Aixtron Bets AI Data Center Optics Can Offset Silicon Carbide Slump

Key Points

• Aixtron is betting on AI-driven optoelectronics demand to offset weakness in silicon carbide power electronics, with management saying data center buildouts are boosting demand for optical connections and could lift optoelectronics revenue sharply this year.
• The company said its silicon carbide business remains in a downturn, with a meaningful recovery unlikely until customer utilization improves, though Aixtron sees a later rebound as EV-related demand normalizes.
• Aixtron also highlighted new upside from AI data center power delivery, including a possible shift to 800-volt HVDC architectures that could create additional tool demand and add a sizable revenue opportunity by 2028-2029.

Aixtron ETR: AIXA is positioning a sharp recovery in optoelectronics demand, driven by artificial intelligence data center investment, as the main offset to continued weakness in silicon carbide power electronics, Vice President of Investor Relations and Corporate Communications Christian Ludwig said at the Industrial Technology Conference hosted by mwb research.

Ludwig described Aixtron as a German company founded more than 40 years ago as a spin-off from RWTH Aachen. The company now has more than 1,100 employees and operates in nine countries. Its core business is deposition systems used at the beginning of semiconductor manufacturing to apply thin layers of material to wafers.

“Our USP is to be as defectless as possible to begin the whole wafer-making process,” Ludwig said, noting that defects introduced early can make the overall chip production process more expensive for customers.

Aixtron Highlights Market Positions Across Compound Semiconductors

Ludwig said Aixtron focuses on compound semiconductors rather than the broader silicon-based semiconductor market. The company serves four main end markets, grouped by material system: silicon carbide, gallium nitride, optoelectronics and LED/MicroLED.

The company’s major tool platforms include a dedicated silicon carbide system, the G10-SiC, which Ludwig said sells for about EUR 4.5 million, and gallium nitride and optoelectronics tools that each sell for about EUR 4 million. He said the three newer tool platforms have similar product gross margins of close to 50%, while older tool generations still sold in gallium nitride and laser applications carry lower gross margins.

On market share, Ludwig said Aixtron had 27% of the global silicon carbide deposition market in 2024, behind Netherlands-based ASM. He said more recent 2025 data showed Aixtron had surpassed ASM, reaching about 35% share versus ASM at about 30%. Ludwig added that the transition to 8-inch silicon carbide wafers could create an opportunity for Aixtron to raise its market share further, potentially toward 50%, because he said Aixtron and ASM have the most competitive 8-inch tools.

In MOCVD-based markets, Ludwig said Aixtron’s share is higher. He estimated the company’s share at about 90% in gallium nitride and about 90% in optoelectronics and laser applications. In LED, Aixtron currently serves red LED, while Veeco and AiMAC dominate green and blue LED, he said.

Optoelectronics Seen as Main Growth Driver

Ludwig said Aixtron’s revenue grew strongly through 2024, helped by power electronics demand, but the company has been dealing with a downturn since 2025, particularly in silicon carbide. For the current year, he said Aixtron is guiding to EUR 560 million, plus or minus EUR 30 million.

The main growth driver is optoelectronics, Ludwig said. He said optoelectronics revenue rose by about 60% from roughly EUR 60 million in 2024 to EUR 100 million in 2025, and could reach as much as EUR 250 million this year.

He attributed the increase to AI-related data center buildout, which is driving demand for optical connections. Ludwig said the market is moving from 400G to 800G to 1.6T, which doubles the number of lasers required for those services. He also pointed to “scale-up” as a new growth opportunity, saying short connections of one to five meters that are currently copper-based are expected to begin shifting to optical fiber starting next year.

“That, of course, opens up a whole new market,” Ludwig said, adding that market experts vary in their estimates but that Aixtron sees the opportunity as at least five times as large as the scale-out opportunity.

In the Q&A session, Ludwig said Aixtron’s best current estimate for optoelectronics-related G10-AsP tool demand is 60 to 120 tools per year over 2027, 2028 and 2029. At an average selling price of EUR 4 million, he said that would imply a range of EUR 240 million to EUR 480 million, though he cautioned that visibility remains limited.

Power Electronics Recovery Expected Later

Ludwig said the power electronics market remains a niche, representing about 3% of the overall semiconductor device market, with silicon still the dominant material. Silicon carbide and gallium nitride together account for about 16% of the power electronics market, he said.

For silicon carbide, Ludwig said demand is heavily tied to electric vehicles, which represent 70% to 80% of end-market demand for silicon carbide applications. He said customers are currently running at capacity utilization levels of about 40% to 50%, and Aixtron does not expect a strong recovery in silicon carbide equipment orders until utilization reaches the typical 80% to 85% threshold for capacity expansion.

“We expect it will be mid to end of next year” before that threshold is reached, Ludwig said. He added that silicon carbide tool sales are expected to be below EUR 50 million this year, with no expected change in revenue assumptions for next year, while a recovery could begin to help by 2028.

Gallium nitride is performing better, Ludwig said, with industry utilization around 70%. He said Aixtron expects moderate growth next year after a slightly down year.

Ludwig also highlighted a potential AI data center power delivery opportunity tied to Nvidia’s planned Rubin Ultra chip introduction at the end of 2027. He said Nvidia is expected to move from a 240/480-volt architecture to an 800-volt HVDC architecture, replacing silicon-based power chips with silicon carbide at the high end and gallium nitride at medium and low voltage levels.

Aixtron estimates this could require an additional 25 to 30 tools per year by 2028 and 2029, equal to about EUR 100 million to EUR 130 million in annual revenue, Ludwig said. He added that the opportunity is not expected to affect current-year revenue, though orders could potentially begin late this year or early next year.

Risks Include Ramp Execution, Supply Chain and Malaysia Expansion

Asked about the biggest risks and challenges over the next 12 to 18 months, Ludwig pointed to ramp execution. He said Aixtron’s German facility could theoretically support up to EUR 1 billion in revenue if all parts arrive on time, making supply chain readiness a key issue.

He also said Aixtron will rely on temporary workers to support the next production ramp after two rounds of layoffs over the past 15 months. In addition, Ludwig said Aixtron has begun construction on a greenfield plant in Malaysia and aims to be production-ready by the end of next year.

“Managing this while managing the ramp, I think those are the most critical topics that we currently have,” Ludwig said.

In other Q&A comments, Ludwig said Aixtron does not sell directly to hyperscalers. In optoelectronics, the company sells to laser makers such as Lumentum, Coherent, Sumitomo Electric, SMART Photonics and AOI. In power electronics, it sells to chip manufacturers including Infineon, ST, TSMC and Innoscience.

On export restrictions affecting indium phosphide supply from China, Ludwig said substrate shortages are a bottleneck for optoelectronics but added that capacity is being built across the industry. He said Aixtron expects the bottleneck to be addressed by mid-to-late next year.

About Aixtron ETR: AIXA

AIXTRON SE, together with its subsidiaries, provides deposition equipment to the semiconductor industry in Asia, Europe, and the Americas. It develops, produces, and installs equipment for the deposition of semiconductor materials; and offers deposition processes, consulting, training, customer support, and other related services, as well as peripheral devices and services for the operation of its systems. The company's product portfolio includes MOCVD, CVD and PECVD, and OVPD and PVPD systems.

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