MKS Instruments Inc at Citi Global TMT Conference Transcript

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

Question: Elizabeth Sun - Citi - Analyst : Great. Thanks for the introduction. So let's get into the questions. So I want to start with some questions on the overall market. In the June quarter earnings call a month ago, you slightly adjusted down your outlook from now second half to be flat with first half. So without going into too many details, what changed your outlook compared with a quarter ago? And is there any changes compared to the month?

Question: Elizabeth Sun - Citi - Analyst : Got it. And could you remind us your end market exposure to memory and logic foundry? And I think you previously mentioned, I think it was last year here at Citi's conference, you said you were about 50% exposed to memory, with memory down for the last two years and exposed right now.

Question: Elizabeth Sun - Citi - Analyst : Okay. Yeah. So I think you're known for kind of overindexing NAND in the past. So is that it's more NAND -- sorry, more DRAM right now. What's the normal level of your exposure like?

Question: Elizabeth Sun - Citi - Analyst : Got it. And do you see any green shoots in NAND recovery, or what signs are you looking at?

Question: Elizabeth Sun - Citi - Analyst : Okay. That's fair. So you guys have a wide range of products and you have this strategy called like surround the wafer, if I'm correct. And you've talked about you are exposed to 85% of WFE equipment. So could you talk more about where are the main areas of strength for MKS and will be the main growth driver?

Question: Elizabeth Sun - Citi - Analyst : Okay. A couple of more questions on the semi, and then we'll move on to other markets you would like to talk about. So in the semi market, you are expecting 200 bps WFE performance in your target model. So what gives you the confidence about this outgrowing? And what's your competitive advantage?

Question: Elizabeth Sun - Citi - Analyst : Got it. And just want to double click into one of the competitions. So regarding Advanced Energy, I think historically you are stronger in the electric edging, but they have -- talking about like these new tools to hoping to gain some shares in that area. So can you talk about your competition environment there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 12:20PM, MKSI.OQ - MKS Instruments Inc at Citi Global TMT Conference

Question: Elizabeth Sun - Citi - Analyst : Okay. And now just move on to the E&P segment. So in advanced packaging, I think you have 25% of exposure in advanced packaging, which I think is, right now, the best part of E&P segment. So what's your growth expectation there? And what do you compete with in that area?

Question: Elizabeth Sun - Citi - Analyst : Got it. And you just talked about 30% increasing in layers for AI server board compared with non-AI. So what's the content increase for MKSI?

Question: Elizabeth Sun - Citi - Analyst : And you just mentioned Atotech. And I guess in your June quarter call, you talk about one of the first wins of the Atotech synergies. So can you remind us what was the area and what kind of future opportunities you are looking at?

Question: Elizabeth Sun - Citi - Analyst : Okay. All right. Before I move on, is there any questions in the audience? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 12:20PM, MKSI.OQ - MKS Instruments Inc at Citi Global TMT Conference Okay, let's just move on. So I just want to quickly touch on the specialty materials segment. So it's a relatively, I guess, stable business and you think about it as GDP plus growth. And so just could you talk about the puts and takes within this segment?

Question: Elizabeth Sun - Citi - Analyst : Yeah. That makes sense. And then on China, to ask that, so I think your China exposure has been increasing for the past few years. Now, I think this year, it is more than 20% so far. So what markets are you most exposed to? Is it memory and logic, or which segments of your business is most exposed to China?

Question: Elizabeth Sun - Citi - Analyst : Got it. And do you see incremental competition from domestic Chinese makers?

Question: Elizabeth Sun - Citi - Analyst : Okay. And just finally touch on capital allocation. I know you've got the new CFO, but he's not here. So what's the top priority? I know the top priority is still going to be debt pay down. But are you still looking for M&A at the same time?

Question: Elizabeth Sun - Citi - Analyst : And I guess your portfolio is diversified enough right now. You're happy with the exposure right now?

Question: Elizabeth Sun - Citi - Analyst : Yeah. And just finally, anything just you want to add you think investors are not fully appreciating of your company?

Question: Elizabeth Sun - Citi - Analyst : Okay. Sounds good. Just before I conclude the session, is there any questions in the audience? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 12:20PM, MKSI.OQ - MKS Instruments Inc at Citi Global TMT Conference