Outlook 2025

Technology transition in 2025 will allow VAT to outperform the market

VAT expects investments in semiconductor manufacturing equipment to grow further over the course of 2025, as the installation and upgrading of new manufacturing tools related to leading-edge logic chips and high-performance memory chips will require significant capex on the part of chip manufacturers. Large logic manufacturers have already announced extensive capex plans for 2025, which will enable them to build experience with low-volume production before moving to volume production in 2026. In memory, fabs are moving rapidly to build high bandwidth memory (HBM) capacity, announcing the partial conversion of existing DRAM capacity. The technology transition is taking place across multiple applications and markets and requires both green-field and upgrading activities.

Additionally, large investment programs have been announced by hyperscalers, partially in cooperation with the US government, in response to demand for artificial intelligence and data centers. While still a small part of the market, VAT believes that these investments will catalyze more rapid AI adaption. Aside from the direct benefits of new data centers being built, AI proliferation will also fuel the sale of new devices such as AI-enabled smartphones and laptops that meet the requirements to run AI models.

On the other hand, global geopolitics have created a more volatile backdrop to business overall. The regulatory environment has placed greater restrictions on the technologies and products that can be sold. Global trade is facing an increased risk of tariffs and potential retaliatory measures. China continues to invest in its domestic manufacturing capabilities and aims to achieve selfsufficiency in the coming years. In 2024, WFE sales in China reached more than 40% of total global spending; estimates for 2025 foresee a decline in China’s spending. This spending was predominantly in the lagging-edge size bracket.

Overall, global market research firms expect WFE growth to amount to around 5% overall globally, and total WFE spend to reach between USD 100 and 110 billion. VAT is uniquely set up to outpace the market growth anticipated for 2025 and beyond. With its higher market share in leading-edge applications, VAT expects to benefit extraordinarily from the anticipated technology shift. VAT has historically been strong in the market for etch and deposition tools, so an anticipated shift in the WFE spend from lithography to etch and deposition will contribute positively, through mix effects, to VAT’s growth. Finally, the time needed to create a chip is increasing overall because more process steps are needed to manufacture the nanometer nodes structures, requiring the installation of more tools in the fabs to achieve the same throughput and yield. This will serve as an additional growth driver for VAT in the coming year. The Adjacencies business will also benefit from the increased demand for leading-edge tools, as this also increases the demand for VAT’s high-spec advanced modules and motion components.

In Global Services, VAT’s consumables and spares business will benefit from a further increase in fab utilization. Given the announcement of major capex plans to upgrade from 7 to 3nm in logic and DRAM to HBM in memory, the upgrade and refurbishment business is expected to benefit as well. In ADV, a rebound in the scientific instrument and research business is expected. Customers supplying the semiconductor market, in line with the growth anticipated in VAT’s semiconductor business, are expected to continue investments resulting in higher orders and sales.

On this basis, VAT expects full-year 2025 orders, sales, and EBITDA to be higher than in 2024. Net income and free cash flow are also expected to be higher in 2025; capex is forecast at CHF 90 to 100 million.