Q3 2023 Tower Semiconductor Ltd Earnings Call
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Speaker 2: Ladies and gentlemen, thank you for standing by. Welcome to the Tower Semiconductor third quarter 2023 financial results conference call. All participants are currently in a listen-only mode. Following management's prepared statements, instructions will be given for the question and answer session.
Ladies and gentlemen, thank you for standing by welcome to the tower semiconductor third quarter 2023 financial results Conference call. All participants are currently in a listen only mode. Following management's prepared statements instructions will be given for the question and answer session for operator assistance during the conference.
Speaker 2: For operator assistance during the conference, please press star zero. As a reminder, this conference is being recorded November 13th, 2023. Joining us today are Mr. Russell Ellinger, Tower CEO , and Mr. Orin Shirazi, CFO .
Please press Star Zero as a reminder, this conference is being recorded November 13th 2023, joining us today are Mr. Russell Ellwanger, Power's CEO and Mr. Oren Shirazi CFO.
Speaker 2: I would now like to turn the conference over to Ms. Noit Levy, Senior Vice President of Investor Relations and Corporate Communications. Ms. Levy, please go ahead.
I would now like to turn the conference over to MS. <unk> Levi Senior Vice President of Investor Relations and corporate Communications Ms. Levi. Please go ahead.
Speaker 3: Thank you and welcome to Tower Semiconductor Financial Results Conference call for the third quarter of 2020.
Thank you and welcome to tower semiconductor financial results conference call for the first of all adults 2020.
Speaker 3: Before we begin, I would like to remind you that some statements made during this call may be forward-looking and are subject to uncertainties and risk factors that could cause actual results to be different from those currently expected. These uncertainties and risk factors are fully disclosed in our Forms 20-F, F-4, F-3, and 6-K, filed with the Securities and Exchange Commission, as well as filings with the Israeli Securities Authority. They are also available on our website.
Before we begin I would like to remind you that some statements made during this call may be forward looking and are subject to uncertainties and risk factors that could cause actual results could be different from those currently expected because I'm sure I can see is nice cross sells off what it shows in all forms 20-F F O F. Three and 6K filed with the Securities and Exchange Commission.
And let us filings with the Securities Authority.
So all available on our website.
Speaker 3: Tower assumes no obligation to update any such forward location.
All right no obligation to update any such forward looking statements.
Speaker 3: Please note that the third quarter of 2023 financial results have been prepared in accordance with the U.S. GAAP. The financial tables and data in today's earnings release and in this earnings call also include certain adjusted financial information that may be considered non-GAAP financial measures under Regulation G and related reporting requirements as established within the Securities and Exchange Committee.
Please note that the third quarter of 2023 financial results have been prepared in accordance with U S. GAAP.
Natural Fayetteville and data in today's earnings release and in this earnings call. Also include certain adjusted financial information that may be considered non-GAAP financial measures under regulation G and related reporting requirements as established with the Securities and Exchange Commission the financial I'll say it does include a full explanation of these measures and reconsider.
Speaker 3: The financial tables include full explanation of these measures and the reconciliation of these non-GAAP measures to the GAAP financial model.
These non-GAAP measures to the GAAP financial.
Yeah.
Speaker 3: In today's call, we have supporting slide deck that complements our conference call. This presentation is accessible on our company's website and is also integrated into the webcast for your convenience.
In today's call, we'd have supporting slide deck that complements our conference call presentation is accessible on our company's website and is also integrated into the webcast for your convenience now I'd like to turn the controversy only serve as an island gear Russell. Please go ahead.
Speaker 3: Now I'd like to turn the call to our CEO , Mr. Russell Ehlinger. Russell, please go ahead. Welcome, everyone.
Welcome everyone.
Thank you for joining our call today.
Speaker 2: Being the first financials release call we are holding since November 2021, we will include in today's call a longer term financial model.
Being the first financials or at least call we're holding since November 2021.
