Qnity Electronics, Inc. Wolfe Research 3rd Annual Materials of the Future Conference 2026 Transcript

Chris Parkinson:Chris Parkinson. I'm proud to lead the sector efforts here at Wolfe. Although they're already in meetings taking notes as good associates should, I'd like to thank them. Harris Fein, who's actually been on my team for 10 years, lucky him. Andrew Orme who's been on my team since I actually joined Wolfe, as well as Reed Halpert, who's actually in the room. Little does he know what he's gotten himself into. I'd also like to give a shout-out to our sales force and corporate access desks, for their efforts to make this event all come together. A lot of what happens here is all behind the scenes. We try to make it as fluid as possible. I sincerely thank them, especially for the late nights. If you see Caroline outside, make sure to thank her because she's been absolutely wonderful.

Chris Parkinson:Listen, our event may not be in Florida in February, which I've argued for, and my boss who's in the room has consistently said is just not possible. Hopefully, everybody in this room finds Wolfe's research content second to none, which is why I agreed to join roughly three years ago, and I couldn't be happier. I'm also thrilled to say this event continues to grow every single year. Actually, he was not in the room. Now he's in the room, so no one tell him what I just said. Anyway, we're going to be up with Qnity in a few minutes here. I'm going to let Jon get set up. Once again, thank you all for attending. [Space station].

Jon Kemp:Where do you want me?

Chris Parkinson:Right there.

Jon Kemp:Right here.

Chris Parkinson:Okay. Awesome. First up, I'm very pleased to introduce Qnity Electronics,

ticker Q. Today, we have Jon Kemp, who's the CEO. I've had the pleasure of getting to know Jon over the past few years, and I must say, his enthusiasm for his company's future is unparalleled. He's passionate even more than me, and he knows his products as well as the R&D team, which I always love about a CEO. He's been straight up delivering, or shall I say, stacking quarterly results and outperforming his end markets since the spin-off DuPont. We're going to respect them as well. They are upstairs. Honestly, there's no better way to kick off with Jon this morning. Once again, thank you for coming in. Full meeting scheduled, the most requested meetings. I think we can go ahead and get started.

Jon Kemp:Thanks, Chris. Happy to be here.

Chris Parkinson:Awesome. I'll start you off with an easy one. I don't think it's going to be a surprise to many in this room that your end markets are looking pretty good for the next several years. When it comes to advanced architectures, stacking, layering, all the lingo that we hear in the media, Qnity, can you just give, especially for the generalists in the room, just an overall overview on how those facilitate Qnity's growth algo?

Jon Kemp:Yeah. Thanks, Chris. Maybe I'll take a step back because we're still kind of getting our name out there and getting people familiar with who we are and what we do. For those who maybe don't know Qnity, we're one of the largest pure-play material solutions leaders in the semiconductor value chain, from chip fabrication to advanced packaging and interconnects, to thermal management and AI PCBs. We're kind of really well-positioned to be able to benefit from the significant market tailwinds associated with AI, high-performance computing, and advanced connectivity. In this era of AI-led transformation, materials innovation is more important than ever, and we're pleased to be working alongside some of the largest and most well-known technology leaders throughout the industry. What our materials do is kind of a few things to keep it simple, right?

Jon Kemp:We pattern and polish, protect, and connect both chips and circuits from the front end all the way to the back end. We support our customers with a local for local operating model that allows us to be very responsive and agile to them in the markets wherever they happen to be located. When I think about the changes in technology for the last decade or for the last couple of decades in the semi industry, technological change has really been driven by Moore's Law, getting nodes smaller and smaller and trying to make transistors smaller and chips more dense, to unlock performance and power.

Jon Kemp:As we reach the limits of Moore's Law , that'll continue to be important, but increasingly we're going from shrinking, making things smaller, to stacking, putting chips together in combinations to chips together in new and innovative ways that will unlock the next frontier of computing. Qnity is really well-positioned at the center of that because of the breadth and the depth of our portfolio.

