Q4 2020 ACM Research Inc Earnings Call

Okay.

Good morning, everyone. Thank you for joining us on today's call to discuss fourth quarter 'twenty 'twenty results. We released the results after the U S market closed yesterday the <unk>.

She is available on our website as well as from Newswire services.

For a supplemental slide deck posted to the investor of portion of our website. The were referenced during our prepared remarks on.

On the call with me today are our CEO, Dr. Dave along the <unk>.

So mark Mckechnie and lease up on the CFO of our operating subsidiary ACM Shanghai.

We continue to please turn to slide two of them really really.

Mind, you that the remarks made during this call may include predictions estimates or other information that might be considered forward looking.

Forward looking statements represent Acm's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in acm's filings with the Securities and Exchange Commission. Please do not place on the input undue reliance on these forward looking statements.

Which reflect the Atms opinions only as of the date of this call ACM is not obliged to update you on any revisions to these forward looking statements certain of the financial results that we provide on this call will be on the non-GAAP basis, which excludes stock based compensation of <unk>.

Loss relating to the change in fair value of the financial liabilities and an unrealized gain in trading securities for our GAAP results from reconciliations between GAAP and non-GAAP amount you should refer to our earnings release, which is posted on the IR section of our website with that let me now turn the call over to David Wang who will begin on slide three David.

Thanks, Gary Good morning, and welcome everyone for today's call.

200 point of view of the very productive year for ACM.

The phase of several challenges such as the COVID-19, pandemic and treat the patients the.

<unk> the challenges through hard work and good execution.

And part of the tailwind in China on semiconductor industry.

We are focused on on what we could control we manage all of our branch in.

We executed on the customer of delivers.

And of the capacity.

Moving to deal with the new products and we've made a great progress with new customers.

We are also moving forward is on long term for forget the fact, you mean zone.

And the completed the Ponzi for employee housing development.

Before getting into the detail.

I would like to the thank all employees for their hard work and the dedications.

I also want group Inc.

Our customer partner and the shareholders for their continuous support and the confidence the ACM research.

For the full year, we had a record revenue for the <unk> six 6 million offer of 46%.

On the record shipments of.

<unk> hundred $82 million offer for the 8% net.

Non-GAAP operating margin was 17, 3% and we enter the year with the $71 7 million in cash and an additional 28 of <unk> 2 million from all of holding of SMIC stock market share.

Our success thought of as our customer who tend to a variety of sales.

We have five major from any company of course, the demand foundry and DRAM.

The west several of the backend of wafer packaging and assembly customers.

Our newest customer manufacturer of call and I don't know if the vessels.

Of ATM technology to optimize their own production production capability.

We help them achieve the operational excellence the.

We needed to compete in today's global semiconductor market.

Let me discuss on key customers.

Thought it was of the Shanghai, <unk>, and all of whom semiconductor.

Also know as the quality of automobile.

They are leaving it alone for the foundry in China on all comp customer.

In 2020 of 37% of the total sales.

We are of great customer and the neighbor.

Is the production near on the Shanghai headquarters sounds kind of body. Neither of them are multiyear capacity expansion, making good progress in 2008 nominated.

On the semiconductor is adding capacity.

The trailing edge nodes and the issue there.

And their major product of Crs and the power devices and the capacity will be more than 80 K per month by end of this year offer from 30 day per month and the.

The end of last year with the.

A piece of the BD and both projects will have of several first group for standard Sis.

And the body for some of our newer product offerings.

One <unk>.

One do you see the setting of the launch of customer contributing to the 27% of a total of sales improve on funding.

We are working closely with our for one piece of the three the mass production.

The new home.

Public reports day that lumpy scared is production capacity for <unk>.

Teekay 50000 wafer per month input on funding and the expanded to add another 25 to 50 K in 2021.

And convert from 64 layer 328 of Alere.

Believe me on.

One piece of the largest single wafer wet cleaning supplies.

ACM pool of being deployed.

A significant number of premium fab. So we continue to expect strong demand from <unk> as the scare the production capacity Johan and other major facility the Bill Com.

And you can fill the largest customer was SMIC and the launch of funding in China.

In the 12% of itself into the impending offer from single digits in 2019.

While the ACM, Shanghai and the flexibility of the deliberate FMC.

This is the level also depend on other U S suppliers of catheter license the ship their own tool for us on Etsy.

Well, we're position with a range of the tool at the MSC, but factoring in just the small amount from SMIC.

Our 2021 outlook.

Now, let's touch on our other significant customers.

I will begin with SK hynix.

The number two available DRAM suppliers.

SK Hynix was ACM towards major customers of strong Testament to our truly SaaS Canadian technology.

And the ability to improve production yields.

We thought that was just the field production staff and as the economics now on tools are used in more than 20 steps and the progress through more of the bank notes.

SK hynix was less than 10% of ourselves and for us on <unk> down from the 20% in 2019 as expected due to the policies during the cycle.

SK kind of implemented several of technology upgrades and towards on funding and we expect them to return of 10% of customer for 2021 and of the young fluid technology upgrades and the capacity additions.

Next <unk> on.

China base entrance to the DRAM industry, we deliver.

Our first of the SaaS product tool for them in the later 2019 and recommend revenue in Q4 of 2020.

On the acceptance.

They select us for compelling value of the preparation proving our ability to improve yields and the quality of technology roadmap.

<unk> is in the early stage of the the multiyear production plant we have.

Our provision to participate in the SaaS Tahoe semi critical cleaning tools.

<unk> and other tools when they get up into the Anthony one of NPL.

Finally, we have two new annual of the power IC customers. We've delivered multiple first tool from the third quarter third and fourth quarter of two of them plenty in the recognizing some revenue in Q4.

The first tool, including on a semi critical tools scrubber mainly for.

Backside cleaning tool and ultra wet bench.

Through meaningful and ultra ethane furnace tool for out of it of meeting profit.

Is this we have the penetrate two of the five key trailing edge nodes and all of the pricing and the Crs manufacturing.

The manufacturing trends.

The C. We are very active with all of the remaining free for the years and expect to receive orders from them. This year.

We believe with customers alone represent a significant lubricant the opportunity for ACM.

Many of them a few of the burden on the those stage of multiyear capacity expansion.

On a plane chunk of friction of our products.

We think our current customer base alone can support solid growth for years to come at the customer added capacity.

The tool and additional production test and buy more ACM products.

In the laser clean enable us to capture more of number one.

On the launch of market opportunity.

Turning to slide five.

As the emerging suppliers, we're focused on delivering advanced technology at competitive cost.

The strong R&D team in Shanghai, and the Korea.

On the one of the launch of the 30th team for semi cap equipment of employees in China.

Let's put the critical mass of the patent near some of the news on a market maker amongst projects on the planet.

We consider this a great opportunity. It is none of those stretched the coal the mix of a few years of lender throughout the period.

<unk> expanded our product line and scale of our business as new major semiconductor products EBITDA there a producer of few of the their business in China, bringing.

We intend to gain market share by expanding our product line and of winning new customer policy in China and around the world.

We estimate our current part of portfolio and stress about the <unk>.

The 5 billion U S dollar of the global wafer.

Crude market with the increased DRAM, moving that foundry power devices and the analog applications.

All of cleaning tools address about the $3 5 billion.

Or 80% of of 3 billion, plus total wafer of coming to market.

Let's start with our flagship.

That cable and Tahoe tools, coupled with the result semi critical cleaning tools on.

New product and another $2 five guidance, including $1 7 billion by a further 5 million by our <unk> and more than 30 million final of stress the policy of products.

For manufacturing and other advanced packaging process equipment, including colder developer wet etch scrubbers and the.

<unk> Super.

The improve on point of view the spend of 12% of sales.

About 18 million for R&D.

For 35% from 2019 levels.

Spending and enable us to extend our offerings beyond SaaS.

And T bolt ins of the Tahoe semi critical tools with the.

And most recently further products.

Our EBITDA tools off towards break with the stock.

In 2020 with deliver for of our first tool for from end and back end packaging customers.

And the.

Had a grew their revenue contribution for the year.

Our key products, including <unk> for advanced packaging and ECB map for authenticity of copper in the connections.

The Pts Lee for fluid in India for from him.

Our secret sauce is the ability to provide the uniform Inc.

For the ultra thin failure for us.

For the advanced packaging, so we'd have a developer of proprietary high speed couple of clean technology and the patent pending for a significantly improved copper pillar of cadence.

Two paid net of field.

For free.

<unk> launching 20, microns and the highest speeds and better uniformity is of major China the loan <unk> trading applications per day.

Historically for a pleasing for appeal at the Hyatt Cleveland research into.

The into the mass transport limitation that reduced depletion rate and generally the uneven top for five of the pillar.

Our new high speed of trading technology solve the mass transfer of challenges, while achieving a path of the appeal on top of buyer and delivering the balance the height of importantly, less than 3% as.

As the warehouse the high throughput.

The ECP AP of high speed, the pace of new rate together with the S&P copper of polishing tool, what become major winning products and coming through the advanced packaging.

We are also excited about further opportunities for 2020.

We believe that a true plus the pool through two companies.

And we plan to deliver of several more in the first quarter this year.

Furnace has been jointly developed by our Trillium in the channel hygiene. Both teams have locked the seamlessly through for the Alpha and the beta tool of issues and the two new projects to meet customer requirements. We.

We haven't made the significant progress of the ability of assets, including HBO sitting on high trial and the high vacuum out of leading process. Our team continued to develop the non pulse and total volume.

And the high temperature oxidation process.

Our next step with Nevada batch atomic layer separation.

Deposits.

Which of the most challenging and of promising product for advanced manufacturing nodes, we have of successfully implement our multiple product strategy and expanding our product portfolio from less profit.

As of lessening, the CP and SFC with chronic product and the vertical from us, which make our first entry for dry products.

And most of the comp in the near future.

For 2021 for propel for new opportunity assets.

We planned of salaried the RMB to about a 14% of ourselves although the group's operating total market addressed by our products from 5 billion per day to more than $10 billion.

Relative to the two.