In today's call our longer term financial model.
Speaker 2: stating the reasons for and the margins resulting from the new capacity agreements that we have announced in the past years. An important aspect of our growth strategy
Stating the reasons for the margins, resulting from the new capacity agreements that we have announced in the past years.
An important aspect of our growth strategy is manufacturing efficiency and scale.
Speaker 2: Increasing capacity in a recreative cost-efficient manner is a competitive edge. First looking at this past quarter, our revenue for the third quarter was $358 million, down year over year, reflective of challenging market conditions. At this revenue level, fabulizations work.
Increasing capacity and are accretive cost efficient manner is a competitive edge.
First looking at this past quarter.
Our revenue for the third quarter was $358 million down.
Down year over year reflective of challenging market conditions.
At this revenue level fab Utilizations, where fab.
Fab, one six inch about 55%.
Fab two eight inch about 75%.
Speaker 2: FAB 3, 8-inch, about 40 percent, due primarily to the weakness in data centers. FAB 5, 8-inch.
At three eight inch above 40% due primarily to the weakness in data centers.
That's a five eight inch at.
At about 60%.
Speaker 2: Fab 7 12-inch, about 60%.
<unk> 712 inch about 60%.
Speaker 2: Fab 9, 8 inch, about 65 pounds.
In fact, nine eight inch about 65%.
Speaker 2: As you can see, with the present utilization levels, we have the ability to quickly ramp up manufacturing to capitalize on a market rebound. A positive point demonstrates...
As you can see with the present utilization levels, we have the ability to quickly ramp up manufacturing to capitalize on a market rebound.
Positive point, demonstrating our operational efficiency.
At these lower utilization levels, excluding the accretive impact of onetime items, we had substantial operating profit.
Speaker 2: Excluding the accretive impact of one-time items, we had substantial operating costs.
Speaker 2: Currently, we are seeing a return in several areas to rational customer inventory.
Currently we are seeing a return in several areas to rational customer inventory levels.
Speaker 2: and are beginning to experience some upsides relative to customer forecasts as end market opportunities present themselves. We have yet to see customers increase their forecasts, although certainly in the RF segment, inventory levels have reached or fallen below the previous steady state.
I know, we're beginning to experience some upside relative to customer forecasts.
Market opportunities present themselves.
We have yet to see customers increased their forecast almost certainly in the RF segment inventory levels have reached a falling below the previous steady state.
We remain proactive with our customers providing operational flexibility that's even small changes in end markets.
One has the ability to act quickly.
Speaker 2: could have a disproportionately positive impact on near-term.
Could have a disproportionately positive impact on near term results.
Speaker 2: For the fourth quarter of 2023, we expect revenue of $350 million, plus...
For the fourth quarter of 2023, we expect revenue of $350 million.
Or minus 5%.
We are active and committed to creating sustainable value for all of our stakeholders.
As we stated at our last Investor call on September 5th Towers actively embedding excellence in everything we do which we define as effective efficient, but at the highest quality.
Speaker 2: we define as effective, efficient, and at the highest quality.
Tower is extremely efficient.
Speaker 2: measured by the 10-point drop from gross margins to operating margins, reflecting total OPEX of about 10% of revenue.
Measured by the 10 point drop from gross margins operating margins, reflecting total opex of about 10% of revenue.
Effective can be measured by gross margins, which means the value added offerings our manufacturing scale.
Our offerings are value add a bit later, our CFO Mr. Oren Shirazi will discuss the long term financial model.
Speaker 2: showing the result of increasing our manufacturing scale, reflecting TOWER's present capacity footprint and the additional capacity capabilities resulting from our investments in the Agrafe facility and in the New Mexico facility with ST and with Intel.
Showing the result of increasing our manufacturing scale, reflecting tower's present capacity footprint and the additional capacity capabilities, resulting from our investments in the graphic facility.
The new Mexico facility with S T and with Intel's respectively.
