Q1 2021 ACM Research Inc Earnings Call
And then.
[music].
Yeah.
Good day and.
Thank you for standing by and welcome to.
The the ACM research first quarter, 2020, One earnings conference call and please.
The time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
To ask a question during the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to your speaker for today, Gary devoid of Inc.
Thank you. Please go ahead.
Good morning, everyone. Thank you for joining us on today's call to discuss first quarter 2020. One results. We released results out of the U S market closed yesterday. The release is available on our website as well as from these wireless of services. There's also a supplemental slide deck posted on the investor portion of our web.
Site that will reference during our prepared remarks on the call with me today are our CEO and Dr. David Wang our CFO, Mark Mckechnie, and Lisa Fong, the CFO of our operating subsidiary ACM Shanghai before and we continue please turn to slide two let me remind you that remarks made during this call may incur.
And the predictions estimates or other information that might be considered forward looking these 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 undue reliance and these forward looking statements, which reflect acm's opinions only as of the date of this call ACM is not obliged said that 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 loss relating to the change in fair value of the financial liability and an unrealized gain and 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.
And the IR section of our website with that let me now turn the call over to David Wang who will begin with slide three David.
Thanks, Gary and good day, and the World Congress of today's call.
We are off to a greater stock with a solid results for the first quarter.
The neighborhood of strong revenue growth record shipments and the accident or profitability.
First quarter results demonstrate the competitive strength of our technical.
And how can we go expertise breath.
All of our product portfolio and our growing production scale.
Revenue grew to $43 7 million opera <unk> 80 per cent year over the years shipment were 74 million up from thank you for.
7 million last quarter and up from 12 1 million in the first quarter of two of southern plenty.
We believe a good the balance of the growth and profitability with a 41, 4% gross margin and 11% operating margin.
We are committed to day.
Labor.
Cost of profitable growth as we continue to invest the R&D for new products and global sales and the marketing.
On the bottom line, we reported 35% of of net income per diluted share.
For the 11th and in the same quarter last year.
We ended the quarter with the 79 many of them for cash also of hope at some of these by market share was 27 million and U S dollar equivalent as the.
For the quarter ends.
I will now discuss the recent operating highlights on slide of full force.
Of course, our Q1 revenue growth was.
For all of the basis.
And by current and new products and the customers.
Good evening and other from and the process tool.
Represented 73% of the total sales in Q1 and grew by 42%.
Oh, the bones packaging and other parts of cool and the service and the spare business accounted for the remaining 27%.
With revenue up more than six times year over year.
And the highlight on the slide five we have of five major from and the customer.
The the foundry NAND and DRAM.
We also have of several back and at least for packaging and assembly customers.
The newer customers manufacture of Paul and analog devices.
As we discussed our launch of the cool we had of penetrated two of the five key trading edge nodes, the other analog and power IC and the Crs and manufactured in China and.
Excited to share with you of that due to the.
During the first quarter, we received orders from the additional one of the five key trailing edge no the customers we have.
Activity and engage with the remaining two players with the goal of receiving orders from one or both of them later this year.
On top of that during the first quarter, but also of penetrated two additional advanced packaging houses and the one compound semiconductor IC manufacturer.
Looking forward, we believe our existing from and and the backend of the customer alone represent a significant opportunity for ACM.
Most of them are still in early or middle of the states of multiyear capacity expansions and.
We expect to continue and even more new customer as we believe every major.
The semiconductor manufacturer and benefited from all technology.
Second we believe the total shipments of the 74 million and the first quarter another record for the company.
And this is a major accomplishment, especially during the lunar new year holiday period.
It is true Testament to our production team has been aggressively adding capacity for me the strong customer demand and.
And as shown on slide six all of original facility and some down includes our R&D and SG&A and prototyping.
And the production of newer products during their first quarter, we expanded the production capacity.
And we've seen a second the beauty and all of factory and turns off.
This will provide us the mena floor space to gradually increase our production capacity for more than 500 million upper from kind of level off.
350 minutes.
Our long term plan because of the beauty of production on the.
Vendor and income region of Shanghai, and the 1 million square feet of the floor space.
Enable us to increase our annual production capacity to $1 5 billion U S dollar.
We expect additional.
Architectural and design work to be completed the this quarter with the initial production target by the end of 2000 and plenty of seconds.
Third we investing in our global sales team since the hiring Jim strong to have our U S and of Europe sales effort last year, we have added several other senior employee and the business development and sort of as a team.
Yesterday, we announced the.
The addition of.
The law lager.
21 year veteran of the major U S semi cap equipment makers.
The long lead.
Our U S cities, and if you've ever and team we now have a seasoned team of the well.
For the costs.
The industry bakeries to drive of our effort to expand our business for additional major customer base.
The Asia.
Our team remains deeply engaged and taken a lot of your discussions and evaluations with the U S and Taiwan based so that makes it the other manufacturers, we're making good progress and.
Confident that and we can secure.
And of one or more of course for your customer building two southern plenty of one.
Force.
We continue to gain traction with the ECB pools, where especially bullish on our opportunity for our ECB of product line.
And from an Simona geometry device.
The <unk> solution. Meanwhile, backend advanced packaging has it become more important.
