Veeco Forecasts $1.3 Billion in Annealing SAM Revenue by 2029, Driven by Advanced Packaging and AI Demand

Veeco Instruments Inc. reported Q2 2025 earnings with revenue of $166 million, exceeding guidance. CEO William John Miller highlighted strong financial performance, non-GAAP operating income of $23 million, and non-GAAP EPS of $0.36. The company projects a $1.3 billion annealing substrate market by 2029, driven by demand for advanced packaging and AI applications.

Title: Veeco Instruments Inc. Reports Strong Q2 2025 Earnings, Projects Growth in Advanced Packaging and AI Markets

Veeco Instruments Inc. (NASDAQ: VECO) reported its Q2 2025 earnings, showcasing strong financial performance despite industry challenges. The company's revenue of $166.1 million exceeded its own guidance of $135–$165 million and analyst estimates of $151.21 million. CEO William John Miller highlighted robust financial performance, with non-GAAP operating income of $23 million and non-GAAP EPS of $0.36.

The company's semiconductor business posted another strong quarter, driven by record revenue for advanced packaging systems and demand from AI applications. Miller noted that the next-generation nanosecond annealing system expanded Veeco's capabilities, enabling new applications and progressing evaluations at advanced logic customers. The company projects its annealing substrate market (SAM) to grow to approximately $1.3 billion by 2029, driven by demand for advanced packaging and AI applications.

Veeco's revenue was 59% from Asia-Pacific (excluding China), highlighting geographic diversification and financial resilience. The company's cash reserves stood at $355 million, providing a solid financial foundation. The company also increased its revolving credit facility to $250 million, extending maturity to June 2030.

CFO John P. Kiernan provided Q3 2025 guidance, expecting revenue between $150 million and $170 million, with gross margin between 40% to 42%. Operating expenses are expected to be between $48 million and $49 million, net income between $12 million and $21 million, and diluted EPS between $0.20 and $0.35. Management maintained expectations for China revenue, forecasting it to be around 20% of revenue for the second half of the year.

Veeco's strategic positioning in the semiconductor equipment sector, particularly in 3D packaging and EUV lithography systems, positions it to benefit from AI and high-performance computing (HPC) demand. The company's focus on cost discipline and high-margin tools for EUV mask blanks and GAA architectures underscores its resilience in the face of industry headwinds.

References:
1. [1] https://seekingalpha.com/news/4480697-veeco-instruments-non-gaap-eps-of-036-beats-by-013-revenue-of-1661m-beats-by-1479m
2. [2] https://seekingalpha.com/news/4480844-veeco-projects-1_3b-annealing-sam-by-2029-as-advanced-packaging-and-ai-demand-drive-growth
3. [3] https://www.ainvest.com/news/veeco-instruments-outperformance-revenue-resilience-semiconductor-sector-gem-industry-headwinds-2508/