Camtek: Broadening advanced packaging growth and new TAM expansion

Research evidence excerpt

Camtek: Broadening advanced packaging growth and new TAM expansion

iQprofile SM Camtek

iQmethod SM – Bus Performance* Company Sector

(US$ Millions) 2024A 2025A 2026E 2027E 2028E Semiconductor Capital Equipment

Return on Capital Employed 18.8% 15.1% 14.2% 15.4% 14.7%

Return on Equity 27.0% 26.8% 24.7% 23.9% 21.1%

Operating Margin 30.3% 30.1% 29.0% 31.4% 32.8% Company Description Free Cash Flow 115 143 158 190 215

Camtek is an Israeli-based SMid-cap semicap equipment

vendor focused on developing high-end inspection and

iQmethod SM – Quality of Earnings* metrology equipment for the semiconductor industry.

(US$ Millions) 2024A 2025A 2026E 2027E 2028E Camtek's system inspect and measure wafers throughout

Cash Realization Ratio 0.9x 1.0x 0.9x 0.9x 0.9x the production process to improve yield and ensure only

Asset Replacement Ratio 1.2x 1.2x 1.0x 1.0x 1.0x good wafers are shipped to end users. Their tools address

Tax Rate 9.7% 3.1% 10.8% 10.8% 10.7% front-end macro inspection and outgoing Quality Control

Net Debt-to-Equity Ratio -23.0% -28.8% -42.2% -50.6% -56.8%

(OQC), inspection and metrology of bumps in the mid-end, Interest Cover NA NA NA NA NA

and inspection of post-diced wafers in the back-end.

Income Statement Data (Dec)

(US$ Millions) 2024A 2025A 2026E 2027E 2028E Investment Rationale

Sales 429 496 572 698 755 We rate Camtek Buy. We like Camtek's strong product

% Change 36.1% 15.6% 15.3% 22.1% 8.1% portfolio, share gains, and exposure to key growth markets

Gross Profit 218 256 299 368 401 across advanced packaging for AI-driven high performance

% Change 42.7% 17.5% 16.7% 23.0% 9.2% logic and memory. We think ongoing tightness in DRAM

EBITDA 136 157 175 230 259

capacity could trigger HBM capacity adds in order to % Change 54.9% 14.8% 11.5% 31.7% 12.6%