Veeco's Q1 2025: Contradictory Signals on Advanced Packaging Growth and China Revenue Impact

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Semiconductor Business Performance:
- Veeco's semiconductor business grew 10% sequentially and 3% year-over-year, representing 74% of total revenue.
- Growth was driven by increased demand in advanced packaging, including wet processing systems and lithography systems, as well as orders for LSA systems.

Impact of Tariffs on Business:
- Recently enacted tariffs are causing some China customers to delay shipments, which could impact future demand and increase costs.
- Veeco is evaluating potential implications and working with customers to mitigate impacts, while maintaining confidence in its long-term strategy.

Laser Annealing System Orders:
- Veeco received orders from leading-edge logic customers for gate-all-around nodes and high-bandwidth memory, expanding adoption of laser annealing.
- This expansion is tied to ongoing collaborations with customers and Veeco's market-leading position in laser annealing.

Advanced Packaging and AI Impact:
- Veeco's Advanced Packaging business is expected to double in 2025, driven by capacity buys from OSATs and IDMs for AI and high-performance computing applications.
- The growth is attributed to AI-related demand, particularly in high bandwidth memory and 3D device stacking.