And that's your shifts to packaging innovation to drive a higher performance as industry and moving to post Moore's law.
The product line includes the and.
For the damascene copper and the connections the PSV for through Silicon via for from Hans.
And the AP for the advanced packaging.
ACM ECP map product.
Presents a penalty of differentiator solution.
And provide a unit won't play the ultra thin fee later.
During the first quarter range deals are proprietary high speed copper plating technology and other kind of deliver improved the one the at the higher throughput.
Essentially important for the balance of packaging customers the.
The highest speed of capability combined with the all proprietary technology to improve in the form D and the notch area.
And our ECP AP system, a strong competitive position the when the market.
The tool support copper pillar bump for copper nickel and the team fever.
And printing and the high density of fan out lobbied the wafers.
The ECP AP was the highest speed of bleeding rate together with all the D cover polishing tool position us to grow and.
And it becomes important the provider is really advanced packaging.
According to your development start.
Status of advanced packaging industry, and <unk> report the market size of the three D backing and the fan out will increase annually by 15% to 21% over the next for you.
We believe the total global market for UCP will expand the faster.
After the free eggs from the present, finding millions of dollars to up to a $1 5 billion and the near future.
Fifth.
The reason the broaden alter and furnace slag processing tool portfolio, we added the different semiconductor manufacturer process, including Unbilled party low pressure chemical vapor deposition or etch and CVD.
And the bulk of the party, obviously BD Inc.
And don't have the really the build out of the configuring. The bowl assistance previously announced oxide silicon nitride, obviously, BD and high vacuum alloy and the only and process capability.
The onshore and furnace platform, what the design from the longer up to meet the customer best in class requirements as the.
<unk> continue the chick and increasing capacity.
The cost for these devices.
<unk> with the complex fine geometry, providing consistent and stable he and control is the prior months and maintaining wafer of integrity.
To meet this demand the hour.
True ethane and the heater features proprietary control algorithm, which should provide the staybolt temporary of control. We believe there are several first tool supporting the new application in Q1 and expect to deliver additional units as we progress through the year.
We also plan to add there of high temperature oxidation and the neon and capability to all of photos of the product line and our third quarter and.
The next major development for.
This roadmap is a batch of atomic layer deposition.
All of the deposits.
The reveal as the most challenging and the promising product for the balance of manufacturing nodes.
Putting the altogether, we are making great progress growing our business with new product line.
Slide seven.
As the only thing and I'm proud of we of course are.
And the products address of Marc Marc and the more than $5 billion.
And it's committed to become a multi product company.
We are positive.
The growing opportunity from our core Canadian tools, including the SaaS Diebold toggle and all of semi critical cleaning indoors.
We are also beginning to see meaningful contribution from our newer product offering body with the ECB, which he likes the backroom ranking in Tucson, and 21 and of beyond the border.
Total buyout fund as part of them would you expect the ramp in Tucson, and plenty of segment and the us.
As we mentioned last quarter, whether it be gone and can do.
And on the R&D investment in two major new product categories to achieve our long term goal. The double the total example of a market of all products from 5 billion per day for more than $10 billion.
As the ACM.
And policy, we will provide the more detail on this new product categories. After the.
We secured custom orders for the first their COO of deliveries.
Before I provide our updated 2000 plenty of all look let's discuss the status of the star market IPO of ACM Shanghai.
We continued to make the progress our team for me the segment of verification and report for the Shanghai Stock Exchange and Commission all assets you see later much of this is the report explaining the class action.
Losses.
Was fire and the U S and last year related to the short of Federal report published October 8th suicide and in 'twenty.
We are responding to other important by the manageable and climate.
We remain confident none of rework received approving from SEC and then moving into the Src. The gives fusion process to complete the ideal.
Consistent with the sort of practice the assets.
The C has not and provides us with the timetable.
And with us to predict the precise timing of ideal.
Now moving to our Tucson plenty of one outlook on page eight.
Okay.
Our guidance reflects our optimism about our growth opportunity for 2021.
We are reaffirming our guidance of the revenue in the range of 200 to five minutes.
The $30 million.
Representing 39 nine.
And 1% annual growth and the need of points.
All of the 2000 for any one is based on several key assumptions for.
The global COVID-19, the situation continuing for the pool.
And stability and the U S China treat the policy.
Odyssey.
Third a range of of spending the scenario for the production ramps of the key customers.
For values and the trajectory of DRAM recover and.
And finally.
Range of of outcome for.
Timing of the customer.
That business of first of all of them.
Our results on the balance.
And then see the successful execution.
All of our strategies.
And our stronger work and supporting I just thought.
The region and the R&D spending and new products, we are building a global sales and marketing resource for pregnancy, if your new customer and using June.
And we are scared and production income.
The capacity to support our long term growth plan.
The issue is to become a major equipment supplier for the global semiconductor and touching.
Maintenance and on track.
To conclude I would like to thank our employees for their hard work and dedication I also want to thank all of our customers partners and shareholders for the continuous support and the covenant the ACM research.
I will now turn the call over the Mark to discuss the financial results in more detail Mark.
Thank you David Good day to everyone.
As David indicated we're up.
And 2021.
Most of my note otherwise I will refer to non-GAAP financial measures, which exclude stock based compensation and unrealized gains and trading securities.
