Ladies and gentlemen, welcome to AIXTRON's full- year and fourth quarter 2020 results conference call. Please note that today's call is being recorded. I now hand you over to Mr. Guido Pickert, VP of IR and Corporate Communications at AIXTRON, for opening remarks and introductions. Thank you very much, operator. Let me start by welcoming you all to AIXTRON's presentation of full- year and Q4 2020 results. I'd like to welcome the members of our Executive Board, Dr. Felix Grawert, Dr. Bernd Schulte, and Dr. Jochen Linck, who joined us last year in October, as well as our VP of Finance and Administration, Charles Russell. As indicated, this call is being recorded by AIXTRON and considered copyright material. As such, it cannot be recorded or rebroadcasted without permission. Your participation in this call implies your consent to this recording. Please take note of our safe harbor statement, which can be found on page two of our results presentation slide deck, as it applies throughout the conference call. You may also wish to have a look at our latest IR master presentation with additional information on AIXTRON's market and its technology. Both slide decks are available on our website. This call is not being immediately presented via webcast or any other medium. However, we will place an audio file of the recording or transcript on our website at some point after the call. I would now like to hand you over to Bernd Schulte for opening remarks. Bernd? Many thanks, Guido. Let me all welcome you to our full year 2020 results presentation. I will start as usual with an overview of the key developments for the year before handing over to Charles for more details on our 2020 figures, and Felix giving you updates on our achievements in our business areas, as well as the outlook for 2021. Let me start by giving you an overview of the key developments last year on slide three. In Q4 2020, orders came in at EUR 92 million, which is 30% higher than the same figure in Q3 2020. As broadly expected, revenues in Q4 were strong at EUR 108 million, which was almost 70% higher than in Q3 2020. While our optoelectronics business was slightly lower in terms of revenues compared to 2019, we saw increasing demands resulting in almost doubling of the orders receiving compared to 2019. This strength was driven by both lasers for Datacom as well as for 3D sensing with a particular order strength in Q4. In power electronics, revenues and orders were up significantly, driven by strong demand for GaN power equipment. Felix will give you more details later on. Fiscal year 2020, we fully met our 2020 guidance with a total order intake of EUR 301 million and revenue of EUR 269 million. Gross margin was at 40% and EBIT margin at 13%. Let me now quickly give you an update on our potential impact of the spread of the COVID-19 disease. Our increased internal safety measures have proven effective to mitigate the risk of infection within our premises. We continue to not have recorded any significant effect related to COVID-19 on our operations and business. However, we will continue to watch the development of the global pandemic very careful and remain to be ready to take measures if necessary. Before handing over to Charles, let me say a few words to our dividend proposal we have made due to our strong results achieved during fiscal year 2020. We, the executive board, as well as the supervisory board, propose to pay out the dividend for full year 2020 of EUR 0.11 per share. This will have to be approved by our shareholders on our annual general meeting on May 19, 2021. This represents a payout ratio of 36% of our group net results, which was EUR 34.5 million. At this point, let me now hand you over to Charles for a more detailed overview on the full year 2020 numbers. Charles? Thanks, Bernd, hello to everyone. Starting on slide four, our income statement. As expected, total revenue for the year was EUR 269 million compared with EUR 260 million in 2019. Gross margin of 40% in 2020 was 2% lower than the 42% in 2019. The difference is attributable to the US dollar/euro exchange rate effect between the two years. Overall operating expense in the year increased from EUR 70 million in 2019 to EUR 73 million in 2020. G&A expense increased to EUR 18 million in 2020 from EUR 16.5 million in 2019, mainly as a consequence of increased recruitment costs and other variable expenses. R&D expense of EUR 58 million was EUR 3 million higher than in 2019. This is a reflection of our product development work for our MOCVD systems, including power electronics and mini LED and microLED. Here we've taken next steps and will start to ship first systems to test customers worldwide. Towards the end of the year, spending on our OLED development reduced. However, costs for the full year were similar to 2019 at EUR 17 million. Net other operating income of EUR 13 million in 2020 compared to EUR 12 million in 2019, mainly consisted of R&D grant income of EUR 8 million and a EUR 3 million reversal in Q1 of an impairment charge on a facility in Germany. We generated an EBIT of EUR 35 million for the year, compared with EUR 39 million in 2019. The effective tax rate in 2020 was 2%, mainly due to the recognition of additional deferred tax assets and because of the reversal of the building impairment. Without these adjustments, the effective tax rate would have been just over 12% of pre-tax profits. The net profit for 2020 was EUR 34 million compared with EUR 33 million in 2019. Turning to the balance sheet on the next slide. As expected, the high level of