We are where we are today because our customers can rely on us as a partner and on the quality we provide. And this will remain so because we continuously have the right answers for a changing world.

Strategy

“MORE THAN AT&S”: GROWING PROFITABLY WITH THE MARKETS

 

We aim to continue our resilient and successful growth course and creating added value: for our customers, shareholders, employees, the company and all other relevant stakeholders. In doing so, our efforts focus on business and operational excellence, customer orientation, as well as premium service and growth, driven by innovative and profitable applications. A broadly anchored innovation culture, the continuous pursuit of technology leadership, pronounced quality awareness and a focus on cash flow generation are at the centre of our endeavours. Our ambitious ESG targets guide us in all our activities.

 

Smart connection across all areas of work and life will continue to exponentially increase the data volume transported and further drive the demand for AT&S technology in the future. With its technologies, understanding of applications and high level of manufacturing expertise, AT&S has achieved an excellent position in corresponding markets. AT&S will use the associated opportunities to continue to grow faster than the market in the future. Profitability should consequently also increase steadily. We consistently invest largely to expand our performance. Our long-term corporate goals reflect our clear growth ambitions in profitable market segments and applications.

VISION AND STRATEGIC GOALS

 

We aspire to be the first contact of choice for our customers in our market segments based on top performance – for high-end printed circuit boards and IC substrates, for modules and the corresponding system and interconnect solutions. Our strategy follows the vision “First choice for advanced applications”. On our path to implementation, we are guided by four strategic goals:

 

1. Expansion of technology leadership

 

We strive to be the leading provider of advanced interconnect solutions. To achieve this, we aim for a Vitality Index (our innovation revenue rate) greater than 20%. When it comes to strategic implementation, we use a dual approach: the industrialisation of new interconnect solutions and the positioning as a proactive system development partner. We industrialise new interconnect solutions as part of the AT&S Toolbox (the right mix of existing and new technologies). In the course of this approach, we increasingly position ourselves as a proactive system development partner for our customers who will take care of the entire production process for them – from the production of printed circuit boards and IC substrates to module integration services. As a result, AT&S is transforming from a manufacturer to an interconnect solution provider.

 

2. Sustainable profitable growth


We strive to exceed the revenue mark of € 2 billion by the financial year 2023/24 maintaining a high EBITDA margin profile (in the range of 25% to 30%). We use four levers for the strategic implementation:

 

a) Customer orientation and highest service level: We support our customers by providing technical advice as well as additional design, simulation and test services in order to enable the optimum interconnect solution.

 

b) Business and Operational excellence: In our processes, we focus on efficiency, productivity with highest capacity utilisation and a competitive cost structure. In doing so, we are also prepared for particularly complex and individual manufacturing requirements in different lot sizes in premium quality.

 

c) Focus on fast-growing and profitable applications: We concentrate on technologically advanced applications with disproportionately high market growth and double-digit EBITDA margin potential.

 

d) Focus on cash flow generation and optimisation of the financing structure: We strengthen our internal financing power for further investment cycles by maintaining our key figures at a high level: We aim for an equity ratio >40% and a debt repayment period <3 years.

 

3. Creation of shareholder value

 

The interest on the capital employed by our shareholders (ROCE) should amount to at least 12% in the long term. Within the peer group ROCE is thus in the upper range. At the same time, we pursue a transparent dividend policy based on investment cycles and profit for the year.

 

4. Sustainable management

 

Only then will we be able to expand our technology leadership and achieve sustainable profitable growth, if our actions are value-based and we generate added value for all stakeholder groups. Compliance with high standards in the areas of ethics, working conditions, health and safety, environment and quality are basic requirements on the road to success. The Responsible Business Alliance, the OECD Guidelines for Multinational Enterprises, the Sustainable Development Goals of the United Nations (SDGs) and our company values serve as our compass.

 

Our strategic focus areas are derived from the above as well as the AT&S materiality analysis, customer requirements and global developments in environmental and social matters.

STRATEGIC FIELDS OF ACTION

 

One of the strengths of AT&S is that the company understands its customers’ challenges and develops customised interconnect solutions together with them early on. This is an ability we will maintain and expand on in the future. In this context, AT&S increasingly focuses on combining the possibilities of the core business with new technologies.

 

We drive our business based on the following four strategic fields of action:

 

1. Expansion of the core business

 

AT&S strengthens its core competence in the area of high-end printed circuit boards and IC substrates and continues to develop its business in the existing market segments; here, the market promises solid growth.

 

2. Expansion of customer and application portfolio

 

AT&S uses proven technologies to implement innovative solutions for other (groups of) customers and applications, thus extending the life cycle of existing technologies and expanding its earnings base.

 

3. Proactive solutions development

 

AT&S intensifies its collaboration with customers during early development phases and develops innovative solutions for specific customer requirements by combining the core business with new technologies.

 

4. Industrialising new technologies

 

AT&S drives the development of new technologies and broadens its positioning in the value chain, among other things through new solutions for the module business. AT&S thus generates additional revenue and increases its leading edge over competitors.