Speaker 2: These technologies that create value, almost by definition, are those which serve exciting high-growth.
These technologies that create value almost by definition are those which served exciting high growth markets.
Speaker 2: Within the analog world that we serve, we are focused on three megatrends. Seamless connectivity served by our RF roadmaps, green everything served by our power platform
Within the analog world that we serve we are focused on three mega trends.
Connectivity served by our RF Roadmaps Green everything served by our power platform and smart systems served by our sensors and display offerings.
Speaker 2: We are committed to continue to advance the platform serving these trends, which in turn empowers us to meet the demands of our customers.
We are committed to continue to advance the platform serving these trends, which in turn empower us to meet the demands of our customers remain at the forefront of industry trends.
Speaker 2: Our RF mobile business is primarily composed of handset RF components, such as switches, antenna tuners, and low noise amplifiers. Built.
Our RF mobile business is primarily composed of handset RF components, such as switches and antenna tuners and low noise amplifiers built on our RF Soi technology.
Speaker 2: As you know, the handset market has been weak in 2023.
As you know the handset market has been weak in 2023.
Speaker 2: Although there are signs of potential recovery, as evidenced by potential quarterly revenue gains through all of 2023, from a bottom in Q1 2020.
Although there are signs of potential recovery as evidenced by sequential quarterly revenue going through all of 2023.
From a bottom in Q1 'twenty.
Speaker 2: Longer term, we anticipate a market recovery, along with increased adoption of 5G in developing nations, to contribute to further growth. To accelerate internal growth that outpaces the market,
Longer term, we anticipate a market recovering along with increased adoption of five G in developing nations to contribute to further growth.
To accelerate internal growth that outpaces the market.
We have invested in that RF Soi technology with the recent release of design kits for Q T 10, our 10th generation process offering the industry best our RMC off figure of Merit.
Speaker 2: the recent release of design kits for QT10, our 10th generation process.
Speaker 2: offering the industry's best R-on-C-off figure of merit, striving improved reception and battery life in handsets. This technology is prototyping today in 200 millimeter, and we are releasing design kits in a 300 millimeter version.
<unk> improved reception and battery life and handsets.
This technology is prototyping today in 200 millimeter releasing design kits and a 300 millimeter version this quarter.
We have significant prototyping and design activity and anticipate this new technology to contribute meaningfully to revenue with design wins already with two of the top five front end module providers and active engagements with multiple others.
Speaker 2: and anticipate this new technology to contribute meaningfully to Red Hat.
Speaker 2: design ones already with two of the top five front-end module providers, and active engagement.
Our RF infrastructure business is primarily composed of silicon germanium and silicon photonics for optical transceivers in data centers artificial intelligence clusters and telecom networks.
Speaker 2: Over the past three months, we have met with most all of our major customers throughout
Over the past three months, we have met with most all of our major customers throughout the world.
Speaker 2: One thing that was striking is that the near-term move to 800G data center appeared to be much more aggressive than is depicted in analyst reports.
One thing that was striking is that the near term move to 800 G data center appear to be much more aggressive and as depicted in analyst reports, resulting in a stronger cycle ramp for the industry.
Speaker 2: as silicon photonics plays an increased role at 800 G and beyond. For your reference, please see slide six. Tied to this.
Silicon Photonics plays an increased role at 800 gig and beyond for your reference please see slide six.
Tied to this we are seeing increased orders for silicon photonics.
Speaker 2: customers forecasting a substantial ramp continuing through 2024 and beyond.
With customers forecasting a substantial ramp continuing through 2024 and beyond.
Speaker 2: Currently, we have over 50 active SYCO customers serving data center telecom, automotive LIDAR, and optical computing.
Currently we have over 50 active cycle customers survey data center telecom automotive Lidar and optical computing.
In the third quarter, we announced a multi generation partnership with N. A light the worldwide leader in data center optical solutions.
