Goldman Sachs reiterates Buy on BESI as hybrid bonding applications expand from edge devices to high-performance computing

Overview

This report is a company research note by Goldman Sachs following a group call hosted with BE Semiconductor Industries CEO Richard Blickman. The core conclusion is that BESI's hybrid bonding business is expanding from logic chips into memory, edge AI, high-performance computing, co-packaged optics, and chiplet architectures, while the traditional mainstream packaging business is also recovering across most end markets. The report reiterates a Buy rating on BESI and a 12-month target price of €325.

Core views

The report's core views include four points: first, new customer wins have expanded BESI's exposure in logic applications, especially as shrinking bond-pad pitch gives hybrid bonding stronger advantages over traditional reflow in yield and process feasibility; second, engagement with memory customers continues to advance, HBM4E qualification activity is increasing, and equipment installation and joint development progress at major Korean memory makers have improved the likelihood of subsequent conversion; third, hybrid bonding use cases are extending from edge AI represented by Apple M5 to data center high-performance computing represented by Nvidia Feynman and AMD MI350/MI400; fourth, the recovery in the mainstream business is spreading across multiple end markets, though automotive remains the main exception.

Analysis framework

The analysis is primarily based on management discussions with BESI's CEO, customer wins and qualification progress, changes in advanced packaging technology roadmaps, end-market recovery trends, and Goldman Sachs' framework for valuation multiples and relative return potential within its coverage universe. The report combines the technology adoption curve, expansion of the customer base, and cyclical recovery to support its Buy rating and target price.

Methodology notes

• Valuation methodsEV/EBITDA target multiple

  29x 2HCY27+1HCY28E EV/EBITDA

  Goldman Sachs bases BESI's 12-month target price of €325 on a 29x 2HCY27+1HCY28E EV/EBITDA multiple, reflecting expectations for its advanced packaging growth and cyclical recovery.

• Stock attribute comparisonGS Factor Profile

  Growth, Financial Returns, Multiple, Integrated percentiles

  GS Factor Profile compares a stock against the market and industry peers across growth, financial returns, valuation multiples, and integrated metrics; the Integrated metric combines growth, returns, and valuation attractiveness.

• M&A scenarioM&A Rank

  M&A probability score from 1 to 3

  Goldman Sachs uses an M&A framework across its global coverage to assess the probability that a company becomes an acquisition target; a score of 1 indicates high probability, 2 indicates medium probability, and 3 indicates low probability.

• Investment ratingGoldman Sachs Buy/Neutral/Sell

  Total return potential relative to coverage universe

  A Buy rating means the stock has higher total return potential relative to its coverage universe; this report reiterates BESI as Buy.

Asset mapping & comparison

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

• BE Semiconductor Industries (BESI.AS)

  Subject company of the report; semiconductor advanced packaging equipment supplier

  Strengths

  Has an installed base of more than 160 hybrid bonding systems, with opportunities to expand across logic, memory, edge AI, and high-performance computing applications, and is preparing to ship a 50nm platform.

  Weaknesses

  Hybrid bonding still accounts for only about 15-20% of revenue, and the business remains affected by mainstream packaging cycles and weakness in the automotive market.

  Comparison

  The company faces more than 50 competitors offering HB equipment, but management emphasizes that its experience and installed base provide differentiation.

  Risks

  Customer spending cyclicality, delayed hybrid bonding adoption, intensifying competition.

• Apple M5

  Example of an edge AI hybrid bonding application

  Strengths

  Adoption of HB is seen as an important step for edge AI, and potential performance improvements may drive adoption across more mobile devices.

  Weaknesses

  The report does not provide specific shipment volumes or revenue contribution.

  Comparison

  Represents the expansion of hybrid bonding from traditional advanced packaging into edge devices.

  Risks

  The pace of end-device adoption is uncertain.

• Nvidia Feynman roadmap

  Roadmap for hybrid bonding applications in data center high-performance computing

  Strengths

  The next-generation roadmap is expected to incorporate HB in multiple products, potentially expanding equipment demand.

  Weaknesses

  Still dependent on customer roadmap execution and volume production timing.

  Comparison

  Together with AMD MI350/MI400, it reflects an increase in packaging steps in high-performance computing.

  Risks

  Roadmap changes, slower capex, or delayed adoption.

• AMD MI350/MI400 series

  Potential source of demand from increased packaging steps in high-performance computing

  Strengths

  The progression from MI300 to MI350 and MI400 will increase assembly steps, and each additional step requires a bonding process, potentially increasing demand for equipment capacity.

  Weaknesses

  The report does not disclose BESI's specific share or order size.

  Comparison

  Together with Nvidia's roadmap, it points to expanding applications in data center computing.

  Risks

  Uncertainty around product ramp timing, customer procurement, and technology choices.

Key data

• RatingBuyGoldman Sachs reiterates its Buy rating on BESI.
• 12-month target price€325The target price is based on 29x 2HCY27+1HCY28E EV/EBITDA.
• Closing price€227.00The target price history table lists the closing price corresponding to the 2026-07-27 report.
• Implied upsideApproximately 43.2%Estimated based on the €325 target price relative to the €227.00 closing price, excluding dividends.
• Hybrid bonding revenue shareApproximately 15-20%Management indicated that HB still accounts for only about 15-20% of revenue, implying that a meaningful portion of recent growth still comes from the recovery in the mainstream business.
• Installed base of hybrid bonding equipment>160 systemsBESI views its experience and installed base of more than 160 systems as a differentiating advantage versus more than 50 competitors.
• Applicable pitch threshold for hybrid bondingRelevant from around 15µm; more critical below 10µmManagement stated that hybrid bonding starts to become relevant when bond-pad pitch is around 15µm, and becomes more critical below 10µm due to reflow yield challenges.
• New platform50nm platform ready for shipmentCompared with the current 100nm standard across most of the installed base, management expects the 50nm platform to lower cost of ownership and support market position.
• Memory qualification timingExpected to begin on 2026-08-01A second major Korean memory maker has completed tool installation and is expected to begin qualification on August 1.

Impact & implications

If BESI can continue expanding hybrid bonding from logic applications into HBM4E, edge AI, and data center high-performance computing, demand for its equipment may grow as advanced packaging steps increase. At the same time, the recovery in the mainstream business can provide additional growth support while HB still represents a relatively low share of revenue. From an investment perspective, the report believes that technology diffusion and cyclical recovery together support the Buy rating; however, intensifying competition, customer capex cycles, and delays in hybrid bonding adoption could still affect realization of the target price.

Risks

• Customer capex and semiconductor equipment spending are cyclical, which may affect order and revenue realization.
• If hybrid bonding adoption proceeds more slowly than expected, it could weaken long-term growth and valuation support.
• More than 50 companies provide HB equipment, and intensifying competition could compress share, pricing, or margins.
• The automotive end market remains the main relatively weak area, which could drag on the breadth of recovery in the mainstream business.
• HBM4E and high-performance computing roadmaps still require customer qualification, volume ramp, and capacity expansion, and the timeline remains uncertain.

What to watch

• Progress of HBM4E-related qualification at the second major Korean memory maker starting August 1.
• Order conversion, delivery pace, and follow-on customer expansion after wins with new hyperscaler customers.
• The actual volume production pace of HB adoption in roadmaps such as Apple M5, Nvidia Feynman, and AMD MI350/MI400.
• Shipment progress of the 50nm platform and its impact on customer cost of ownership and competitiveness.
• The sustainability of recovery in end markets outside automotive for the mainstream business, and when automotive demand improves.
• The pace at which hybrid bonding revenue share rises further from 15-20%.