MARKET GROWTH DRIVERS:
EXPONENTIALLY GROWING DATA VOLUME

 

Driven by increasing digitalisation, the number of connected things and the requirements in terms of data processing, transmission and storage are also growing. We serve the corresponding applications with our system and interconnect solutions, which enable sustainable, profitable growth. This boosts, among other things, the business of data centres and cloud computing applications. For AT&S this development offers significant growth opportunities in the field of IC substrates for server and network applications. The required performance and computing power of the processors lead to massively growing technological requirements on IC substrates. At the same time, the digitalisation trend drives the growing need for computing performance in end devices (edge computing), which opens up interesting opportunities for AT&S in terms of profitable growth in the printed circuit board business in all market segments.

TECHNOLOGICAL GROWTH DRIVERS:
MINIATURISATION AND FUNCTIONAL
INTEGRATION

 

The development of the electronics industry is currently strongly influenced by the trends of miniaturisation and functional integration. Besides, the life cycles of products are also getting shorter. This boosts the trend towards modularisation, i.e., the development of highly integrated functional components featuring a defined performance spectrum, which can be used in different applications and devices. The use of these pre-developed modules enables suppliers of devices to further reduce the time to market. This process will fundamentally change the supply chain in the electronics industry. Based on the modules’ high integration density, a wide variety of technologies will be combined to achieve for the production of the modules.

MODULARISATION TREND:
ADDITIONAL BUSINESS OPPORTUNITIES

 

The trend towards modularisation in electronics is becoming increasingly apparent not only in consumer, computer and communication products, but also in automotive, industrial and medical applications. As part of its growth and diversification strategy, AT&S addresses the growth potential on three levels:

 

Level 0: Expansion of the classic printed circuit board business – with a continued focus on the high-end segment.

 

Level 1: Providing of IC substrates and high-end printed circuit boards for the rapidly growing market segment of modules.

 

Level 2: Broadening the service spectrum in the value chain through additional module integration services such as co-design, simulation, architectural optimisation, assembly and test services with the objective of offering comprehensive solutions for modules.

 

With this approach, we are expanding our position in the value chain and opening up additional business opportunities by entering the field of module integration. We will finance this growth largely from our own cash flow. The implementation of the strategy will lead to further diversification of our application and customer portfolio in a high-tech market segment and enable AT&S to position itself in an important future market early on. AT&S has gradually built crucial capabilities required for the implementation of the strategy over the last few years (with the AT&S Toolbox). At the same time, all possibilities for the establishment of additional required technologies and capabilities are being revised. In this context, AT&S is considering both organic and non-organic measures.

The
Management Board

Interview

Listen to the detailed audio podcast with the Executive Board here. Peter Schneider, the new Chief Sales Officer, is also on the podcast.

since June 2021
until May 2021

The
Management Board

Interview

Listen to the detailed audio podcast with the Executive Board here. Peter Schneider, the new Chief Sales Officer, is also on the podcast.

Interview with the Management Board

Mr Gerstenmayer, looking back at the last year, what is your overall assessment?

 

Andreas Gerstenmayer: We had a very successful financial year. We were able to generate significant growth during the most severe economic crisis since World War II. The team delivered a great performance even under challenging conditions. Meeting our business targets despite corona while at the same pushing ahead a new plant on schedule is an achievement that cannot be taken for granted in any way. We also succeeded in remaining a reliable partner to our customers in this environment.

 

This success proves the resilience of our business model and shows that we are pursuing the right path with our strategy. We succeeded in investing in the right segments at the right time. In the market for IC substrates, we currently stand at the beginning of the next development cycle. We are well prepared and will be able to play a major role here in the years to come.

 

Ms Faath, how do you view the business development of AT&S in the past year?

 

Simone Faath: Very positively. Our revenue grew by 19%. We raised our EBITDA margin by 130 basis points. And we also recorded a significant increase in return on capital employed: this indicator, which is very important for our shareholders, climbed from 2.8% to 5.8%. We are definitely moving in the right direction.

 

Also on the stock exchange?

 

Simone Faath: After the general crashes in early 2020, our share initially recovered relatively slowly. But then the price picked up significantly and reached its all-time high to date at the beginning of this financial year.

 

How would you summarise the development in the individual market segments?

 

Andreas Gerstenmayer:We saw a heterogeneous picture, although even the markets that were difficult last year remained stable for us when looking at the year as whole. The Industrial, Automotive and Medical segments were massively affected by the turmoil surrounding the pandemic in the first half of the year: The automotive segment declined by up to 30% in some areas. The medical sector shifted its focus almost completely to fighting the pandemic. Investments also dropped sharply in the industrial sector. 

 

Not so in mobile communications: Here, the market developed significant momentum, however, without taking off. With the introduction of 5G, we expect even more from this segment in the future. The renaissance of notebooks and tables came rather unexpectedly. Due to the population’s changed living and working situation, demand for these products was strong — a trend that is likely to continue in the years to come, among other things due to catch-up effects. As data volume keeps increasing, areas such as data centres and edge computing have seen a very positive development. We expect massive growth for our business in this area in the coming years.

/ This success proves the resilience of our business model and shows that we are pursuing the right path with our strategy. /

Andreas Gerstenmayer

Mr Moitzi, after 40 years at AT&S you will step down from the Management Board at the end of the month. How do you feel about that?

 

Heinz Moitzi: Very good! I know that my responsibilities are in very good hands with my successor Ingolf Schröder and my team. The time to hand over my tasks is well chosen – for me and for AT&S. People who breathe fresh air into the business and young dynamism – that is exactly what the company needs in the phase that it is entering right now. Apart from that, I will continue to support the company in a consulting role in the near future. That makes the transition easy for me.