sales in the quarter produced a substantial reduction in inventories between the end of Q3 and year-end. At EUR 79 million, inventories were similar to the previous year's level. The high quarterly sales volume is also reflected in the increase in receivables to EUR 41 million, most of which will be collected in Q1 2021. Advance payments received from customers of EUR 51 million were similar to the end of 2019. Advance payments are equivalent to 34% of the backlog. Our cash balance increased to EUR 310 million at the end of the year, including EUR 60 million shown in other non-current assets on the slide. Moving to slide six, which shows our cash flow statement. Operating cash flow of EUR 23 million was lower than 2019 because of the increase in receivables at the end of 2020. CapEx increased during 2020 to EUR 9.3 million from EUR 7.7 million in 2019, which reflects an increase in demonstration equipment for expanded product range and investments in facilities needed for an expanding business activity. With that, let me hand you over to Felix. Thank you, Charles. I would like to give you some perspective on our address market on slide seven before concluding with the outlook for the rest of the year. In 2020, our optoelectronics business was slightly lower in terms of revenues compared to 2019. Towards the end of the year, we saw strongly increasing demand. With this, the orders received in this area almost doubled in comparison to 2019. The strength was driven by lasers for Datacom from the 5G build-out, as well as lasers for 3D sensing. Here we see a growing adoption of 3D sensing applications on both sides of the smartphone and in other devices. In the LED space, customer inquiries for tools to make ROY LEDs are strong, driven by demand from the areas of full color mini LED displays and backlighting units. For the first time in 2020, we have received significant orders for royal blue LEDs targeting the horticulture market, also called indoor farming. In microLED, we have seen the transformation of the industry from pure R&D to the manufacturing feasibility stage, making the adoption of this technology more probable than before. At this stage, the order volumes for this segment are still comparatively small. In power electronics, the 2020 revenues and orders were up significantly, mostly driven by strong demand for gallium nitride power equipment. Here we continue to receive orders from customers who address the growing end market of efficient gallium nitride chargers for consumer electronic devices such as smartphones and notebooks, as well as efficient gallium nitride power management solutions for servers and data centers. In 2020, we have clearly seen the tipping point of broad gallium nitride power adoption. We are now in the volume ramp phase for GaN power solutions that replace the incumbent silicon-based power management systems. At the same time, we see increasing momentum in the area of gallium nitride and gallium arsenide RF solutions driven by the 5G build-out. In silicon carbide, we have achieved the qualification of our fully automated high- throughput system from two customers. We continue to work hard to achieve the same with additional customers. With regards to OLEDs, we have achieved the customer acceptance of our Gen2 tool in December 2020. We are now in customer discussions related to a scale-up of the system to larger size, which will be the final part of the qualification process. Let me now come to our outlook for 2021 on slide eight. For 2021, we expect order levels to once again increase year-on-year to a range between EUR 340 million and EUR 380 million. This expectation is based on many orders that we have already at the beginning of the year and a very healthy level of customer inquiries across all applications. Starting with a backlog of EUR 151 million, we expect revenues for 2021 in a range between EUR 320 million and EUR 360 million. We expect our gross margin to again be around 40%, despite adverse U.S. dollar-euro currency effects. We expect an EBIT margin of around 16%. The figure increase our new expenses for the completion of the development of our next generation products for laser, microLED, GaN power and RF, and 8-inch silicon carbide. With this large portfolio initiative, we expect to secure our leading market position in our rapidly growing core markets. Important to note is that orders, order backlog, and the other guidance figures are based on our 2021 budget exchange rate of $1.25 per EUR. In the quarters to come, revenues and profit margins will be reported based on actual exchange rates. We have made our guidance based on the assumption that the current COVID-19 pandemic will continue not to have a significant impact on our business. Please also note that these estimates fully include the results of APEVA from top to bottom line. With that, I'll pass it back to Guido before we take questions. All right. I think we are now open for questions. Please ask, operator, please ask the participants to ask their questions. Yes, of course. Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to withdraw your question, please press nine and star again. Please press nine and star to register for a question. The first question comes from Olivia Honychurch from Liberum. Over to you. Hi. Thank you for taking the question. A couple from me, actually. I just wondered if, first of all, you could talk a little bit more about the OLED project that you currently have ongoing with one of your Korean customers. Have there been any more developments there over the last couple of months? I guess elsewhere, sort of regardless of that customer, is it possible that you might look to mirror that project work with other customers going forward as well, for example, in China? That's my first question. Secondly, just on silicon carbide power applications. Can you talk a little bit more about what sort of applications that you're currently seeing strong demand for at the moment? Maybe give a bit more color on whether you're getting any closer to qualification with customers with your platform there, as you did towards the end of last year. Thanks. Yeah, thank you very much for the two questions. Let me get started with OLED first. The key development towards the end of the last year was the completion of the Gen 2 project. We achieved the full qualification and the project is concluded. The final acceptance has been reached, together with the customer. The specs have been fulfilled, so to say. With that, this qualification project is concluded. If you recall, this was the Gen 2 project, referring to a Gen 2, a smaller size or R&D type size of substrates, of glass substrates, which was attached to the R&D line of our customer. That project is concluded. In other words, you can say the proof of concept has been done that the OVPD technology, which is a new technology, is working. That concluded. Now we are in discussions with customers, both in Korea and outside of Korea, about a scale-up to larger substrate sizes. Larger substrate sizes are needed for a full volume production, where ultimately the technology would go. Those discussions are ongoing. It involves a lot of technical details, technical specifications. That is something which we expect to take a couple of months. That's what I would like to give as a summary for the OLED discussion. With that, I come to your second question on silicon carbide. I think you have two elements. The first was what applications we addressed and about the qualification status. With respect to applications, we expect the biggest volume to go in the market for electromobility, into the electric drivetrain in the main inverter of cars. We furthermore see silicon carbide elements to go in the onboard charger for cars. To say, the compact power charger converting the energy through a cable into the DC voltage in the battery. We also see further use cases and volumes, not as large, in smaller quantities compared to the first two ones, in fast charging stations, in infrastructure, for example, along the highway or at. Today we call it gas stations. In the future, it will be electric charging stations. The discussions going on about 100 kilowatt, even 350 kilowatt charger, which can charge, for example, 100 kilometers of driving distance for your car in, let's say, five minutes or so. This will clearly need silicon carbide as a power converter. Also we see silicon carbide going into the electricity generation, so into inverters, for example, for solar power plant or for wind power plant. There is many applications around, but by far the biggest use case is around electromobility. Now, that's the main driver in quantities. To your second question, we have concluded the qualification with two customers. As we mentioned before, with other customers, our system is standing on the shop floor and qualification programs are running. Such a qualification typically takes several quarters because it not only involves that our tool produces appropriate wafers in a reliable manner, but it also means that these wafers need to be put through the production line of our customers. Let us say, full MOSFET or full devices being produced, and only when these fully produced devices pass the qualification test of our customers, they then typically also accept the tool. So that is a multi-quarter ongoing effort, which will well extend into the year 2021. The next question comes from Uwe Schupp from Deutsche Bank. Over to you. Yeah, thank you. Good afternoon, gentlemen. Two questions, please. Firstly, on the gross margin, and secondly, on the gallium nitride opportunity. Just firstly, on the gross margin. You gave a relatively broad revenue range, with about a EUR 40 million or so number. I was just wondering how we should read the 40% absolute gross margin and why you also didn't decide here to give maybe a bit of a range. I would expect, given what we saw in the past, 2018 or even before that, there should be some benefit from higher volume. I would also assume that your product mix is probably going in the right direction, with silicon carbide and potentially also some VCSEL business coming back. Secondly, just like to hear your thoughts on the gallium nitride opportunity, as in how big do you see the market this year? I guess some of the concerns would be, is gallium nitride power really comparable, maybe only to the 3D sensing market in 2018, when you basically had one strong year? Do you really think the opportunity is maybe a bit more structural, more longer term, and really comparable maybe even to the silicon carbide opportunity? Thank you. Thank you, Mr. Schupp, for your question. Let me get started with the gross margin first. We have decided on the 40%, not to give a range, but the 40%, if you make a delta interval of a couple of percentage points below and a couple of percentage points above 40%, this is what we mean with a 40% or a range around 40%, just to address the aspect of the numbers. What are the drivers behind the 40%? First of all, there is a number of mix effects behind it. Also in 2021, we have significant volume from the ROY LED