ams OSRAM to re-assess its microLED strategy, to record non-cash impairment charges, to adjust its mid-term structural revenue growth target to 6% to 8%, and to improve cash flow profile

News Source: 

Ad hoc announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange
-------------------------------------------------------
ams OSRAM to re-assess its microLED strategy, to record non-cash impairment charges, to adjust its mid-term structural revenue growth target to 6% to 8%, and to improve cash flow profile

  • A cornerstone project underpinning its microLED strategy got unexpectedly cancelled today, triggering the company to re-assess its microLED strategy.
  • Non-cash impairment charges of EUR 600 to 900 million are expected based on a preliminary first estimate.
  • FY/24: As a first estimate, the company expects around EUR 30 to 50 million lower adjusted EBIT for FY2024 due to lower capitalization of R&D expenses and lower subsidies from government funding schemes. The company will consider additional cost improvements on top of its known Re-Establish-the-Base program to lessen the impact.
  • Q1/24: No change to first quarter 2024 revenue (EUR 800 to 900 million) guidance
  • Q1/24: No change to the adj. EBIT margin range of 4% to 7% expected, but profitability will be impacted by lower capitalization of R&D expenses and lower subsidies within this range.
  • The cash flow profile of the company is expected to be positively impacted in the next 24 months (lower CAPEX amongst other effects).
  • Mid-term structural growth model slightly adjusted to 6% to 8% revenue CAGR from its new 2023 base excluding the non-core semiconductor portfolio and the Lamps & Systems related divestiture in Q1/2023.


Premstaetten, Austria, and Munich, Germany (28 February 2024) - ams OSRAM revises its microLED strategy with unexpected cancellation of cornerstone project. A non-cash impairment charge of EUR 600-900m, a slightly revised mid-term revenue CAGR of 6-8% on a like-for-like basis, and a positive impact to its cash-flow profile within the next 24 months is expected.

The Management Board of ams OSRAM AG has decided to re-assess the microLED strategy of the company after having been informed of the unexpected cancellation of a cornerstone project for its microLED program. Discussions with the related customer are ongoing.

Following the cancellation of the cornerstone microLED project, the company will revisit the future use of its assets related to its microLED strategy, particularly the new 8-inch LED facility in Kulim (Malaysia). Based on a first, preliminary estimation, ams OSRAM expects to record non-cash impairment charges on microLED related assets and goodwill of EUR 600 to 900 million in the first quarter of fiscal year 2024.

Changes to the capitalization of R&D investments into microLED and reduced subsidies from public funding schemes will impact the operational profitability (adjusted EBIT) for FY2024 by around EUR 30 to 50 million. The company considers additional cost improvements on top of its known ‘Re-Establish-the-Base’ program to further balance this negative impact on Fiscal Year profitability.

The underlying business performance is on track and the company continues to expect first quarter revenues to improve year-over-year on a comparable basis to a level of EUR 800 - 900 million. The adj. EBIT is expected to still come in between 4% to 7% of revenues but will be burdened by the aforementioned changes to capitalization of R&D and reduced subsidies within that range.

The cancellation of the cornerstone project is expected to improve the cash flow profile of the company in the next 24 months, among others due to reduced CAPEX.

Implications for mid-term target financial model
The company now assumes on a like-for-like basis (without the non-core portfolio in semiconductors of EUR 300 to 400 million in 2023 and the divestments in the L&S segment in Q1/2023), to grow revenues now with a 6% to 8% CAGR mid-term, as volume sales from its 8-inch LED facility in Kulim can no longer be assumed in that time frame. The company continues to expect that the largest growth contribution will be coming from the strong momentum in its target automotive semiconductor applications, where it is clear market leader, followed by mobile light sensors on the back of the large design-wins that the company secured earlier besides the other growth drivers in industrial, medical, and selected consumer applications.

The company sees unchanged momentum in design-wins in its core businesses of automotive, industrial and medical.



About ams OSRAM
The ams OSRAM Group (SIX: AMS) is a global leader in intelligent sensors and emitters. By adding intelligence to light and passion to innovation, we enrich people’s lives.