 

Ms Faath, you have been on board since 1 November. You have of course set an agenda for your area of responsibility …

 

Simone Faath: Absolutely. One topic that is very important to me is capital market communication. I see that our pool of investors is growing and becoming more international. There are also many interested investors in the Asian region now. We will respond to this growing interest and further increase our presence at the sector-specific conferences. I want the market to understand the company story as well as possible.

 

Now, in the phase of digital transformation, the company is enjoying increasing attention from international investors. Last year we grew clearly in the double-digit range – and we expect this development to continue this year. It is wonderful that Austria has such a top-class technology company, and I am delighted to have the opportunity to help shape its path as its CFO.

 

Mr Schröder, you have been on board since 1 September. Which areas will you focus on in the near future?

 

Ingolf Schröder: AT&S has grown significantly over the past years. The focus was naturally on building up capacity and ensuring the ability to supply our customers. Now that we are growing to a completely new size category, it will be important to adjust the relevant structures and systematics to our new size. We will have to review and comprehensively align the entire value chain, from suppliers to customers. In doing so, we will examine not only our structures with a view to end-to-end processes but also total costs, standards, quality and excellence methods. We will use the possibilities offered by digitalisation even more extensively by enhancing efficiency through further automation and by improving utilisation. My goal is to establish a “Future Production“, in which we align ourselves more closely to semiconductor production. We are already using similarly complex machinery in many areas today and have comparable cleanliness standards, for example. This approach could be a game changer for us.

 

Mr Schneider, sales is a new area of responsibility on the Management Board. What philosophy will you apply to managing sales?

 

Peter Schneider: AT&S has a “customer first” philosophy. And so we will continue to put the customer at the centre of our attention in the future. We have a clear focus on applications. It is very important for us to be at the upper end of the scale and to be an early mover in new applications. And so, on the one hand, we have to make sure that we continue to build on our strategy in the area of applications and implement it consistently. On the other hand, we have to ensure that we become broader and diversify further - in other words, diversify our customer base and tap into the regions outside Europe in order to grow more strongly.

/ Now that we are growing to a completely new size category, it will be important to adjust the relevant structures and systematics to our new size. /

Ingolf Schröder

How does the demand for high-end IC substrates increase with digitalisation? What is the correlation here?

 

Andreas Gerstenmayer: To put it simply, not only data volume increases significantly with digitalisation, but also the requirements for data management. We generate data. We transmit data. We process data. And we analyse data. High-performance microprocessors are needed everywhere in this chain. Whether it is mobile phones or notebooks, server farms or, in the future, autonomously driving cars. The processing components built into them must become more powerful based on new architecture concepts. And this requires high-performance IC substrates. The IC substrates of the future are larger, have more layers, are more integrated and have additional functionalities.

 

This is where a key element of our growth story lies: It is not just quantitative growth that matters to us, but especially value growth. Requirements for IC substrates, as well as those for substrate-like printed circuit boards, will increase and the number of suppliers is limited. We have already defined our goal in this context: We aim to move up from 5th place to 3rd place in the area of ABF substrates within the next three years.

 

Is this also why you recently decided to speed up the expansion of Chongqing III?

 

Andreas Gerstenmayer: In the end, we follow the growing market demand with this decision. Our analyses have shown us that there is a massive shortage of capacity in the market for IC substrates. This shortage was further aggravated by the most recent digitalisation boost. Even though we — and our competitors — implemented all expansion projects, a significant shortage of supply will remain for the time being. This reassures us that we are making the right investments.

 

Ms Faath, does the digitalisation trend increase the awareness of AT&S in the capital market?

 

Simone Faath: The number of talks, also with new potential investors, has increased significantly. I see two reasons for this: On the one hand, the currently overheated capital market for large caps is driving investors to increasingly look for small and medium caps now. That plays into our hands. Of course investors are well aware of our very solid growth: over the last five years we grew be an average of 9%.

 

On the other hand, they also see that we are excellently positioned in a rapidly growing market: In particular the substrate market, which is highly profitable for us, will grow by roughly 9% per year according to current forecasts. 

 

Mr Schröder, how strong was the impact of the COVID-19 phase on the operating processes?

 

Ingolf Schröder: We were able to address the situation very rapidly at the different locations, and the overall effect on the operating business was minor. In India, we partially had to take intensive protection measures. In China, where we employ around 9000 people, it was significantly easier to make it through the critical phase. In Austria, the impact was also low, despite temporarily having to implement short-time work in the production for the Automotive segment. On a very positive note, we were able to implement our construction project in Chongqing without any limitations, on schedule and on budget. Moreover, we learned a lot for our communication processes during the crisis: today, we hold the majority of our meetings virtually. Among other things, we have also found a virtual format for customer and certification audits at the respective sites.

/ Many of the lessons learned are here to stay. Nevertheless, personal contact will remain very important. /

Peter Schneider

Which impact does the miniaturisation trend have on your production processes?

 

Ingolf Schröder: In general, we distinguish between two areas: classic printed circuit boards and IC substrates/module technology. The second area in particular is strongly tied to a high level of automation and complex structures. Both will further increase with miniaturisation. We are working on a production environment in which we will work even more intensively with data by incorporating AI and data analytics in the future. The interfaces and connection points are already included in the design of our future machines so that the data generated in the processes can be used for controlling processes but also for decision-making.