Chris Parkinson:I imagine this is probably the toughest question I'm going to have to ask you this entire fireside chat, but what are you the most enthusiastic about over the next year or two? You're primarily consumables. You've got a great breadth of products. You've launched probably three or four new, either innovative collaborations, a few new products. EUV comes to mind. It seems like your customers are asking you to do more and more, but what are you the most passionate about? I understand that's probably pretty difficult, but go ahead.

Jon Kemp:There's a lot of good things to be excited about in this part of the space, right? It's in this era where materials innovation matters more than ever, because so much of the growth in the semi industry is really coming from the most advanced technologies, right? That's really the key to Chris asked a little bit about our growth algo a few minutes ago, and the key to our market outperformance is really content and share gains in the most advanced technologies. For me, what I'm most excited about is the investments that our customers continue to make,

to progress their technology roadmaps, and we help enable those technology roadmaps. The fastest-growing parts of our portfolio are also the parts that are critical to the most advanced technologies.

Jon Kemp:I'll work that kind of from the front end all the way to the back end, so you can see how that fits with our portfolio. On the front end, in particular, it's about chemical mechanical planarization, where we have a combination of pads, cleans, and slurries that help to advance the especially leading-edge logic in the industry, kind of going excited about two nm scale-up this year. If you go to the packaging side, we've got a full suite of solutions, including CMP from the front end, but a lot of back-end materials, things like metallization, dielectrics, substrates, and thermal materials to really help enable and unlock advanced packaging. When you get to the back end, it's things like thermal materials and metallization that are necessary for the most advanced circuit boards that are going into data centers and other AI applications.

Chris Parkinson:You've described Qnity as primarily the only company that is basically end-to-end in terms of chip fabrication all the way through the PCBs. You do have some fairly formidable competition in the U.S., Northeast Asia, China. What do you believe is the most, let's say, the largest differentiator in terms of Qnity's R&D, product development, and customer relationships that you'd like to convey here today?

Jon Kemp:Look, there's a couple of really good competitors in this space, we're happy by that because they force us to be better every day. When I think about it, what differentiates Qnity is really kind of the breadth and the depth of the portfolio. What we're seeing, particularly as the market starts to become the process technology starts to become more complicated, increasingly OEMs are starting to get more and more involved in material selection and overall design decisions. As the OEMs, whether that's the hyperscalers, the premium smartphone providers, automotive companies, they don't want to have to work with 15 or 20 companies

throughout the value chain in order to bring an advanced system solution.

Jon Kemp:When they try to work on the problems that matter most to them, problems like signal integrity, device reliability, and performance or thermal management, they'd rather work with companies that have an end-to-end view that can solve that problem along every step of the way, and who intimately know the process technology of their entire manufacturing network. That's proven to be a significant advantage for Qnity, because we have those partnerships already, and their number of OEM engagements continues to increase dramatically for us. When you combine that with the decades-long partnerships that we've got with the industry leaders and our local-for-local operating model that allows us to move fast and be agile in any type of supply environment, that's really kind of what differentiates us.

Chris Parkinson:Yeah. I think when a lot of investors familiarize themselves with the space, there's so much going on, especially those newer to the thesis, when you go across lithographic materials and etch and cleans and deposition and pads and slurries and CMP materials. Where do you find Qnity's the strongest in your portfolio? Perhaps, would you be willing to comment on perhaps one or two substrates for which you'd like to strengthen your position?

Jon Kemp:Yeah, it's a good question. When I think about kind of the process technology in the industry, where Qnity is best positioned is also is the spaces that are growing the fastest for us, right? It makes sense. In the areas, and I've talked about some of them before, it's really in the CMP space with the combination of pads, cleans, and slurries has been the fastest-growing part of our chip fabrication business. Within advanced packaging and interconnects, it's been the metallization and IC substrates. Then thermal, just to give you one data point, advanced packaging and thermal in the first quarter, that we talked about a few months ago, both of those areas grew 50% year-over-year.

