MKS Instruments(US:MKSI)2022-07-18 18:18MKS Instruments Overview - MKS Instruments is a leading critical subsystems supplier for semiconductor manufacturing and an emerging solutions provider for advanced electronics manufacturing[9] - In 2021, Semiconductor accounted for 62% of total revenue, Advanced Electronics 15%, and Specialty Industrial 23%[11] - From 2015 to 2021, MKS Instruments' total revenue increased from $08 billion to $29 billion, representing a compound annual growth rate (CAGR) of +24%[57] Semiconductor Market - MKS addresses >85% of Wafer Fabrication Equipment (WFE)[22] - Average WFE spending is projected to increase from $53 billion (2016-2020) to over $100 billion (2021-2025)[20] - MKS estimates that ~100% of all semiconductor chips manufactured in the world today are made possible by MKS[23] Advanced Electronics Market - Laser manufacturing is seeing broad adoption in electronics manufacturing due to increasing processes and complexity[32, 34] - MKS leverages its "Surround the Workpiece" strategy to drive growth in precision manufacturing[37] Acquisition of Atotech - MKS entered into an agreement to acquire Atotech Limited for ~$51 billion in cash and stock[46] - Pro forma with Atotech, the revenue mix is estimated to be approximately 41% Semiconductor, 27% Advanced Electronics, and 32% Specialty Industrial[67] - The acquisition of Atotech is projected to reduce MKS's exposure to the semiconductor market to ~40% and add recurring revenue with strong profitability[68] Financial Performance - MKS generated $18 billion in strong through-cycle free cash flow[60] - From 2017-2021, MKS allocated $32 billion in capital, with 41% towards acquisitions, 26% towards product development, 14% towards debt management, 10% towards CAPEX, 7% towards dividends and 2% towards share buybacks[62, 63]