Core Insights - SCHMID Group has successfully secured two significant orders in the rapidly growing field of Printed Circuit Boards (PCB) for artificial intelligence (AI) server applications, specifically AI-Server-Boards [1][4] Company Developments - The first project involves delivering a complete wet-process equipment setup featuring advanced V+ and H+ systems, while the second project includes supplying critical horizontal H+ machines, marking a breakthrough beyond traditional PCB and IC-substrate business [2][16] - One customer has entrusted SCHMID with full responsibility for an entire production line, indicating strong confidence in the company's technology and services, which may lead to future investment opportunities [3] Market Context - The semiconductor industry is projected to reach $785.5 billion in revenue by 2025, with expectations to accelerate to $1.1 trillion by 2029, driven by AI adoption [5] - Global AI server shipments are anticipated to grow by 24.3% year-over-year in 2025, with North American cloud service providers leading this growth, supported by sovereign cloud projects in Europe and the Middle East [5] - Demand for large-body substrates is increasing due to the rise in high-bandwidth memory (HBM) stacks and co-packaged optics (CPO) requirements for AI applications, highlighting the strategic importance of SCHMID's process equipment portfolio [6] Executive Insights - The orders represent a pivotal milestone for SCHMID Group, showcasing the necessity and trust in its technology not only in IC-substrates but also in full PCB production lines for AI-Server-Board, a rapidly growing market [7][10] - The AI server segment is characterized by rapid innovation cycles, with typical server boards having a lifecycle of only 18 to 24 months, creating a recurring need for advanced PCB manufacturing solutions [8] - Winning these projects positions SCHMID at the center of the AI server board cycle, where each generation requires more layers, smaller features, tighter process windows, and new materials, areas where SCHMID's systems provide a unique advantage [9]

Core Insights - SCHMID Group has announced the shipment of its first InfinityLine P+ system, a new panel-level plating equipment that integrates photoresist stripping, providing a modern and efficient alternative for manufacturers in the electronics industry [1][10]. Product Features - The InfinityLine P+ is a touch-free, double-sided vertical cluster plating system that can be configured with various plating, pre-treatment, cleaning, and rinsing modules, ensuring uniform copper distribution across the panel through segmented and moveable anodes [3][9]. - The system integrates photoresist stripping directly into the plating workflow, which minimizes handling and transfer steps, resulting in a compact and low-maintenance architecture that reduces both operating and capital costs [4][11]. Competitive Advantage - The InfinityLine P+ is designed to compete effectively against existing plating equipment in dynamic manufacturing environments characterized by frequent design changes, thin seed layers, and stringent process integration requirements [5][11]. - Unique differentiators of the InfinityLine P+ include integrated stripping, segmented current distribution, and reliability on thin seed layers, making it suitable for environments where flexibility and yield are critical [11]. Customer Benefits - The features of the InfinityLine P+ lead to higher equipment uptime, reduced footprint, shorter process chains, and lower total cost of ownership, enhancing overall operational efficiency for customers [7][9]. Market Positioning - The shipment of the first unit marks the beginning of commercialization, with initial customer installations and pilot runs planned for the upcoming quarter, indicating a proactive approach to market entry [12]. - The InfinityLine P+ expands the InfinityLine family, positioning SCHMID Group as a key player in next-generation advanced packaging and high-density PCB applications, offering a competitive alternative to existing plating platforms [13].

Core Insights - SCHMID Group has expanded its product portfolio to address the increasing demand for advanced packaging substrates and high-performance server boards driven by the AI era [1][14][15] - The semiconductor and advanced packaging sector is projected to grow at a CAGR of around 10% over the next five years, with significant contributions from market leaders like TSMC and NVIDIA [2][15] - The traditional PCB industry is expected to grow at an 8% CAGR, while AI server boards are anticipated to experience a robust growth rate of about 20% [3][15] Company Developments - SCHMID has broadened its InfinityLine product family to enhance its position in next-generation package substrates and AI-server PCBs [4][12] - The company is uniquely positioned to deliver Chip-on-Wafer-on-PCB (CoWoP) solutions, focusing on best-in-class yield and low cost of ownership [5] - SCHMID anticipates that 2025 will be a transition year, with above-market growth expected from 2026 onwards, particularly in AI-driven product lines [6] Product Innovations - The existing InfinityLine H+ remains the top-selling equipment, while the new InfinityLine C+ is on track to become a significant revenue contributor [12] - Upcoming products include InfinityLine L+ for panel-level substrates and InfinityLine P+ for next-generation single panel plating, both set to launch in late 2025 [12] - SCHMID's QuantumLine and SCHMID-AVACO Plasma Equipment are designed to enable high-yield glass core substrate production [12]

Core Viewpoint - The Federal Reserve's SCHMID indicates that while the policy is somewhat restrictive, it is not overly so, and a restrictive policy is currently appropriate; economic growth remains robust, and inflation is still too high [1] Group 1 - The current monetary policy is described as having a certain level of restrictiveness, which is deemed suitable for the current economic conditions [1] - Economic growth is reported to be steady, suggesting resilience in the economy despite inflationary pressures [1] - Inflation levels are highlighted as being excessively high, indicating ongoing challenges for the economy [1]