Jon Kemp:Over the history of this business, it's been brought together, the combination of really smart acquisitions over time that really have kind of two things in common, right? Innovation and technology leadership and strong customer centricity and partnerships. Really, when we think about continuing to add on attractive technologies that would be complementary to our portfolio, as long as they have those kind of characteristics, we would be interested in continuing to build out the portfolio. We think the semiconductor and advanced electronics industry continues to be relatively fragmented. We'd be excited to add complementary technologies in semi consumables, in advanced packaging or in thermal management into our portfolio, and those are the areas that we're focused on.

Chris Parkinson:It seems as though in both of your businesses, across semi tech and ICS, there are these gravitational forces that are essentially forcing a mix shift into certain substrates. I'll let you comment on what that is. If you looked at both of your segments independently, what do you think the mix is going to look like two, three years down the road versus what it was prior to even the spin announcement a few years ago?

Jon Kemp:Yeah. I think when you think about where we sit today, the fastest-growing end market from a mix point of view in our portfolio has really been data centers. Right? That's no surprise to everybody with the boom in the infrastructure investment that's taking place in the space, and cloud computing. That has increased to about 20% of our portfolio. What I'm most excited about is I still think we're still in the relatively early days of the AI-led transformation, and most of the early wins have come in data center and in the cloud. As we move from the cloud to physical AI and the edge, I think there's plenty of opportunity to see an extension of AI applications in the rest of the industrial economy, whether that's in applications like factory automation, autonomous driving, communication infrastructure, or even premium smartphones.

Jon Kemp:I think what we'll see is a shift increasingly to more industrial parts of the economy, data center, factory automation, even automotive, and probably less orientation towards traditionally what's been the largest part of our portfolio in consumer electronics. That's good from an end market diversification. The important point here is, whether chips are going to data centers, smartphones, or satellites, we're somewhat end market agnostic. We're going to win in all of those end market applications.

Chris Parkinson:Switching to one of those many topics, and I would stress one of the many is, there's been a lot of debate in terms of the sustainability of the AI data center build-out. There have been some concerns about pull forward and selling activity. From Qnity's perspective, you do touch everything. Could you just talk about the sustainability of the growth algo over the next few years in terms of how you view it?

Jon Kemp:Look, as I said before, I think that we're in the early days of the AI has been the most transformative trend that I've seen in my career in the electronic space, and I think we're still in the early days of that adoption. Most of what we've seen so far has been in data center and cloud computing. I think cloud computing represents where AI learned to think and to learn. Now as we go from cloud computing to edge computing and physical AI, it's about AI learning to do. Right? That's why industrial IoT, automation, autonomous driving, I think there's a lot more growth opportunities out there that will start to scale up over the next handful of years, and you see a lot of folks in the industry talking about that.

Jon Kemp:The interesting thing about that is that while up to now, data centers and thinking and learning has consumed a lot of CPUs and GPUs, it hasn't as much touched the other portions. In HBM, it hasn't extended to the other parts of the semiconductor ecosystem. When you move from the cloud to the edge, you have to lower the cost of inference down to be more cost-competitive and more reasonable so that the economics work. As you do that, you'll see a

lot more custom chiplets and custom design of applications where you're combining different types of chips together. You may have a CPU and a GPU, you're going to pair that with a lot of discrete and analog chips around it in order to perform a specific function.

Jon Kemp:That's going to be a tremendous growth accelerator for Qnity because we have the most content in the most advanced technologies, we're also really well-positioned in all of the mature nodes as well. As you get broader growth from AI across the industrial economy, we'll see that surge in demand benefit our portfolio.

Chris Parkinson:You've recently increased your own guidance and your MSI outlook in terms of, obviously, we've been hearing this consistently from your customers. How should investors interpret the cadence of the growth algo throughout the year, what you're seeing, and what, as a new CEO, are you willing to actually embed in guidance versus what you're a little bit more strained to get too optimistic on?

