Veeco at Oppenheimer Conference: Strategic Growth in Semiconductors

On Tuesday, 12 August 2025, Veeco Instruments Inc. (NASDAQ:VECO) presented at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The company outlined its strategic focus on the semiconductor market, emphasizing both challenges and opportunities. While Veeco anticipates a decline in compound semiconductor and data storage revenues in 2025, the company projects growth in 2026, driven by advancements in AI and high-performance computing.

Key Takeaways

• Veeco is focusing on semiconductor capital equipment, particularly in AI and high-performance computing.
• The company expects its semiconductor served available market (SAM) to more than double, from $1.3 billion to $2.7 billion.
• AI revenue is projected to grow from 10% in 2024 to 20% in 2025.
• Veeco’s LSA platform is recognized as a production tool at leading logic and memory customers.
• The company is confident in its long-term growth strategy, aiming for significant market expansion by 2030.

Financial Results

• Current semiconductor SAM is approximately $1.3 billion, with projections to grow to $2.7 billion.
• Veeco’s semiconductor business has grown at an approximate 30% CAGR from 2020 to 2024.
• GaN power devices market is expected to expand from $100 million to $300 million.
• Photonics market is projected to grow from $150 million to $400 million.
• Advanced packaging solutions SAM could potentially grow by $650 million.
• LSA SAM is expected to reach $800 million, while NSA SAM could grow to $450 million.
• IBD for EUV mask blanks projected SAM growth to $120 million, with IBD SAM for high-value front-end applications reaching $350 million.

Operational Updates

• Veeco’s LSA platform is utilized by all leading logic customers and one memory customer at advanced nodes.
• The NSA platform is under evaluation for multiple applications with two tier-one logic customers.
• A 300 millimeter evaluation tool was shipped to a tier-one power device customer in 2024.
• Plans to ship an LSA evaluation system to a second tier-one DRAM customer later this year.
• An NSA evaluation system is expected to be shipped to a third logic customer.

Future Outlook

• The semiconductor industry is projected to exceed a trillion dollars by 2030.
• Growth in compound semiconductors and data storage markets is anticipated to start in 2026.
• Evaluation programs could generate $30 to $60 million in follow-on business per application win.
• Additional NSA and IVD 300 evaluation systems are expected in 2026.
• AI revenue is projected to increase from 10% in 2024 to 20% in 2025.

Q&A Highlights

• Anthony Popon, VP of FP&A and IR, emphasized Veeco’s role in enabling mass adoption of LED lighting.
• The LSA platform’s expansion into new applications was highlighted as a key growth area.
• The growing demand for advanced technologies in AI was noted as a significant driver for Veeco’s products.
• Veeco’s exposure to high-growth market areas is expected to enable its SAM to outpace overall wafer fab equipment spending.

For a deeper understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Rick Schafer, Oppenheimer Semiconductor Analyst, Oppenheimer: Hi. Good afternoon, everybody. Thanks for joining us. I’m Rick Schafer, Oppenheimer Semiconductor Analyst. Joined today by Anthony Popon, VP of FP and A and IR.

Anthony’s been been part of the IR team since 2023, I believe. So, Anthony, you know, great as always to see you. Thanks for joining us, and, I will, I’ll turn the floor over to you.

Anthony Popon, VP of FP and A and IR, V Go: Hey. Thanks, Rick. Hello, everyone. Thanks for joining me today. Before I begin, as a reminder, just please, take a moment to review our Safe Harbor statement on Slide two.

So, for today’s presentation, I’ll start with a quick overview of V Go, speak about our role in semiconductor space, discuss our served available market, share our current evaluation systems and our technology role in AI, then I’ll move over to our semiconductor market, provide an overview of our historical revenue, and lastly, end with why Vico is a strategic investment opportunity. So, who is Vico? Our company has a long track record of success in data storage in the nineties. Vico demonstrated industry leadership with our ion beam technology to manufacture thin film magnetic heads that are used today. We grew this portion of our business and then expanded into compound semi, in compound semi, Vico saw tremendous growth with our MOCVD tools that were used for the technology to make LED, specifically LED TV backlighting and LED general lighting applications.

