News: Suppliers
2 October 2025
Axcelis and Veeco to merge, forming fourth largest US wafer fabrication equipment supplier
Ion implantation system maker Axcelis Technologies Inc of Beverly, MA, USA and epitaxial deposition and process equipment maker Veeco Instruments Inc of Plainview, NY, USA have entered into a definitive agreement to combine in an all-stock merger, forming a a semiconductor equipment supplier worth about $4.4bn (based on Axcelis’ and Veeco’s closing share prices as of end-September, and outstanding debt as of end-June) offering an expanded product portfolio for complementary, diversified and growing end markets. On a pro-forma basis for fiscal year 2024, the combined company generated revenue of $1.7bn, non-GAAP gross margin of 44% and adjusted EBITDA of $387m (not including expected cost and revenue synergies).
Veeco shareholders will receive 0.3575 Axcelis shares for each Veeco share. At closing, Axcelis shareholders are expected to own about 58%, and Veeco shareholders about 42%, of the combined company, on a fully diluted basis. The merger agreement has been approved unanimously by the boards of directors of both companies.
“This combination marks a transformational milestone for both Axcelis and Veeco, establishing a new leader in semiconductor capital equipment with complementary technologies, a diversified portfolio and an expanded addressable market opportunity,” says Axcelis’ president & CEO Dr Russell Low, who previously worked at Veeco. “Together, we will be well-positioned to serve large and growing end-markets poised to benefit from significant secular tailwinds,” he believes.
“With increased R&D scale, the combination of these two exceptional businesses will accelerate our ability to solve material challenges, enable advanced chip manufacturing and build an even stronger company,” says Veeco’s CEO Dr Bill MiIler.
The strategic rationale and financial benefits are cited as:
- Increased addressable market opportunity. By integrating complementary technologies, solutions and offerings, the combined company will expand its total addressable market to over $5bn, with greater exposure to secular tailwinds including artificial intelligence and the corresponding demand for power solutions.
- Diversified technology portfolio and market segments to advance customer roadmaps. The combination will create the fourth largest US wafer fabrication equipment supplier by revenue, with the scale and resources to better compete throughout the global semiconductor equipment value chain. The combined company will offer a comprehensive product portfolio spanning ion implantation, laser annealing, ion beam deposition, advanced packaging solutions and metal-organic chemical vapor deposition (MOCVD). The expanded portfolio will be supported by after-market services for the combined company’s global customers. These complementary capabilities are expected to provide revenue synergies through the integration of technology expertise, cross-selling and platform optimization.
- Combined complementary expertise and scale to deliver innovative solutions. The complementary teams and technical capabilities directly lead to stronger capacity, expanded R&D scale, accelerated innovation and new opportunities across key geographies and end-market segments. Customers should benefit from a more robust partner capable of supporting differentiated, next-generation technologies, accelerating their roadmaps.
- Resilient operating profile and strong balance sheet to drive growth and returns. On a pro-forma basis in 2024, the combined firm generated a 44% non-GAAP gross margin and 22% adjusted EBITDA margin (excluding anticipated cost synergies). Pro-forma cash is expected to be over $900m upon closing. The combined balance sheet should support organic growth of the businesses and provide a foundation to deliver capital returns to shareholders. Following the closing of the transaction, the combined company will execute a share repurchase program. Axcelis and Veeco expect annual run-rate cost synergies of $35m within 24 months following closing, with the majority achieved within the first 12 months, and accretion to non-GAAP earnings per share within the first 12 months post-closing. Run-rate synergies exclude additional savings associated with share-based compensation expense. Veeco’s $230m in outstanding 2029 convertible bonds will be assumed by the combined company in connection with the transaction.
Governance, leadership and headquarters
Upon close, the combined company’s board will consist of 11 directors: six from Axcelis (including Low) and four from Veeco (including Miller, who will also chair the board’s Technology Committee). Thomas St. Dennis (currently on the boards of both firms) will serve as chairperson of the board. Axcelis’ current chairperson Jorge Titinger will remain on the board of the combined company.
Low will serve as president & CEO. Axcelis’ current chief financial officer James Coogan will serve in the same role at the combined company.
Following the closing of the transaction, the combined company will be headquartered in Beverly, Massachusetts. To reflect the transformational nature of the merger, the combined company will assume a new name, ticker symbol and brand following close.
Timing and approvals
The transaction is expected to close in second-half 2026, subject to approval by shareholders of both companies, the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.
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