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1. Company Snapshot

1.a. Company Description

Soitec S.A. designs and manufactures semiconductor materials worldwide.Its products are used to manufacture chips that are used in smart phones, tablets, computers, IT servers, and data centers, as well as electronic components in cars, connected devices, and industrial and medical equipment.It offers Fully Depleted Silicon-On-Insulator (FD-SOI) for automotive radar and processors, and PD-SOI and FinFET-SOI products for high-performance computing markets.


The company also offers RF-SOI substrates for front-end module devices, as well as 4G LTE and new 5G sub-6 GHz/ mmWave smartphones.In addition, it offers power-SOI products that address the requirements for integrating high and low voltage functions in power IC devices for automotive and industry markets.Further, the company offers Smart photonics-SOI products for optical networking; Smart Imager-SOI products for next generation 3D image sensing; Auto Smartsic for green mobility; Connect RF-GaN for 5G infrastructure architecture and smartphone power amplifier markets; Connect-POI engineered substrates for high performance surface acoustic wave filter; and Gallium Nitride (GAN) Epitaxial wafers for energy efficient power management system.


Soitec S.A. was incorporated in 1992 and is headquartered in Bernin, France.

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1.b. Last Insights on SOI

Soitec's recent performance was negatively impacted by a significant net loss of €66.7 million in its half-year results, a swing from prior net income. The company's sales of €230.74 million were insufficient to offset rising costs. Additionally, Soitec's revenue guidance for the third quarter of fiscal 2026 was cautious, forecasting mid-to-high single-digit sequential organic growth. Weak market conditions, particularly in the automotive sector, are expected to persist. The company focuses on innovation and strategic investments to drive future growth.

1.c. Company Highlights

2. Soitec's H1 '26 Earnings: A Mixed Bag with Strategic Progress

Soitec's H1 '26 financial performance was marked by a revenue decline of 29% year-over-year to EUR 231 million, primarily due to organic factors. The EBITDA margin stood at 34.1%, impacted by the reduced revenue base and a temporary inventory increase. The net result was a loss of EUR 67 million, largely due to non-recurring items such as a SmartSiC impairment and a one-off non-cash foreign exchange conversion loss. The actual EPS came out at '-1.13', significantly below estimates of '0.31'. Operating cash flow was EUR 26 million, while free cash flow was negative at EUR 31 million.

Publication Date: Nov -23

📋 Highlights
  • Revenue Decline:: Soitec's H1 '26 revenue fell 29% YoY to EUR 231 million, driven by inventory correction and sector-specific challenges.
  • EBITDA Margin Compression:: Margin dipped to 34.1% due to a smaller revenue base and inventory build, impacting operating cash flow to EUR 26 million.
  • Sequential Q2 Recovery:: Q2 revenue surged 47% sequentially, with Edge and Cloud AI divisions rising 34% YoY (excluding Imager-SOI phase-out).
  • Balance Sheet Strength:: EUR 483 million in cash and EUR 145 million net debt, with CapEx reduced to EUR 140 million (down from EUR 230 million in FY '25).
  • Gross Margin Headwinds:: H2 margins face 300 bps pressure from lower fab loading and FX effects, with 95% of EUR/USD exposure hedged at ~1.10.

Operational Highlights and Outlook

The company's Edge and Cloud AI divisions showed strong momentum, with revenue reaching EUR 96 million, flat organically year-over-year but up 34% excluding the anticipated Imager-SOI phase-out. Soitec expects Q3 '26 to see organic growth in the mid- to high single-digit range sequentially. For the full year, the company anticipates continued weakness in RF-SOI and automotive, contrasted with strong growth in Edge and Cloud AI. As Albin Jacquemont noted, the company targets a working capital requirement level of 30-40% of revenue, indicating potential for cash generation.

Balance Sheet and Cash Flow

Soitec's balance sheet remains robust, with EUR 483 million in cash and investments and EUR 145 million in net debt, offering flexibility to support strategic priorities. The company aims to achieve positive free cash flow by the end of the fiscal year. CapEx is expected to be around EUR 140 million, down from EUR 150 million previously and significantly lower than the EUR 230 million spent in fiscal year '25. The 'Free Cash Flow Yield (%)' is 3.49%, indicating a relatively attractive cash generation profile.

Valuation and Future Prospects

Given the current 'P/S Ratio' of 0.93 and 'EV/EBITDA' of 3.56, Soitec's valuation appears reasonable, considering the challenges it faces. Analysts estimate next year's revenue growth at -32.9%, reflecting the ongoing industry adjustments. Despite the near-term challenges, Soitec's growth potential remains intact in an addressable market expected to expand at a double-digit pace. The company's focus on cash generation, selective investments, and cost reduction initiatives are positive steps towards navigating the current landscape.