market. Also in 2021, we expect some very large orders, volume orders, with customers who expect, and can expect for good reasons, appropriate lower pricing points. There is a mix effect mixed into the 40%. The U.S. dollar in 2021, now with 1.25, of course, is a heavy burden on the margin if you compare that with 2020, where, over many parts of the year, we were at an exchange rate of about 1.1. This is a big, heavy load on the gross margin. Last but not least, our production model is not too much asset heavy. It's relatively asset- light and relatively flexible due to a high level of an outsourcing or third-party contract labor. We do not have so big volume effects of dilution, fixed cost dilution, fixed cost regression, as one would have, for example, a semiconductor company who has their fab, their equipment standing there, and suddenly more volume is being produced on the same asset. This is not the case for us. The volume effect does not give us such a big benefit. I think these are the main points going into the 40%. Maybe to add, Mr. Schupp, when we say around 40%, we imply with that certainly a certain range. It could be slightly above or slightly below 40%. It doesn't mean it will be exactly 40%. Okay. That's clear. Yeah. With that, I come to your question on gallium nitride, which was essentially, is this one strong year as we have seen with the VCSEL, or is this a multi-year trend? I expect that this is a multi-year trend. Of course, around a trend, there's always ups and downs. This is also very clear. What we are seeing today is the first investment, which to a large part, I expect to be covering the demand for chargers and mobile devices, which is one sub-segment of gallium nitride. As we also explained in multiple instances, expect that gallium nitride will step by step penetrate multiple sub-segments. It could very well be that the 2021 demand is covering the portable mobile device segment. We also look at the segment of IT infrastructure, be it in data centers, the power supply for servers, or be it the power supply for mobile base stations and mobile communication, who are very hungry in terms of power. Later on, also expanding in markets such as motor drives and integrated power circuits, which, for example, you would find in white goods, household appliances, and air conditioning devices. Based on that, we expect that the gallium nitride is a multi-year growth trend. However, we clearly see a first wave of this trend linked to a very particular application. We also know consumer electronics, in particular, is an area where trends have very hefty and heavy movement because the adoption is very fast. While other, more industrial applications have a much more steady, slower momentum. In a nutshell, yes, there is a strong wave, but it will continue as a long-term growth driver. To summarize, the growth this year will be really mostly, as far as you can see, for the fast charging opportunity in mobile devices? I would think this is the biggest driver. That's very clear. Thanks, Felix, thanks, Bernd, and all the best, Bernd, for the next chapter of your life. Thank you. The next question comes from Jürgen Wagner from Stifel Europe. Over to you. Yeah, good afternoon. Thank you for taking my question. You mentioned in your prepared remarks that microLED is moving to pilot production. When do you see that market developing in volume, and who would be your closest potential competitors? A clarification on the OLED. You said you have APEVA included from the top to the bottom line. Does that mean that there's any OLED contribution in your revenue forecast for 2021? Thank you. Yeah, thank you, Mr. Wagner, for the microLED. You're right. Our customers are going now in testing microLED production on small scale, but really testing the feasibility of mass production methods to build devices such as small displays for smartwatches or even large displays for TVs. The timeline, how we see it in the moment, is that you might see first TVs in the market, but they're on very small volumes, certainly starting basically more like a market test maybe in 2022 already. While the mobile applications will take a bit longer. I would not expect them before 2023, 2024, really on the shelf here in the shops. Competition is the traditional one. We see in terms of gallium nitride and other systems, our old friends from the U.S., Veeco, as our main competitor. We take certainly that situation and that competition very serious. We strongly also believe that currently that we have a clear upper hand. With that, let me come to the second part of your question relating to APEVA. The question was whether we have modeled in our guidance some revenue for APEVA. Yes, we have modeled in some revenue for APEVA based on most realistic scenario, so to say. We hope that this scenario does materialize. Can you say how much? Honestly, I don't have it off my head. It's not a significant number. Okay. Thank you. The next question comes from Stéphane Houri from ODDO. The floor is yours. Yes. Hello, good afternoon. Actually, I have two questions. The first one is about 2021, and I would like to know if you can rank by opportunity, the fastest-growing opportunities this year, between power, LED, and lasers. Inside power, I'm a little bit surprised that you seem to be more bullish on GaN than on SiC for the time being. Does it mean that what is driving your orders at the moment is not yet SiC and SiC is for the years to come? That's the first long question. Sorry for that. The second question is about the operating leverage. You