Too early to offer detail I can see that our team has begun work on several new major products on kind of get us close to the 10 billion addressable market for the next couple of years.

Next I will comment on the efforts of any major first tier of new customers on.

Our investments in our global sales.

Team on making steady progress with higher of Europe VP of sales in April.

Of truth on point of view as Wes said of the other key hires during the year with delivery of our very first through the U S for.

For the lap of the recruitment of the player that neither the factory Canadian.

The profit.

The greater execution of 17, the customer formally accepted tool on a week book the revenue in Q4.

The team is actively building of cells tightly in line with the likelihood of engagement such as the advanced technology of caution for the U S and the Taiwan players.

We are confident.

Not in the SaaS cable toggle on the highest speed the Cabo <unk>, the AP or the web sake, we'll kind of secure range of one of them on <unk>.

More major for tier of customers, giving 2021.

To fulfill our growth in leisure.

Where we are neither of capacity, let me update on our progress.

On to slide six.

All of the regional facility in Shanghai, and remainder of the headquarter office in Shanghai.

Includes our R&D and SG&A and a total of high teen and production of new products.

Each day that Quebec, we started production at our second of factories in China Zone.

In September of two from AP.

It could lead to it.

And as of the segment for the production in Q3 two of unfunded.

We now have of $303 million of annual revenue capacity of these trends on even need it. We can further expand for more than 5 million of the revenue capacity by leasing additional space.

Our new lead on facility will include the production and R&D is the plan the 1 million square feet of floor space. We will have the ability of the increase our production capacity to $1 5 billion yielding.

During 2020, we purchased the 50 year landed right many of them.

Expect the additional architectural and design work in the first half of 2000 for anyone with initial production expected in later 2020.

Venture for all of inbound operation from low cost employee policies.

One other comment in the U S will be the standard of practice for large companies in China particular in Shanghai.

Can offer of housing to attack and retain key on experienced employees.

We trained many of our key engineer on the manager for more than a decade, we need the TD with key engine. The key employee of the secure our future growth and technology development.

In 2020 the deposits for.

For demand holler floats of their purchasing of the <unk> two of housing units.

<unk> for the needs of over half of the month from ACM Shanghai's the cash balance.

On the finance the on behalf of a 10 year loan facility.

Before I provide of Tucson plenty of on all of the.

Let's discuss the status of the star market IPO of ACM Shanghai.

Progress the study slowdowns.

Slower than expected.

Soon after the ACM Shanghai application for the true on the Shanghai Stock Exchange of Commission of SMP on September 30 was on <unk>.

<unk> in the U S caused the delay in the IPO.

For the stated with the short seller report issue on October eight two is on <unk>.

All of our bond math of class action lawsuit filed on December 21, total unfunded wins.

We have of previously described all of these agreements with the short sellers for us.

And therefore, I believe there's no substance for the losses, which is largely based on the short seller report.

The SEC, which did not familiar with this kind of the imports and the lawsuit on too.

For the better on spending in the USB deposits as we have also previously described.

Responded with the five points verification of the pool for the short seller report and.

And under the basically the report was affected by the SEC on December 11, 2020, and released the publicly in both China and the U S.

Before August of nutrition application should be filed with the China Securities Regulatory Commission.

<unk> however, the CV of ships, where the fire and we learned that FMC will again require additional information on <unk>.

<unk> is now in the process of providing secondary pumps report to F&B to plan the class action lawsuit.

The covenant.

We will go over the hurdle and complete all of.

IPO.

But at the SEC does not provide us with the timetable for the review and the EBIT enabled us to predict the precise timing.

Now, let's move for us with Anthony on the.

Seven.

Our guidance reflects optimism about our growth prospects for 2000 per month.

For that we offer of preliminary guidance in early January which is unchanged, we expect that revenue to the.

In the range of 205 million weighted 30 million.

For example, 39% annual growth of immediately.

On the southern 'twenty, one for the based on several key assumptions for.

On the global COVID-19 situation improves in the coming months segment U S. China trade the policies stabilize for a range of of funding scenarios for the production of the key customers for.

The variance in the trajectory of the DRAM recovery and finally, a range of accounts.

Outcome for the timing of the customer acceptance of the first of all.

Our results and outlook.

Thanks to the successful execution of our strategy.

Our strong growth is providing.

Capability to accelerate the R&D spending for new products, we are building a global sales and the marketing resource to penetrate the new customer EMEA reviews, and scaling production capacity of the support our long term growth plan.

We are increasing operating spending to take advantage of the <unk>.

Most opportunity.

Our mission remains to become a major of instrument supplier for the global semiconductor industry.

I will now from the call over the Mark to discuss the financial results in more detail.

Thank you David Good day, everyone Q4 was another strong quarter capping off a tremendous share for ATM for.

The full year, we grew our business significantly with increased market share creep.

The customer exposure and expanded production at our second factory, we launched several major product lines, putting the furnace semi critical cleaning introduced the number of extensions for SaaS PCP on advanced packaging.

Closed the year with the solid balance sheet, including $72 million in cash and an additional $28 $2 million of trading securities of our SMIC stockholder.

Now I'll put some detail around our full year 2020 results unless I note, otherwise I will refer to non-GAAP financial measures, which exclude stock based compensation change in fair value of financial liability.

And unrealized gain of trading securities.

A reconciliation of these non-GAAP measures to comparable GAAP measures is including in our earnings release.

Yes.

Highlights of the results for the full year 2020 shown on slide eight.

Revenue was $156 6 million up 46%.

We break out 10% customers annually provide occasion of color on our quarterly calls.

David noted on slide four we had 310% revenue customers for 2021st the quality for home grouped together for kind of for 37% of revenue versus 26, 5% in 2019, the group by 103% the big contributor to growth as we expand the penetration from all of the Shanghai Fabs to additional factories.

For for a new ship.

Brian <unk> was our second largest customer of 27% of revenue versus 27, 5% in 2019 of revenue from why MPC increased by 42% year over year for healthy spend on <unk> to expand the wafer starts to 50000 per month.

Share gain into additional cleaning steps drove the growth as the.

She was 12% of revenue versus single digit from 2019, the participation of SMIC improved nicely in 2020 due in parts of successful sales effort and smic's recognition of our ability to scale.

Hi, next with the little less than 10% of revenue versus 98% for 2019. This was as expected due to a pause of DRAM spending.

Revenue from wet cleaning and other front end processing with 87% of 2020 sales versus 84, 6% from 2019 revenue from advanced packaging other backend processing tool services and spares was 13% of sales from 2020 and 15, 4% in 2019.

Total shipments for $182 million versus $115 million in 2019 for.

The margin for the year was 44, 5% compared to 47, 3%. The switch has been our normal expectation of 40% to 45%.

<unk> gross margin to continue to vary on a quarterly basis due to product mix and manufacturing utilization.

Operating expenses were $42 7 million compared to $29 5 million. The increase was due to higher R&D spending on new products increased sales in North America, China IPO related costs operating income was $27 1 million compared to $21 4 million operating margin of 17, 3% versus 19, 9%.

On a year ago non.

Non-GAAP results exclude stock based compensation of two additional line items below the operating line. The first is the change in fair value of financial liability as the non operating non cash book loss of $12 million.

Described in previous calls this was related to investments in ACM prior to 2017, IPO and restructured in Q3 of 2020 in connection with the star market IPO.

The liability was terminated upon our issuance of equity warrant after which it became of balance sheet items and no longer Inc. Factored our income statement in Q4 and beyond.

Second as an unrealized gain of traded securities of $4 6 million from our investing SMIC prior to the star market IPO the investment as Mark to market at year end from the gain reflects the increase in value from the original IPO price.

<unk> decided for the non-GAAP results until the game is realized if none of them sell the shares.

Net income attributable to ACM research was $23 8 million versus $22 5 million net income per diluted share with the $1 12, compared the $1 17 in 2019 tax items on the effects of foreign exchange fluctuations on operating results provide the net benefit of <unk> 9 million and for $7 million in 2000.

<unk> 2019, respectively for the <unk> per share and <unk> 25 per share respectively.

Right now for the fourth quarter as shown on slide nine revenue of $45 6 million of 85, 2% for.

Shipments for $67 million versus $25 million in the fourth quarter of 2019 from $59 million in the third quarter of 2020.

Gross margin was 43, 3% versus 57% operating expense as the $13 million versus $8 million operating income of $6 7 million of 49, 6% from $4 5 million operating margin of 13, 8% versus 18, 3% unrealized gain on trading Securities <unk>.

<unk> the non-GAAP for reasons mentioned above.

<unk> was $3 6 million in the fourth quarter of 2020 net.

Net income attributable to ACM research for $6 2 million versus $4 6 million from 2019 net income per diluted share was 29 per <unk> 23 in 2019 tax items from the effect of foreign exchange fluctuations on our operating results provided a net benefit of $9 million for <unk> per share in the fourth quarter of 2020 versus the.

The net benefit of $1 1 million of <unk> per share on the fourth quarter of 2019.

Now I will review the balance sheet cash.

The cash balance was $71 8 million at the end of 2020 short term borrowings at year end of the 27 million $27 7 million versus $13 8 million of 2019, and long term borrowings for $19 7 million.

Total inventory was $88 6 million at year end versus $44 8 million of 2019, the increasingly inventory was driven by a couple of factors first finished goods inventory for ACM debt represents first tools delivered to our customers for evaluation and of waiting for acceptance of finished goods grew to $32 4 million.

At year end up from $19 3 million at the end of 2019.

The remaining inventory growth was mainly due to work in process and raw materials to support our sales growth for 2021.

Cash flow used by operations of $13 5 million for the year cash was used to fund our growth in 2021 and to deploy first tools and the products to keep customers capital expenditures for the year were quite quick 5 million versus $2 million in 2019.

The 2020, we spent the total of $50 million on a linked bond related investments. This includes the $9 7 million for the 50 year land rights of $40 2 million of deposits for employee housing for.

For 2021, our base case for capital spending is 10% to $15 million for 2021 investments will be balance between capacity increases at our second factory tranche of <unk>.

