Q3 2020 Veeco Instruments Inc Earnings Call
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Good day and welcome to the Veeco instruments Inc. corporate hosted Q3 2020 earnings call at this time I would like to turn the conference over to Anthony Pennsylvania Investor Relations. Please go ahead Sir.
Thank you and good afternoon, everyone. Joining me on the call today are Bill Miller, Chief Executive Officer, and John Kennedy, Our Chief Financial Officer.
Today's earnings release is available on the Veeco website. Please.
Please note that we have prepared a slide presentation to accompany today's webcast.
I heard you to follow along with the slides on Pico dotcom.
This call is being recorded by Veeco instruments and is copyrighted material it cannot be recorded or rebroadcast without <unk> Express permission your participation implies consent to our recording.
To the extent that this call discusses expectations about market conditions market acceptance and future sales of the company's products future disclosures future earnings expectations or otherwise makes statements about the future such statements are forward looking and subject to a number of risks and uncertainties that could cause actual results to differ.
Really from the statements made including as a result of the COVID-19 tend to have it.
These factors are discussed in the business description management's discussion and analysis and risk factors sections of the company's report on form 10-K annual report to shareholders and subsequent quarterly reports on form 10-Q current reports on form 8-K and press releases you can just not under.
Take any obligation to update any forward looking statements, including those made on this call to reflect future events or circumstances. After the date of such statements.
During this call management may address non-GAAP financial measures.
For me here regarding such non-GAAP financial measures, including reconciliations to GAAP measures of performance is available on our website with that I will turn the call over to bill for his opening remarks. Thank you Anthony good afternoon, everyone and thank you for joining the call I Hope you and your families are well.
I'm excited to talk to you today about the current status of a United because we're making great progress, becoming a more cohesive organization as we implement our two phase strategy as a result of our teamwork determination and accountability, we have been operating remarkably well through this global pandemic I'm very.
Proud of our vehicle employees worldwide.
As you know we are investing in our core technologies to drive organic growth and is this investment which will drive the next phase of Veecos growth by helping our customers enable a new experience age for consumers with game changing applications like artificial intelligence virtual and augmented reality and autonomous driving.
These applications require new device architectures, new materials and higher performance Veeco has a history of solving difficult materials challenges, which gives us a unique advantage in delivering scalable technology solutions in short veeco is well positioned to play a meaningful role in driving this new age with our CA.
Customers.
Today I will take you through our Q3 highlights John will provide a financial update and guidance and then I will discuss our markets and technologies before taking your questions.
Q3 marked another quarter of solid execution with results driven by strength in our data storage business and revenue came in at $112 million, which was above the midpoint of our guidance. Our gross margin was again healthy at 44% and along with well managed expenses we achieved non-GAAP.
Operating income of $14 million and non-GAAP earnings per diluted share of 22 cents.
Our sustained profitability as a result of the work we completed over several quarters to improve our operating model such as expanding gross margins and restructuring to reduce costs.
And we increased our cash balance by generating $10 million in cash flow from operations.
There has been significant activity and our data storage market related to data center and cloud storage demand.
We are also seeing significant customer engagement and advanced nodes semiconductor manufacturing five G.R.S. and power electronics.
Entering the fourth quarter, we are in a strong backlog position.
Our success in Q3 would not have been possible without putting employee health and wellness first we maintain all health measures at our sites and have been working closely with our supply chain partners, enabling us to operate at normal capacity.
As an added for caution and consistent with our commitment to safety, we communicated that all employees, who can work from home should continue to do so into Q3 of 2021.
Overall, we are confident looking forward, we have strong customer engagements and have a healthy backlog.
The market drivers linked to the experience to age such as data Center Fiveg semiconductor power electronics and photonics are all trending positively and are aligned with ficos growth initiatives.
We believe we will have a strong finish to 2020 and are optimistic about 2021.
And with that I will turn the call over to John for review of the financials.