 

Mr Gerstenmayer, to what extent does AT&S think about acquisitions in view of the expansion of the value chain?

 

Andreas Gerstenmayer: So far, we have developed very well organically. When a company is among the top players in a highly specialised market, it is difficult to buy the right business. Nevertheless, at some point we will have to make a decision regarding module integration services: To what extent is it enough for us to grow organically? And where will it be necessary to consider inorganic growth steps?

 

Ms Faath, AT&S is currently investing large sums. What does the financing situation look like?

 

Simone Faath: Our current projects, including Chongqing III, are fully funded. And we are also in a solid position regarding upcoming refinancing. The indicator relevant to us, the ratio of net debt to EBITDA, was 2.1 for the past financial year, which is clearly below the target of 3.

 

Things are also looking good for future investments: Here we have all the options we need to cover increased capital requirements if need be. To ensure that this does not change, we are in a continual exchange with our banks and review our capital structure on a regular basis. Whenever we make an investment decision, we always take care to maintain the right balance.

 

Mr Moitzi, how would you describe the R&D strategy of AT&S?

 

Heinz Moitzi: Then as now, we take a close look at megatrends early on and try to determine: What does this trend mean for the needs of our customers? Today, devices should become smaller, use less energy and have more functions. For us this means, for example, that we reduce the heat in printed circuit boards, create space for batteries and shorten the information transport paths.

 

Moreover, we realised at an early stage how important our knowledge is - and that it is a good idea to protect it. Today we have more than 420 active patents. And every year, another 40 to 60 are added. In addition to the close collaboration with our customers and suppliers, our cooperation with universities is also very important to expand our knowledge. Today we conduct research with renowned universities in China, India, Japan, Germany and Austria. 

 

/ It is true that sustainability has been important to us for a long time. On the one hand, because we are convinced of its importance. On the other hand, because it pays off. /

Heinz Moitzi

What insights has Covid-19 brought to winning over and keeping customers?

 

Peter Schneider: I think the pandemic has had a big impact on how we will interact with our customers in the future. When we started working remotely a year ago, many of us will have thought it would only be for a few months. In fact, it took considerably longer. It now seems that much of the new will probably stay. We are experiencing that we can also negotiate intensively and successfully with new customers without having met even once. Everything is done via video calls. That was unthinkable a year ago. It can be difficult. But, it also increases efficiency.

One of our particular strengths at AT&S is that we are very well networked with our customers - for example, through our sales engineers. In the past they visited the R&D departments and took on new tasks from the customer as a result of a dialogue. It doesn’t work like that anymore.

That’s why we are using new ways to approach our customers. For example, a few weeks ago we held a new technology conference online. It was extremely successful. We had more than twohundred participants. In addition, we are now also making greater use of social media. This is how we remind current and potential customers that they can contact us with their problems at any time. We have the solutions. 

 

 

While industry is currently discovering the topic of sustainability for itself, AT&S has long been active in this area. At AT&S, this merit is attributed to you, Mr Moitzi ...

 

Heinz Moitzi: It is true that sustainability has been important to us for a long time. On the one hand, because we are convinced of its importance. On the other hand, because it pays off. We started as early as in 2005 to assess our energy and water consumption through indicators. Both are highly relevant resources, which are not readily available at all locations. We have included these requirements in our machine specifications for quite a while now. Building a sustainable organisation does not happen overnight. That’s why I am pleased that we are also very well positioned in the areas of environmental protection, occupational safety and fire protection.

 

Mr Gerstenmayer, on which areas will you focus your work over the next few years?

 

Andreas Gerstenmayer: Due to the market environment and the current investments, one focus will remain on IC substrates. Another focus will be our level concept for modules: We got off to a good start with level 1, printed circuit boards for modules. Here we concentrate on further diversification, in terms of both applications and customers. Furthermore, it will be important to prepare level 2, module integration, so that we can adequately implement the performance range as soon as opportunities arise. Along with that, we will keep our basic business, printed circuit boards, stable and continue to maintain our customer relationships.

 

/ The general direction is still positive. We expect an EBITDA margin between 21 and 23%. /

Simone Faath

How do you see future market opportunities for opening up new areas?

 

Andreas Gerstenmayer: In theory, but also in practice, countless doors are open for us in the future. This is because we have succeeded in developing an application-driven strategy. In all segments in which we operate we have identified applications the applications and of course the customers for whose challenges we want to offer solutions.

In other words: It is the applications and customers and not so much entire market segments  that are crucial for us. As soon as we identify a trend in certain markets, industries, or among customers, we can analyse which applications are relevant there and decide whether we want to go there with our technology. That makes us very flexible.

 

What is the outlook for the financial year 2021/22?

 

Andreas Gerstenmayer: After a good last year despite the pandemic, we are also optimistic for the current year. The health crisis is likely to level off. The boom markets will keep growing and markets that experienced temporary weakness will recover. Against this backdrop we assume that our capacity utilisation will improve in all segments in 2021/22. Moreover, we were able to communicate a few weeks ago that we are ahead of schedule with the ramp-up in Chongqing so that we can put additional capacity on the market earlier than planned.

 

Simone Faath: The general direction is also still positive economically. Our revenue guidance ranges between plus 13 and plus 15%. We expect an EBITDA margin between 21 and 23%. This value is adjusted for the start-up effects in Chongqing of 40 million euros. As for investments, we will spend a total of up to 630 million euros this year. This is the highest amount AT&S has invested in maintenance and expansion in one year.