A reconciliation of these non-GAAP measures to comparable GAAP measures is included in the earnings release.
Now the first quarter shown on slide <unk>.
Revenue was $43 7 million up 79, 6% and.
And they have noticed more detailed reporting of our revenue and yesterday's earnings release revenue for single wafer cleaning tools, which saps tebo and Tahoe and our strength.
Okay.
And two 4 million.
Up 42% from 22 point of it.
Revenue for ECP furnace, and other technologies for $5 6 million.
And the first quarter of 2020.
And the need for advanced packaging, excluding ETB services, and spares and spike 8 million versus $1 $6 million and 2020.
Total shipments for $74 million for <unk>.
$12 million and the first quarter of 2020.
The $67 million and the fourth quarter of 2020.
This includes deliveries for revenue and the quarter deliberate assistance of awaiting customer acceptance for potential revenue from the future quarters.
And as David mentioned this was another quarter of record shipments from the great accomplished.
Most of our production team during the holiday shortened.
For the year period.
Gross margin was 41, 4% versus.
Versus 42, 2%.
And then our normal expectation of 40% to 45%.
We expect gross margin to continue to your area of COVID-19.
For a variety of factors, including product mix and manufacturing utilization.
Operating expenses for $13 5 million versus $8 from them.
The increase in operating expenses reflect the higher R&D and new product sales related activities and preparations for the China market.
Market appeal.
Operating income was $4 7 million up from $1 9 billion operating margin was 10, 7% versus the 78%.
Unrealized loss on trading securities related to the change in market value of of Epsilon much the investments was $1 million and the first quarter of 2021.
Excluding this non cash item per month, our non-GAAP results.
Tax benefits of $2 8 million versus the tax expense of 304000 and the year ago period.
The benefit for us because of stock options that were exercised during the quarter.
Net income attributable to ACM research of $7 7 million versus $2 $4 million a year ago period.
Net income per diluted share was <unk> 35.
For 211, and Q1 of 2020 thanks.
Thanks items and the effects of foreign exchange fluctuations of our operating results provided a net benefit of $3 8 million of 17 per share from the first quarter of 2021.
Versus the net benefit of $6 million of <unk> per share first quarter of 2020.
Now I will review selected balance sheet items, our cash balance of $78 $8 million at the end of the first quarter up from 71 8 million at the end of 2020 and in addition to the cash balance and you also have true.
The securities and the $27 million related to the SMIC and investment.
Short term borrowings at quarter end of $23 5 million down from $26 1 million at the end of the fourth quarter of 2020 long term borrowings for $17 4 million.
Total inventory was $103 2 million at quarter end of $88 6 million and the prior quarter.
Quarter on quarter, increasing inventory and was driven primarily by growth and finished goods inventories.
It represents the first tools and delivered to customers for evaluation and our cash.
Pending acceptance and which grew to $47 1 million at the end of Q1 and started to put $4 million and the Q4.
Find balance of work and process of raw materials was essentially unchanged over the same period.
Cash flow from.
Oh I'm sorry.
For 2021, our base case for capital spending is $10 million to $15 million.
Our 2021 investments won't be part of the spot capacity increase of about the tranche of factory investments the support of R&D program.
And that's the planning of some initial spending on Linzess.
In summary, we continue to execute on our strategy and have participated in the growth of <unk> line.
The ramp in production as we continue to develop and deliver innovative products and broadening of the customers were positive and our opportunities in China and the expansion outside of China.
We remain committed to achieving our mission of becoming a major player and the semiconductor.
The mid market now, let's open the call for any questions that you may have operator. Please go ahead.
Ladies and gentlemen at this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
To withdraw your question press the pound key.
Please standby, while we compile the Q&A roster.
Your first question comes from the line of Patrick Ho.
Thank you very much and congrats on the nice quarter.
And maybe first off in terms of the increase in inventories and the increase in shipments.
Maybe mark if you can just give a little bit of detail, whether you experienced any <unk>.
Tony shortages of any supply constraints.
And given that your revenue and the levels are very healthy it doesn't seem like there were any issues, but if you could detail some of the the issues you may have had to manage through during the quarter.
Great and maybe maybe I'll, let David go ahead and start.
Yeah, Okay for the rest.
True.
And actually.
And we see that the amaze of higher right. We got of a lot of demand from the other customer either existing customers of the new customer.
Do feel pressure and our supply chain.
<unk>.
Leaving time for the longer.
So in other sense as well.
I view the.
Predict project.
And therefore, we're purpose do some loan leaving item.
And the wrong of apache's purchasing from our lender.
Trials and managing.
The data of a time, but again you know there's a bunch of he is real dynamic of journey right and with some of the thumb does.
And see some surprises come out and because of all of vendor has the load at all because there.
The too many order kind of thing so I should say.
Yes, there's the Devon.
China and you were facing right now and the.
They also may be there.
Especially in the middle and the end of this year, we see the either property either delay or does the trend will continue so anyway.
And so as good of headache, but there were tried to many of the we can also expanding our capacity high of more people and do the.
For the quality of the award and also and to the success of insulation, So it's sort of it.
And maybe the year.
Anything on the add on that.
And actually David I think you covered it well Patrick other if you've got another questions yeah.