Thanks, Bill and good afternoon, everyone.
Today, I will be discussing non-GAAP financial data and would encourage you to refer to our reconciliation between GAAP and non-GAAP results, which you can find in our press release or at the end of the quarterly earnings presentation.
Covering revenue for the quarter.
Revenue totaled $112 million for the quarter, which was a sequential increase of 14%.
We had strong performance in our scientific <unk> industrial market, which made up 47% of our revenue.
This was led by ion beam system shipments to our data storage customers.
The front end semiconductor market contributed 18% of our revenue and was driven by and I'm being deposition system sold for you be mask blanks.
We were encouraged by our laser annealing customer activity in the quarter and expect laser annealing to become a bigger revenue contributor in the upcoming quarters.
Oh, he be lighting display and compound semi was 18% of revenue driven by a broad number of applications, including RF and power devices as well as advanced applications in the Photonics segment.
And the advanced packaging, Mems and RF filter market made up 17% of our revenue with system shift into five g. RF filter and advanced packaging applications.
And looking at our revenue by region rest of World, which includes Japan, Taiwan Korea, and Southeast Asia was 42% of revenue driven by sales of I'm beam deposition systems, two you'd be mask blank and data storage customers in southeast Asia.
U.S. was 36% of revenue and included sales of systems for data storage as well as advanced packaging and Gan power electronics EMEA was 13% of revenue and was driven by sales to compound semiconductor customers.
And finally, China was 9% of overall revenue as expected.
Now turning to non-GAAP operating results, we achieved gross margin of 44% in the third quarter at the high end of our guidance range.
Opex for the quarter was $36 million. This is in line with our stated operating expense target.
On a non-GAAP basis tax expense for the quarter was approximately $400000 with net income coming in at $11 million.
EPS was 22 cents on a diluted share count of 49 million shares.
Now moving to the balance sheet and cash flow highlights we ended the quarter with cash and short term investments of $310 million, a sequential increase of $9 million.
From a working capital perspective, our accounts receivable increased to $80 million as we increased shipments dsos for the quarter came in at 64 days, a slight increase from the prior quarter.
Accounts payable increased $8 million to $34 million driving days of payables up.
249, partially offsetting the increase in accounts receivable.
Inventory increased $6 million to $143 million, resulting from investments, we are making to increase shipments and provide evaluation systems to our customers in support of our growth strategy in semiconductor and compound semiconductor markets.
Long term debt on our balance sheet was recorded at $321 million, representing the carrying value of $382 million in convertible notes.
And lastly, our capex during the quarter was $1.4 million.
Now turning to Q4 guidance Q4 revenue is expected to be between 120 and $135 million.
Non-GAAP gross margin between 42 and 44%.
Reflected in our gross margin estimate or additional service expenses to support customer evaluation arrangements.
We expect non-GAAP opex to be between 36 and $38 million on a go forward basis, we expect to keep X gene a close to current levels.
But are making strategic investments in R&D to support our growth initiatives.
GAAP EPS is expected to be between two cents and 17 cents per diluted share.
Non-GAAP EPS is expected between 22 cents and 37 cents per diluted share.
Diluted EPS is based upon 50 million share count.
And now for some additional color beyond Q4 at this time based on our current visibility and forecasted backlog, we expect revenue growth in full year 2021 in the 10% range when compared to full year 2020.
And with that I'll turn it back over to bill for a market update.
Turning to the markets, we serve and our technologies.
With the first phase of our transformation behind US we will continue to focus solely on the second phase of our transformation growing the company organically in the semiconductor and compound semiconductor markets.
We are confident in our execution in the near term based upon multiple customer engagements, where the pull for production solutions is strong this near term growth stems from multiple product lines and comes from the data storage market renewed demand in RF filters related to Fiveg and continued activity in the front end.
Semiconductor market.
Consistent with our longer term strategy for growing in semiconductor in compound semiconductor markets, we are making investments to solve our customers' most difficult challenges with our core technologies. These investments include increased R&D and service spending as well as inventory supporting evaluation tools at customer sites.