 

As in the past, your shareholders can also look forward to a dividend this year …

 

Simone Faath: That’s true. We will propose a dividend of 39 cents per share to the Annual General Meeting – that is 14 cents more than last year. We continue our policy of sharing the profit generated for the year with our shareholders – but always also considering upcoming investments. We try to reward our investors as a matter of principle, even if it may be a little less in some years. Our investors put their trust in us and we do our best to live up to their expectations through our work with their money.

Podcast

Again, let us point you to our podcast with the Board of Management.

The interview was conducted by Carolin Roth, a business journalist and freelance presenter. Ms Roth worked at CNBC International in Zurich and London for eleven years and is always close to the action in the world of economics.

 

Enjoy listening!

 

Demand for high-end interconnect solutions is growing rapidly. The successful development of AT&S shows that we are serving the right industries and understand the needs of different markets. Our strategic decisions of the past years have stood the test of time.

Identifying industry trends – and exploiting them

PLUS 30 TO 50%: COVID-19 caused data volume to virtually explode last year and catapulted the ongoing digitalisation process forward by years. Video calls, working from home, surfing the Internet, video streaming – the growth rates have exceeded all expectations of the beginning of 2020. The data volume transmitted on mobile broadband, i.e. data exchange via smartphones, also increased considerably – even though many users were on the road to a lesser extent in 2020, thus spending less time outside the WLAN range of their home.

 

But even without the pandemic, all signs still point to growth for data traffic: In only a few years, there will be far more than three billion 5G-capable mobile devices. Many countries are currently pushing the establishment and expansion of 5G. The new standard will once again take data volume to a new level. High speed – and, along with it, data processing capacity – provide the automotive industry with the basis for implementing autonomous driving. On the way there, the share of electronics used in cars will see a significant increase. The implementation of the climate targets additionally drives the introduction of technologies designed to prevent emissions, and consequently electrification.

 

More efficient power supplies (48V board net) and electric motors require the transmission and switching of ever greater loads. Modern technologies from the printed circuit board and semiconductor segment allow the reduction of switching losses and better heat dissipation. This enables more compact, lighter and more efficient electronics, which increases range and reduces the carbon footprint.

19%

increase in revenue in 2020/21

Mobile Devices

 

While the infrastructure for 5G networks is not even in place yet, research is already focusing in the next generation: 6G will enable high-speed internet with transmission speeds of up to one terabit per second in the foreseeable future. This would make it possible to download 25 Netflix movies with 5 gigabytes of data each to a mobile device in one second.

IC substrates

 

Multi-chip solutions push the limits of miniaturisation and allow increasing performance as needed for example in laptops or servers.

MEDICAL TECHNOLOGY is also on the verge of a data revolution: wearables, smart watches or blood pressure apps on smartphones will supply their owners with nearly all relevant vital data in the future. They record cholesterol and blood pressure levels, take the pulse or analyse the breathing rhythm and sleep phases. The evaluation helps doctors to identify patterns and enables targeted treatment. Pharmaceutical research currently shows the enormous power of big data: Usually, the development of new drugs takes years or decades. With the help of digital intelligence, an active ingredient against the coronavirus was successfully developed in significantly less than a year.

+30-50%

more data volume in the past year

All of these developments drive the demand for processors, for which AT&S provides an important interconnect platform. This platform has to process ever more data on ever less space. In terms of technology, AT&S achieves this by manufacturing larger and more powerful IC substrates with more layers. In doing so, it is now possible to assemble not just one silicon element onto the IC substrate, but rather multiple elements of different process nodes at the same time. In technical terminology this is referred to as “heterogeneous integration”. The separately manufactured components integrate into a higher level assembly that in the aggregate provides enhanced functionality and improved operating characteristics.

 

Having positioned AT&S as a high-end supplier for decades is paying off. Based on this aspiration we have permanently expanded our expertise and can easily keep up with the high pace of technological development that the market is currently confronted with – in communication technology, in medical technology and several industries, some of which AT&S is yet to enter into.

The expansion for IC substrates in Chongqing is progressing despite the pandemic. The capacities and technologies created for future demand are now being prepared for series production in 2021. In view of strong demand, the investment volume originally budgeted was recently further increased. As a result, capacity can be multiplied six-fold.

Creating capacity – to serve the right trends

MARKET DEMAND increased faster than expected in 2020. Therefore, it was all the more important to advance the capacity expansion nearly as planned in 2020. The capacity for IC substrates was nearly doubled through the full expansion at the Chongqing I plant. Thanks to the constructive cooperation with customers and auditors we managed to successfully complete the complex audits – often also digitally. As a result, the plant can now produce at full capacity.

 

The establishment of Chongqing III is also making good progress. Here we benefit from the broad experience we gained while building Chongqing I. More than 1,000 construction workers ensured, even under challenging conditions in 2020, that an additional 65,000 m2 of production area will soon be available for the production of high-end substrates. This area will be used for manufacturing high-end IC substrates that have more layers, are larger and more energy-efficient and enable faster connections at the same time. Several hundred production machines have been set up at the plant since January and have undergone the required audits so that one of the world’s most modern IC substrate pants will start series production here in the current financial year.

6x

When Chongqing III is completed, we will have six times as much capacity for IC substrates.