To support the R&D programs.

As well as planning and some initial spending on Linkedin, we expect to adjust our capital spending upwards after our China IPO.

To conclude we continue to execute on our strategy.

The painting the growth of major new IC Fabs, we are ramping production and continued to develop and deliver innovative products. We are positive on our opportunity in China and our expansion outside of China.

Let's now open the call for any questions that you may have the operator. Please go ahead.

Okay.

Secondly.

Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask the question. Please for Scott walk on the telephone keypad.

Moving to be balanced if you wish to cancel the liquids rich British pound from attached.

Okay.

We have the first question net from the line of Patrick share held.

Please go ahead.

Okay excuse me. Thank you very much of Ed Congrats on the nice finish to the year.

Maybe David or Mark.

Looking ahead at local Chinese domestic spending we're looking at potentially another strong robust year can you just give a little bit of color of the breakdown between your thoughts on memory spending versus the trailing edge foundry logic spending.

And whether you see potential growth in both areas or is it going to be weighted.

More on one segment or the other.

Okay. Thanks, Patrick.

Actually we have a very good visibility on.

Our base of three B Mab and also a bunch of QC and also a bump on the quantity.

And so we see that continue quickly the spending there.

Five.

Both either on the loans the freedom and also the.

The non memory of side, mostly on the launch of the Hungary, the size of port on the volume growth right and the of clients. We are also quite there.

The five kind of second tier customer and there we got two already this year will accommodate them together the rest of the three additional second here a quota share treaty edge nodes the cost.

For the period, so the building fiber.

Rapidly and they're on a I'd still say on probably Missouri.

More than 50, 50% of that come from all of them.

Part of it.

For the customer and their list of things either five additional <unk>.

The new customers expanding quickly.

Kind of out there through the precise number of the mixed this year most of each of our view on obviously.

On the Greens expanding there.

And for Mark anything from kind of yes, no. Thanks, Patrick I mean.

I think you asked about the.

The the relative growth versus memory and trailing edge and yeah. As you know for why Mtc is of the three.

<unk> NAND big customers.

We're expecting that to grow with bearing the capacity adds Dave.

David mentioned for the policy for Hain.

SK Hynix said, David in the prepared remarks.

Uh huh.

Anticipating of DRAM recovery from them and so they were less than 10% and 29.

2020, and so we didn't need the you would expect them to kind of get the deep EBITDA correct.

So some decent growth here and now in 2021.

Okay.

Great that's helpful and maybe as my follow up question for you Marc as you get the new facility out of factory ramped up for.

Production, how do you look at gross margins given that you know there are typically startup costs. Some under utilization to begin with how quickly do you get that we tend to you of normal I guess corporate of ranges as that facility ramps.

Yeah, you bet so Patrick.

Patrick we're not going to modify our gross margin kind of outlook kind of the $40 to 45 per cent range right at the there's a lot obviously dependent on the product mix.

And that's really the biggest driver relative.

Relative to production capacity.

We set of big here.

Traunch of we're adding capacity pretty quickly we've got really pretty good demand throughout the year.

The the link zone facility that we're looking at debt for the the end of 2022 is when that would start to.

Kicking up so we don't really anticipate any impact to our gross margin from from that lingering that'd be out there in 2023 and beyond.

Great. Thank you very much.

Thanks, Patrick.

Rick.

Yeah.

Thank you we have the next question from the line.

Jean Silva from <unk>.

The capital. Please go ahead.

Hi, David Hi, Mark Congratulations on the strong end of the air.

Quick question on the on the.

On the start of lifting can you just give us the sense qualitatively the level of detail of the atrophy.

Second the requested of the additional review of versus the original report your file just kind of sort of some of the magnitude of here of how much more of a looking for.

Okay.

I guess a state of it right as the.

Shortly of the before and come out and it will spend the almost two months within each of the rental season of the floor.

And then on the contact center and almost of our study into the fire even for recall that the distribution for let's say for on the sales RFC.

The end of the lawsuits that come out right and the family now we're taking care of this and also the higher they're very experienced the lawyer in the U S and on already upon us pretty much no substance in there for the answer right now and so the goal whether.

Again, the response of the pool to FMC.

To give them the kind of detail on what is going on on what are the legal process is less.

I'd say the property within the fire. This the report.

<unk>.

Then what we do for their response holiday you know the thing about this.

The positive report then we can start the continuing there.

The decision process in the CSR space for that.

Timing of laying down but again.

We don't know hung on that are there for there to review our second of import.

That's the line that we put thinking of the size of the timing of it.

On the deal and I think we know where our covenants and finger.

I'm looking over at 995 per cent already.

And the remaining five of them and we're pretty confident we should there be the success of the ideal for use in the China.

Yeah.

Okay.

And then perhaps on on the financials on the the true.

Do you have price of the customers entering 'twenty. One maybe you have come from brokers do you have a higher per cent of visibility from those two of them for your guidance for 'twenty, one versus say a year ago, given that you have more customer the more products.

Yes, I can see that this year, obviously bad debt last year, right and getting our projection.

Also actually of where I'm very busy on the Q on Q2.

We're aware of the stretching on kind of a real scale on various things.

Factory.

Capabilities. So we saw the hire more people and also of training more people and two on final past also to the sort of the year.

So the moment at the very busy Q on Q2, including two of three.

So.

We're very picky.

For the quarter.

Our confidence in some of our projections for this year.

Yeah, Hey, do you keep the obviously.

Obviously, you look at the of the level of the finished goods inventory right at the end of.

Last year the end of 2020.

And so the group from a 19.

$19 million for about $32 million so.

Right and that's carried of cost so assume our corporate gross margin for that to get an idea for how much of revenue visibility would be there.

Right.

It sounds like the visibility arent guys I'll step back in the queue. Thanks.

Thank you for me.

The.

Thank you.

Half of our next question from the line of.

Charlie Chan from Morgan Stanley. Please go ahead.

Yeah.

Oh hi.

Hi.

So so my question is the ball.

Your China, causing the contribution you mentioned about the.

The one PC in the at home, but how about from <unk> and because the.

The company also announced they want to have kind of on the top.

<unk>.

Sam <unk> Capex.

Do you think back in the it's going to be.

Thinking of game.

Gross driver for you for.

For this year and what do you think about there.

Capacity expansion.

Given the continuing if the issue thank you.

Okay the things.

We're pretty well positioned with SMIC and we have worked with them for lobster on three of five years.

They will have a price and throw them in the premium and it was our key.

Key of process.

And also we also have the hum like on the semi critical positive true both of the sold into us on a fee.

What's the do have or are contemplating and also on TSV pool. So the them right in the plants and also future north of.

Provision are furthest tool for the U S Army Institute.

I think for a brief provision for the point of marketing now and the UK there are announcements.

Spending.

10000 per month.

Sure.

And of course, the revenue expansion for they're probably going on plenty of non all the kind of technology.

Provision for that too.

Again.

As the licensing can be sold and quickly we can.

Can see quite a bit of a tremendous opportunity in front of us a hybrid of this momentum.

We're at the very.

Contract, the launching and recognizes the stuff and obviously the is out there.

For the Gwen going down and for them to be expanded quickly, it's kind of difficult right. So anyway, just more of them.

The just the people.

Hello, and welcome to country.

The.

Any weakness on our customers. So we're making good of supporting the credits for the for the company, Yeah, Hey, Tony One thing I'd add right I mean, it's obviously a bit of a wildcard right.

We've got David really good visibility with the what's the.

The number of our top customers.

But for some I see we're not factoring a significant amount in our outlook.

It really depends on their ability to get tools from other U S manufacturers, so that demand in China is pretty strong across the board.

And we also think that if smith, depending on how much capacity. They had some of the other manufacturers may add to it may step up their spending it's hard to tell but.

For them, where we're.

We're not going to factor too much into our outlook.

Next question operator.

The business.

Right.

Hey, there Charlie.

Hello.

Most of the next question Sir.

Hmm.

Yes.

Thank you get an extra credit income from the light.

The next question comes from the line that will be.

From the new habits, and coupled with the teams.

Okay.

Hey, guys, let me add.

All of my congratulations to the to the strong finish in the and the nice outlook for 2000 for one.

David wanted to check on the follow up on <unk> question or on the.

Assets you see review.

I understand you're about to file your response for more information about the class action lawsuit and you don't know how long it will take DSS the seat of review that.

But once you receive that flow.

Or what once the FCC has completed its review can you walk us through how long does it typically take to get three of the CSR see registration process. So folks can have on it.

Sense of talking about once that accessories sneak S sets of review is complete.

What what the timeline for an IPO might look like as the order of weeks instead of a couple of months any any thoughts you can provide would be helpful.

Okay.

Premium revenue question and actually I.

Further.

When the <unk> finished the review from a segment of the floor and then we're getting for the so called the institution for CF on IC.

And by the <unk>.

I should say so far the aesthetic of Ada shown averaging the.

The institution pruning of CFR seeing about a 45 day to 60 day.

So because of their registration of time.

Peter and the opposite.

That will probably spend the other revision down because for them on a two week or three week roadshow.

You can kind of about the two to three months right IP of time now.

That's the after we finish there.

Acceptance on the proving the hesitancy of a second of April.

Okay great.

Perfect. Thank you for.

Yes.

On the second question is.

Very nice job on the shipments in the fourth quarter, Mark I I believe I heard you say $67 million, obviously that gives us some pretty good visibility into 2021, I'm wondering if you might be able to break down for us how much of that 67, where youre kind of traditional critical cleaning.

Tools versus some of your newer semi critical furnace ECP tools.

<unk> is the majority is still the the critical clean or are you starting to see on <unk>.

Much broader.

Kind of the composition of the shipments for making.

Yes, maybe I couldn't give you the detailed numbers I can give you the general property on Canadian tools, the occupy about 80 580, 85% on it.

For the total <unk> is there are.

I called the flagship also for a semi critical together the restaurant, but they are above the 15, 20%.

The new product coming in the comp.

Copper plating and also we have the application in the packaging applications. So that would probably give you the ballpark 80 of the funding of items.