And my follow up question and maybe for you Mark gross margins came in within the range that you guys had previously only of between 40 to 44 per share, but at the same time of a lot of moving pieces and increasing utilization.
But you also have startup losses.
Product mix all of these variables over the next several quarters, how do you look at those influences and and which ones are the biggest ones and we should be looking out.
Yeah, you bet Patrick so.
On the on the gross margin side.
The one.
We did 41, 4% and.
And our number of 40 to 45 per share range.
That's true.
It's almost always due to the product mix and.
So Q1, you had a higher mix of semi critical and back and products.
Gary of lower relative margin.
And these are the game early stage products.
And haven't necessarily hit volume.
And we Havent zone.
And the cost downs on them.
The newer products and we do expect the margins on those products to improve as they mature.
And then the balance that the other side of the mixed fleets.
And our flagship cleaning tools, and the ECP and where we get.
Good margin so.
No change to our target to the gross margin range of 40 to 45 per cent.
Did you have any day.
Yes, I think the model you cover very well and.
And you pointed out is it clear the there is a mixed in between there and.
And no margin part of high margin product and I think as the timing going on as the volume increase.
And then the semi critical cleaning tool and it was from packaging tool and the volume increase we think increase all of the manufacturing efficiency.
And that quantity and therefore increase the margin, but I've seen and also because of the cost of manufacturing.
So I think of this is still within our range of 40, and 45 per cent and the covenants and that sort of continue.
And our range and the as time goes along and we'll obviously know and we tried to increase the efficiency and also increase.
And for the quality and then beaker malls are stable and process and that's I'll go and visit and the gross margin.
Yes.
Right. Thank you very much.
Thanks, Patrick the question do you have a question from from the line of Donnie King.
Hi, good evening, and David and Mark Congrats on the good result, the.
First question is free got into.
And your shipment and revenue so it looks like we have very strong shipment trends since the second quarter, there was plenty plenty of.
But look.
And look at all the sales trend is like all of our sales trend.
What's the little bit slower since the fourth quarter.
Last year, and the GAAP between shipment and sales and it's getting bigger and bigger.
No I understand that we.
We need to shipped to customers for us and then Oh wait for customer acceptance.
So just wondering how and how hard it but how are we able to resolve these kind of huge gap going forward and is there any.
If you are seeing any.
The longer.
Acceptance period by your customers or is there any other issue. Thank you.
Okay.
The army and thank you all.
And I actually looking there and the last year or this year Q1 this quarter.
Just either.
And you were having.
The increase of new customer right normally and new customer.
And for the I call it the mature and existing product and they're not of the record revenue until the qualify their policy and the production line right off of a lot of and new customer. There is the new production line so of the relative to the the longer time to qualify you of all our mature product.
Meanwhile, also we're shipping from neutral for the against the existing customer, especially like I mentioned wherever.
Vertical for us and.
And what's the old however, and the long.
And I can enroll and.
And for the couple of operating and almost the web of from the end of couple of operating for both the mapping and yesterday, so those kind of true.
And you know, it's the new even for a new customer or for the existing customer the other.
I think a little bit longer time than normal expectations.
And again, you know is and that's the process that we'll have to go through as the manager of the semiconductor business, where the title with a bad supporting and.
And the you know and meet the customer requirement for a bathroom supporting and the fix there.
And the problem were having.
But I mean right.
And peer it and that's our goal right.
I think.
Looking at history, so far.
And I have confidence and almost every.
The first tool.
For us the customer new customer, we got off to a final qualifying so that gives the as a matter of timing of the.
We'll go through that process.
And Mark anything you want to add on that.
Yeah, No I think you've covered it well and.
I don't think we haven't seen any change and the and the timing of acceptance rates.
The broad levels.
And part of our outlook for it is tougher for day, one more debt acceptance on those and so when.
And we mentioned that as one of our guidance dependencies.
Got it and so simply say is that we are extending the the new more and more and more new equipment and so.
The most human but probably longer qualification time and stuff.
Correct.
Really entered the advantage of it depend on the product right.
And the some products even knew we kind of acceptance of that within the six months for this way right and I should say liabilities day at six months of the one year timeline and it would do see from.
Difficulty of tool.
And maybe you got the longer than one year right, so, but I'd say and major all of the tool and go to <unk>.
Got it qualify within six months of one of your timeline and that's I think at that time, there should be no change.
So all of the my my second question is free regarding to the.
For your guidance.
And based on the very strong schuman and actually.
And so you have seen a loss of a foundry or memory companies.
And have started to add capex.
And I'm just wondering.
And if there's any chance that our sales momentum in the second quarter or beyond and to be stronger or a day always expected and.
And also could.
Could you comment on theater and market outlook.
Hi, Nick sales force quite quite quite slow last year, and so just wondering what and always seen.
The DRAM sales from DRAM and kind of start to pick up the school. This year. Thank you.
Okay.
It's all of the Audi put a price.
<unk>.
Actually we see the likelihood that we see the demand because of strong strong range I mean, two two and two ways of very busy.
I'd say above the Q2 and even view of it in Q1 and even looking at the J P. And Q4 is a pretty tied up right.
So all of the mines you learn things.