Auditing – it also works virtually

 

In regular supplier audits, the customers of AT&S confirm the performance of the organisation and its compliance with customer specifications in the course of production. Under normal circumstances, an audit of the products and processes on site during ongoing production is part of this process. During the pandemic this was not possible, so AT&S created the necessary basis for conducting audits virtually: using a helmet camera or a gimbal, a technician can present important process steps to a person or a group with virtual access rights. The participants can take part in the virtual audit via a collaborative tool. The auditor can access all necessary documents and communicate with the participants in real time.

65.000 m²

of production area

Owing to the current shortages in the market and the strong demand expected in the future, we decided in spring to fully use the newly available space for the production of IC substrates based on ABF material (so-called ABF substrates). These substrates are based on the currently dominant technology for the application in high-performance computers located at the heart of servers, personal computers, 5G base stations and in the future in vehicles. To intensify the capacity expansion process, we are planning on investing approximately 200 million euros over the next four years.

As a result of the accelerated capacity expansion and strong market demand, we expect to achieve our goal – exceeding the two-billion-euro revenue mark – already in 2023/24, one year ahead of the original schedule. This underscores our goal to move up to the top three ABF substrate suppliers in the coming years.

Chongqing III will produce high-end IC substrates that enable even faster connections based on their more complex structure.

In the growing market for high-end substrates we have long been an established partner for our customers and set the benchmark for quality standards. On this basis AT&S is now also developing the market for modules. With this approach we are implementing our “More than AT&S” strategy and expanding our position in the value chain.

Integrating solutions – for the next interconnect generation

Growing technical performance requirements and ever shorter product life cycles will continue to boost the trend towards modularisation in the years to come. AT&S has prepared for this development and already taken a visible step in this direction with the full expansion of Chongqing II, which started in 2019. The plant will be a central module hub for our company in the future.

 

This is also reflected in our strategy: In the future, our goal is to be not only the first choice for high-end printed circuit boards and IC substrates, but also a leading supplier of modules and the corresponding system and interconnect solutions. The basic conditions are good: We have decades of experience in the printed circuit board business and know exactly what counts in the high-end segment. We are already working very closely with our customers in the field of modules and they actively involve us in the development of solutions. And we engage in intensive innovation activities: we make more than one in five euros with new products.

 

We follow a clear roadmap on our journey: During the first stage, we are stepping up the production and provision of IC substrates and substrate-like printed circuit boards (SLPs) for the rapidly growing module market segment. In a second step, we will gradually expand our service range in the value chain by offering additional module integration services such as design, assembly and test services – until AT&S can offer its customers complete solutions in the not too distant future. This advanced positioning enables us today to develop additional business opportunities tomorrow.

 

The extended positioning will bring significant benefits for device manufacturers: With the integration of previously tested modules, they can incorporate entire systems into their production more easily and rapidly and thus launch their products on the market even faster, while at the same time saving costs. Because the application of the AT&S Toolbox with printed circuit boards, IC substrates and the embedding of components comprehensively supports module integration.

MODULE A module integrates multiple electronic components and can therefore perform a variety of functions: in a smartphone, for example, modules integrate transmitting and receiving units or identify features of the surroundings in cars (e.g. camera modules).

Modules are already applied in many different ways, especially in mobile devices.

The world’s smallest Bluetooth module

 

AT&S develops and supplies a wafer-thin printed circuit board substrate, which is at the heart of a sophisticated project of the South Korean high-tech company LG. The module is the size of a grain of rice and contains more than 20 individual components such as resistors, inductors and a communication chip. Applications for the module include wireless headphones, hearing aids or medical devices for continuous glucose monitoring.

>20%

The Innovation Revenue Rate (IRR) is now called Vitality Index

Integrating solutions – for the next interconnect generation

We follow a clear roadmap on our journey: During the first stage, we are stepping up the production and provision of IC substrates and substrate-like printed circuit boards (SLPs) for the rapidly growing module market segment. In a second step, we will gradually expand our service range in the value chain by offering additional module integration services such as design, assembly and test services – until AT&S can offer its customers complete solutions in the not too distant future. This advanced positioning enables us today to develop additional business opportunities tomorrow.

 

The extended positioning will bring significant benefits for device manufacturers: With the integration of previously tested modules, they can incorporate entire systems into their production more easily and rapidly and thus launch their products on the market even faster, while at the same time saving costs. Because the application of the AT&S Toolbox with printed circuit boards, IC substrates and the embedding of components comprehensively supports module integration.

INTERCONNECT SOLUTIONS Our interconnect solutions consist of printed circuit boards and IC substrates with embedding functions. They shorten electrical lines between the components and save space.