Evaluation agreements are in process for our laser annealing systems for logic and memory applications.
And our MOCVD systems for early stage micro LNG applications.
We have confidence this activity in high value markets will be the catalyst for our growth in 2022 and beyond and we will keep you updated on important milestones over the coming quarters.
Now looking more specifically at each of our four markets.
In our front end semiconductor market our opportunities today are with our laser annealing technology, so the foundries and integrated device manufacturers and our ion beam deposition technology, so the easy mask blank providers.
Both of these technologies are performing well.
We are becoming incrementally more optimistic with our laser annealing opportunities you may recall, we are the process tool of record for one application step with two customers at advanced nodes. We are seeing continued order activity at the current node as our customers add capacity.
In addition, there are multiple growth vectors, we believe will drive market share gains in laser anneal.
We are making solid progress will the second application step at an existing customer.
We continue to make progress with our customers on their next nodes. In fact, we expect to ship evaluation systems to multiple customers in the coming quarters and lastly.
While our let's say product line has historically been applied to logic applications. We have shipped systems to a top tier memory customer who is evaluating veecos laser annealing solution. If successful we expect the evaluations will result in new market opportunity, which would produce revenue growth in 2020.
Two and beyond.
In summary, our laser annealing technology with its unique process capabilities at advanced nodes is providing near term strength and is also a key component in our long term growth strategy.
In the EU be mass blank market, we ship the system in the quarter and we continue to work closely with our customers on future plans for capacity expansion as the industry progresses.
In fact, one of our customers issued a press release in July announcing their plans to expand facilities in response to market demand for you'd be lithography mask blanks. As previously stated we see this market as it two to four system opportunity per year.
In compound semiconductor markets, our MOCVD product is well positioned to address applications like power electronics Fiveg Ers.
Axles and edge emitting lasers and micro level.
We are experiencing an uptick in demand for MOCVD systems, we received multiple orders for our high volume propel system for power electronics, RF devices and early stage micro LNG applications and there are noteworthy examples reflected in recent press releases.
A leading developer of next generation advanced displays has selected Veecos propel 300 millimeter MOCVD system to manufacture threed nano wire micro LCD displays.
The system features a semi compliant equipment front end module with full automation and was chosen due to its excellent productivity and film quality.
A pro Semicon based in Korea has selected because propel HCM MOCVD system for Gan based power and Fiveg RF semiconductor device manufacturing.
As you can see our single wafer gallium nitride propel system has been well received by leading customers for its proven high performance capability.
I'm proud to announce recent successes with our alumina arsenide phosphate system as well.
As Ram Opto semiconductors qualified our alumina and MOCVD data system to drive their next generation of advanced photonic devices. The performance as we have demonstrated reinforces our confidence in luminous capability.
Also we have an evaluation agreement in place with another leading customer which will further advance our ability to drive long term growth.
Within our scientific and industrial market data storage continues to be strong driven by cloud and data center demand our ion beam technology enables our customers to increase the aerial density of their read write heads.
This improved performance in our high capacity drives using cloud and datacenter applications.
Based on our visibility in this market, we expect strong performance to continue through 2021.
In our advanced packaging, Mems and RF filter market RF filter demand is driven by Fiveg RF adoption and increasing RF content in Fiveg mobile devices we.
We expect this market to contribute to our near term growth as we continue to deliver on wet processing solutions to our RF filter customers.
The advanced packaging lithography market is driven by mobile devices artificial intelligence and high performance computing.
Our advanced packaging systems are optimized for methods such as fan out wafer level packaging and we continue to engage with our customers to solve their lithography challenges.
Lastly, before turning to our 2020 progress to date I would like to inform our stakeholders that we will be modifying the way we report revenue to align with the Companys evolving strategy.
