Axcelis' Q2 2025 Earnings Call: Unraveling Contradictions in China Revenue, Memory Growth, and Margin Drivers

Strong Financial Performance:
- Axcelis Technologies reported revenue of $195 million for Q2 2025, exceeding their outlook, and non-GAAP earnings per diluted share of $1.13.
- The performance was driven by better-than-expected Systems and CS&I revenue, strong gross margins, and disciplined cost control.

Power Segment Dynamics:
- In the Power segment, sales were primarily driven by mature node applications, with a focus on power and general mature applications.
- Shipments of silicon carbide applications remained relatively flat, but there is a growing demand for silicon carbide in the China EV industry due to increased investments in capacity and technology transitions.

Geographic Revenue Distribution:
- China accounted for 65% of total shipped system sales in Q2 2025, up from 37% in the previous quarter.
- This increase is due to strong demand for silicon carbide applications and efforts by customers to optimize their tool utilization.

Memory Market Outlook:
- Memory sales accounted for 3% of total shipments in Q2 2025 and were sequentially down.
- The decline is attributed to customers focusing on scaling to higher layer counts and prioritizing upgrades in deposition and etch chambers over ion implantation capacity.