Great. Thank you I'll go back in the queue.

Okay excellent. Thank you.

Operator next question please.

Certainly the next question comes from the line of.

Try Tsai from Jefferies. Please go ahead.

Okay.

Yeah.

Okay.

She thought of your line is open you can ask the question there from difference.

Since the machine.

Yeah in general.

Yes, the pay cheaply.

Yeah. Thank you often talk about you from my question on.

So your partner channel.

Sure.

I wanted to check on the Ross.

And keep on 'twenty.

And I think that would indicate a saving of 1 million barrel of Oh.

I'm sorry, it's tiny.

The volume discount right I think we knocked off more of that.

60 million of La.

And.

The extending into the on time line.

<unk>.

On a range.

Yeah, Yeah, let me just correct a few things so the.

The way you would look at the the value of our tools that are awaiting acceptance right you you'd want to look at the the finished goods inventories level not the number that we shipped in the year, but.

The finished goods inventory was a little over $32 million right. So that's carried at cost so he would.

I assume the corporate gross margin to get an idea for the level of the potential revenue that's in net.

And so I.

I think what you may be asking for 'twenty 'twenty, one we don't really give guidance on our on our overall shipments.

But we would anticipate.

You know strong shipments again.

Shipments.

The additional delivery of of demo tools this year.

Well, obviously this year I can add there the more new customer coming on especially around the new product and the ECP and also on further product and also additional new customer coming in.

We're expecting and Moreover, and of course deferred revenue will come out of this year too which is the recorder.

Now the recognized upon shipment for the.

Recognize revenue upon acceptance of where this theater.

At the end of this year of a much more.

The first tool to be deferred for the next year.

Right.

Thank you all on Mexico.

Question is that true.

Kind of.

That's oh like down 21 of revenue first.

First half turns of the house.

The kids I think a lot of our capacity expansion plan.

I like the personnel expense and saying, we're making the second half last year.

The short test so I think of.

Well I'll go back to work for them.

And that's on top so.

So I think from there.

Yeah on how on top line.

And that day.

Yeah, I think I can address that I mean, we typically just give us a full year outlook with them.

The Q1 is typically our seasonally weakest quarter, but you've got Chinese new year's in there. So.

You get a nice day.

Generally a good day snapback in Q2.

Q3 has traditionally been our biggest quarter.

And then.

A slight decline in Q4, so that's that's how we're looking at it and I think you're correct.

A little bit more in the second half than the first half kind.

Kind of balance that way, but nothing traditionally out of the ordinary from the seasonality of you've seen in the last year.

Yeah.

Got it thank you very much.

Thank you. Thank you.

Next question please.

The next question comes from the line of Mark.

From the.

French market the company. Please go ahead.

Thank you for the question.

You indicated you expect the return of our clinics from the 10% customer in fact of more of a second half for first half type return.

Okay I think there are.

Look part of it in the second half of this year and we brought on some on.

The order coming in the queue line and so look.

Look at the market and the people project.

Around the.

The number of comparable last year for we're expecting from other.

Order coming for the second half this year.

So your your sales and marketing expenses were up.

Definitely I'm, sorry of yourself expenses were up significantly.

Sequentially as well as R&D day.

Despite somewhat lower sales from the fourth quarter do you expect this trend to continue into 2021.

I think of the using a number of their sales and marketing of Boston and 9% to 10% and the other range will keep continue however, this year the do add additional probably three point in the middle of the R&D sort of a total of 14% and the plants on the effort on <unk>.

And you mentioned.

And so the very pivotal year for me for a few years for ACM growth.

It's the critical there.

Positioning us strongly in the Asia market and that's the way I would imagine the more could be of out of the new product come home.

You know from one of the spending for the for the R&D.

On the there really isn't it.

But so you said sales will be about 10% roughly.

Yes, she is the less than 10% sales marketing and the bandwidth of funding more of the R&D.

The total G&A, that's sort of either.

This year for a total of it.

The spending.

And of course, the plan Yeah, Mark just to make sure your alignments of debt.

Non-GAAP right.

Excluding the the stock based compensation the percentages of their statements.

Yeah, you mentioned stock base.

The stock based comp last quarter.

Uh huh.

For the line.

Yeah.

Uh huh.

Q4 stock based comp was $1 3 million $5 6 million for the year.

Yes.

Thank you.

Yeah.

Thank you.

We have a free.

Follow up on that.

From Charlie Chan from Morgan Stanley. Please.

Charlie I think the cut you off there or maybe the lots of debate.

Yes.

Hey, guys, sorry, I got disconnected.

<unk> been looking for a home.

So so maybe maybe and other.

How long these for you if all your.

International customer programs I know hynix.

Probably with the bed head and you see it but how about other.

Maybe it's the same when it's strong for kimco TSMC or other.

U S customers and the any progress here.

Great and Tony So let me maybe elaborate on room Tony on the.

The mix of footprint of comes with the FERC.

For the economy.

The other.

<unk>, three and frankly, they're kind of once the technology trend per day in the industry.

The people are part of on all of the gate all around and the also the to be part of it comes with the rural will be the patients sooner.

Non will lend nominal it's really the Hobbit and also very expensive too for people in the three D. Now can say through the month of free demand because of lot of the structure of piece of taking the people part of the DRAM and advanced packaging. So I look at the trend on hand, ACM and the real for the police.

For us in the future apparently between them.

The reason the Canadian tool on.

South deep is real good for producing potable cable is the only technology today in the world.

We are seeing that kind of stuff.

Sure on the timing of political inside the <unk> trends are in the area.

That's the only available I share the market and we can clean those sort of deep or timing of corner of particle and for all.

The technology and I pretty much of free and never could get out and also the makeup on either the Omega is kind of the kind of issue.

I think on the part of the graduate out of the structure right. So that's the line where we're positioned for that I was thinking of the one I can see that are moving.

On the major applications on the role of lot of the multi layered into the connection and also Switzerland sides of the three the connector of recruiting tier for.

The need for the BB DRAM. So I'll cover premium technology is aware of their provision for that reason the linker progress on.

On the high speed cover operating and I think our key volume that you're going to reach 3% of importantly, the.

You know right at the top tier of the profile and the real attractive in patients from the top tier countries.

And also another way of the S&P stress for the partnership there talk about it we can policy comparable at of <unk>.

The less consumable cost, let's say the avian of 80% compared of the tubular CMT of another facing tool for them.

You can see the type of the site of.

For more than that as you said is that for the right. They are very good there of getting into the traditional quota silicon nitride and CVD observation and on the other part of quarter process for the really aiming for this product if they ever day.

We think of a photo of Airbnb can create great bigger as well.

Because of the efficiency and for the future AB projects. So looking at the kind of I mean, our R&D pretty pretty well.

The target a mix of few years semiconductor manufacturer trend further it will also tried the beneficial new product right now is again the announcements soon.

Anyway, the point for the theater of the ACM is the technology differentiation is on our core point of this.

The momentum.

Having engaged with the U S on Taiwan customer.

Greg of the portion of or even for the demo for the.

The key customer laying out the thinker.

The thing to take the time, but we are comfortable this year that wish you penetrated the one of.

The talk to your customers.

<unk> for the most convenient might also are at the mountains of copper has the.

The cover of previous site and.

That's our goal this year.

The market anything like that.

Yeah, the only thing.

Charlie's debt this year.

Wouldn't say you don't we didn't factor of any revenue from these big customers for these new customers and get into this year's outlook.

Mhm, Okay. Okay sure sure I think the 10th of the updates and analytical question Mary Agnes for the.

Mark.

I guess the way. Please two questions. The first of all of the portfolio of the IPO.

IPO funding debt the impact here.

And the funding for the new business or are you trying to essentially any impact of the operation.

And how soon you think of debt funding between the Lady.

Before the had been pegged.

For this claim and the second.

Cash into market, it's really about.

The opex ratio guidance or your op margin guidance for it for the for BP or for for the coming three years. Thank you great great, Yes, I'll hit that.

So on the China IPO time, the timing as David said, you know the progress of is.

Not under our control. So we're doing what we can to support that were confident with complete it hopefully it will be soon.

What our business plan doesn't require an immediate IPO and we've talked about our capex planned 10 to 15.

For this year.

We would adjusted upwards.

After the IPO since the spin.

To spend more on link on.

And what we're doing right we feel like we've got.

Plenty of room to add capacity in tranche of we're looking at other options there.

But we feel quite well funded and.

Our plan doesn't require the.

The immediate funds here.

So in terms of the Opex levels for 2021, David talked about the R&D.

Got to think about our model of 40% to 45% of on the gross margin. It kind of gets you to about a 14% from.

The op margin on the non-GAAP basis for a for the year.

Okay. So that then is the Ah okay.

I'll pass the ratio of around that 30%.

That'd be right yeah, yeah, yeah, maybe another round of.

Yep Yep.

So again thats, okay, maybe balance growth versus GAAP it'll be one is at the moment I'd rather spend there.

For your point of hire for R&D, and then we deal with the dividend.

The profit leaks, but that's where the real good for all.

The grabbing the market and also the stray ethanol producer.

I think our philosophy behind it.

Sure sure I think for it for the it gets the nation. Thank you.

Yes.

Thank you and I think we have time for one more question operator please.

Yes. So we have the next question from the line of questioning from.

The Craig Hallum Capital. Please go ahead.

Hey, great. Thank you guys actually for.

For the last few questions with the questions I had so congratulations on the other great outlook I don't have any further questions to ask at this time.

Okay. Thank you.

Okay.

I think you're seeing there no more questions on the cash I would like to hand the call.

Back to of presenters for some closing remarks.

Thank you operator, and thank you all for participating on today's call and for your support.

This concludes the call and you may now disconnect.

Okay. Thanks, everybody.

Thank you, ladies and gentlemen that does conclude the conference for today. Thank you for participating you may own disconnected from that thank you.

Yeah.

[noise] [music].

<unk>.

[music].

Good day, ladies and gentlemen, thank you for stabbing volume locating the Chi the ACM research fourth quarter and fiscal year, 'twenty and 'twenty earnings Conference call. At this time all participants on listen only mode. Later, we will conduct the question and answer the question.