Jon Kemp:Yeah. It's a good question. Look, our priority coming out of the gate as a new company and a new leadership team was to really establish a track record of credibility and strong execution, and I think we've now got two solid quarters under our belt. As we thought about guidance for the year, the framework that we used was really built on a couple of things. First of all, we had a great start to the year, and really proud of the execution that our teams were able to deliver, and really driven by the surge in AI-led demand, and we expect that to continue. When we looked at the full-year guidance, there was a lot of uncertainty back when we issued guidance as to what would happen. You had potential industry supply chain dynamics that we talked about a little bit earlier.

Jon Kemp:You also had the geopolitical situation and what was happening in the Middle East. We wanted to be prudent in our guidance with the understanding that if the conditions

improved and our customers were able to scale up a lot of the technologies that they were excited about. By the way, those customer conversations continue to go very well in terms of two nm technologies, HBM4 technologies. Those conversations continue to be very positive. If the general market environment is relatively stable and the market does better, we raised our guidance. When we came out at the 1st of the year, our initial guidance was for 6% for the full-year. We raised that guidance to be at the midpoint a bit over 11%-11.5%, a fairly hefty raise to our guidance.

Jon Kemp:That was really predicated on the strong start to the year, as well as an upgrade in the MSI outlook for the year from mid-single digits to mid-to high-single digits. If the broader industry does better, I think we're really well-positioned to continue our strong outperformance.

Chris Parkinson:Just a little corollary question on top of that. You hit on a few things on the advanced side of it. What are you seeing in mainstream markets right now in terms of operating rates and everything that's going on? It seems like there's a hesitancy to fully embrace the inflection, yet it seems like it's the first time in years there is some sustainability to the growth algo.

Jon Kemp:Yeah, it's a good question, I think it's understandable. There's been lots of false starts over the last couple of years in mainstream, right? The tone of the conversation does seem to have shifted. I would say, broadly, in the first quarter, when we announced in the first quarter, there were two places that did better than we expected. The first was kind of in the ICS space, driven by advanced packaging and thermal. The second space that did better than what we were expecting was mainstream, right? Mainstream logic, in particular, did better than expected in the first quarter, we saw fab utilization rates that maybe finished in 2025, averaging in kind of the mid-70%s. We're kind of in the upper 70%s, with some customers maybe even being in the low 80%s.

Jon Kemp:We expect in the customer conversations that we're having, we expect steady improvement in mainstream logic. A lot of conversation from our customers there around orienting some of their future growth opportunities to take advantage of some of the physical AI end markets that I've talked about before. That'll structurally take utilization probably from the high 70%s into the low 80%s as we move throughout the remainder of the year.

Chris Parkinson:Yeah. In ICS, I would argue, at least from my seat, has been gaining in popularity and enthusiasm across the investment community. As you know, I like to make my corny jokes about the term stacking. I know how corny they are, to be clear. Could you just talk about the importance in terms of that trend within the industry and how your product portfolio specifically adheres to those trends, and how you enable your customers to ultimately reach their goals?

Jon Kemp:I think this shrink to stack trend is really important because it really is the economics of shrink start to become more challenging. The economics and the only pathway to unlock the next frontier in computing from a performance and a reliability point of view is stacking and putting chips together in innovative and creative ways. As you do that comes with fairly significant challenges. Each of those layers has to be perfectly flat, those connections have to be perfect in order to preserve the signal integrity and the reliability of the devices. That kind of plays at the sweet spot of where Qnity's portfolio is positioned to make sure as we're polishing the surface of each layer, I'll give you an example.

Jon Kemp:When you go from, say, if you think about the number of CMP steps when you make a chip, right? As you go down that architecture roadmap, say, from 14 nm to three nm, you're doubling the number of CMP layers, but you're also increasing the process complexity along the way. It's almost a doubling of materials intensity, and that means that products like what are in Qnity's portfolio are more important than ever. We see that trend continuing as you get more

and more capacity into advanced packaging. That's one of the things that I think is maybe not quite as appreciated is when we think about adding semiconductor capacity, the frame of reference there is these giant fabs, right, that take two to three years to build and qualify. Advanced packaging can scale up much faster than that, and our technologies scale up even faster.