have discussed about the gross margin EBIT margin, also some may have expected a little bit more leverage. Why is that? That's the first question. What kind of long-term EBIT margin do you target? Thank you. Let us address your questions one by one. I think the first question you asked is about the growth drivers for the year 2021. We see strong momentum and strong growth from all the segments, which is very nice, across the board, both from the optoelectronics as well as the power electronics. The only segment which we have highlighted, because it really sticking out and growing particularly strong, is the gallium nitride, which we already discussed with a strong demand coming from the mobile charging segment. Which addresses the second part of your first question, gallium nitride versus silicon carbide. In both these segments, we expect a year-to-year growth trend. Nevertheless, in the year 2021, gallium nitride is clearly in a wave of several customers expanding and fully equipping their factories. Because now is a moment in the market, a spot on a very fast- coming moment, where these devices are needed. That is typical for the consumer electronics industry, where an adoption of a particular technology goes very fast. 2021 is so strongly dominated by the growth of gallium nitride. In comparison to that, silicon carbide, which addresses much more the automotive market, as we discussed earlier in this call. In this segment, we see a dynamic where customers step by step, on a more steady, continuous pace, equip their factories. In silicon carbide in 2021, we do not see customers putting, let's say, 10 systems or 20 systems in one shot in a factory. We rather see expansions of customers adding one system, two systems, three systems here and there. However, in both segments, we expect a year-to-year growth driver trend. With that, I come to your second question, which I understood, and I do not know whether this is right, about the margin. EBIT margin we have guided as around 16%. This of course, takes into account that also for 2021, as we have mentioned before, we expect an increase in our R&D expenses to complete our portfolio renewal. That, of course, consumes, again, a certain portion of the gross profits realized from the higher top line. Maybe that addresses that part of the equation. Okay. Long term, you think you can reach what kind of EBIT margin if you continue to grow? That, of course, depends on many factors. Last but not least, competitive environment, pricing power, and so on and so forth. I think 15%-20% should be a reasonable range. Okay. Thank you very much. Next up is Andrew Gardiner from Barclays. Good afternoon. Thank you for taking the question. I got a longer-term one, just in terms of the longer-term growth outlook. You guys have included a slide for the last few quarters in your deck, looking at the growth out to 2025 for the compound semi equipment market. It's industry analyst forecast. There's some fairly big numbers in there in terms of the 20%-35% compound annual growth through 2025. I'm just wondering on your current perspective on this outlook. You've seen orders inflect quite strongly at the end of last year. It feels like the business is quite nicely balanced at the moment between specialty LED power and opto, and with good orders coming across all of them. What's your current perspective on those kind of long-term growth numbers? Are you willing to endorse them as we look out over the next few years? Just sort of related to that, what are you guys thinking in terms of CapEx need? You've already highlighted, Felix, sort of the outsourced nature of your production. Do you need further CapEx in order to support this kind of growth that you're seeing at the moment? Thank you. Yeah. Thank you, Andrew. I think for all to understand, I think what Andrew is referring to is a slide we have in our slide deck, which basically displays the expectations from Yole Développement about epitaxial equipment and markets potential. They have basically two scenarios. One, let's say a base case and an aggressive case. One is about a CAGR of 20% and another of 35%. The main difference between the two scenarios is how strong the rising of microLED is, more or less. Let me comment. I would generally agree to the fundamental growth concept behind that study. I would be more careful with the absolute numbers because, from historical data, we think the absolute numbers do not stack up like reports there. However, the underlying momentum and the underlying applications, I would agree to, and meaning that there is a potential of 20%-30% CAGR in this market, I would definitely agree to. The driver is, Felix said it many times, it is power, silicon carbide, gallium nitride. We at AIXTRON certainly would benefit from gallium nitride even stronger than silicon carbide due to our market position. Then there is the laser business, telecommunications, and 3D sensing, as well as the LED market. The LED market is a little bit the wild card in it, let me call it, whether the microLED will make it to a volume product, which is not 100% given, which is currently in the test I mentioned before. If that turns out positive, I definitely see the opportunity for such growth rates. With that, let me come to the second part of your question on the CapEx. CapEx in the last years was typically around EUR 10 million per year, sometimes below, sometimes above. For 2021, we expect a CapEx of around EUR 25 million. That is driven by two major consumption needs. The one area is moderate expansion on our production facilities, and in particular, in terms of testing facilities, test equipment, and so on and so forth. This one. The other part where the CapEx is going, or a significant additional amount of CapEx is going this year, is additional prototypes for our new generation of products, which we're just about to bring into the field. Thanks very much. That's very clear. Next up is Charlotte Friedrichs from Berenberg. Over to you. Hello. Thank you for taking my questions. 