And the instructions will follow at that time instead.

Of the mine that we are recording this call. If you have any objections you may disconnect at this time.

Now I will turn the call over to Mr. Gary There will drop the managing director of the Blue shirt group Mr. Goh of chalk. Please go ahead.

Good morning, everyone. Thank you for joining us on today's call to discuss fourth quarter 2020 results. We released the results after the market close yesterday. The release is available on our website as well as from Newswire services. There's also a supplemental slide deck posted to the and that's for a portion of our website the referenced.

During our prepared remarks on.

On the call with me today are our CEO, Dr. David Wong the CFO Martin of Cagny and lease up on the CFO of our operating subsidiary ACM Shanghai.

Before we continue please turn to slide two let me remind you that the remarks made during this call may include predictions estimates or other information that might be considered forward looking these forward.

Forward looking statements represent Acm's current judgment for the future.

Every day is subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in acm's filings with the Securities and Exchange Commission.

Do not place undue undue reliance on these forward looking statements, which reflect the Atms opinions only as of the date of this call ACM is not obliged to update you on.

We revisit these forward looking statements certain of the financial results that we provide on this call will be on the non-GAAP basis, which excludes stock based compensation of lots relating to the change in fair value of the financial liabilities and an unrealized gain in trading securities for our GAAP results and reconciliations between GAAP and non-GAAP of mountains.

You should refer to our earnings release, which is posted on the IR section of our website with that let me now turn the call over to David Wang who will begin on slide three David.

Thanks, Gary Good morning, and the work from everyone for today's call.

2020, it was a very productive year for ACM.

We faced several challenges certainly on the COVID-19, pandemic and treat the St Jude's the.

The <unk> the challenges through hard work and good execution.

And part of the tailwind in China on semiconductor industry will.

And the folks on what we could control the manager all supply chain.

We are skewed on the customer delivers the expanded the capacity.

The deal with new products, and we've made great progress with new customers.

We are also moving forward is on a long term facility of the thank you mean zone.

And the completed at the Ponzi for employee housing development.

Before getting into the detail.

I would like to the thank all employees for their hard work and the dedications.

I also want to thank all of the customer partner and the shareholder for their continued support and confidence.

ACM research.

For the full year, we had a record revenue of 406 6 million on a per 46%.

And the record shipments of <unk>.

On the $82 million offer of 58%.

Non-GAAP operating margin was 17, 3% the re enter the year of 71 7 million cash and cash.

An additional 28 of <unk> 2 million from all of holding of MSA market shares.

All of that said Sotheby's on a customer whose didn't move for item four.

We have five major from any company of course, the demand foundry and DRAM as well as several of the backend of wafer packaging and assembly customers.

Our newest customer manufacturer of call on analog devices.

Two of ATM technology to optimize their own production production capability.

We help them achieve the operational excellency needed to compete in today's global semiconductor market.

Many of you've got on key customers.

I would have thought of as the the Shanghai lobby and of all of whom semiconductor also known as the quality of all of them do.

They are leaving it alone the foundry in China, and the I'll call it customer.

In 2020, and the 37% of the total sales.

They are great customer and the neighbor.

The production near on the Shanghai and kind of quarters sounds like body neither of them are multiyear capacity expansion.

<unk> grew the progress in 28 nanometer.

On the semiconductor is adding capacity at least.

The trailing edge nodes and the issue.

Their major product on Crs and the power devices and the capacity will be more than 80 K per month by the end of this year offered from 30 K per month.

And the end of last year.

The proceeds of the BD and both projects will have the several first good for.

The system in the quantity of some of our newer product offerings.

The next one PC.

One do you see the fed and the launch of customer contributing grew 27% of the total itself improve on funding.

We are working closely with our for one piece of the three the mass production.

Lastly, moving on.

We can report stay that lumpy.

Geared at production capacity for <unk>.

K 50000 wafer per month input on funding.

And the expanded to add another plenty of five to 50 K in 2021.

And convert from 64 layer three line 28 of late.

Believe me on one piece of the largest single wafer wet cleaning supplies.

ACM pool of being deployed.

So you need within the member of the new Fab. So we continue to expect strong demand from one TSV as the scare of the production capacity.

Line and other major facility with the call.

Avian flu or the largest customer was as of 99.

Logic foundries in China.

In the 12% of itself into the unfunded.

For from single digits equals on 19.

In Shanghai, and the flexibility of the deliberate affinity.

This is the level also depend on other U S suppliers to gather license the cheap their own tools as on anything yeah.

Yeah, well position with a range of the tool at the MSC, but factoring in just more of a month from SMIC.

On 2021 on book.

Now, let's touch on our other speaking even the customers.

I will begin with SK hynix the.

The number two available DRAM suppliers.

SK Hynix was ACM towards major customers.

Strong Testament to our truly SaaS Canadian commodity.

And the ability to improve production yields.

We thought that was just the field production staff and as the game kind of now our tools are used in more than 20 steps of the progress to more of the bank notes.

SK hynix was less than 10% of <unk>.

And for Us on 'twenty down from part of the 20% in 2019 as expected due to policy of view on the cycle.

<unk> kind of in the amended several of the technology upgrades, which was on Sunday and we expect them to return of 10% of customer for 2021 and of the young <unk> take a lot of of the upgrades and the capacity additions.

The next six to 17.

I'm not trying of base entering for the DRAM industry with the labor.

Our first of the SaaS fount of tool.

Then in the later to the 19.

The recognized revenue in Q4 of 2020 upon acceptance.

They select us all compelling value of the presentation, proving our ability to improve yields and the quality of technology roadmap.

<unk> is in the early stage of the the multi year production plan.

Our position to participate in the SaaS Tahoe, the semi critical cleaning tools.

And other tools when they scare up interest on.

And the one NPL.

Finally, we have two new annual the power IC customers. We've delivered multiple first tool from the third quarter third and fourth quarter of growth on <unk> and then recognizing some revenue in Q4.

The first tool, including on semi critical tools.

Sure thing.

The AG side continued growth in ultra of weapons.

The two Canadian pool, and ultra F N furnace tool for <unk>.

Out of it of meaning profit.

Is this we have the penetrate.

Of the five key trailing edge nodes and all of the policy and the C. I S manufacturing trends.

As you can see we have very accurate with all of the new meaningfully for the years and expect to see orders from them. This year.

We believe the customers alone represent a significant lubricant the opportunity for ACM.

Many of them a few of the burden on the those stage of multiyear capacity expansion.

On a plane count the friction of our product.

We think on a current customer base alone 10 set for solid growth for years to come at the customer added capacity.

The tool the additional production stats on <unk>.

By more ACM products.

In the laser cleaning enable us to capture more of an umbrella.

On the launch of market opportunity.

Turning to slide five.

As the emerging suppliers, we are focused on delivering advanced technology of competitive cost we have.

The strong on BP in Shanghai in Korea.

And the one of the launches of <unk> for semi cap equipment the employees in China.

Let's put the critical math of the patent near some of the mirrors and the largest semiconductor projects on the planet.

We can see the great opportunities. It is none of those tracks. The coal. The next few years amend the graph appeared.

To expand the product line and scale of our business as new major semiconductor products due to the there a producer of a few of the they are visiting China.

We intend to gain market share by expanding our product line on the winning new customers, both in China and around the world.

We estimate on current product portfolio and press about the <unk>.

5 billion U S dollar of the global wafer.

The crude market with the increased DRAM through the night foundry power devices and the analog applications.

All of convenient tools address about the $3 5 billion.

For 80% of our fleet the impasse Coco Libre can lead the market.

Let's start with our flagship.

That's T bolt on Tahoe tools, coupled result, semi critical cleaning tools on.

New product and another $2 5 billion, including $1 7 billion by a further 5 million by our NPD and more than 300 million final of stress free polishing products.

Repo manufacturing and other advanced packaging process equipment, including colder developer wet etch scrubbers.

What geos Super.

Yeah.

It was on point of view the spend the 12% of the felt for about 80 million and R&D offer of 55 per cent for improved on 19 level.

Spending in the able us to extend our offerings the young staff.

And people into the call.

I'll send the critical tools with the.

And most of these the need further the products.

Our EBITDA tools at work right, where the stocks.

In 2020 with deliver a handful of of first tool for from an and backend packaging customers and.

<unk> had of grew their revenue contribution for the year on.

Our key products, including <unk> for advanced packaging and ECB map for the entity in copper in the connections.

The Pts leap for smoothing of the year for from him.

All the secret sauce is the ability to provide the uniform Inc.

On ultra thin failure for a bump for the other one.

On the packaging, we have developed a proprietary high speed couple of clean technology.

The patent pending to a significantly improved copper pillar of cleaning the pumps.

For paid net of field via for food.

<unk> not getting plenty of micron and the highest speeds and better uniformity is of major China the loan <unk> applications per day.

Importantly for PV for appeal at the Hyatt <unk> EBITDA.

Even for the ninth of transport limitation that we view the ablation rate and generally the on even top for five of the pillar.

Our new high speed of trading technology solve the mass transfer of tonnage, while achieving a path of the appeal on top of buyer and delivering the balance of the highest importantly less than 3%.

As the warehouse the high throughput.

The ECB.

For the high speed of patency rate together with the S&P copper of polishing tool, what become major winning products and timing of <unk> and advanced packaging.

We are also excited about our.

Further opportunities which was on funding.

EBIT through what's the true.

True through to customers.

And we plan to deliver of several more in the first quarter this year.

From the has been jointly developed by our Korean on the Shanghai team. Both teams have looked to seamlessly through for the alpha and the beta tool of issues and the two new process to meet customer requirements.

We haven't made the significant progress we have the ability of assets, including HBO sitting in on time and the high backing out of lean process. Our teams continued to develop the non coal and bulk volume.

And the high temperature oxidation process.

Our next step with Nevada batch atomic layer separation.

Deposits reached.

<unk>, the multi challenging and the promising product was advanced manufacturing nodes, we have of successfully implement our multiple product strategy and expanding our product portfolio from less cost of products at <unk>.