Jon Kemp:When people are bringing on new capacity to advanced packaging, they can typically do it much faster than they can in bringing up a traditional fab.

Chris Parkinson:You brought it down to three nm. I'm going to go for two nm and then angstrom level. Two-part question. Just how much of your R&D is now focusing on, let's say, two nm down to the angstrom level in terms of gravitating your portfolio that way? Could you just remind those that, once again, are newer to the story of what your relative balance is in logic in terms of advanced versus mainstream and where you think it could be in a few years?

Jon Kemp:Yeah. Maybe starting with the way we think about the R&D approach. Typically, for us, we're working kind of always two to three years out on our technology roadmap. The two-nm technologies that are scaling up this year, we actually won all of that business two years ago. The stuff that we're working on today is 16 angstrom, 14 angstrom, and even 10 angstrom era nodes that we're really excited about. About 80% of our portfolio is oriented to logic, and 20% is oriented to memory. Within memory, it's a little bit more kind of DRAM, HBM-intensive versus NAND. The reason for some of those splits really comes down to kind of where you see kind of CMP used more broadly in the process technology. It's much more extensively used in advanced logic and logic in general than in memory.

Jon Kemp:We're excited by node migrations and the most advanced technologies in both logic and memory. Angstrom era nodes in advanced logic is really exciting. HBM4 is what we're

working on. That was what we, from an R&D perspective, we were working on that two years ago. Today, we're working on HBM5 and HBM6. In NAND, we're working on stuff that would be kind of 400-layer count and beyond, kind of what they would call V10+.

Chris Parkinson:Every time I see a press release from Qnity, I realize I have to read it pretty much immediately because I have to think to myself, this is where Jon's going to take the company. I could list seven or eight of them, but one of the ones that sticks out, and yes, I have to use the buzz term, but you did sign one in terms of materials development for NVIDIA back in March, if I'm not mistaken. Can you just add a little detail? It's across a few different products, if I'm not mistaken. Can you just talk in detail on just how we should be thinking about that relationship? Is that going to be the benchmark going forward? How should we be interpreting that?

Jon Kemp:Yeah. We made a couple of OEM announcements, an innovation partnership with NVIDIA, really focused on accelerating R&D capabilities, and another one announcing that we had joined Apple's advanced manufacturing program. If I take both of those together, what I think they're doing is they're pointing to the trend that I mentioned earlier around the perspective that OEMs are getting more actively involved throughout this entire value chain and ecosystem, and they're looking for the critical few partnerships that can help them to accelerate their product roadmaps and enable the most advanced manufacturing technology that will give them confidence that they can continue the cycle of rapid product launches as quickly as possible. That's where we're focused, at those OEM partnerships, as well as with the partnerships with their manufacturing partners throughout the ecosystem.

Chris Parkinson:Do you believe that's? You've mentioned this in a few cases, but in terms of customers saying, Jon, or Qnity, we need more from you, or, we'd love it if you had something that's substrate. That seems like it's relatively new, but are customers consistently coming to

you and saying, you need to expedite our R&D. We need this, and this from you. Is that basically now table stakes when you're dealing with the larger customers?

Jon Kemp:Speed is how we win in this market and in this industry. Anything that we can do to go faster. It used to be that we were working on 18-to 24-month life cycles. Now it's 12 to 18 months, and some of the leaders are out there saying they want it to be even nine months. Right. That's an extraordinary challenge to think about, because each leap forward is unlocking the next frontier of computing. To do that with that type of pace, that's where that local-for-local operating model and those deep trusted partnerships become so important. Because it's impossible to achieve that level of speed and performance without having deeply and being embedded early.

Jon Kemp:What I would say is the trend that we're seeing is getting engaged even earlier in the design process from the OEMs as well as from the fabs and the foundry customers. The time point at which we're being inserted into that conversation is earlier than ever, and it's faster than ever, right. As long as we continue to deliver, and we've got a pretty good track record of delivering on those POR wins. Last year was a record year for us in terms of POR wins, really across every part of our business. That's only strengthening those customer partnerships more and reinforcing their trust in us to bring us to that design table.

