MKS Instruments Inc at Needham Growth Conference Transcript

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

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Good overview of that. Before we dive a little bit more deeply into it, obviously, a lot of questions coming up at this conference and leading up to the conference just about tariffs and about China export restrictions. If you could maybe bring us up to date first, the direct, indirect impact on MKS, whether it's minimal -- I think you've talked about it in the past -- and whether there's any uncertainty as it relates to these restrictions, the ones that are being proposed that would affect your large OEM customers.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Not sure you'll answer this but any reaction to some of the public comments from some of your bigger customers in early December, notably AMAT and Lam since the publication of these rules? I think one of them even suggesting back in December that WFE, they expect growth in WFE in '25. And just curious what your reaction might be to some of the comments.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : You know, it might be worth reminding us two of the areas because this part of the business has changed a little bit. It's going back aways from the Newport acquisition, but it might be worth talking about where MKS today is over-indexed in certain parts of the business. And generally, how that might play out as we see some of the things that we've been talking about?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Yes, that's right.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : You mentioned AI and how is there a way for us to think about how much of a driver it is for the packaging side of the business? How much it is for the semi side of the businesses? Obviously, we're going to be talking about this for a while. But what's the best way to think about that?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : You know, let's just turn back for a second to the Atotech business. It might be helpful for some folks. You mentioned 25% that represents electronics and packaging. Roughly, a third of that business come from specialty industrial, right?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : And so I guess what I'm asking is if we look at that business because it's somewhat unique for MKS versus historically. It's materials and equipment. Give us a rough idea of that mix because it's also been important during this cycle, hasn't it?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : And that business sells to what the top 30 PCB?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Talk to us about, looking at that business, some of the inroads that you've made with these customers with your laser technology and the drilling business has been a tough business several years. What are you seeing in that market that gives you the confidence that the synergies are going to play out.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Is one way to think about both parts of the business, John, you're -- and the Atotech business is holding up pretty well without the mobile phone driver, PC demand, as you noted has been soft. Now WFE, we've been kind of bumping along for a while. But is -- the way you're describing it -- sounds like what you're describing is that there should be some very nice leverage as both these things turn.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Please. Unidentified Participant Sorry, Jim, (inaudible) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2025 / 6:30PM, MKSI.OQ - MKS Instruments Inc at Needham Growth Conference

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : You alluded to the gross margin and certainly solid improvement Q3. Was that across all three areas if the business?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Maybe on that S, talk about the competitive position of market share. I think you may have touched upon it but I think it's worth --

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Turn to the balance sheet. The company has made significant progress paying down debt. Maybe it's -- why don't you remind us what the MKS is thinking is in terms of debt pay down relative to what you said back at Analyst Day.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : You shared some other metrics back a couple of years ago, December '22, on just in terms of targets. Has any -- John, has anything changed with respect to how you see the business today?

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Any other questions? A question here. Unidentified Participant (inaudible - microphone inaccessible)

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Any other question? Okay, cool.

Question: Jim Ricchiuti - Needham & Company, LLC - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2025 / 6:30PM, MKSI.OQ - MKS Instruments Inc at Needham Growth Conference