Statement of the Chairman and the CEO

We look to the future with confidence.

2023 was a very difficult and eventful year economically, and Comet was not immune to these conditions. Above all, the company was affected by the correction in the semiconductor cycle. Due to oversupply and lower demand, the entire semiconductor supply chain suffered from declining orders and sales in 2023. In the fourth quarter, the situation then recovered slightly at a low absolute level, both in the semiconductor/electronics market and in the traditional markets for x-ray technology. This indicates that these markets will resume their growth again in 2024. Despite the cyclical decline in sales, Comet achieved a good EBITDA result under the circumstances.

The strategy that we formulated in 2019 and have regularly adapted to changing needs was consistently continued in 2023. With our two technologies, RF power and x-ray, we focus on attractive markets, especially the semiconductor space with its high long-term growth. In the long run, this market will continue to expand due to the advancing digitalization and electrification of the economy and society. Especially artificial intelligence, the data centers it requires, and electrified vehicles will require ever more, and more powerful, semiconductors. The semiconductor market is expected to reach one trillion US dollars in size by 2030. The x-ray business will also benefit from this, as advanced chip technologies will be dependent on x-ray inspection due to their very high quality requirements. Our aim is to further increase our market share through new technologies and products. Our close collaboration with key customers makes us very optimistic that we will succeed.

Despite the imponderable factors in the environment, we are certain that the next upturn in the semiconductor cycle is coming. Although the correction forced us to reduce our costs and make some painful cuts, we continued in 2023 to invest in the future: We worked even harder on Comet’s positioning as a technology leader, which is critical to our success. With the purchase of land in Penang, Malaysia, where we plan to build another production plant, we have set the stage for future growth and are further strengthening our global presence. Also in 2023, we successfully integrated the acquired Canadian company Object Research Systems (ORS) into the Comet X-Ray Systems division. At the same time, we enlarged and refreshed our management team and prepared it for the next growth surge.

Correction in the semiconductor cycle clearly visible in 2023 financial results

With the strong downturn in the semiconductor market, 2023 brought a significant decline in our sales. Comet’s largest division, Plasma Control Technologies, which is almost completely focused on the semiconductor market, was hit hardest by the correction. In the X-Ray Systems division, the strategic realignment did not yet translate into an upside impact on results. However, the division increased its profitability despite a further sales decline and high ongoing investment in its realignment. Gratifying results were delivered by the X-Ray Modules division, as the many years of investment in its product development for new market segments are now paying dividends. This is an effect that, with a time lag, we also expect to see in the X-Ray Systems division.

Material progress at the technology and product levels

We made great strides in 2023 both in technologies and products – first and foremost, in the commercialization of Synertia®, the RF power delivery platform, where we achieved several design wins in the year under review. We also marked a further milestone in the realignment of the X-Ray Systems division – with the market launch of the first x-ray system designed purely for semiconductors, the CA20, at the end of 2023. In addition to many other new products, the X-Ray Modules division successfully established its MesoFocus x-ray modules for battery inspection in the market. And with its new NanoFocus modules, it took major steps toward the semiconductor market.

Artificial intelligence is integral to the Comet business model

Artificial intelligence forms an integral part of our business model. This is true in two ways: First, AI is a huge growth driver for Comet. The semiconductor components used in the development of AI technologies represent the state of the art. Our contributions in this area make the realization of these highly advanced technologies possible in the first place. AI is increasingly finding its way into every area of people’s lives and is leading to far-reaching societal changes – and we are proud to be part of this transformation with our technologies. The second way in which AI is integral to our company is that it is revolutionizing the way we work at Comet, as we continuously integrate AI-based tools into our work processes. And last but not least, we are also integrating AI into our products.

Transition to renewable energy is a focus of our ESG agenda

Responsible management and behavior have always been a priority for Comet and are therefore not really new. However, sustainability is not only relevant for us as a company but for society at large. Each one of us shares responsibility for it. At a strategic level, we are currently focusing on various initiatives to transition to renewable energy in the manufacture of our products and to improve their energy efficiency. Yet, thanks to the consistent involvement of our highly motivated employees, the range of our sustainability activities is much wider than a pure focus on climate targets and covers the entire breadth of the ESG agenda.

Comet as an attractive employer in high technology

As with many companies, the shortage of skilled workers is also an issue at Comet. However, Comet is and will remain a very attractive employer. Our world-leading technologies are indispensable to the development of the latest big technologies such as AI. In this enabling role we are partners to the leading companies worldwide. Through our work and technologies, we are helping to shape the dominant technological trends of digitalization and electrification. At Comet, employees can develop their skills in high technology and gain valuable experience abroad thanks to our locations in North America, Europe and Asia. Talent development and succession planning are important parts of our corporate culture. By virtue of all that we offer, we are consistently able to recruit talent in Switzerland and abroad.

75 years exploring for better

In 2023, Comet celebrated its 75th anniversary, under the tag line “Exploring for better”. The world has changed significantly over the past three-quarters of a century, and Comet has changed with it. For us, the anniversary is a reminder not only of our obligation to all our stakeholders, but also of our debt to our long history. Comet’s current opportunities and successes owe as much to the hard work of previous generations as to the efforts of the present one. We therefore consider it essential to look back on the past with humility and respect, while at the same time acting responsibly and with an eye to the future and developing our technologies in such a way that they contribute to sustainable progress and create value.

Medium-term targets adjusted upward and in line with the cycle

In November 2023, Comet adjusted its medium-term targets upward and to a later date. Back in 2019 when we set our medium-term targets for 2025, we had not anticipated the extent of the semiconductor market correction that we have described above. Despite this unexpected challenge, we are very positive about the future. While the recovery is somewhat delayed, the fact that the correction has been a protracted one also means that the upswing will very likely be all the stronger. The lengthy correction has enabled us to create the basis, through new products, for serving new applications and markets in the coming upturn and thus generating additional sales. This strengthens our confidence that we will be able to achieve or even surpass our targets for the next peak in the cycle.

Clear strategic direction for the future

Our strategic goal is clearly defined: We strive for market leadership through technology and product leadership in all process stages that we serve in the semiconductor industry: in the front-end, back-end, and now also in the middle-end of line with our new 3D advanced packaging inspection systems. To achieve this aim, we have invested heavily in the development of our product portfolios and in our customer proximity and market presence. At the same time, our strategic “Boost” initiatives focus on continual efficiency improvements and cultural development in order to sustainably and profitably manage the strong growth spurts in our industry. Having expanded the Executive Committee by adding a Chief Human Resources Officer and Chief Technology Officer, we are better positioned as a management team than ever before; we are ready to respond to external influences and adjust our plans accordingly, but do not see any immediate need for action at the moment. We are confident of the chosen strategic path.

Thank you

Comet is ready for the next upswing, and a great many people have contributed to that. Above all, we warmly thank all our employees, who did an extraordinary job in a very challenging year. We also sincerely thank our customers and suppliers for the trustful collaboration with us. And our gratitude goes to our shareholders, whose confidence supports Comet on its promising journey and who in many cases have been loyal to the company for a long time.

Review Group