Chris Parkinson:Out of the spin process, I know Lori and Antonella, you had a fantastic relationship. They're very complimentary of you. You're very complimentary of them. At the same time, as the independence, especially given how rapidly the industry is evolving, has enabled you to do a lot of things that perhaps could be done quicker than under Mother DuPont. As a Philadelphian, I wholeheartedly respect that. Could you just talk about some of those initiatives? It seems like you were able to get clean room space, grow, your maneuverability is improving a little bit. Are there one or two things you'd like to highlight to

the investment community today?

Jon Kemp:Yeah. I think that certainly, working closely with DuPont, we were set up for success coming out of the gate, I think you've seen that in our recent performance. We're working through the really only remaining entanglement that we have of any importance, is really kind of the IT system and some of the data in IT. We're working quickly to work that through. One of the things that we have built into the culture of Qnity around our core values is this principle of speed and being able to move quickly. You saw it in the first quarter in some of the announcements that we made, whether it's with the OEM partnerships that were announced, because those customers move fast, look, they don't want to negotiate that for months and months and months. Right. When they're ready to go, they want to go.

Jon Kemp:Similarly, the opportunity, clean rooms in this industry were so important, and we had an opportunity in Taiwan to move very quickly with some facility investments to be able to serve some of the rapid growth of some of our largest customers. We were able to come together, and even on something that required board approval, it literally happened in a matter of weeks, not months, that we were able to move and secure advanced manufacturing capacity for R&D facilities, manufacturing facilities, warehouses, and it happens to be across the street from one of our largest customers. It was just a few weeks, and something that it's really become kind of a flashpoint for our entire organization as really a symbol of we mean it when we say we're going to move fast.

Chris Parkinson:This is my favorite one. You can answer as quickly or as lengthy as you'd prefer. You've been now a public CEO for roughly nine months or eight months. I think you have one of the fullest schedules here. Thank you for that, by the way. I know you've been on the road a lot, meeting with investors, just non-stop. Whether it's the sell-side or the buy-side community, is there one theme where you'd say, wow, I really wish the Street appreciated that a

little bit more, or, why isn't the sell side embracing this thematic a little bit more, and why are they overlooking it? Is there anything that comes to mind?

Jon Kemp:Yeah. First of all, we're really happy with the reception that we've had from the investor community. I think there's been a lot of interest. It certainly has kept me very busy, and I'm excited by that, and the company continues to perform. Really what we're focused on is that execution credibility and kind of capitalizing on the mark of momentum. I think that I would come back to a little bit of where we started today, kind of really understanding the importance of the end-to-end value of the breadth and depth of the portfolio and bringing end-to-end solutions from the front end all the way to the back end. I think where that manifests itself the most directly is for a long time, interconnects were perceived as a relatively unattractive part of the industry, right? With good measure, because for decades it probably was.

Jon Kemp:As I think about where the industry is today and going forward, this interconnect space, this advanced packaging and thermal space, is one of the most critical sparks that will unlock the next frontier of computing and be a catalyst for growth in many AI-led applications in the coming years. I think about it as a structural upgrade of the interconnect side of the portfolio. I think the semi side of the portfolio is relatively more and better understood, but understanding the value and the contribution and the structural upgrade to the interconnect portfolio is, I think, something where we've spent the most time having the most conversations with investors. They understand the value of the innovation partnerships, that deep partnership with customers, and the local-for-local operating model.

Jon Kemp:Whether it's been the pandemic environment, a tariff environment, or the Middle East environment, that model has served us really well and allowed us to perform well in any economic environment. I think that's kind of the things that we're focused on as we take this strategy in the company and really drive it forward.

Chris Parkinson:Jon, I'd like to sincerely thank you for your time here today. Thank you very much.

Jon Kemp:Thank you so much.