Our goals

80%

renewable energies by 2025

 

Decarbonisation of all AT&S
production facilities by 

2030

 

30%

Women in leadership positions

 

45%

Proportion of female employees

 

Life cycle assessments

at product group level

 

Stronger partnerships

with suppliers

 

What we are proud of

45%

renewable energies (including large-scale hydropower)

 

100%

Code of Conduct signed by all key
suppliers

 

34%

Proportion of female employees

 

Start

of life cycle assessments

 

Strong crisis management

during the COVID-19 pandemic

 

High standards

in the area of environment, energy, quality, occupational
health & safety

Our goals

80%

renewable energies by 2025

 

Decarbonisation of all AT&S
production facilities by 

2030

 

30%

Women in leadership positions

 

45%

Proportion of female employees

 

Life cycle assessments

at product group level

 

Stronger partnerships

with suppliers

 

What we are proud of

45%

renewable energies (including large-scale hydropower)

 

100%

Code of Conduct signed by all key
suppliers

 

34%

Proportion of female employees

 

Start

of life cycle assessments

 

Strong crisis management

during the COVID-19 pandemic

 

High standards

in the area of environment, energy, quality, occupational
health & safety

Our goals

80%

renewable energies by 2025

 

Decarbonisation of all AT&S
production facilities by 

2030

 

30%

Women in leadership positions

 

45%

Proportion of female employees

 

Life cycle assessments

at product group level

 

Stronger partnerships

with suppliers

 

What we are proud of

45%

renewable energies (including large-scale hydropower)

 

100%

Code of Conduct signed by all key
suppliers

 

34%

Proportion of female employees

 

Start

of life cycle assessments

 

Strong crisis management

during the COVID-19 pandemic

 

High standards

in the area of environment, energy, quality, occupational
health & safety

Our goals

80%

renewable energies by 2025

 

Decarbonisation of all AT&S
production facilities by 

2030

 

30%

Women in leadership positions

 

45%

Proportion of female employees

 

Life cycle assessments

at product group level

 

Stronger partnerships

with suppliers

 

What we are proud of

45%

renewable energies (including large-scale hydropower)

 

100%

Code of Conduct signed by all key
suppliers

 

34%

Proportion of female employees

 

Start

of life cycle assessments

 

Strong crisis management

during the COVID-19 pandemic

 

High standards

in the area of environment, energy, quality, occupational
health & safety

Open-mindedness, responsibility and commitment

are the values that guide us in achieving our strategic goals.

 

From energy to water to copper:

How we keep improving our use of resources

From energy to water to copper: How we keep improving our use of resources

To keep the negative impact on the environment to a minimum, AT&S relies on a broad-based strategy which incorporates both energy consumption and the careful use of different resources.

The future of energy: renewable and efficient

 

Energy transition is a key element on the path towards a carbon-neutral future. However, long-term decarbonisation will only be possible by combining green electricity, the development of environmentally sound innovations, and climate-friendly production. That is why teamwork is crucial, also at AT&S: Our energy strategy is based on the close cooperation of internal and external stakeholders such as production workers, customers and suppliers. Our strategy currently focuses on enhancing energy efficiency and identifying potential hot spots where energy consumption within production is particularly high. The principles of circular economy play an important role here. We therefore use a variety of systems to recover waste heat from production processes.

 

We are also aware of the importance of digitalisation to achieve the climate goals. AT&S is, for example, working with external partners to implement a digital twin to improve energy efficiency and reduce energy consumption as well as to monitor leakages at an early stage.

Valuable water: recycle and reduce

 

The global supply of drinking water is becoming ever more difficult due to persistent droughts and environmental pollution. As a globally operating company dependent on the consumption of fresh water in many parts of the value chain, we are well aware of our responsibility. Closely linked with our energy strategy, we are developing a sustainable water policy, reducing consumption, reusing and recycling water, with a special focus on regions where water is scarce. To this end, risk assessments according to the WWF Water Risk Filter have been conducted at all our locations and the financial impact was analysed in order to take appropriate countermeasures

 

We strive to continuously increase the water recycling rates at production sites located in high-risk regions according to the Aqueduct Water Risk Tool. At the site in Nanjangud, the water recycling rates total up to 53% in the financial year 2020/21, and at the Shanghai plant 26%. In a pilot project at the location in Hinterberg, the water flows were analysed, main consumers identified and losses and data gaps recorded. This analysis will be extended step by step to other locations in order to obtain further know-how and create the basis for efficient improvements.

Raw material copper: intelligent recovery

 

Copper is an essential raw material in printed circuit board production and, consequently, one of the key raw materials for AT&S. At present, copper-containing material flows in the form of copper-containing sludge are fed to in-house wastewater treatment plants and subsequently disposed of – classified as hazardous waste. This type of treatment requires intensive use of chemicals. That is why AT&S has initiated its copper recycling project, which relies on the development of a closed loop in order to prevent hazardous waste and increase raw material efficiency. This enables the recovery of the valuable raw material for production. There is also a connection with the energy strategy in this context: many heat cycles are closed and therefore contribute to energy optimisation in recycling.

Living diversity at AT&S

Living diversity at AT&S

57 different nations under “one” roof: our diversity provides for top performance worldwide, and not just with a view to culture. Because in a global economy with increasingly complex challenges, it takes bright minds of all genders, cultures, generations and disciplines.

Diversity is firmly embedded in the corporate culture of AT&S and enriches our collaboration in many areas: it leads to more effective decision-making, can contribute to solving problems and supports innovative capability and creativity due to different perspectives. AT&S is aware of this and openly positions itself as an attractive employer for women, people of every age, different national and ethnic origins as well as people with a disability. We also put this promise in writing: by signing the “Diversity Charter”, we commit to ensuring and promoting equal opportunities for all employees.