Because of our new customer new product come out and we are really at the end of this between the revenue versus the shipment and utilize day for maximum of revenue, obviously that should take care of all the appeal of like.
Visiting customers. The order. However, we also balanced the new customer and the new tool. So it's really kind of are you.
No.
It's a little bit of the Nemo and you're right we need to maintain good the new customer and future revenue, let's sit and kind of whether via sacrifice some deliver for any of these.
And I'll repeat the other so I think it will make a very good.
The balance between that and then the need of revenue obviously and at the same time. We also have new pot of new customer and you can take a pool and that's what made the for your first question.
For the second one and.
Probably the CMA also notice that there's there are of.
Because from the Hynix and probably the big increase there.
And spending this year, maybe there's a pool of <unk>.
Tucson plenty of second spending for the.
And one.
I mean I.
And I think that's the good news and maybe some other.
The vendor of fields and long lead item Linda maybe they have some indication that the.
And one of the we're still real and be working with our customer and.
Maybe that kind of reporting U.
And as you'll see later very soon at the moment with zero kind of weekend for the instruction for the for the.
The dealings.
Okay. Thank you.
The question from the line of C. G research.
Hi, David Hi, Mark Congratulations on the progress here.
Can you talk maybe about the bill.
And again the caveat the lead times, you're you are quoting to your customers versus the three months ago and your ability to meet demand, whether it's surging of whether its been pretty steady steady can you control your own manufacturing.
Okay.
Yeah, I think the argument.
And right now is that correct, yes, the lead times of your according to your customers if they're extending at all.
Okay.
It depends on product range I should say all of our average.
The normal lead time used to be about for months and obviously, the non of where extended right and some part of it even go through five months and some of them go longer.
And for that as I sit there and a component of the system or the type of components.
And get along the along all the time and all the time, there so which is R. R.
Vendor supply.
And kind of a delay for the obviously will have the volume manufacture of BV and the Manhattan of floor and as I mentioned and we're expanding our manufacturer of spacing right now was the high of more people. So that's the second of the fact that we're considering right now so I'll answer the question, Yes, we do see our.
These high and for our product and get the longer average I should say between five and six months right now.
Okay.
Okay, and then you mentioned and the press release.
Our global customers and opportunity. There can you can you update us and what the remaining steps might be for additional customers. It sounds like you have visibility for shipments potentially into the qualifications there, but any color there would be helpful.
Yeah actually you know that and we are actively working with the first of all of your customer and you know sort of out of me back from the mainland and who it is and.
The other and.
We'd be the two month ago, we'd be the rig of the demo and for one firstly of customer.
And so far the finally resolved.
And they're there for the device and we're in the kind of are you.
And Peter.
Moving to the grant agreement and negotiation right now so hopefully and we can you know.
And when this customer and.
And.
You know within the time the timeline also of working with the additional.
Other for steel customer true right, that's the way I mentioned.
Hum.
Speaking of that you know we got the one.
This year, maybe try though.
And make it more and that's all I got.
Okay. So I think and one last question on the IPO and do you have a sense that you know with the report you filed and you need to have further comments responses or a second reported why do you of any sense of what the remaining steps might be.
Good question and I think the we're actually we're working lost the is pretty of full month's rate what kind of as the CDC.
And China and.
And the processing and China here is not making the sudden either they take it.
And then some of the boys have the early even I mean February and March time line and they can continue to say you know at the more material at a more of the kind of and so we're doing.
And you were the dialogue and engagement with assets you can see so by April 30, and Youre looking at the.
I think the report.
There are the report that you reported or other requirement. We're almost finished the.
And.
But again as the waiting for them to make a final acceptance and.
That's the way I'm not getting yet and.
And I should say of when the.
Except for all of the report with the acceptance of finished.
And I think we're moving into the registration process and you'll see Src right now and the.
And final phase of the acceptance of the report and then work ethic and a web pretty close to the Digitization for the CFC, that's the scatter right now.
Okay, great. Thanks, guys.
Thanks <unk>.
Thanks Lee.
The question from the line of Charlie Chan.
Oh, Hey, Hey, Dave, Hey, Hi, and congratulations for that.
The results are there.
Just the two to follow the question.
And sometimes Fuji.
The economy.
So when you are re book it and said Goodbye.
ACC and saying they need to do another 60 day team to give you the documents.
Or are the tends to be quicker.
Yeah.
Well, it's a it's hard to predict right I mean, as I said that we'd be the.
Product sales either of 95 per cent and all of our job already hopefully and 99 and 100 per cent night or something maybe either of you know I had them all but the I think.
And that's more than other.
We don't know yet and sort of put us line can be once a week.
And be more weak right. This moment I should say, that's the what we'd be right now because of finally acceptance now and I just couldn't buy of FMC.
And we believe where we.
The most of the we can't do and with somebody that whatever the required some fall and arguing or you meant the anchor our lawyer and also including the auditing firm our team did a great job and so you know at this moment.
And if that's the way we definitely you know the patient the weakness right.
Okay.
And I think that.
Bonnie also ask the question and I tried to ask I mean, the you'd see a.
You know of foundries like Vanguard UMC TSMC the old device out there, okay, that's right and maybe by 50% 70 per cent.
Similar.