Strategic Developments

Soitec has made significant strategic moves, including the termination of its license agreement with GlobalWafers and an impairment against its SmartSiC assets. While SmartSiC's prospects were reviewed downwards, the company still sees great technical capabilities and an excellent roadmap. The ongoing inventory destocking is expected to continue into 2026, with the goal of reaching pre-COVID inventory levels. Pierre Barnabé noted that despite fierce competition from Chinese monoSiC players, Soitec maintains its market share due to its premium product and innovation.

3. NewsRoom

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SOITEC - INFORMATION RELATING TO THE TOTAL NUMBER OF VOTING RIGHTS AND SHARES FORMING THE SHARE CAPITAL

Dec -03

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3 European Stocks Estimated To Be Trading Below Intrinsic Value By Up To 47.6%

Dec -02

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Will Soitec’s (ENXTPA:SOI) Net Loss Reshape Its Long-Term Growth Story?

Nov -23

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Soitec SA (SLOIF) (Q2 2026) Earnings Call Highlights: Navigating Market Challenges with ...

Nov -20

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Soitec Q2 revenue meets guidance but half-year sales slide as markets stay weak

Nov -19

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SOITEC: AVAILABILITY OF 2025-2026 HALF YEAR FINANCIAL REPORT

Nov -19

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SOITEC: SOITEC REPORTS SECOND QUARTER REVENUE AND HALF-YEAR RESULTS OF FISCAL YEAR 2026

Nov -19

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Soitec (ENXTPA:SOI): Exploring Valuation After Recent Share Price Decline

Nov -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.00%)

6. Segments

Electronic

Expected Growth: 12%

Soitec S.A.'s 12% growth in Electronics is driven by increasing demand for 5G and IoT devices, adoption of silicon carbide (SiC) and gallium nitride (GaN) in electric vehicles, and growing need for energy-efficient and high-performance semiconductor materials.

7. Detailed Products

Silicon-on-Insulator (SOI) Wafers

Soitec's SOI wafers are used in the production of microprocessors, graphics processing units, and other semiconductor devices.

Radio Frequency (RF) Silicon-on-Insulator (SOI) Wafers

Soitec's RF SOI wafers are designed for radio frequency and millimeter wave applications, enabling high-performance and low-power RF devices.

Photonics-on-Silicon (POS) Wafers

Soitec's POS wafers integrate photonic and electronic functions on a single chip, enabling high-speed data transmission and sensing applications.

Gallium Nitride (GaN) on Silicon Carbide (SiC) Wafers

Soitec's GaN on SiC wafers are designed for high-power and high-frequency applications, such as 5G base stations and satellite communications.

Smart Cut Technology

Soitec's Smart Cut technology enables the transfer of thin layers of material from one substrate to another, allowing for the creation of complex semiconductor structures.

8. Soitec S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Soitec S.A. faces moderate threat from substitutes due to the presence of alternative technologies and products in the semiconductor industry.

Bargaining Power Of Customers

Soitec S.A. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Soitec S.A. relies on a few key suppliers for raw materials, which gives them some bargaining power, but the company's large scale of operations helps to mitigate this risk.

Threat Of New Entrants

The high capital requirements and technological barriers to entry in the semiconductor industry make it difficult for new entrants to challenge Soitec S.A.'s market position.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with several established players competing for market share, which increases the intensity of rivalry for Soitec S.A.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.32%
Debt Cost 3.95%
Equity Weight 66.68%
Equity Cost 10.97%
WACC 8.63%
Leverage 49.97%

11. Quality Control: Soitec S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nova

A-Score: 4.5/10

Value: 0.2

Growth: 8.9

Quality: 8.4

Yield: 0.0

Momentum: 8.5

Volatility: 1.0

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BESI

A-Score: 4.2/10

Value: 0.0

Growth: 4.7

Quality: 7.6

Yield: 5.0

Momentum: 6.5

Volatility: 1.7

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AIXTRON

A-Score: 4.2/10

Value: 4.9

Growth: 7.0

Quality: 6.8

Yield: 1.2

Momentum: 4.0

Volatility: 1.3

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Tower Semi

A-Score: 4.2/10

Value: 3.3

Growth: 5.0

Quality: 5.5

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

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Nordic Semiconductor

A-Score: 3.3/10

Value: 0.7

Growth: 3.6

Quality: 4.8

Yield: 0.0

Momentum: 9.5

Volatility: 1.3

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Soitec

A-Score: 2.7/10

Value: 5.6

Growth: 4.7

Quality: 5.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

27.12$

Current Price

27.12$

Potential

-0.00%

Expected Cash-Flows