Materion Achieves Record-Breaking Q2 Results, Strengthened by Consumer Electronics and Aerospace Growth

Materion is a major Tier 2 supplier of ALD precursors to the big Tier 1 companies. In the second quarter of 2024, Materion Corporation delivered record-breaking results, reflecting the company's recovery after a challenging start to the year. The improvement was primarily driven by organic growth initiatives, strong operational performance, and cost management. Key areas of growth included aerospace and defense, consumer electronics, and a gradual recovery in the semiconductor market. Despite some softness in industrial and automotive sectors, Materion secured several new business partnerships, particularly in aerospace and defense, bolstering long-term growth prospects. The company also achieved its midterm EBITDA margin target of 20% for the third time in five quarters and remains focused on operational excellence and sustainable earnings growth for the remainder of the year.

2024 Outlook

• Semiconductor market recovery slower than prior expectations
• Continued benefit from cost improvement initiatives

Specifically, Materion's expansion into ALD products has been significant for supporting advanced semiconductor production, especially in the context of rapid digitization and AI advancements. The company received an excellent supplier award from a leading ALD customer, highlighting its successful innovation in ALD materials. This expansion into ALD not only supports complex chip production but also positions Materion to capitalize on the growing demand in the semiconductor industry. Despite a slower-than-expected semiconductor market recovery, the company's strategic moves in ALD and other high-tech sectors are expected to drive continued growth and margin expansion in the future.

Materion Corporation has significantly expanded its capabilities in ALD products, particularly focusing on advanced materials for the semiconductor industry such as Hafnium and Molybdenum. The company produces ALD precursors, which are critical for creating the ultra-thin films required in the manufacturing of next-generation semiconductor chips. Recently, these materials also include tantalum and niobium-based compounds, which were added to Materion's portfolio following the acquisition of H.C. Starck's electronic materials business in 2021.

Materion's new facility in Milwaukee, Wisconsin, is dedicated to enhancing the production of these ALD materials, positioning the company as a key supplier in the high-growth semiconductor market. The facility also supports the development of next-generation battery technologies for electric vehicles, indicating the strategic importance of ALD materials in both semiconductor and EV markets​

Sources:

Atomic Layer Deposition

Business Wire

Materion Corporation (MTRN) Q2 2024 Earnings Call Transcript | Seeking Alpha

Materion to develop advanced chemicals for EV batteries, semiconductor chips at new facility

Materion Corporation (NYSE: MTRN), a world leader in high-performing advanced materials, announced today that it has established a new facility in Milwaukee, Wisconsin to accelerate the growth of advanced chemical solutions for the semiconductor and electric vehicle (EV) battery markets.

The new 150,000 square foot facility expands the company’s capacity to produce Atomic Layer Deposition (ALD) materials for the most sophisticated semiconductor chips and provide advanced chemicals for the development of next-generation battery technology for EV’s. Production capabilities are expected to ramp up during the first half of next year.

“This expansion is in direct response to the confidence that our customers have in Materion as a critical partner in the development of game-changing technologies to advance growth aligned with these exciting megatrends,” President and CEO Jugal Vijayvargiya said. “We are proud of the role that we will play in the development of the most technically advanced semiconductor chips for a wide variety of applications as well as next-generation batteries that will support the broader adoption of electric vehicles globally.”

Building on Materion’s existing portfolio of electronic materials and premium thin film target solutions, the expansion of its ALD capabilities will significantly enhance the company’s position as a leading global supplier to the high-growth semiconductor industry. The move follows the company’s successful 2021 acquisition of the HCS-Electronic Materials business, which added tantalum- and niobium- based solutions to Materion’s portfolio of precious and non-precious metal targets, extending the company’s global reach and expanding its position with leading semiconductor chip manufacturers.

On the EV front, Materion is working with a number of leading battery manufacturers on the development of inorganic chemicals to be used in their next-generation battery solutions focused on enabling longer range, faster-charging and enhanced safety. Following a multi-year R&D partnership, one specific customer is funding $6 million to establish a prototype line in the new Milwaukee facility. Materion’s relationships with next-generation battery customers are expected to further strengthen the company’s already strong position as a critical supplier to the automotive market, as today the company develops advanced materials for use in a wide variety of applications that include battery and electric connectors and lidar optics.

About Materion

Materion Corporation is headquartered in Mayfield Heights, Ohio. Materion, through its wholly owned subsidiaries, supplies highly engineered advanced enabling materials to global markets. Products include precious and non-precious specialty metals, inorganic chemicals and powders, specialty coatings, specialty engineered beryllium alloys, beryllium and beryllium composites, and engineered clad and plated metal systems.

Source: Materion Corporation - Materion Establishes New Facility to Accelerate Growth in the Semiconductor and Electric Vehicle Markets