Speaker 2: multi-generation partnership with Enelight, the worldwide leader in data center optical solutions. This partnership highlights the strength of our offerings with
This partnership highlights the strength of our offerings with the end customers representing the core of all Hyperscale.
Speaker 2: enabling cutting edge technology to support the growing demands of data centers, including AI.
Enabling cutting edge technology to support the growing demands of data centers, including AI, a next generation telecom networks.
Speaker 2: For our Silicon Germanium business, we are seeing significant first-year design wins for linear pluggable optics, LPO components, which promise to replace costly DSPs in a very short period of time.
For our Silicon germanium business, we are seeing significant first year design wins for linear plug a hole optics L. P O components, which promise to replace costly D. S. P.
<unk> optical modules.
Your referenced please see slide seven.
Speaker 2: LPOs integrate some additional functionality into traditional silicon germanium drivers and transimpeded amplifiers to eliminate the need for
P O integrate some additional functionality in traditional into traditional silicon germanium drivers and trends in Peter's amplifiers to eliminate the need for costly and power hungry.
Speaker 2: digital signal processors in many 400G and 800G outputs.
Deep digital digital signal processors, and many 400 G.
<unk> applications.
Speaker 2: This new innovative technology offers improved cost, reduced power consumption, and reduced latency for data center, including for AI applications. We have also seen...
This new innovative technology offers improved cost reduce power consumption and reduce latency for data center, including for AI applications.
We have also seen design wins and first orders for <unk> using an active copper cables built with our silicon germanium technology, serving top data center, hyperscale and hyperscale or providers as an alternative to more costly applicable optics, particularly for short reach applications.
Speaker 2: serving top data center hyperscalers and hyperscaler.
Speaker 2: It is an alternative to more costly pluggable objects, particularly for short reach applications.
Speaker 2: further expanding our silicon germanium total available market.
Further expanding our silicon germanium total available market.
Finally, I'd also of significant importance, we see increased activity towards the newer markets of satellite Internet service using silicon germanium phased array offering the best performance in cost tradeoffs and terrestrial receivers employed by the system.
Speaker 2: increased activity towards the newer market of satellite Internet service using silicon germanium phased array offering the best performance and cost trade-off in terrestrial
For your reference please see slide eight.
Speaker 2: This application space promises to meaningfully increase the sewing and germanium total available market over the next several years.
This application space promises to meaningfully increase in selling and germanium total available market over the next several years as each receiver requires on average 250 silicon germanium phased array I see.
Speaker 2: receiver requires on average 250 silicon germanium phased array ICs, with a major win having been awarded to us this past quarter.
With a major wind having been awarded to US this past quarter.
Yeah.
Turning to our power IC business.
In the past few months, we had two very major ways.
Speaker 2: Firstly, from a premier power management integrated device maker for the next generation 65 nanometer BCD. And secondly, from a leading analog phablet company with a design wind with their first tier end customers. These activities are forecast and aligned with at least one end customer.
Firstly from a premier power management integrated device maker for the next generation 65 nanometer BCD and secondly from a leading analog Fabless company with a design win with their first year and customers.
These activities are forecasting and aligned with at least one and customers to grow to several tens of thousands of wafers per month.
The major catalyst for entering the new Mexico Fab manufacturing agreement.
Speaker 2: In the imaging market, we continue our focus on creating highly differentiated technologies for industrial, medical, and automotive industries.
And the imaging market, we continue our focus on creating highly differentiated technologies for industrial medical and automotive use.
Speaker 2: Scoring a major win in Q3, where we partnered to provide sensor technology to an iconic mirrorless camera.
Barring a major win in Q3, when we partnered to provide sensor technology to an iconic mirror less camera company.
Speaker 2: For your reference, please see slides 10 and 11, which define
For your reference please see slides 10, and 11, which define this market.
In the industrial segment, we gained an entire next generation line with leading imaging provider.
