Goldman Sachs reiterates Buy on BESI, with hybrid bonding and advanced packaging expansion supporting long-term growth

Overview

This is a Goldman Sachs management roadshow note on BE Semiconductor Industries (BESI.AS). The report summarizes key takeaways from discussions with CEO Richard Blickman following an investor conference in the Netherlands. Its core view is that AI infrastructure, advanced packaging capacity expansion, HBM hybrid bonding evaluations, and CPO demand together enhance the credibility of BESI's long-term growth targets. The report maintains a Buy rating and a 12-month target price of €286.

Core views

The report's core views include: first, Agentic AI, hyperscaler profitability, and AI infrastructure investment continue to support the semiconductor technology cycle, easing concerns about a near-term slowdown; second, management described hybrid bonding adoption in Memory as a question of 'when' rather than 'if'; third, BESI maintains leadership in hybrid bonding through its installed base of around 150 systems, 20-customer footprint, AMAT partnership, and mass-production experience; fourth, advanced packaging capacity expansion in Taiwan, HBM evaluations, and CPO-related orders provide additional support for long-term demand.

Analysis framework

The report mainly uses a management interview and roadshow feedback framework, combining CEO comments with industry demand signals, customer qualification progress, capacity expansion, competitive dynamics, and valuation assumptions. Its conclusions are not based on new financial model disclosures, but rather on supply-demand indicators, customer expansion trends, and technology roadmap evolution to reinforce the long-term growth view.

Methodology notes

• Valuation methods31x CY27 EV/EBITDA

  12-month target price

  Goldman Sachs's €286 target price for BESI is based on a 31x CY27 EV/EBITDA multiple, reflecting its valuation assumptions for the long-term growth potential of hybrid bonding.

• Factor profileGS Factor Profile

  Growth, Financial Returns, Multiple, Integrated

  GS Factor Profile compares individual stocks with covered stocks and industry peers across growth, financial returns, valuation multiples, and integrated factors to provide investment context.

• M&A probabilityM&A Rank

  Probability tiers of becoming an acquisition target

  Goldman Sachs uses M&A Rank on a scale from 1 to 3 to assess the probability that a covered company could become an acquisition target; this framework is part of the standard research methodology in the disclosure appendix.

• Database toolQuantum

  Financial history, forecasts, and ratio database

  Quantum is Goldman Sachs's proprietary database, which can be used for deep single-company analysis or cross-company and cross-industry comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BE Semiconductor Industries (BESI.AS)

  Research subject and equity target

  Strengths

  It has leading advantages in hybrid bonding mass-production readiness, installed base, AMAT partnership, Taiwan customer coverage, and advanced platform qualification.

  Weaknesses

  Near-term valuation is already relatively high, and the direct upside from the target price versus the disclosed price is limited; long-term demand still depends on customer adoption timing.

  Comparison

  Management believes competitors still lag BESI, and some peers do not yet have tools qualified for large-scale mass production.

  Risks

  Customer spending cycles, delays in hybrid bonding adoption, intensifying competition, and changes in macro conditions could affect orders and valuation.

• HBM hybrid bonding demand

  Long-term growth driver for BESI

  Strengths

  All three major Memory customers are evaluating HBM hybrid bonding, and management believes Memory adoption of HB has shifted from 'if' to 'when'.

  Weaknesses

  The final scale and timing of demand remain uncertain.

  Comparison

  Compared with traditional stacking or existing packaging routes, hybrid bonding is expected to see broader adoption under high-bandwidth and high-density requirements.

  Risks

  Delays in customer qualification, changes in technology roadmaps, or a pullback in capex would weaken demand.

• Optical interconnect and CPO applications

  Emerging opportunity for advanced hybrid bonding tools

  Strengths

  Next-generation pluggables and CPO require higher bonding precision, which benefits BESI's high-precision platform and a better margin structure.

  Weaknesses

  CPO is still a more long-term opportunity, and the pace of commercialization remains uncertain.

  Comparison

  CPO is expected to require higher precision than current pluggables, and therefore may drive demand for more high-end equipment.

  Risks

  Architectural evolution, customer adoption timing, and competing alternatives could affect order conversion.

Key data

• RatingBuyThe report explicitly reiterates the Buy rating.
• 12-month target price€286Based on a 31x CY27 EV/EBITDA multiple.
• Price shown on the disclosure page€276.40Used to estimate approximately 3.5% upside versus the current price, excluding dividends.
• Hybrid bonding installed baseApproximately 150 bonding systems across 20 customersManagement views this as an important lead for BESI versus competitors.
• Taiwan market positionEffective share close to 100%The report says BESI currently holds virtually the entire share in Taiwan's hybrid bonding-related market.
• 50nm platform progressIn qualification stage, with output capability above 2,000 units/hourManagement emphasized that its throughput and stability are superior to competing solutions.
• Long-term revenue target€1.4bn-€1.9bnThe report believes advanced packaging expansion improves the achievability of BESI's CMD revenue target.
• Malaysia capacity expansionFrom 180 systems per year to 300 systems per yearIntended to address potentially higher hybrid bonding demand in Logic and Memory applications.
• HBM customer evaluationAll three major Memory customers are evaluating hybrid bondingSupports the long-term HBM demand trajectory, although the ultimate scale of demand remains uncertain.
• Optical interconnect precision requirementNext-generation pluggables moving from 1 micron toward around 800 nanometersHigher precision requirements could benefit BESI's high-precision platform and margins.

Impact & implications

In investment terms, the report positions BESI as a key equipment beneficiary of AI compute infrastructure and the advanced packaging upgrade cycle. If HBM hybrid bonding, Logic advanced packaging, and CPO demand progress as management expects, BESI's long-term revenue targets and high valuation multiple will be easier to justify. However, given the limited direct upside from the target price relative to the disclosed price, subsequent share-price performance will depend more on whether hybrid bonding adoption, order conversion, capacity expansion, and competitive dynamics continue to tilt in BESI's favor.

Risks

• Customer capital spending is cyclical and could affect orders for advanced packaging and hybrid bonding equipment.
• Adoption of hybrid bonding in HBM and Memory applications could be delayed.
• Competitors may accelerate their catch-up efforts, compressing BESI's lead and pricing power.
• Changes in the macro environment could become a source of volatility for semiconductor equipment demand.
• The ultimate scale of HBM demand remains uncertain and could fall short of management and market expectations.
• If Malaysia capacity expansion and key component supply assurance are not executed smoothly, delivery capability could be constrained.

What to watch

• Qualification progress and mass-production timelines for HBM hybrid bonding at the three major Memory customers.
• Equipment installation pace tied to advanced packaging capacity expansion at major Taiwan customers and in Arizona.
• Qualification results for BESI's 50nm platform, throughput stability, and customer adoption.
• Execution progress in expanding Malaysia capacity from 180 systems to 300 systems per year.
• Conversion of CPO and optical interconnect-related orders among customers in Taiwan and on the processor side.
• Whether hyperscaler AI capex, Agentic AI workloads, and CPU-related demand continue to remain strong.
• The pace of second-supplier strategies and competitors' progress in mass-production-qualified tools.