Net debt.

We provide products and the vertical from us reach of birth intrigue to dry product.

And more of a comp in the near future.

For 2021 for propel for new of community tests, we planned of salaried. The RMB 12 out of 14% of ourselves although at the top of the total market addressed by our products from 5 billion per day for more than $10 billion.

The other day to eat too early to offer detail I can see that our team has begun work on several new major products that kind of get us close to the 10 billion addressable market for next couple of years.

Next I will comment on the efforts of any major first tier of new customers.

All the investment global sales.

Our team on making sadly the progress we hired a VP of sales in April.

Our <unk> point of view.

As the west so the other key hires during the year with delivery of our very first true less for the lap of the Inc.

On the player that neither of the factory Canadian.

Pocket.

The lead the execution on the 17th the customer formally accepted tool and the REIT book the revenue in Q4.

The team is actively building itself tightly aligned with the lack of engagement such as the other votes technologies of caution for the U S and the Thailand players.

We are confident not in the SaaS tebo and Tahoe and the high speed the cover for <unk>.

A P <unk> <unk> what kind of.

The killed the zinc and of one of them on more major for tier of customers, giving 2021.

To fulfill our growth in leisure.

Yeah, we were neither of capacity.

Let me update on our progress.

Turning to slide the fixed.

All of the regional facility in Shanghai remains the headquarters in Shanghai.

<unk> R&D SG&A and the prototyping and production of new products each day that Quebec, we started production at our second the factories in China Zone.

During the September of 2018, Inc.

Could lead fill it.

And as of the second for cause of action in Q3 for the unfunded.

We now have of 303 million of the annual revenue capacity and the.

The trends are even need it we can further expand for more than $5 million on the revenue capacity by leasing additional space.

Our new leaned on facility will include the production and R&D is.

The plan, the 1 million square feet of floor space.

The ability of the increased production capacity for a one 5 billion.

Moving to prove on 'twenty, we purchased the 50 year landed right many of them with.

The additional architectural and design work in the first half of 2020 in line with initial production expected in later 2020.

Centric for all of the inbound operation from low cost employee pumping one other comment in the U S. Within the standard of the practice for large companies in China.

The Shanghai, we can offer of healthy to attack and retain key employees.

We trained many of our key engineer on the manager for more than the packet we need with TD with key engineered key employee of the secure our future growth and technology development unit.

During 2020, the deposits $40 million floats the purchasing of the.

<unk> housing units.

We paid for the Veeva over half of the month from ACM, Shanghai as the cash balance.

The finance the on the half is a 10 year loan facility.

Before I provide of Tucson plenty of all of it.

Lessons content status of the star market IPO of ACM Shanghai.

Progress the steady but slower than expected.

Soon after the ACM Shanghai of complication of the pool on the Shanghai stock Exchange of commission or at the SEC on September 32 of unplanned events.

The events in the U S cargo delaying the IPO.

The this data with the short salary for issue on October eight 2020, followed by Matt of course.

Action lawsuit filed on December 21 total on funding.

We have of previously described all of these agreements with the shorts out of Newport.

And therefore, I believe there's no substance to the losses, which is largely based on the short seller report.

The SMC, which do not familiar with the kind of the imports and the lawsuit.

The inspector on sending the USD deposits as we have also previously required.

The founded with the.

0.5 point verification of the pool for the.

The short salary pool.

And under the very picky.

The report what the affected by the SEC on December 11 2020.

And the leads the publicly in both China and the U S Inc.

For arguably depletion of application could be five of the China Securities Regulatory Commission.

All of <unk>, However, the CV sales, while the fire and we learned that the SEC will again require additional information on.

<unk> is now in the process of providing secondary pumps for to add the DC.

For the plan the class action lawsuit.

We have a covenant that we would go over the hurdle and complete all of IPO.

But as the SEC does not provide us with the timetable for the reveal and enabled us to predict the precise timing.

Now, let's move to the hour with Anthony.

On slide seven.

Our guidance reflects optimism about our growth prospects for 2020 a month.

For that offer of preliminary guidance in early January which is unchanged. We expect the revenue to the range of 205 million slated for the Union represented 39% annual growth in the medical.

On the southern 'twenty, one two of the based on several key assumptions for the global COVID-19 situation improves in the coming months.

The China trade the policies stabilize for a range of of spending the scenarios for the production <unk> of the key customers for.

The variance in the trajectory of the DRAM recovery and finally, a range of kind of outcome for the timing of the customer acceptance of the first of all.

Our results and outlook demonstrate.

Thanks to the successful execution of the offset.

Yes.

Our strong growth is providing.

The capability for X Ray the R&D spending in new products, we are.

Moving our global sales and the marketing resource to penetrate the new customer and the new reviews and scaling production capacity of the support our long term growth plan.

We are increasing operating spending to take advantage of the.

<unk> growth opportunity ahead.

Our mission remains to become a major instruments' supplier for the global semiconductor industry.

I will now on the call over the Mark to discuss the financial results.

The results in more detail.

Yes.

Thank you David Good day, everyone Q4 was another strong quarter capping off a tremendous year for ATM for the.

The full year, we grew our business significantly with increased market share deep.

The customer exposure and expanded production at our second factory, we launched several major product lines, including the furnace semi critical cleaning introduced the number of extensions for SaaS PCP on advanced packaging.

Most of the year with the solid balance sheet, including $72 million in cash and an additional $28 $2 million of trading securities of our SMS seek stockholder.

Now I'll put some detail around our full year 2020 results unless I note, otherwise I will refer to non-GAAP financial measures, which exclude stock based compensation change in fair value of financial liability.

And unrealized gain of trading securities.

A reconciliation of these non-GAAP measures to comparable GAAP measures is including in our earnings release.

Yes.

Highlights of the results for the full year 2020 shown on slide eight.

Revenue was $156 6 million up 46%.

The breakout 10% customers annually of provide occasional color on our quarterly calls.

David noted on slide four we had 310% revenue customers for 2021st the quality for home group together accounted for 37% of revenue versus 26, 5% in 2019, the group by 103% the big contributor to growth as we expand the penetration from all of the Shanghai Fabs to additional factories.

But for home and Wuxi.

Brian <unk> was our second largest customer of 27% of revenue versus 27, 5% in 2019.

Our revenue from why MPC increased by 42% year over year to help expand the YMCA seek to expand their wafer starts to 50000 per month and some share gain into additional cleaning steps drove the growth.

She was 12% of revenue versus single digits in 2019 for <unk>.

It's a patient with SMIC improved nicely in 2020 due in part the successful sales effort and Smic's recognition of our ability to scale.

SK Hynix was a little less than 10% of revenue versus 98% in 2019. This was as expected due to a pause on DRAM spending.

From wet cleaning and other front end processing was 87 percentage of 2020 sales versus 84, 6% from 2019.

Revenue from advanced packaging other backend processing tool services and spares was 13% of sales from 2020 and 15, 4% in 2019.

Total shipments for $182 million versus $115 million in 2019 of.

Gross margin for the year was 44, 5% compared to 47, 3%.

Has there been or <unk>.

Normal expectation of 40 to 45 per Se, we expect gross margin to continue to vary on a quarterly basis due to product mix and manufacturing utilization.

Operating expenses were $42 7 million compared to $29 5 million. The increase was due to higher R&D spending on new products increased sales in North America, China IPO related cost.

Operating income was $27 1 million compared to $29 $4 million operating margin was 17, 3% versus 19, 9% of year ago.

Non-GAAP results exclude stock based compensation of two additional line items below the operating line. The first is the change in fair value of the financial liability as the non operating non cash book loss of $12 million.

As described in previous calls this was related to investments in ACM prior to 2017, IPO and restructuring in Q3 of 2020 in connection with the star market IPO the.

On the liability was terminated upon our issuance of equity warrant after which it became of balance sheet on and no longer Inc. Factored our income statement in Q4 and beyond.

Second as an unrealized gain of traded securities of $4 6 million from our investing SMIC prior to the star market IPO the investment as Mark to market at year end from the gain reflects the increase in value from the original IPO price. We will exclude this item for the non-GAAP results until the game is realized if none of them sell the shares.

Net income attributable to ACM research was $23 8 million versus $22 5 million net income per diluted share was $1 12, compared the $1 17 in 2019 tax items on the effects of foreign exchange fluctuations on operating results provided a net benefit of <unk> 9 million and for $7 million.

The 2000 22019, respectively of <unk> per share and <unk> 25 per share respectively.

Now for the fourth quarter as shown on slide nine revenue was $45 6 million of 85, 2% total shipments for $67 million versus $25 million in the fourth quarter of 2019 from $59 million in the third quarter of 2020.

Gross margin was 43, 3% versus 57% operating expense as the $13 million versus $8 million operating income was $6 7 million of 49, 6% from $4 5 million of.

Operating margin was 14, 8% versus 18, 3% unrealized gain on trading securities excluded the non-GAAP for reasons mentioned above that was $3 6 million in the fourth quarter of 2020.

The net income attributable to ACM research for $6 2 million versus $4 6 million from 2019 net income per diluted share was 29 for 23 in 2019 tax items from the effect of foreign exchange fluctuations on our operating results provided a net benefit of $9 million for per share in the fourth quarter of 2020.

The net benefit of $1 1 million of <unk> per share on the fourth quarter of 2019 now.

Now I will review the balance sheet cash.

The cash balance was $71 8 million at the end of 2020 short term borrowings at year end of the 27 million $27 7 million versus $13 8 million of 2019, and long term borrowings for $19 7 million.

Total inventory was $88 6 million at year end versus $44 8 million of 2019. The increase in inventory was driven by a couple of factors first finished goods inventory for ACM debt represents first tools delivered to our customers for evaluation and of waiting for acceptance of finished goods grew to $32 4 million.

At year end up from $19 3 million at the end of 2019.

For the remaining inventory growth was mainly due to work in process and raw materials to support our sales growth of 2021.

Cash flow used by operations of $13 5 million for the year cash was used to fund our growth in 2021 and to deploy first tools and new products to keep customers capital expenditures for the year were quite good 5 million versus $2 million in 2019 the.