2.5, please. The first one is sort of related on the order intake. Can you give us an idea of the split that you saw with your order intake in the fourth quarter of 2020? Also, what kind of quotation level are you now seeing in the first quarter? Does it continue at this high level? The second topic would be around the gross margin. Do you already have a broad feeling for where the gross margin could go in, say, 2022, 2023, when you start phasing in your new product generation? Thank you. Of course. Yeah, the order intake in Q4 was strongly, as we mentioned, dominated by optoelectronics applications, laser systems for telecom, datacom, and consumer electronics. I think it was quite strong. It was almost around 70% of the order intake just came from that application. That was a certain Q4 effect, and we should also mention there were a very few, very big orders, which drove that demand. With that, let me come to the gross margin. You asked around 2022, 2023, where the gross margin would go and develop. On average, I would expect for our new product series, a gross margin of 45%-50% on that area, because it offers additional differentiation potential and increased productivity. Please keep in mind, when you model that in, that in our markets, the adoption of new product series typically takes quite some time. Even if we bring in the product into the market in 2021, 2022, it easily can take two to three years after the qualification is completed until we see a broader market adoption. That simply comes from the dynamic that when a product is qualified, in the sense of when a new tool is qualified, the customer has to re-qualify all the existing products on this tool before they can use it broadly for their production. This is nothing, which is to say on our side, we are ready to produce. We could immediately switch our entire production from the existing series to the new series. However, our customers will convert new installations step by step. Therefore, I think we will have a transition phase from the existing product series, G4, G5, AIX G5 WW, for our three application areas to the new one, I would say in a time period from 2022 to 2024, and we will see the full roll-out of the portfolio around 2024, 2025. I missed to answer one of your questions, sorry, about the order intake development. Right now, we're seeing a continuation of a very healthy demand in terms of customer contract discussions, quotation levels, et cetera. I would not be surprised if we see in Q1 order levels even above Q4 levels. Thank you very much. Now we're coming to the next questioner. It is Malte Schaumann from Warburg Research. Please go ahead with your question. Good afternoon, gentlemen. The first question is cost. If we look at SG&A, that had been relatively stable over the past years with stable sales. Now, as we enter a new growth phase, sales up to EUR 350 million, potentially EUR 400 million sales in a few years, where do you see SG&A developing relative then to sales? In that respect, also on R&D. R&D is currently rising due to the new product innovations. As your earnings would afford spending for other things. Do you see areas of interest where you think, okay, in the past you abandoned several projects, but as you are in a better position now, do you see certain areas so that we should expect an inflated or higher R&D position going forward as well, due to your capabilities and potential market opportunities? Okay. Let me talk on the R&D spending and what we expect going forward on longer term. We are definitely, 2021, for the compound product line on a quite high level, and we even expect it to grow over 2020 due to the very ambitious product initiatives we have running. We have started, and we have to continue. We want to continue in order to come out with very competitive products in the course of 2021 and 2022. That is the main driver of the increase in R&D cost in these two years. Beyond that, certainly, we have to continue also thinking about the next generation development. The markets start talking about 300 millimeter applications, where we certainly have to respond to, and we will respond to. I would not personally expect a significant growth over the levels we currently are in. Okay. Yeah, go ahead. Potentially stable. Maybe stable at the current level, even if it's currently inflated, but you're going to new opportunities going forward, the level might be sustainable. Right. Yep. SG&A, in terms of sales, I would not expect also a significant change. These are fixed costs. Certainly, if you have bigger and more demanding customers, you somewhat need maybe a few more people to support customers and stay in touch with them. However, I would say this is not really significant. Yep. Okay, good. On OLED. If you talk to other customers besides your lead customer, what's the potential timeline? Because your lead customer obviously has an advantage, should be theoretically much closer to a decision because of available data. If you talk to other customers, what's the potential timeline until when customer really has to gather new data you