Core Insights - The SCHMID Group is experiencing a turnaround after a challenging year in 2024, with incoming orders now within the expected range, indicating a positive market trend that began at the end of 2024 [1][10]. Market Development - A significant driver of the company's recovery is the dynamic growth in the AI server segment, with increasing market interest and demand leading to a surge in volume, expected to continue into 2026 [2]. - The company is strategically realigning to stabilize its situation and capitalize on technological advancements, particularly in artificial intelligence [3]. Strategic Initiatives - SCHMID is evaluating several strategic and financial partnership opportunities to strengthen its market position and expand growth through targeted collaborations, in response to ongoing global challenges from the trade conflict [3]. - The company aims to ensure long-term competitiveness and sustainable growth, with timely decisions on cooperation initiatives to seize current opportunities [4]. Company Overview - The SCHMID Group is a global leader in high-tech industry solutions, focusing on electronics, photovoltaics, glass, and energy systems, with over 800 employees and multiple technology centers and production facilities worldwide [5].

Group 1 - The Federal Reserve's SCHMID will be absent from the FOMC meeting due to the passing of his wife [1] - Minneapolis Fed President KASHKARI will vote in place of SCHMID [1]

Business Combination Details - The Business Combination between Schmid Group and Pegasus was completed on April 29, 2024, involving the issuance of 99 new ordinary shares and the purchase of 100 shares by Schmid shareholders at nominal value [908]. - Schmid shareholders subscribed to 28,000,000 Pegasus TopCo B.V. shares, with an additional 5,000,000 earn-out shares at EUR 0.01 nominal value [908]. - As of April 29, 2024, Schmid shareholders own 28,725,000 shares, representing 75.6% of total equity, while Pegasus public shareholders hold 4,274,037 shares, or 11.3% [915]. - Schmid has been determined as the accounting acquirer based on its largest voting interest and senior management control post-combination [911]. - The Business Combination will be accounted for as a capital reorganization, treating Pegasus as the acquired company for financial reporting purposes [910]. - The Business Combination is not within the scope of IFRS 3, as Pegasus does not meet the definition of a business under IFRS 3 [912]. Financial Position and Performance - The unaudited pro forma combined financial position as of December 31, 2023 shows total assets of €112,394,000, with current assets totaling €79,980,000 [918]. - Non-current liabilities for the combined entity amount to €53,681,000, while current liabilities total €98,320,000 [918]. - The total equity of the combined entity is reported as €112,394,000, with significant contributions from Schmid's historical assets [918]. - Total revenue for the year ended December 31, 2023, was €90,246 thousand, with a gross profit of €26,397 thousand [919]. - Operating profit (loss) was reported at €32,195 thousand, while net income (loss) for the period was €37,954 thousand [919]. - The total comprehensive income for the year was €36,346 thousand, despite a loss attributable to non-controlling interests of €677 thousand [919]. - The company reported a significant loss before income tax of €40,732 thousand, indicating challenges in operational performance [919]. Transaction Costs and Financial Adjustments - The company incurred total estimated transaction costs of €9,945 thousand related to the Business Combination, with €8,839 thousand expected to be incurred by Pegasus and €9,945 thousand by Schmid [934]. - The cash settlement of €974 thousand for deferred underwriting commissions was reflected in the financial adjustments following the Business Combination [931]. - The transaction costs estimated to be incurred by Schmid and Pegasus as part of the Business Combination amount to €4,184 thousand [947]. Share and Asset Details - The pro forma net loss per share for the year ended December 31, 2023, was €-1.189, based on 37,974,862 weighted average ordinary shares outstanding [919]. - The estimated fair value of the net assets acquired from Pegasus is €48,074 thousand, with total liabilities assumed of €14,281 thousand, resulting in an excess of €70,106 thousand recognized as an IFRS 2 charge [944]. - TopCo will acquire a 24.1% equity interest in Schmid Technology (Guangdong) Co., Ltd. for 1,406,361 TopCo Ordinary Shares and €30,000 thousand in cash, with the transfer occurring in three tranches [946]. - The issuance of 5,000,000 TopCo Ordinary Shares at a nominal value of €0.01 per share is subject to vesting conditions under the Earn-out Agreement [945]. - The fair value of TopCo Ordinary Shares issued was estimated at $10.30 (€9.81) per share at the closing of the Business Combination [942]. - The increase in fair value of the Private Placement Warrants recognized amounts to €210 thousand, reflecting the fair value as of December 31, 2023 [938]. - The weighted average shares outstanding for basic and diluted net loss per share is 37,974,862 [949]. - The total assets acquired include adjustments for redemptions, transaction costs, and waiver of deferred underwriting fees totaling €34,000 thousand [944]. Other Income and Expenses - The company reported other income of €15,985 thousand, contributing positively to the overall financial performance [919]. - The impairment reversal on financial assets amounted to €22,696 thousand, positively impacting the operating results [919]. - The company recognized finance income of €19,685 thousand, which contributed to the overall financial results [919]. - Pegasus recognized a compensation expense of €6,785 thousand related to the transfer of 843,750 Class B Ordinary Shares and 2,750,000 Private Placement Warrants to directors and officers [938].