The 2020, we've spent the total of $50 million on a linked bond related investments. This includes the $9 7 million for the 50 year land rights of $40 2 million deposits for employee housing for.

For 2021, our base case for capital spending is 10% to $15 million for 2021 investments will be balance between capacity increases at our second factory tranche of <unk>.

To support the R&D programs.

As well as planning and some initial spending on Linkedin, we expect to adjust our capital spending upwards after our China IPO.

To conclude we continue to execute on our strategy for <unk>.

Operating the growth of the major new IC Fabs, we ramped production from continued to develop and deliver innovative products. We're positive on our opportunity in China and our expansion outside of China.

Let's now open the call for any questions that you may have operator. Please go ahead.

Okay.

Secondly.

Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please for Scott walk on the telephone keypad and very true.

Moving to be balanced if you wish to cancel the liquid from scratch pound research team.

Okay.

We have the first question is from the line of Patrick Ho Hum.

Please go ahead.

Excuse me. Thank you very much of it congrats on the nice finish to the year.

Maybe David or Mark.

Looking ahead at local Chinese domestic spending we're looking at potentially another strong robust year can you just give a little bit of color of the breakdown between your thoughts on memory spending versus the trailing edge foundry logic spending.

And whether you see potential growth in both areas or is it going to be weighted.

More on one segment for the other.

Okay. Thanks, Patrick.

Actually we have very good visibility on.

Our basis, we'd be matched and also on the QC and also a bump on the quantity.

And as the we see that continue quickly the spending there.

Five.

Both in the on the loans the three D. NAND also the.

The non memory assigned mostly in the launch of a hunk of the size of the full body volume growth right in the plant. We are also quite there.

The five what we call the second tier customer.

And there we've got two already this year and will accommodate the other rest of the three additional second tier I quoted the treaty <unk> knows the cost.

For the period, so the building fiber.

Rapidly and there are still.

Still say on probably majority of.

More than I think the 50% of that come from volume.

<unk> for the customer.

And with the neither five additional.

The new customer spending on quickly.

Cannot there.

For the precise number of the mix this year as it was the reason of our view on obviously.

And both of their the Greens expanding their plan with the market anything on the Endo Yeah, no. Thanks, Patrick I mean.

I think you asked about where the.

The the relative growth versus memory and trailing edge and yeah. As you know for IMTT is within the three D NAND big customers. So.

We're expecting that to grow with their neither the capacity adds day.

I had mentioned to the part of the for Hain.

SK Hynix, David in the prepared remarks.

Are you anticipating of DRAM recovery from them and so they were less than 10% in 2000.

2020, and so we didn't need the you would expect them to kind of get the.

So some decent growth here.

In 2021.

Yes.

Great that's helpful and maybe as my follow up question for you Marc as you get the new facility and the factory ramped up for.

Production, how do you look at gross margins given that you know there are typically startup costs. Some under utilization to begin with how quickly do you get that we tend to you of normal I guess corporate ranges as that facility ramps.

Yeah, you bet so.

Patrick we're not going to modify our gross margin kind of outlook kind of the $40 to 45% range right at the Theres a lot obviously dependent on the product mix.

And that's really the biggest driver.

I'll take the production capacity.

And we said we set a bit here tranche.

We're adding capacity pretty quickly.

On really pretty good demand throughout the year.

The the link zone facility that we're looking at debt for the.

We ended 2022 is when that would start kicking up so we don't really anticipate any impact to our gross margin from from net lending that'd be out there in 2023 and beyond.

Great. Thank you very much thanks.

Thanks, Patrick.

<unk>.

Yes.

Thank you we have the next question from the line.

GE can sell the <unk>.

Cash flow. Please go ahead.

Hi, David Hi, Mark Congratulations on the strong end of the year.

Quick question on the on the.

On the Scarlet from can you just give us a sense qualitatively the level of detail of the outsourcing.

I can see you requested in the additional review of versus the original report your file just kind of sort of some of the magnitude of here of how much more of the looking for.

Okay.

I guess I'll stay there there's the.

The short there before and come out of it we spend almost two months for credit.

Each of them.

Seasonally the floor.

And then on the contact center and almost the was brought into the fire even for recall that the distribution for safe on the CFO.

On a fee for that.

And of the lawsuits that come out right and the anyway now we're taking care of this and also the higher they're very experienced the lawyer in the U S and on all Youre, telling us pretty much no substance in the philosophy right now and so we're our goal of weather.

Again as long as the accrual to FMC.

To give them the end of detail on what is going on on what are the legal process is less.

I think that probably within the fire. This the report.

No.

Then what we do for their response, how they think about this.

The positive report then we kind of February.

Moving there.

Is your decision process in the CSR space for.

For the other tightening right now on again.

We don't know hung on that of their for their two revealed on <unk>.

The report.

The line, particularly with the size of the tightening of the <unk>.

The deal.

And I think we're confident and finger.

I'm looking over 90, 95% salary.

The remaining 5% free the confidence we should there be a success of ideal for use in the China.

Okay.

And then perhaps on the financials on the debt.

Do you have price of the customers.

Entering 'twenty one maybe you have come from I'm curious do you have a higher percentage of visibility from those sales into your guidance for 'twenty, one versus say a year ago, given the you have more customer of them more product.

<unk>.

Yes, I can see that this year, obviously of bad debt last year, Mike and the looking on protection and also actually of we're very busy on the tier one cases on even we're aware of the stretching out kind of the real pay scale and various things.

Factory.

Capability. So we saw the hire more people and also of training more people and two on final past also to the sort of the year. So that the moment at the very busy Q on Q2, including 33.

So.

We're very I.

Our confidence in some of our projections for this year.

So you can.

Obviously, you look at the of the level of the finished goods inventory right at the end of.

Last year the end of 2020.

On the sort of group from a $19 million for about $32 million. So.

And that's carried of cost so assume our corporate gross margin for that to get an idea for how much of revenue visibility would be there.

Right.

It sounds like good visibility on the guys I'll step back in the case.

Thank you.

Thank you.

Our next question from the line of.

Charlie Chan from Morgan Stanley. Please go ahead.

Hi.

Hi.

So so.

Can you step on.

Sure.

You are China, causing the contribution you mentioned about that.

The one PC in the at home, but how about for me and because the.

The company also on that if.

They want the standard around the total.

<unk>.

The <unk> capex.

Do you think debt and he's going to be.

Thinking of game.

Both driver for you for.

For this year and what do you think about here.

The capacity expansion per.

Please.

Given the continuing is the issue. Thank you.

Okay the things.

We're pretty well positioned with SMIC and we have worked with them for lobster on three of five years.

And we do have a point on it and throw them in the premium end.

And it was our key.

Key of process.

And also we also have the.

I call on the semi critical parts of tool both of the sold into is on the C relative to do kind of a couple of <unk> and also on TSV pool. So the net right.

Alright and the.

And put on to also future north of.

The provision are furthest to enter the U S.

Is it true.

I think for brief provision for the planned marketing now and going from there are announcements.

It is expanding a 10000 per month.

The.

And of course, the revenue expansion for there probably isn't the kind of hidden nano in the car technology, the way of presenting for that too.

Again, it's true.

As licensee in the consulting quickly, we can see quite a bit of a tremendous opportunity in front of us a hybrid with momentum.

We're at the very.

Cautious of launching this amazing stuff and obviously these out there.

The Gwen going down and for them to be expanded quickly is kind of.

The difficult right so anyway at the moment.

On the just the pieces now and are working closely.

The any weakness on our customers. So we're making the go to for <unk> and footage per day.

For the company.

Hey, Charlie one thing I'd add right I mean, it's.

Obviously, a bit of a wildcard right.

We've got David really good visibility with the.

The number of our top customers.

But for some I see we're not factoring a significant amount in our outlook.

It really depends on their ability to get tools from other U S. Manufacturers. So we've got demand in China is pretty strong across the board.

And we also think that it's.

It's Nick depending on how much capacity they had some of the other manufacturers may add to it may step up their spending it's hard to tell but.

For them, where we're on.

We're not going to factor too much into our outlook.

Next question, operator, and carrying the business shrunk.

Hey, there Charlie.

Hello.

I mean, most of the next question Sir.

Okay.

Yes.

For.

Yes, the next get credit in pumps from the light.

The next question comes from the line of X Quinn Bolton.

Net income.

And with the two scope here.

Hey, guys, let me add.

All of my congratulations to the to the <unk>.

On finish and the like.

Outlook for 2000 to one from David wanted to check on the follow up on <unk> question or on the <unk>.

Yes.

Review.

Understand you're about to file your response for more information about the class action lawsuit and you don't know how long it will take the FCC the we view that.

Once you receive that flow or what once the FCC has completed its review can you walk us through how long does it typically take to get through the CSR see registration process. So folks can have on it.

The sense of timing of once that accessories.

The SEC review is complete.

What what the timeline for an IPO might look like as an order of weeks instead of a couple of months any any thoughts you can provide would be helpful.

Okay.

Premium revenue question and actually.

Further the wording.

The FCC finish the review of from a segment of the floor.

They were getting for the so called of the decision for the Src.

By the.

I should say so far of the aesthetic of the data shown averaging the.

The decision of improvement <unk> seen about a 45 day to 60 day.

So because of their registration of time.

Period.

All of that we'll probably spend the other revision down on one or two weeks or three weeks the roadshow.

You can kind of about the two to three months IP of.

Hi.

The after we finish there.

Acceptance of proving the DCF of secondary airports.

And then for Greg.

Perfect. Thank you for it.

Yes.

On the second question is.

Very nice job on the shipments in the fourth quarter, Mark I believe I heard you say 67 million, obviously that gives you. Some some pretty good visibility into 2021, I'm wondering if you might be able to break down for us how much of that 67, where youre kind of traditional critical cleaning.

Tools versus some of your newer semi critical furnace ECP tools.

Tools is the majority is still the critical clean or are you starting to see on <unk>.

Much broader of all.

Kind of composition of of the shipments for Baker.