can provide, et cetera, before he might be ready to really decide on the next step? Could such a customer already order a kind of a pilot tool, or would he firstly might copy certain mapping, such the Gen 2 project, because he has not the same data available as your lead customer obviously has? Yeah, I think there's multiple factors determining the speed of the customer decision. There's actually a very different corporate culture inside of different customers about the decision-making. Yeah. Some customers are very entrepreneurial and go very fast. Others want to have the almost perfect data before the project starts. Yeah. There is a broad bandwidth. For sure, it will take a couple of months until that is concluded. Yeah. We cannot determine and say there is a certain pattern of decision-making or there is a certain timeframe, because in the end, every customer is different, and every customer looks at different aspects where they put their focus on. Yeah. Unfortunately, I cannot give a very precise answer to that one. The second part of your question about the size of the system, it is very clear the focus and now to bring the size and the system to a production scale size because the R&D type feasibility study and phase has been completed. The discussions are focusing on upscaling to Gen 8, Gen 6, whatever the sizes are for production equipment, and that's the focus. It's not a repetition of another R&D type system. Okay. Good. Understood. Quick one on LED. What's the revenue share of the horticulture applications? Let me have a look at that. I think for Q4 it was minor. I think we talk more about in order intake. We're selling typically on orders level of many tools, and this equipment is versatile in the sense that you can produce LEDs for horticulture as well as for mini LED or microLED. This is very difficult. We're just giving you a, let's say, a flavor what drives the demand. There is no sticker on the tool, this is for horticulture or this is for red LED, for mini LED. You can do with the tool all of it. Basically, customers typically also serving all markets at once. Yeah. Right. That's right. Okay, thanks. The next question comes from David O'Connor from Exane BNP Paribas. Over to you. Great. Thanks for taking my questions. A couple of notes there, if I may. Firstly, the clarification on the order breakdown for Q4. What was the percentage of power within that? Does the mix switch to power in the Q1 order intake, or that incremental strength, is that driven by power? I have one or two follow-ups. The power electronics in Q4 2020 was relatively small. This was just around the 10% level. The expectation for the Q1 of 2021 is very different. Here, I think we speak about power electronics, about a 50% level. That is, by the way, very typical that quarter to quarter, we have discussed together many calls, the individual applications fluctuate quite strongly, and therefore it is so convenient and so nice now that we address multiple end markets, and that these fluctuations overall level out and create a more steady envelope. Understood. That's helpful. Maybe a follow-up on the GaN side of things. Can you help us size that market for consumer, for instance, equip the industry for smartphones, fast charging? How many tools overall over the next 1-2 years, do you estimate that market at? This is a very difficult question. I must say, I don't have the correct number off my head. It may be 30, 40, 50. Per year? Per year. Yeah. I don't know it exactly. Okay. No, that's helpful. Thank you. Maybe for my last question on the silicon carbide side. One of your customers recently announced the move to 8-inch SiC wafers. Does that change, in any way, how other customers think of their silicon carbide roadmap? Can this, in any way, help you crack some of these other customers? Thank you. Yeah, that's a very good question. There's a very interesting trend in the market. Initially, the focus of the entire industry was on silicon carbide 6-inch. Now, everybody sees that, especially in the last one to 1.5 years, the plans of all the car OEMs worldwide towards electrification have significantly accelerated. I think we are now clear everything will become electric, it's just a question of when it becomes electric. Yeah. We have also seen in the last one year that all the car OEMs are significantly pulling in that timeline for electrification. I think that is the major change that we saw in the automotive industry in the year 2020. With that, now for the semiconductor industry, it also becomes very clear that very soon there will be very significant volume of MOSFET for the drivetrain of all these electric vehicles. This has now put a push on the faster 8-inch adoption, because for the adoption of 8-inch in the wafer size, the market needs to be big enough, and suddenly, throughout the year of 2020, the expectations on that market have become big enough. With that, customers are now pulling in the conversion from 6-inch to 8-inch. It was initially planned around 2024-2025, and many customers are now talking about the adoption 1- 1.5 years earlier than that. The adoption will be somewhere between 2022 to 2024. That creates now a new dynamic. Everybody is now starting to make their plans for the 8-inch transition. Here, AIXTRON has a unique position, and we believe, as you have indicated in your question, that we can exploit that or our clear strategy to exploit that. Because in our planetary equipment, we typically also in gallium nitride, can both load six-inch wafers and eight-inch wafers. The reactor