Our technology enabled mass adoption of LED lighting throughout the world. In 2018, when Bill became CEO, our LED business became largely commoditized. And as a as a result, we had to significantly, transform the company. We developed a strategy to utilize our core technologies in the markets with the highest return on investment, including the semi market. The technology we had in semiconductor market, through the acquisition of Ultratech was best in class.

However, prior to the acquisition of Ultratech, Ultratech fell out of favor with the tier one semi providers due to their inability to substantially support the customers. Bill, with the strength of the Vico infrastructure, was able to reengage these tier one leading semi manufacturers and subsequently turn them back into customers. With Vico’s focus on leading edge customers, we were able to expand the business and transform into a semiconductor capital equipment provider with technologies enabling advanced semiconductor chips for AI and high performance computing. Now I’ll discuss VCO’s role in semiconductor manufacturing. Our technology is critical for several leading edge semi manufacturing steps for both current and future, applications.

I’m gonna walk through this chart from left to right. So to begin, our IBD 300 system, which is currently being evaluated for differentiated, technologies, through its ability to achieve improved thin film properties with critical metals, which can directly impact device performance speed and battery life. Next, I’m moving over to the IVD for EUV mask blank production. We’re the market leader for deposition of defect free of free films for EUV mask blanks. Our ion beam deposition technology is critical to the industry’s road maps, and we’re in strong position to support demand for EUV lithography.

We see opportunities to expand our business into adjacent mask blank steps. Next, we’re the market leader or we are market leader in laser annealing with our laser spike annealing systems qualified as production tool of record for leading logic customers and one tier one DRAM customer. Our next generation nanosecond annealing system expands our capabilities to enable new applications. Moving to advanced packaging, at wet processing systems are production tool of record at a number of leading customers, and we continue to expand with application wins. In advanced packaging lithography, we sell to several IDMs and OSATs customers with several, applications.

Now I’m gonna transition to discuss Veeco Semiconductor market position. Our semiconductor SAM is about 1,300,000,000.0 today, which we see doubling to more than 2,700,000,000.0 as our core laser annealing, nanosecond annealing, and IBD technologies continue traction. Our LSA platform is production tool of record at all leading logic customers and one memory customers advanced nodes and is continuing to expand to new applications. We see opportunity for LSA SAM to grow to 800,000,000 driven by industry inflections in logic and memory resulting in an increase in laser annealing intensity. Our NSA platform is being evaluated for multiple applications at two tier one logic customers, and we have strong pull from a third tier one logic customer.

We expect the SAM to grow to approximately 450, million dollars. We expect LSA adoption in memory and adoption of our NSA system for advanced applications in logic and memory to be key growth drivers. In ion beam deposition for EUV mask blanks, leading logic and memory customers expect EUV and high NA EUV lithography to to be integral to their road maps, contributing to projected SAM growth to $120,000,000. In I b d March, we have opportunities to expand our SAM to $350,000,000 for our high valued front end semi applications requiring critical film performance. And we have two evaluations outstanding with memory customers and pull from customers in logic as well.

In advanced packaging, we see potential SAM growth at 650,000,000 for enabling wet processing solutions and lithography for growing number of applications supporting AI and high performance computing. So the next two slides, are gonna discuss two of, our largest opportunities, two of the opportunities that are currently out for evaluation right now. So first, I’m gonna start with our NSA tool. Our NSA tool offers a substantial opportunity to expand our SAM to a broad range of new advanced node applications in both logic and memory. Our NSA system’s unique laser and architecture results in a shorter dwell time versus today’s most advanced annealing solutions.

The dwell time is the length of time the wafer is subject to heat of the laser. These capabilities can help customers address scaling challenges through a more precise and shallower annealing and are ideal for steps such as backside power delivery, contact anneal for advanced nodes, and three d devices. We expect nanoseconding annealing to be complementary to our current laser annealing systems as we expect both technologies to be utilized at advanced nodes for different steps. Now moving to our ion beam deposition system for thin film, for, low resistant metals. Our core ion beam technology has been honed over decades and is the technology of choice in the semiconductor industry for EUV mass point production.

