BE Semiconductor Industries NV
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| LOCK|gg | LOCK|&M | LOCK|^J?>V#> |
Besi Reaffirms Its Strong Long-Term Outlook and Upgrades Its Targets in Investor Day
Business Strategy and Outlook
BE Semiconductor Industries understands well how to operate in a cyclical industry like semiconductors. Supply/demand balances change rapidly in the chip industry, so equipment suppliers need flexibility to adapt. Besi runs a very flexible business model by (1) multisourcing from different suppliers to rapidly adapt capacity to demand changes, (2) having 15%-20% of its staff working flexible/temporary hours, and (3) having 70% of its workforce in Asia, mainly in assembly and production, where it can save personnel and logistics costs, as more than 60% of revenue comes from Asia (including China). This strategy allows Besi to consistently maintain leading gross margins of more than 60% even in downcycle periods, compared with its peers ASMPT and Kulicke & Soffa, which are at 40%-50%.