 

AT&S pays special attention to gender equality and a great deal of “woman power”. Because in addition to the obvious reasons of fairness, it is above all economic arguments that speak in favour of motivating more qualified women and bringing them into leadership positions: companies with women in top management have a track record of developing significantly better in terms of earnings, revenue and market capitalisation than companies with a completely male management board. In addition, this is a great opportunity to counter the shortage of qualified personnel because the qualification level of female professionals is equally high as that of men. At present, the share of women in our Management Board is already 25%, but we want to go even further: AT&S has set the quantitative target to increase the total share of women to 45% of its workforce by 2025. The target for women in management positons is 30% across the Group. When filling positions on the Supervisory Board, each gender should be represented with at least 30%.

 

 

 

 

For a working climate without prejudice

 

At AT&S, not only equal opportunities for women are on the agenda. AT&S lives and actively promotes equal opportunities and inclusion in four core areas: gender, culture & ethnicity, age & generation, and skills.

 

  • AT&S has committed to providing and maintaining an appropriate organisational culture, which goes hand in hand with respect for, and appreciation of, every single individual.  
  • AT&S job advertisements in Europe expressly address all genders. The AT&S website (careers page) also contains a clear statement specifying that AT&S values and promotes diversity in all areas of the company.  
  • AT&S supports the inclusion of employees who have physical or mental disabilities. In doing so, overcoming barriers for us extends beyond creating an appropriate infrastructure of social rooms, elevator systems, automatic door openers and disabled parking. AT&S fights barriers that exist in people’s heads, provides for equality in development and income opportunities, and promotes collaboration free from discrimination and employees’ preconceptions.  
  • AT&S offers its employees from 57 nations intercultural training and language courses.

 

To recognise the diversity of society within and outside the organisation, value the inherent potential and use it in a profitable manner, AT&S is working on implementing country-specific action plans for the financial year 2021/22, which address the focus areas of AT&S’s diversity strategy.

 

 

 

Tackling the crisis together –

sustainable supplier relationships

Tackling the crisis together – sustainable supplier relationships

When it comes to sustainability, AT&S thinks beyond its own system boundaries and relies on strong partnerships with customers and suppliers. For AT&S, sustainable supplier relationships mean: communication as equals and continuous exchange to improve together and learn from one another – that is our approach to a sustainable supply chain. Particularly in times of crisis we show that our efforts in this area pay off and continue to develop even during the pandemic.

The best example of a successful, sustainable supplier relationship is the expansion of our location in Chongqing, one of the world’s most modern production sites for substrates. Construction of the Chongqing III plant began in August 2019. The effects of the pandemic could have had a severe impact on planning due to travel restrictions, quarantine at arrival and logistical restrictions. However, thanks to continuous communication and the strategic relationship with our key suppliers, the delivery of new equipment and machinery was on schedule. To minimise the risks and effects of the COVID-19 pandemic, strict safety precautions such as distancing rules, mandatory mask-wearing and testing possibilities apply not only to AT&S employees but also to external partners. Another reason for the successful crisis management is the long-standing collaboration and partnership with our suppliers. When choosing suppliers, we ensure not only our own economic viability, but also non-financial criteria such as respect of human rights, no child labour, occupational safety, environmental protection and fair remuneration of employees, to ensure that our actions are ethically correct and environmentally oriented even outside our system boundaries.

/For the capacity expansion at plant I, we worked with all internal and external stakeholders based on continuous daily communication and meetings with top management, and supported suppliers with visa applications, transport, travel and accommodation in order to find new solutions to install the machines on site and share and optimise resources./

 

Mark Wu, Head of Global Equipment Commodity

 

Strict criteria for everyone

 

In addition to the AT&S Supplier Code of Conduct, which requires suppliers to adhere to our standards, supplier compliance is assessed by means of a questionnaire and qualification audit prior to awarding a contract. In this process, AT&S audits the suppliers’ duties in practice and reviews their emergency plan as well as their CSR activities. All suppliers must comply with the REACH Regulation, which deals with the registration, evaluation, authorisation and restriction of chemicals. Moreover, AT&S will only accept an RMI-compliant supply chain and contacts all gold, tin and cobalt suppliers at regular intervals, at least annually, and in cases of suspicion. The requirements regarding conflict minerals are set forth in the Supplier Code of Conduct.

 

Our first concern is always to work with all suppliers on a long-term basis and to build a lasting relationship. Therefore, it is necessary to monitor the performance of every supplier and assess it depending on their contribution to individual AT&S institutions and business segments. In addition to everyday operational communication, the quarterly business review meetings with the suppliers’ top management constitute an important milestone in AT&S’s supplier relations management to evaluate the performance review, monitor continuous improvements and coordinate with regard to strategic orientation, product development and innovation. Suppliers increasingly focus on social and ecological sustainability. AT&S supports them in this area by offering annual supplier training days, whose contents cover training on EHS, dangerous goods and materials management as well as the AT&S Supplier Code of Conduct.

 

Sourcing sustainable raw materials and other materials plays a key role within the AT&S supply chain. The goal is to improve energy efficiency solutions and reduce emissions. In addition, AT&S organises workshops for waste reduction with suppliers.  

 

Down

loads

Annual Report

10,9 MB

Annual Financial Report

3,8 MB

Non-financial Report

11,2 MB

Consolidated Corporate Governance Report

279 KB

Annual Report

10,9 MB

Annual Financial Report

3,8 MB

Non-financial Report

11,2 MB

Consolidated Corporate Governance Report

279 KB

Con

tact

Gerda Königstorfer
Director Investor Relations
Johannes Mattner
Manager Investor Relations