically as of 30th July exchange rates, if nothing changes?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Final question is on the tax rate...

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : Final question is on the tax rate, 14%. And there was -- you said it's related to higher earnings in lower tax countries. I always thought Switzerland is a low-tax country, but is it now Malaysia? Or what is your lowest tax country and that basically drives the really low tax rate? And what shall we now think for tax rate going forward?

Question: Sebastian Kuenne - RBC Capital Markets, Research Division - Analyst : So, it's a temporary effect. Okay. And if Malaysia rents up further and further and you have to allocate earnings to Malaysia, how would that change the tax rate going forward? What's the effective tax rate in Malaysia that you have?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : I would like to follow up on the previous question. So you mentioned the issue -- there are some persisting issues in the supply chain. And I wanted to ask what are some of the bottlenecks that haven't been yet resolved that you still see? And then I have another question, please.

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : And I wanted to actually know what is for your customers that you are not the bottleneck, I just wanted to ask who is the bottleneck basically?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : And in the past, you used to show a chart with the market share, and you mentioned now that in spec wins you have more than 90% of the leading edge. And what's your overall market share in semi at the moment? Could you update us on that, please?

Question: Marta Kinga Bruska - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : May I have the very last one, please. On the -- with regard to the expectation for the next year, I heard you speaking about considering the scenario. And -- which is basically unchanged throughout the year and it is a very difficult environment. And I was just wondering, is it the right way to think like the CHIPS Act and the support from government for the industry that has been known already for more than a year. So why is basically not really a new news. While on the memory CapEx cuts are something that came out right now. So does this mean that the weight on your downside scenarios could probability weight that would have increased versus the continued growth for the next year? Or can you talk us a little bit with the weight you are putting on these various scenarios?

Question: Harald Eggeling - Znrcher Kantonalbank, Research Division - Analyst : Basically, looking into 2025, we have seen the wafer fab equipment spending split on Slide 23 now going for the 36% for 7-nanometers below. Could you probably elaborate a bit on your personal expectation of the trajectory of these 3 elements, 7-nanometer, below legacy and 14 to 7 nanometer, please?

Question: Harald Eggeling - Znrcher Kantonalbank, Research Division - Analyst : One last follow-up. Would it be -- would you call it a bullish scenario to go for 50% share of 7-nanometer and below by 2025 and like 45% share of legacy?

Question: Harald Eggeling - Znrcher Kantonalbank, Research Division - Analyst : So 50% 7-nanometer below and 45% for legacy?