And of your.
The customers, especially in China over the past the past that too much.
Yeah again, obviously, you can see that Intel and there just from the C. There make a very you know faster all of you know and the announced.
Announced their bigger kind of.
And expansion right.
Again and in China, our customers in China right now they have a multi year expand and plan right and I don't see that and not two months that you meant the changing however, the keeper.
Ah speeding our free it up and also there are.
Again this is the multiyear expansion right now so we see more of or at the men and for existing customer more than that and also the second tier customer as I mentioned, and you know five trading edge and customer and the.
Also the speed up their play and do what was the addition of the other than maybe in more than five right.
Coming out and so there's a lot of the demand had been China and the U.
And as soon as the budget mentioned, there probably of steel.
Somebody and say they got some license sales and waiting for some license of <unk>.
And the other.
The customer in China, the keeping spending and also I can see that the demand is stronger.
I'd now like I said in the back and you can tell just from the sale of.
For the announcing the big one non economic.
The board and I agree gradually and the cable you know strong and stronger and that's why I say, the and of course from China.
Got you and then and then and.
And it was so good with the countrywide and co packing in the first quarter I E.
Research and I'll pass the ratio so maybe the question to Mark so sort of come.
And.
Two to three years do you still do you think I think they all vacation of the scale to be around the 30 for saying he said the kind of right, but the assumption for the come into the three years.
Yes, Charlie on that front and I mean, obviously.
The guide a lot on the air.
But.
This year, we're investing pretty heavily and orange.
Sales and marketing what have you and so.
And she will walk out of from here.
Obviously, the likes to see some leverage.
The leverage on the top line so the longer term with the.
For our top line asking for.
And our operating expenses.
Yes, I mean tani on the other one of them obviously in excess.
Oh, okay.
Maybe the other one.
And are there either.
The next school year revenue will continue invest the R&D right as I mentioned, we do have additional planned for.
And a further demand the two.
True Glen and new product and that's the live for the ball R&D Index every year, obviously and so on the what we are number one the investment and continue to believe the further south of market and we'll continue to add the way.
We are very good there are I quoted the sales and marketing and the mainland China and some have and Korea. However, we do we do things with city of the in house marketing itself.
And the Taiwan and.
And the U S, maybe and infusion and the New York, So that the marketing yourself can give me the Muslim and do right. So the.
The next few years, I think will rebound as the between the profitability versus the growth.
Growth opportunity. So we're probably even put more effort on the growth opportunity and sales and marketing and new product development and that's our.
Still our major spending areas.
Yeah. That's it. Thank you my and my last question Thanks for that.
Can you.
Can you give us some sort of direction or.
The timing of that.
And then you talked a lot and.
Can you update that.
You can I think you know kind of needs and like out of 5 billion and I and into any.
Absolutely he to extend the attempt in the coming year.
Yes, good question actually.
As I mentioned given lots of lost earnings.
Earning call.
For the.
During the two new product development and actually right and there's the one maybe earlier and one day the dealer and later I think of the property.
And maybe by beginning of next year, and even Stuart's I'll first for the product and then hopefully and we can get a second away and come on the next year, that's the timeline.
And we already started the.
The initial.
And I quote or feasibility study and the initial R&D almost a year ago right. So it's a it will take time, but there with all of our accident and team and both of in Korea and in China.
And I think they are very efficient and also we have a very good there.
The channel and on the same customer requirement and also with our sovereign control and the.
All of the country of system all of those kind of thing is the.
And our speed for them.
And the R&D part of the market.
So we couldn't hear the effort and I've said this will be true new product well add additional $5 billion.
And addressable market for.
And because this is 5 billion sort of thing of the future of part of addressable size of what the you know beyond the 10 billion. That's how the that's our target and go.
Okay, great. Thanks, and so your of your answers. Thank you.
Thank you Charlie.
And you have a question from the line of Queen and vote.
Yeah.
Okay.
Quinn and your line is open.
Sorry, guys I was on mute congratulations on the nice results I wanted to start with the shipments you guys have seen very strong shipments over the past three quarters, increasing from $59 million and the third quarter two of 74 million here and the first quarter is there any reason why you would think that that trend and shipments would take a big step.
The one over the next couple of quarters or do you expect shipments to remain at pretty healthy levels.
Yeah clean and very good question I think of human continue over the probably increase right. That's the that's what happened here.
Uh huh.
You know I'll put it for it where pack with the appeal right. However, we're struggling and makeup.
The manufacturing capacity increase and we are also a balance of the team there the P O versus the new tool and.
And so that's the what the other thing and now obviously there is another factor.
All in all of that is the supply chain and he has a very tiny right now and especially with some long lead items and London and longer and that's what struggle right now.
Yes, I mean, we tried to withdraw that managing our supply chain and also manage all of manufacturer of capacity with very good they're treating the people with it for the quantity and so we see the other shipment.
Shimon will come and give me increase next for a few quarters.
Great and then.
And thanks for the additional disclosure on the revenue break down by by front end back end and by tool type.
What's what's pretty impressive is the growth and the advanced packaging or the back and where revenue was up by about 10 assets versus last year, and and back and now sort of somewhere between 25 and 30% of revenue I guess as you guys look forward could you give us some.