Yes, maybe I Couldnt give you the detailed numbers I can see the general of poverty Canadian towards the occupy above 80, 580 85 per cent.

For the total premium is there you know.

I called the flagship also for semi critical together.

The other Bob about 15, 20% are new product coming in.

Copper plating and also we have the application in the packaging applications. So that from the key to the ballpark for the funding provided.

Great. Thank you I'll go back in the queue.

Okay excellent. Thank you.

Operator next question please.

Secondly, the next question comes from the line of.

Ah Chi Tsang from Jefferies. Please go ahead.

Yeah.

Okay.

Cheap side of your line is open you can ask your question there from difference.

Since our machine.

Yeah Jamie.

Yes, the pay cheaply.

Yeah. Thank you. Thank you for taking my question on.

So your partner channel.

Sure.

The 88 180 chairs.

Yes.

On 20.

And I think that work in the case studies.

1 million.

And just on planes are climbing.

The volume discount right now more of them.

On 16 OEM.

And do you see this.

Extending and she went on line.

We're expecting that the MLR range.

Yeah, Yeah, let me just correct a few things so the the.

The way you would look at the the value of our tools that are awaiting acceptance right you you'd want to look at the the finished goods inventories level not the number that we shipped in the year, but that.

Of that finished goods inventory was a little over $32 million right. So that's carried at cost so he would.

Assume the corporate gross margin to get an idea for the level of.

The potential revenue that's in net.

And so.

I think what you may be asking for 'twenty 'twenty, one we don't really give guidance on our on our overall shipments.

But we would anticipate.

The strong shipments again.

Shipments.

The additional delivery of of demo tools this year.

Well, obviously this year I can add there is the more new customer coming on especially around the new product and the ECP and also on further the product and also additional new customer community.

We're expecting and Moreover.

And of course deferred revenue will come on this year too which is the recorder.

Non of recognized upon shipment for the.

Recognizing revenue upon acceptance, so where this theater.

At the end of this year because of a much more.

The first tool to be deferred for next year.

Okay great.

I see thank you on Mexico.

Question is that.

You kind of.

That's I'll like to down 20 on one revenue first.

First half turns of the house.

The kids I think a lot of capacity expansion plan.

Like the personnel expense and finally, we're making the second half last year.

The short term so I think.

Well I'll go back to work.

At the top.

So I think for me.

The effect on how all drive top line.

And good day.

Yes, I think I can address that I mean, we typically give our full year outlook with them.

The Q1 is typically our seasonally weakest quarter, but you've got Chinese new year's in there so on.

You get a nice day.

Generally a good day the snapback in Q2.

Q3 has traditionally been our biggest quarter.

And then.

Sure.

A slight decline in Q4, so that's that's how we're looking at it and I think you're correct.

A little bit more of in the second half the in the first half kind.

Kind of balance that way, but nothing traditionally out of the ordinary from the seasonality of you've seen in the last year.

No.

Got it thank you very much.

Thank you. Thank you.

Next question please.

The next question comes from the line of Mark Miller.

From for.

French market the company. Please go ahead.

Thank you for the question.

You indicated you expect the return of our clinics as of.

The 10% customer is that of more of a second half for first half type return.

Okay I think there.

In the probably the second half this year and we do have some on.

Order coming in the queue line and also.

Look at the market and the people project.

The around the required to recover comparable last year for we're expecting from other.

Order coming in the second half this year.

So your sales and marketing expenses were up.

Definitely I'm, sorry of yourself expenses were up significantly.

Sequentially as well as R&D day.

Despite somewhat lower sales of the fourth quarter do you expect this trend to continue into 2021.

I think of the using a number of where sales and marketing about 9% to 10% and that of the range of keep continue.

However, this year, we'll do add additional probably three point in the middle of the R&D. So a total of 14% and the plants on the.

The effort.

Because of the nation.

And some of them.

Very pivotal year for me for a few years for ACM growth.

The critical.

The position us strongly in the.

Asia market and that's the way we met the more could be of out of the new product come home.

The one of the spending for the for the R&D.

On the there really isn't it.

Go ahead.

So you said sales will be about 10% roughly.

Yes, she is the less than 10% sales marketing and the bandwidth of point of view more of the R&D day.

Until the G&A that sort of either.

This year for.

The total.

The spending.

The quota plan, yeah, Mark just to make sure your alignment that the non-GAAP right. So.

Excluding the the stock based compensation this percentages of net statements.

Yes.

You mentioned stock base.

The stock based comp last quarter.

For that.

For the line.

Yes.

Yeah.

Q4 stock based comp was $1 3 million $5 6 million for the year.

Yes.

Thank you.

Yeah.

Thank you.

We have a follow up from that.

From Charlie Chan from Morgan Stanley. Please.

Charlie I think the cut you off net.

The loss of debate.

Yeah.

Yes.

Hey, guys, sorry, I got it.

Some of it.

<unk> been working from home.

So so maybe maybe and other.

How long do you sort of if all your.

In conventional customer programs I know hynix.

Probably with the bed head and you see it by the hub.

The other.

Maybe it's the same when it's strong for kimco TSMC or other.

U S customers and any progress here.

Great and Tony So let me maybe elaborate of new Xiaomi on.

The mix of footprint on come for the FERC.

First of the company.

The way, we're always looking for three and frankly, they're kind of whats at the gallery of the trend today on the industry.

The Beaver port of on all of the gate all around and the also the to be part of the comes with the real limitations to non.

Non will lend nominal it's really the hub and also very expensive too for people from the fleet now can say through the month of the demand because of lot of the structure of the people taking the people total accrued the DRAM and advanced through the packages. So I look at the trend out of hand, ACM and the real for the per issue for us is.

Due to a patent on the 18th.

Part of it is in the convenient tool on the SaaS payable is real good of for producing potable capability of the only technology today in the world and we are seeing us.

The mature or timing of political inside the tube turns on in the area.

Available I share the market you can clean the deep or timing of corner Conoco and the other technology and I pretty much every day never could get out and also the makeup on either the Omega just kind of the kind of an issue I.

Think of the particle graduate out of the structure right. So that's the line where we're positioned for that.

The one I can see that it will be on the major applications on the role of lot of of multi layered into the connection and also <unk>.

The $5 three of the connector, including TSV for the Abd line. So I'll cover premium technology is the way.

The provision for that reason, we are making progress on the.

Hi, Steve couple of Brady.

And I think our key volume are we going to reach 3% in the fall.

The range of top tier of the profile and the real attract the intention from the top tier countries.

And also another way of the S&P stress free polishing the.

Talk about it we can parts of the comparable at a much less consumable costs and you'll see the ATM of 80% compared with the CMT of another patient pool.

We do the kind of the site.

And more than that as you stated that for the right. They are very good there of getting through the traditional quota Sydney the nitrite CVD.

CVD on.

Excavation and on the other other quarter process by the <unk>.

We were aiming for this product as they already.

We think are the photos <unk> can create great bigger role and because of the efficiency and for their future AB process. So looking at the kind of I mean, our R&D pretty treaty.

Target the mix of few years semiconductor manufacturer trend further it will also tried the beneficial new product line now is again the announcements soon.

Anyway, the point for the feet on the ACM is the take all of R&D differentiation is on our core point at this moment.

However, the engage either U S on Taiwan customer and.

Greg of the portion of or even the.

Hello.

For the key customer right now I think are.

The thing to take the time, but we are confident this year as you penetrated one from the more of the top tier customer.

Buyer for the most convenient line and also our other mines of copper.

Probably the site and.

That's our goal this year.

The market.

Yeah.

Charlie You said you know.

This year.

We wouldn't say, we don't we didn't factor of any revenue from these big customers shift from these new customers enter into this year's outlook.

Mhm, Okay. Okay sure sure I think some of the updates and analytical question.

Mark.

I guess the way. Please two questions. The first of all of the put sort of the other.

IPO of funding debt impact here.

And the funding for the new business or <unk>.

Chad official any impact of the operation.

And how soon you think of debt funding need to the Lady.

That being pegged.

<unk> play and the second.

Cash into market, it's really about the.

The opex ratio guidance or your op margin guidance for it for the for.

For the P O or for the coming through the years. Thank you Craig.

Yes, well I'll hit that.

So on the China IPO the timing as David said the progress is.

Not under our control. So we're doing what we can to support that were confident with complete it hopefully it will be soon.

What our business plan doesn't require an immediate IPO and we've talked about our capex planned 10 to 15.

For this year.

We would adjusted upwards.

After the IPO since the spin.

And what we're doing right we feel like we've got.

Plenty of room to add capacity in tranche of we're looking at other options there.

But we feel quite well funded and.

Our plan doesn't require the day.

Mediate funds here.

So in terms of the Opex levels for 2021, David talked about the R&D.

No you got to think about our model of $40 to 45% of on the gross margin. It kind of gets you to about a 14%.

Margin on the non-GAAP basis for for the year.

Okay. So that then is the.

Okay I'll pass the ratios of around that 30 per se.

That'd be great.

And all of that yes, yes.

Okay. So there are really balance growth.

Yeah, it'll be one is at the moment I'd rather spend there.

The appointment of higher for R&D, and then we deal with the dividend of profit there right, that's where the real good for all.

Grabbing the market and also the stray ethanol producer and that.

I think our philosophy of behind you.

Sure sure I think of it for.

It's the nature of it thank you.

Yes.

Thank you.

We have time for one more question operator please.

Yes sure we have the next question from the line of Aaron a question from Craig Hallum Capital. Please go ahead.

Hey, great. Thank you guys actually the.

For the last few questions with the questions I had so congratulations on that.

The great outlook I don't have any further questions to ask at this time.

Okay. Thank you.

Okay.

I think you're seeing there no more questions on the cash I would like to hand the call.

Back to of presenters for some closing remarks.

Thank you operator, and thank you all for participating on today's call and for your support.

This concludes the call and you may now disconnect.

Okay. Thanks, everybody.

Thank you, ladies and gentlemen that does concludes the conference for today. Thank you for participating you may hold the disconnect now thank you.

Here.