X-Fab Silicon specialises in manufacturing mixed-signal integrated circuits (ICs) using silicon wafers. Its products are designed for a variety of applications, including automobiles, industrial equipment, medical devices, consumer electronics, and mobile communications. X Fab has facilities in Belgium, Germany, France, Malaysia, and the United States.
Anybody in this? I think it’s a contrarian buy. Trading at a huge discount to other mixed-signal foundry peers amid a $1b bet the farm expansion.
There’s increasing amounts of research on it:
Market seems to be concerned with China exposure and customer concentration, but only 10% of revenue is from China, and it is growing very fast due to the EV boom. All fabs have dominant customers and 30%+ of revenue is anchored by a cornerstone chipmaker, owned by the same family as itself. But the market is completely missing the fact analog/mixed-signal foundries are more attractive than the big digital ones like TSMC and Samsung: larger nodes, longer product lifetimes, far less capex, and less competition. XFAB is the sole supplier for >90% of their own products. There’s only a handful of larger competitors in this area like Renesas and Infineon. To me the auto chip shortage of 2021 demonstrated this is a structurally under-supplied industry and only likely to continue amid electrification and driver assistance.
More recent commentary from a fund manager: https://static1.squarespace.com/static/65554ad23182d210f95181f7/t/66fc6cdfc6f09f5007702212/1727818975697/Q3+2024+NWIM+Update.pdf
Really interesting points, especially with the weak Euro that will no doubt continue to depreciate, offsetting tariff risk.