On a go forward basis, beginning the fourth quarter 2020, we will provide revenue in a new market segmentation, we will provide historical data reclassified to the new market segments for comparative purposes.
As you know.
Today's market segments, our front end semiconductor.
Led lighting display and compound semiconductor advair.
Advanced packaging, Mems and RF filter and scientific and industrial.
Given the size of our data storage business, we will be breaking out a data storage segment separately.
We will also designate segments for semiconductor and compound semiconductor separately, given our strategic focus in these areas and other important customers such as universities are those that manufacture optical coatings will be reported in a fourth segment.
Our new segments will be semiconductor compound semiconductor data storage and scientific and other.
Now turning to our 2020 progress to date.
We implemented appropriate actions and maintain the health and well being of our employees during the global pandemic.
During this time, we improved profitability by restructuring and reducing our expenses and improving gross margin and as a result, our quarterly non-GAAP operating income improved year on year by $10 million on similar revenue.
We also aligned R&D projects with our long term growth strategy. Our current markets are performing well, giving us confidence we will continue to perform well through 2021.
And we're pleased by our high level of customer engagement as we invest in evaluation systems for semiconductor and compound semiconductor customers, which we believe will drive our growth in 2022 and beyond.
We are committed to making a material difference in building a stronger veeco that serves all our stakeholders and what that John and I will be happy to take your questions. Operator. Please open the line.
Thank you.
I would like to ask a question.
Please signal by pressing star one on your telephone keypad.
If you are using speakerphone mcdreamy function is turned off for like your signal to reach our equipment again press star one to ask a question.
We'll pause a moment that everyone has an opportunity to signal for questions.
And well go to our first question from Tom O'malley of Barclays.
Hi, guys. Thanks for taking my questions and congrats on solid results of course was really around now.
Thats installed during the quarter a bunch of questions about some additional traction there can you talk about.
Why you're seeing our initial traction right now and is that becoming an increasing portion of what you guys recognize as the growth story.
Historically, the bird studies.
And ladies or sorry, really but can.
Can you can you kind of talk about how the opportunity in compounds in the fall, particularly of late.
Yes. Thanks for the question Tom Yes, MOCVD is at historically low revenue levels right. Now are really that's driven by the fact that we decided to exit the Commoditized, China Blue Ltd business. So over the last year and a half or so we get a lot of work restructuring the bid.
This has really focusing on new markets and new opportunity and what you're seeing is just.
Just some early success are starting to gain some traction with propane.
Propel and propel power and Fiveg RF with a pro and that's.
Thats a pretty exciting opportunity also we had an announcement with.
The leader in propel micro SD they have.
A very disruptive way of manufacturing Micrel levies on 203 hundred millimeter Silicon. We also have another customer beta agreement in place for micro welly with our aluminum system.
As Ram has signed off.
They're ruminants system. So I think we're just seeing the fruits of a lot of work kind of starting kind of from a very low level. So.
I think on a go forward basis, certainly coming off.
These very low levels in 2020 I would expect.
To see an uptick in 2021.
Great. That's really helpful. And then my second is really.
A question on the market.
You saw.
Yes in our core a couple weeks ago, and there was a little more cautious on our outlook there I understand it's not a one for one for you guys.
Part of that supply to can you talk about.
They are different.
On your expectations there or.
You mentioned in your prepared remarks that sort of your customers are actually talking revenue facilities, but can you talk about the variance there between 1 million and what some of your customers.
Yeah, we obviously follow a SNL very closely and were.
In very close discussions with our two Japanese customers, who do provide those mask blanks.
I think all in all there there's many puts and takes.
Between asset Mel and what customers plans are our view is unchanged.
Overall, we plan to ship about two to four systems per year on average and I think even with some of these changes were not seeing and material impact to our forecast.
Great. That's helpful. Thanks, guys.
Thanks, Tom.
We'll go to our next question from Rick Schafer of Oppenheimer.
Yes, Thanks, and let me add my congratulations guys nice quarter.