Some sense of where do you think the split will will be for 2021 between the the wet cleaning and front end tools for the advanced packaging and other of backend tools.
Yeah, and I I can't get there and what is really the driving force for the the month package of the ratio go up is on copper of advanced packaging right.
And they're.
Obviously, there have yourself price and much higher than other and cold the developer at your you know what the cleaning. So that's the real major and driving force and we see that trend and continue to increase that's the.
And I mentioned, you know couple of Beijing.
Become ramping up this year the Avenue of revenue next year, and that's why the the real driving our.
Packaging.
The revenue continue to go up and obviously you also have a phone and the end of a couple of great and convenient flow too right. So what was the question, yes, the major driving force for the at the month of agony of the real are superior.
Advanced the Cabo.
Couple of Crazy and pool and for the pillar and for the panel applications.
But David do you think that the mix stays roughly 75% say 25 per cent front and versus backend and in 2021 and setup.
Is that about the right mix for from folks you'd be thinking about.
A good question and the.
And I Couldnt give you the other for monster right and really the been the hall from any and all of the fly do right you can see that as the.
The borrower or gathering and the more attraction and our furnaces right you know that or what's the the rent for the next year ranking for the quarter. So.
So that all of you add additional revenue going down there and I'd also say a phone and the printing and keep it going too.
So I made about reinsurance of the right I don't know how much of that would be precise of the magic right maybe go.
And I the higher maybe at the very lower but I can see there and both side of other you know it can be the globe right.
Thank you David.
Yeah.
Question from the line of Krish <unk>.
Wow.
Hey, guys congratulations on the great start for the year.
Most of my questions have been answered and I just have one quick thing.
And your guidance for <unk> for calendar year 'twenty, one to me the tiers.
The kind of conservative given the spending trends and some of the leading customers that you're dealing with I understand.
Your commentary between you know having to.
Manage and new customers versus existing customers and so if we're having a conversation in December and <unk> and.
And my estimation that the expectations look a little conservative.
Would that be like greatest.
Fly changed management or what would be some of the puts and takes to that.
Yeah, I think there.
And you make the point right. It's really I should say you look into our guidance and for one year beginning on here now.
And this time, we didn't change much like an agenda of the reason for our read of that is Oh, we got a more deal coming right. We got of more of a shipment of going on and by the same time, we've got and this is something like here and you know real holding losses right now also of manufacturing capacity and current only.
A quick space you can do so besides just the yeah.
The major of the holiday really managing our manufacturing how the manager of.
Supply chain is really you know also all of the balance our revenue versus the shipments and new customer versus the other.
And customers. So that's something we'll have the real and by the way the won't be tell me what the revenue right.
It was the beginning it would give us all.
All projections of the shipment, but obviously, we're going to change the shipment of you know the by now and I give you the new update but the.
And you know because of the revenue wise, and especially and we'll have somebody and new customer and new which will come off and so so so what I'd say right and hopefully we'll give you more of the update on the.
The second quarter, earning call.
Sounds great. Thanks, guys.
Extra strength.
Thank you.
And you have a question from the line.
And of Si.
John Your line.
Hi, guys from March.
Thanks for taking my question.
So what's the.
The question is regarding Europe and Asia.
And so when I look at that.
Shanghai song.
And <unk> website.
That's true.
Chad.
Yeah.
And then.
Okay. Good.
So could you give us.
And.
Thank you.
Yeah.
Ill and whatnot.
And the C J.
Waiting for I guess, the box you're already and to me.
Got it.
And yeah I can't happen.
Okay.
Okay. So I think for you.
Your checking and money because of the way you got it. Okay. There is no update on S. E T right.
So the basically as you can see always updating and we believe the C D or accept the new material and which of the units.
Moving to our 2020.
The revenue right.
The board also for me there are additional but I think you can report right for this class action and also with some either of a symptom of shareholder.
And I'd kind of for inclusion of requirement and there's a reason and require perhaps the D. C for any any company, who you know who can go into and.
The fabrication of anyway. So.
And this moment I think of the major free thing with.
Well I should say of Westfield and magnify the per cent right and what we are doing for their final.
Acceptance of the altogether. So that's the way the updating that they're so far of status and April 30.
And the final acceptance for the day.
For Us I don't know maybe a few week, maybe you know we've been two weeks. So it depends on the other parts of the how the how the how fast the adult so off of that that we're moving to the CSR Digitization right. So again, it's really hard for worldwide to give a precise I mean and but we think there you know maybe that's the.
A few weeks is a good time, you were thinking but again nobody can guarantee of that right and that's the so far.
I'll pass the estimation.
And that's very clear, but they have made that and are making.
And a big part of that.
So I think line.
And question.
Regarding their jobs for games.
And first quarter margin.
Uh huh.
First of all pay loss share.
Yeah.
Okay.
Well for cleaning.
Of course that was 95% of loss share.
That sounds good.
And the first quarter and if that's true so I'm wondering does it mean.
I know what the cleaning equipment.
Higher gross margin products.
And how.
Should we.
Yeah.
Gross margin.
Got it.
And the definitely part of it.
Yeah, and you're looking at.
And part of it and deals last year and also you know obviously you know this year too.
We have a semi critical product and.
