Element Solutions Inc (NYSE:ESI) Q3 2023 Earnings Call Transcript

Josh Spector: Yes, I appreciate that. And I actually wanted to follow up on advanced packaging and how to think about what that means for you. So I mean you’re talking about some of the newer smaller businesses, but there’s also some impact on your existing business. And if I think if I look at your different opportunities we can kind of size the content opportunity in smartphones EVs, et cetera. Advanced packaging is a bit harder. So I don’t know what you think that does in terms of industry growth x MSI grows x your content grow why as a result of a shift in this technology. Is there any way to quantify that so we can better incorporate that into our models?

Ben Gliklich : Yes. It’s a difficult thing to parse out, because we’ve got technology in all of our electronics businesses that supports advanced packaging applications whether that’s in our circuitry business I see substrate markets in our assembly business some of our advanced interconnect materials, and of course, in our semiconductor business in multiple areas. So there’s not one line I can point you to. And some of the chemistry is we’re providing I think substrates we’re also providing the high-density interconnect markets. So, it’s not clean. I think the simple way I would characterize it is, we say we can grow one point or two faster than our underlying markets. And we believe that we’re investing both dollars and R&D to grow our leadership from a technology perspective in these markets. And that plays into the underlying growth algorithm we’ve talked about, call it mid-single-digit growth through the cycle on the top line that’s — this is contributing to it.

Operator: [Operator Instructions] Your next question is from the line of David Silver with CL King.

David Silver: Okay. Good morning. Thank you. I’d like to go back to, I guess Ben your comments, about your front end of line opportunities. And I believe the quote was growth beyond initial expectations. So, just a couple of things. But keeping with that theme, I’m just scratching my head, and I’m wondering if you could maybe discuss, I guess in regards to ViaForm where that incremental growth might be, now that you’ve brought the distribution rights in-house. In other words, was the original arrangement kind of suboptimal in terms of exploiting the full potential of ViaForm? And then secondly, maybe a little bit more speculative. But if I understand you correctly, you’re talking about like meaningful commercialization on Kuprion maybe being advanced, I don’t know 18 months or more from what we heard last quarter.

And regarding that, I was wondering if you could just discuss a couple of things, maybe your intellectual property position there. And then is this a product that is best exploited by developing it or by handling the upstream in-house or to accelerate the deployment, would you contract the manufacturing or other aspects of commercialization of Kuprion to others, just how best to exploit that opportunity. Thank you

Ben Gliklich: Absolutely. Thanks for the question. So, the partnership and distribution agreement we had with ViaForm was a very productive one. It’s a product line that grew massively in the 20 years during, which we were partners with Entegris and its predecessor organization. Since we now control that product line from manufacturing R&D through to the customer, we do believe there are incremental opportunities and our partners also sell that and understood that there would be an opportunity from one party owning, soup to nuts around that product line. What we found, when we say opportunities in excess of our initial expectations, is one, a lot of new semiconductor fabricators are coming online, new fabs are coming online and we believe we’ve got a real opportunity to convert that at a higher rate than our current share of that market.