With over 110 years of combined history, our core is defined by imagination, deep engineering expertise and the ability to provide global industrial capacity in sensor and light technologies. We create exciting innovations that enable our customers in the automotive, industrial, medical and consumer markets to maintain their competitive edge and drive innovation that meaningfully improves the quality of life in terms of health, safety and convenience, while reducing impact on the environment.

Our around 20,000 employees worldwide focus on innovation across sensing, illumination and visualization to make journeys safer, medical diagnosis more accurate and daily moments in communication a richer experience. Our work creates technology for breakthrough applications, which is reflected in over 15,000 patents granted and applied. Headquartered in Premstaetten/Graz (Austria) with a co-headquarters in Munich (Germany), the group achieved EUR 3.6 billion revenues in 2023 and is listed as ams-OSRAM AG on the SIX Swiss Exchange (ISIN: AT0000A18XM4).

 

TrendForce 2023 Micro LED Market Trend and Technology Cost Analysis
Release Date: 31 May / 30 November 2023
Language: Traditional Chinese / English
Format: PDF
Page: 160 / Year

 Gold+ Member Report

Report Title
Content
Format
Publication
LED Industry Demand
and Supply Database
Demand Market Analysis:
PDF / Excel
1Q (Mid Mar.)
3Q (Early Sep.)
2024-2028 Demand Market Forecast
(Backlight and Flash LED / General Lighting / Agricultural Lighting / Architectural Lighting / Automotive- Passenger Car & Box Truck & Scooter / Video Wall / UV LED / IR LED / Micro LED / Mini LED)
Supply Market Analysis:
1. LED Chip Market Value (External Sales, Total Sales)
2. WW New / Accumulated GaN LED and AS/P LED MOCVD Chamber Installations
3. GaN LED and AS/P LED Wafer Market Demand (By Region / By Wafer Size)
4. GaN LED and AS/P LED Wafer Market Demand and Supply Analysis
LED Player Revenue
and Capacity
LED Chip Market Analysis:
PDF / Excel
2Q (Early Jun.)
4Q (Early Dec.)
Top 10 LED Chip Manufacturers by Revenue and Wafer Capacity
LED Package Market Analysis:
LED Package Manufacturers: Total Revenue, LED Revenue, and Capacity Analysis
Top 10 LED Package Players by Revenues in Backlight and Flash LED, Lighting, Automotive, Video Wall, UV LED
LED Industry Price Survey
Sapphire / Chip / Package (Backlight, General Lighting, Agricultural Lighting, Automotive, Video Wall, UV LED,
IR LED, VCSEL)
Excel
1Q (Mid Mar.)
2Q (Early Jun.)
3Q (Early Sep.)
4Q (Early Dec.)
LED Industry
Quarterly Update
Major Players Quarterly Update:
PDF
1Q (Mid Mar.)
2Q (Early Jun.)
3Q (Early Sep.)
4Q (Early Dec.)
EU / U.S.- Lumileds, ams OSRAM, Cree LED
(Smart Global Holdings)
JP- Nichia, Citizen, Stanley, ROHM
KR- Samsung, Seoul Semiconductor, Seoul Viosys
ML- Dominant
TW- Ennostar, Everlight, LITEON, AOT, Harvatek, PlayNitride
CN- San’an, Changelight, HC SemiTek, Aucksun, Focus Lightings, Nationstar, Hongli, Refond, Jufei, MTC, MLS
Micro/Mini LED
Exhibit Report
CES 2024 / Touch Taiwan 2024
PDF
Aperiodically;
<20 Pages

If you would like to know more details , please contact:

Global Contact:
 
ShenZhen:
Grace Li
E-mail : Graceli@trendforce.com
Tel : +886-2-8978-6488 ext.916
  Perry Wang
E-mail : Perrywang@trendforce.cn
Tel : +86-755-82838931 ext.6800

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

Figure 1. Overall concept of face-fit surface-lighting micro-LEDs (FSLED) mask. a. Optical image of the FSLED mask showing uniform surface-lighting. schematic illustration of the FSLED mask. The 2D to 3D transformation procedure b. Difference ... READ MORE

The next generation of high-performance LEDs is now available: the OSCONIQ® C 3030 from ams OSRAM. Engineered for demanding outdoor and stadium lighting applications, this cutting-edge LED series combines exceptional intensity with thermal... READ MORE