Good evening and don't see the.
Because of the scrubber and almost the library or the bench and the comparator of single wafer cleaning those the semi critical product.
Gross margin is lower than that of Odyssey and.
And I also said and I call the advanced packaging tool and all of them.
So the margin about the either so as the altogether and which is really probably for the.
No sign of over 40 of 45 per cent. However, as I've said as we were a volume increase and and also with all the product quality improved and the you know.
And then.
Our pricing and also a manufacturer of efficiency also a compilation of many of them and well give us the space to increase our gross margin and so so again I think it was this data and we've been kind of were talking and also as a way of more of the amongst the high margin tool kit of qualifying and.
And the customer and those of operating the higher you know and I call. The average ammonia higher so the moment.
Until the one much of a worry about that and how it doesn't match of the you know part of the mixing.
And we're that's the way it's the you know with Green who are you know.
75 per customer and the customer requirement and the same time are you spending our cash.
<unk> position and also.
And given the good of mixing of the product portfolio not the law.
And what sort of the managing right. So so I mean, that's the that's the way when picking the right now.
Yeah that sounds very exciting.
Thank you for taking my question.
Thank you and your final question comes from the line of Mark Miller.
Yeah.
Just wondering with respect to your guidance.
Potential upsides I know.
Next is pulled in some of their spending plans.
So could you give us the status do you have licenses to ship to smack.
Okay. So the.
And that's what is the Mark is the.
For the familiar gray and I heard of some some.
Some companies of nicely already and there is some company both of the Linky and there's the moment I can tell is where.
Well continue shipping their product and however, I can see that as a part of it she can do with MSC and non.
As the volume and the other other customers at the moment right.
And so what's the right maybe we'll have to get a lot of of other customers.
And give their license and they can related for the expanded capacity and that momentum factor and you know we've got the more of an appeal and it kind of seemed more tool to have the MSA.
And at this moment, where we're part of the week and whether the regulatory preparation too.
And they need our technology to the product and obviously they have the bat and Sina and also make sure the tiny and whether they are going and you know.
And largely expanding the capacity so what were the right now.
Okay. So your weighted to ship for Smith, and you'll you'll need the required do you need to get the license does that is that what you said.
And let me clear of that and.
Our of cleaning tool most of their well developed right and.
And.
And the China right, there's the non U S technology, and so we've talked to our experts.
Excellent control of the lawyer in the Washington D C as long as we control our U.
The U S components lesser of a certain percentage and we did not utilize the ship to the.
And I think that's there.
Are these the eagle.
Other gave us that the right.
And what about any upside factors.
And you can see and of your head.
Do you think of it could be significant upside coming from certain things.
There's a lot of just in general in terms of your original market.
Oh, okay.
Yeah actually the.
The man here and.
And all products.
All of our economy.
But we just didn't show of SaaS, IBO and Tahoe kind of more.
Acceptance in the mall.
And today and also would have of semi critical product, especially at some of the customer and also we have a couple of Beijing and for the wrong packaging and it wasn't for there and that is the.
Also have a for the vertical of Florida come and go.
So it's a great we have of new product and it was the wherever and new customer come out.
And so the two by the Bureau of.
It is of great. This year, that's why we made the the historical rack of the high shipment in.
In the Q1 and and also our Q1 revenue of the regular item it.
It's the other regular Hagen and again.
For the year. So so this year, we see the.
Tremendous opportunity.
As I mentioned and we need of many of them very well on all of the supply chain and <unk>.
And you put the quality of new products.
And the high capacity expansion also heavily we were managing our expectation from customer and also all of inspiration for the supporting too. So there's a lot of China and the weapons.
However, as the break with the headache is it really good the dual spending our capacity or the training our employees and our or the citizen and you know too so the Goodyear.
The real you know it's a.
And as the opportunity and we Gotta catch and Eli and also put effort into the new product development and what was the cause did not just this year because they have been the three five years on the role of ACM continue growth.
Odd when the goal.
And all of or the cost semiconductor provider. So I think that all of $10 billion future.
The market the addressable market and will bring us for the big players and the global market.
Thank you.
Thank you for a month.
Thanks Mark.
Okay, and then additional quake.
And at this time of and I can turn the call over Q.
Q, David Wang for closing remarks.
[noise], Okay. Thank you operator, and thank you all for participating on today's call and for you of support before we close the gathering is going to mention the some upcoming investor relations events Gary Please.
Thanks, David and the company as of the.
A number of upcoming conference appearances and we're going to let you know very quickly may 12, and we're gonna presented the credit Suisse, China Asia Conference and the 18th will be at the Needham Virtual technology and media conference on May 26, we'll be at the Goldman Sachs Tech net virtual conference and <unk>.
The Pacific.
We also haven't coming up the Craig Hallum Conference and.
Minneapolis, and you and second the Cowen and virtual Tech media and Telecom conference on June 3rd and the Stifel Virtual cross sector insight and June 10th So all of those conferences or attendance is by invitation only for clients of the firm. So please contact those firms your sales representatives.
If you want to register and sign up for one on ones.
That concludes the call. So everyone. You may now disconnect and have a good day.
Ladies and gentlemen, this does conclude today's conference call. Thank you for participating and you may now disconnect.