Bill maybe my first question is kind of a follow up on that I'm. A CBD question I think its specific probably to April but I'm curious.
With that when you.
It just seems like that the customer certainly is focused on.
The fast charging stations and I was wondering if you could describe that market opportunity and how you look at the growth potential there.
You need really starts to take a take off and certainly Gan power as you mentioned a couple of times on your call continues to grow.
Yes, we have seen a an uptick in business certainly in the third quarter.
From an order activity and I think what we're seeing now.
Is the introduction of the Gan power devices.
In consumer electronic products and so for applications like fast charging in wireless charging is a is driving demand.
There is also other customers trying to qualify Gan in the automotive market not in the high power Silicon carbide high voltage areas, but for power management throughout automotive so it looks like it's going to be a good market for us and it looks like our product.
Propel single wafer tool is pretty well positioned there.
Thanks, and then another question and thanks for all the color on next year and the look on topline and obviously some pretty bullish I think you said for a while that you got great visibility on.
CD business into the first half now it sounds like you've got pretty strong visibility in the second half I didn't know if you could.
I could give not not to get too fine a point on it but just give a little color on how that second half shapes up I mean at this point I know, it's it's next year, but it does the second half looks like it could be up over the first half of next year in that business.
You know I would say you know obviously, we just announced that we're expecting 10% growth next year over 2020, and really let me just break down I guess with the key growth drivers for us in the first is data storage.
Yeah, Weve been booking a lot of business.
And we see that is really pretty clearly through all of 2021. The second growth driver for US next year is really in laser annealing and you know we continue to.
Ship at a at the current nodes and qualify it the next nodes.
And our outlook there is very positive for 2021 and.
We're seeing a lot of activity in our wet processing equipment real.
Really for RF filters by GE, RF filters and power amplifiers. So I think we really have a very good handle on 21, but as I looked at 22 and beyond we are making investments now in R&D and inventory for evolves and improving our service capabilities.
To really support long term growth in semiconductor in compound semi market. So.
Big push right now is is in placing evolves in laser annealing for memory advanced logic nodes, new logic customers and in MOCVD are one focus for us is.
Becoming qualified and micro LTV when that takes off in two to three years from now so.
And then finally, where we are exploring other veeco core technologies in front end semi but it's a bit early for us to elaborate on that yet so.
Got a long winded answer, but we see a clear path for 21, and we are really doing a lot of work to make sure we continue.
That growth trajectory and 22.
That's great color. Thanks.
Mm.
Thanks very much.
David do you all had security.
Oh, yes multiple for my question.
Correct.
The upcoming quarter could you just talk about the problem going forward would directionally, what you put up there.
I would expect to see.
Strength in.
Our scientific and industrial really on the back of a continued activity in data storage or do I think that's one I'm sure.
Well, Dave just to add to what Bill said and we do expect.
We expect to have a good quarter coming out of compound excuse me out of the semiconductor the front end semiconductor market as.
As well, we see some opportunities for our laser annealing product there as well so I think across the board we're seeing.
You know activity across all four markets.
Okay, and I guess, China is fairly de risk out of our numbers.
Okay.
I noticed.
From a deposit per up fairly significantly.
Sequentially I think it was 20 million if I'm not mistaken could you just talk about what's going on there.
Yes, sure sure that so we have been.
Increasing engagements with customers, where we've been fortunate to to receive customer deposit.
So we've expanded the base of customers that were receiving.
Deposits.
From so yeah. It was a very strong quarter for us in obtaining new deposits from customers for orders, we took during the quarter.
Okay final question for me.
There wasn't a lot of.
Information, where the argued that the packaging front I was just wondering if you might address.
Coming in 2021, or what you would expect that the pack.
From a customer that you've had in the past or one or two of those customers I guess or a new customer.
Yeah, Dave I would say you know the part of the market, where we participate you know has been steady and healthy and it has had modest growth and that's for applications like fan out wafer level packaging copper pillars in bumping. This.