The semi road map is turning to new technologies and materials to enable continued device shrinks and address growing need for energy efficient compute performance. Low resistant metals are increasingly critical to maintain device performance as customers look to scale via device shrink and traditional deposition technologies are reaching their limits. Our IVD 300 system can achieve lower resistivity through improved thin film properties for critical metals, which can benefit our customers to improve device performance and speed. I’d now like to provide an additional detail on our evaluation program and its importance in capturing several of our largest opportunities. Our evaluation program has been essential to penetrating new opportunities in front end semi market, and we had several evaluation systems outstanding the tier one logic and memories as I stated earlier.

This slide shows the semi evaluation systems currently at both logic and memory customers. We’re seeing strong customer engagement across multiple evaluations, which are targeting a range of high valued applications. Each application win has the potential to generate thirty to sixty million in follow on business, assuming a 100,000 wafer starts per month. Our evaluations in the field are progressing well and continuing to invest in additional, systems to drive new business in both logic and memory. We expect to ship an LSA evaluation system to a second tier one DRAM customer later this year along with an NSA evaluation system to a third logic customer.

We also see potential for additional NSA and IVD 300 evaluation systems in in 2026. So now I’d like to turn to our opportunities in AI and how all of this this semi, the semi equipment that we’re speaking about, how it applies to AI. So AI is requiring the most advanced technologies to manufacture higher performance chips, and we’re seeing growing adoption of our products in three main areas. Our laser drilling systems are used for GPU and CPU production at all leading logic customers’ most advanced nodes. For HBM DRAM, our first customer has adopted our LSA system for both the logic die and the peripheral logic on each HBM DRAM, DRAM die.

In ion beam deposition, our IVD systems enable mass blank production for both GPUs and HBM DRAM. Equally as important, we’re seeing future opportunities for our nanosecond annealing and ion beam deposition solutions for both GPU and HBM. In wet processing, our systems support advanced packaging for AI by enabling flux clean of micro bumps at leading foundry and memory customers as well as OSATs with similar similar, packaging processes. Notably in this area of the business, we are seeing strength, and we see AI revenue increasing from about 10% in ’24 to about ’20, to about 20% in ’25. So now I’d just like to, briefly turn to our compound semi opportunities.

So in compound semi market, we see SAM today of nearly 700,000,000, and we expect it to grow to 1,200,000,000. GaN power devices are common in customer electronics for applications like fast charging, wireless charging, and other automotive applications, and we believe we’ll be well positioned as the market continues to expand. We shipped the 300 millimeter eval to tier one power device customers in ’24, which is an exciting opportunity, and we’re seeing this market growing from a 100,000,000 to 300,000,000. We’re also excited about our opportunities in photonics in areas like micro LEDs and solar applications and see this market growing from 150,000,000 to 400,000,000. I’ll now transition to discuss our historical revenue by end markets.

So investment in core technologies in the semi market has been a significant focus for the company. We’ve had a great deal of success in growing our semi business over the last few years. And from 2020 to 2024, the business has grown at an approximate 30% CAGR. Continue to see potential for growth in semi for February for, for semi in 2025, particularly in leading edge investments, driven by AI and high performance computing. And beyond ’25, our outlook remains strong in the semiconductor market supported by our differentiated product portfolio across, laser annealing, ion beam deposition, web processing, and and litho.

And in compoundsemi and datastorecom data storage markets, although revenue is expected to decline in 2025 compared to 2024, we are seeing encouraging signs. In compound semi, customers’ interest in GaN power and photonics has been increasing, and we see these emerging opportunities to begin contributing to revenue growth in 2026. And in data storage, we’re encouraged by increased engagement and commercial discussions around future requirements. I wanna conclude with the key takeaways on why we believe VECO is a compelling investment opportunity. First, some industry analysts and leading equipment providers project growth of semi industry to over a trillion dollars by twenty twenty thirty, contributing to expectations for long term growth in wafer fab equipment spending.

Second, VCO has a portfolio of enabling technologies that are increasingly critical for several leading edge semi manufacturing process steps. Third, our strategy of investing in core technologies to enable industry inflections in advanced logic and memory continues to gain traction. Fourth, we believe our exposure to these high growth areas of the market can enable our SAM to grow faster than growth in WFE spending. And finally, we expect our execution to generate long term value for V Go. So with that, I’d just like to thank everyone for joining me today, and this will conclude our presentation.

If you have any questions or follow ups, please reach out to investor relations. We’d be happy to take your calls. Thank you. Thanks, Anthony. Great to see you.

Great to see you, Rick. Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.