furniture needs to be a little bit retrofit. It's a small kit, costs like EUR 100,000, EUR 200,000. This is a small fraction of the total price of the tool, and then the tool can be retrofitted. With this, we are currently now working on a, let me say, revision of our tool, which is both eight-inch and six-inch capable. We are in first discussions with customers on that tool. Actually, first customers have purchased the tool already. We plan to ship it early in 2022. It's standing already on our shop floor here. That tool will then be both 6-inch and 8-inch capable. It will give us an additional value proposition and an additional angle to approach and address more customers or to crack into those customers where we are not a tool of record yet. Yeah, that's really part of our strategy. Very helpful. Thank you. The next question comes from Harald Schnitzer from DZ Bank. Yes. Thank you. Given the strong demand in power electronics, could you give us an indication how or if your market share has improved in GaN and SiC? With regard to SiC for the automotive industry, do you have follow-up orders after Bosch has signed? That's these questions. With regard the tax rate for 2021, could you give a guidance on that as well as on the free cash flow? Thank you. Thank you very much. Yes. Market shares and power electronics. Market share and gallium nitride, we estimate that the market share is somewhere between 90%-95%. In silicon carbide, our market share is strongly driven by which customer is ordering in which year. In the year 2020, which just passed, one of our customers is placing significant amount of order, compared to other customers or other players in the market, which are not using our tools. In the year 2020, we could register, I think, around 45%-50% of market share in silicon carbide. That was, again, strongly driven by the individual ordering pattern of customers. Far from the market share. In terms of the tax rate for 2021, I think I said in the speech that the underlying tax rate in 2020 was just over 12%, and I would expect somewhere between 12% and 15% to be the tax rate for 2021, bearing in mind that is all subject to any change in recognition, whether deferred tax assets or derecognition, depending on what the prospects are for future years beyond that. In terms of free cash flow, we don't usually give a guidance on free cash flow. We stopped doing that during 2020. I would expect it to be positive and probably more positive than it was in 2020 itself. Thank you. The next question comes from Lee Meyer from Lord Abbett Yeah. Hi. Thanks for taking my question. Hello? Operator? Just a second. Yes. Let me see where the connection of Lee Meyer is. Give me a moment. Sorry. Mr. Meyer, the line is open again. Hi. Can you hear me? Yes, we can hear you. Can you start again, please? Sure. All right. Thank you. My question is in regard to microLED, which, albeit is still a bit in the future. It's a bit of a ways off. You clearly have technological strength in the ROY market. Historically, in the blue-green market with GaN, it's been a bit of a more of a challenge from the competition both out of China and, as you mentioned, with Veeco. As we move into these smaller, finer feature sizes, both in mini and then more importantly with microLED, do you think you can regain your competitiveness outside of ROY, specifically in green and blue or blue? Yeah, Lee, thank you for the question. Definitely, yes. The requirements for microLED are very different than the requirements for solid state lighting LEDs. In all three colors, what is the utmost requirement is the uniformity leading into a good yield level, low defectivity, et cetera. This comes together with relatively big wafers, 6-inch, 8-inch wafers. If you want to do this with acceptable throughputs, we are very convinced, and that's the feedback we're getting from all our customers, the Planetary Reactor is the best choice. We believe we will have all three colors for microLED. Okay. All right. Great. Thank you. That was my question. Okay. Ladies and gentlemen, I would like to end this call on a personal note. After 28 years with AIXTRON and 19 years at the Executive Board, I will retire end of March. Looking back at these years, there have been good and less good ones, but all times have been very exciting for me. Even after that long time, I'm still amazed about the technology and the markets AIXTRON is serving, AIXTRON's people, and the great perspective of the company. I would like to thank you all for your interest and support for AIXTRON, and I really wish that you will continue like this, as I believe there is a bright future. Thank you very much, and goodbye. Thank you, Bernd. I would like to add some personal words to that, what he just said. Bernd, I enjoyed very much working with you, and I will until the end of March. That's for sure. You have pushed and supported me at the same time, and we always discussed our ideas and views very actively, sometimes controversially. At the end, it was always fruitful. In addition to that, we went along very well on a personal level. Therefore, I sincerely regret seeing you go, but I wish you all the best for your time after AIXTRON with your family and whatever you want to do. Thank you, Bernd. I ask my thanks to all of you for attending. We will be hosting meetings on virtual roadshows in different time zones next month. Please let us know if you're interested in joining. Please note that our next earnings call will be on April 29th, 2021, for our Q1 2021 quarterly results. Thank you, and bye-bye