This quarter, we did revenue several tools to Osats and I'd EMS and.
And I think as you know, we do have short lead times and limited visibility, but the business is a is a steady steady performer for us.
We have not yet seen a significant uptick in this business yet so we're that's kind of where we stand.
Would you expect that to be more activity in 2021.
You know there obviously could be.
We are not seeing visibility to it yet and so I think I wouldn't want to speculate.
Certainly our growth our 10% growth plan does not have that factored in.
Thank you very much.
Thanks, Dave.
Our next question from Patrick Ho with Stifel.
Thank you very much and congrats on the nice quarter.
Maybe first off as a follow up to some of your let's say comments, let's see really.
The walk you now doing with the net each side of things can you give us a little bit of color on the types of applications, whether it's because of the advanced memory moving to a lot more logic type of process seed is that helping to drive I guess the work you're doing with memory manufacturers or even near future.
For adoption.
Yeah, I mean, I I think what we're seeing and weve been working with a number of memory customers.
From a demo standpoint for a pretty long time, and we are seeing as a general statement that customers run a few nodes behind.
Front end semi a number of those behind front end semi so.
They're looking at similar class of problems.
The front end logic guys have been working on for the previous number of nodes and so.
They are seeing a in certainly in the demo activity.
Some significant benefits and benefits enough for them to take a evaluation tools. So obviously that's a it's.
It's very early and the evaluation periods, a year or more.
But you know in two years, if we're successful this could be a significant driver of longer term growth things, it's probably a market that's similar if.
If not maybe larger than the logic.
Business, we have today.
Great. That's helpful. Maybe as my follow up question going onto the data storage side of things well you know one of the leading just truck makers are has noted that they are in the process of lowering outright based on camera technology before.
Before year end can you just remind investors about some of the opportunities ahead for veeco, especially if its technology finally gets rolled out.
Yeah. Thanks, Thanks for the question Patrick.
As our investors may know.
We've been a partner to the data storage industry for decades, and our ion beam technology is used by.
All the hard disk drive manufacturers and we're certainly seeing.
Explosion of data in the cloud and data centers, you know requiring higher capacity near line drives and so we go is benefiting from additional head capacity on an absolute value, but also this hammer or ma'am or heat assisted magnetic.
Recording so.
So this technology transition is really driving a lot more steps and passes through veeco equipment as the drives become much.
Much more complex and so what we're seeing are some companies actually making brick and mortar expansion.
For for there.
To produce other capital to place their capital excuse me.
So it's a it's a good long term trend and a benefit veeco benefits from not only capacity, but this technology transition.
Right. Thank you.
Thank you Patrick.
Our next question from Mark Miller with Benchmark company.
Well.
Congrats on your own.
Quarter.
Just was wondering okay fair enough one.
Hi, just following up on Intevac yesterday, which.
Came out and they said, yes, we're factory utilization or tools, which are used to measure the positive pony.
Tony.
Our desk as near historic highs or you're seeing some are high utilization on your data storage tools.
Yes, yes, we are.
And they were talking about New York City I know you said, it's going to remain change that'd be strong you're going to be linear throughout the year stronger in the first half of the year or there will be strong throughout.
We have a visibility pretty much through the entire year.
Okay.
And typically you get nice margins on these tools will this help give you.
Margin improvements next year.
You know because I wanted to answer that question.
Sure.
So mark you know were.
Were currently operating in margin range in 42% to 44% range. This last quarter, we achieved 44%.
Gross margin at the company level, that's what we're guiding on going forward as well, that's where our current visibility gives us and in some respect as as volumes go up as we've indicated the volume increase topline increase in Q4 and 10, 10%.
Year on year we.
We will get some benefit from from volume, but as we indicated we are making investments in service and some other spending for supporting these evaluations that will start to drive revenue in 2022. So overall, we expect to operate.
But in this 42% to 44% gross gross margin.
Okay and finally on thank you finally in terms of that give us an update on what's going on with the vixel opportunities wells. The Piedmont, though is that going to be choppy next year as it typically is.
Yeah right now we're seeing.
The market is really satisfied with the capacity that's a that's there we have a a product that's capable of.
Of producing a edge emitting lasers and VIX soles.
As well as silicon photonics as well as.
Micro equities Red micro allergies, so oh, we are.
Replacing an evaluation tool at a key customer for micro the applications a beta evaluation.
So I would think it's probably going to be slow to build but I think over the longer term I think it could be can be pretty good.
I could just sneak one other one what are you looking for in terms of tax a tax rate for next year.
So so so so so mark I think you know the way we look at it as more of a tax you know expense given our and are well positioned in the U.S. and then looking at it as a as a as a as a rate so we.
We are looking at you know taxes on a cash basis than the one to 2 million dollar range as weve been.
On that are on that trajectory because.
Because we expect that the U.S. profits that we have will be shielded by by <unk> and.
The wells that's present, you're right one to two month, yes per year.
Thank you.
Thank you Mark.
And that was reminder, you may prefer star one on your telephone keypad. If you have a question at this time that is star one for question.
And well go to our next question from Gus Richard of Northland.
Yes, so thanks plus.
On the elephants.
Getting into memory is that's why should you.
Or both.
[noise] the opportunity of DRAM.
Okay that makes sense and then on the announcement today, but with the person out some getting qualified congratulations thank you.
No it's in revenue for that mm.
Order or will that be recognized in the fourth.
But that will be recognize John Wyndham.
I actually I think that was in the third is our ore in the third quarter.
Got it.
And then.
Can opportunity seems to be taking.
Taking off a bit.
[laughter].
Our own mystery second 200 millimeter tool works with an order for and I'm just wondering on the can side how much is power how much is or.
How much is you know 300 millimeter versus smaller diameter.
Yeah, I would say most of.
I'd say all of the power is at 200 millimeter and really that's driven you know their thicker films and 300 millimeter. The bow is very.
Substantial boat so I think the power applications will probably stay at 200 millimeter and the 300 millimeter tool that we ship.
We announced two alenia is for anything unique or Gan nano wire method, where they actually deposit the ladies directly on it on a 300 millimeter silicon wafer.
Okay, that's kind of a disruptive view of Makeready.
I I got it and then so they would do the.
Lean and the below.
Well then they do the red as well.
You know I I.
I know the answer, but I'm not going to say I mean, we should ask alenia [laughter] someone else.
I'll move out on that one.
Yeah fair enough and then.
You know you had a record from what I can tell quarter in times and industrial nine being down and you should be systems as well.
Are there any possible claims in that and so that tool.
Oh no no. We're we're performing well you know we are still at a point, where we can socially distance are assemblers and test technicians and and work or work on staggered shifts. So no. We don't see any any problem delivering our capacity and too.
Anyone.
Okay, and then last one for me sorry to take so many on the advanced packaging.
Can you hold them. It's it's you know.
Mid sixtys level were worse than any opportunity to start to see growth as demand for our Oh increase next year.
You know as I said were we are seeing the business growing modestly, but not not explicitly and I think you know certainly you know five GE has a really a abroad indirect effect I think on on all the markets whether it's.
Ella say or advanced packaging. So I think we're we're seeing it starting to see bits of it but not a not in large chunks at this time.
Got it I think if we don't need that growth.
Thank you Gus Yeah, Yeah, I can tell thanks.
Mhm.
And at this time there are no other questions Q.
I would now like to turn the call back to our speakers for any closing comments.
Yes, Thank you operator, and I hope everyone is doing well during.
During this challenging time we.
We do expect a strong finish to 2020 and I want to thank the veeco team for their continued dedication executing our growth strategy I look forward to updating you upcoming conferences have agreed.
And this concludes today's call.
Thank you for your participation you may now disconnect.
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