The display market is undergoing a revolution with the rapid growth of the VR and AR market.
Speaker 2: Technology-wise in order to meet these markets resolution and brightness
Technology wise in order to meet these markets resolution of brightness requirements a shift from the traditional LCD based displays to organic Leds on silicon is required for your reference please see slide 12.
Speaker 2: shift from the traditional LCD-based displays to organic LED on silicon is required.
Speaker 2: We have developed a 5-volt platform and are currently in the advanced stages of creating a 10-volt platform for even higher brightness and are engaged with leading display suppliers in Korea and China. This is the next big thing in the display area and we are technology savvy.
Have developed a fivefold platform and are currently in advanced stages of creating a tenfold platform for even higher brightness.
And our engage with leading display suppliers in Korea and China. This is the next big thing in the display area.
Technologically well positioned to take a substantial market share of this exciting new market.
Providing a revenue breakdown for the third quarter of 2023.
Speaker 2: and displays represented 18 percent, RF mobile business represented 26 percent, RF infrastructure represented 10 percent, power IC business 21 percent.
And displays represented 18% RF mobile business represented 26% RF infrastructure represented 10%.
Power IC business, 21%.
Discrete business, 17% mixed signal Cmos about 6% with about 2% miscellaneous for this period Automd.
Speaker 2: signaled CMOS about 6% with about 2% miscellaneous.
Speaker 2: Automotive, which had served through several of the above-mentioned technologies, was at about 70%.
Automotive, which is served through several of the above mentioned technologies.
17%.
Speaker 2: I'm pleased to announce two strategic organizational changes.
I'm pleased to announce two strategic organizational changes, we just implemented.
Speaker 2: These changes have been carefully designed to enable our next series of steps to achieve the next peak in our population.
These changes have been carefully designed to enable our next series of steps to achieve the next peak and our progress.
Speaker 2: Dr. Marco Roccanelli was promoted to serve as Tower's
Dr. Marco Racanelli, what's promoter to serve as towers president as such he is responsible for all business units and sales activities in the organization.
Speaker 2: As such, he is responsible for all business units and sales activities.
Speaker 2: Dr. Avi Stroum was promoted to be Towers Chief Technology Officer.
Dr. Avi Strum was promoted to be towers, Chief Technology officer responsible among others four of four to six year accretive technology roadmap with associated activities.
Speaker 2: responsible, among others, for a four- to six-year accretive technology roadmap with associated activities and
And all M&A activity.
Speaker 2: I believe that these organizational changes will enhance TOWER's value proposition and continuous profitable growth.
I believe that these organization changes will enhance power's value proposition and continuous profitable growth.
Please join me in wishing Mark and I'll be much success Godspeed.
Oren please.
Speaker 4: Thank you, Russell. We released today our quarterly results reporting revenues of $358 million, gross profit of $87 million, and net profit of $342 million, which net profit included $290 million.
Thank you Ross of.
With us today, our quarterly results reporting revenue.
$58 million.
Gross profit of 87 million below and that's appropriate dose $342 million.
Which net brokerage included $290 million.
Speaker 4: Net profit impact associated with the merger contract termination fee receives from impact.
Let's brokerage impact associated with the merger of contract termination fee received from India.
Speaker 4: I will start my review by analyzing the P&L highlights, followed by our balance sheets and a presentation of our long-term financial model.
I will start my review by analyzing the P&L highlights followed by all balance sheets and the presentation of our long term financial model.
Speaker 4: Revenue for the quarter ended in September 2023 was $358 million dollars compared to $357 million dollars in the prior quarter and gross profit for the quarter ended in September 2023 was $87 million dollars similar to the gross profit in the prior quarter.
Revenue for the quarter ended in September 2023, 50.
$58 million compared to 357 million during the quarter and Gulf book, We'd go to the quarter ended September 2023 was 87 million similar to the gross profit in the quarter.
Speaker 4: Operating profit and net profit for the quarter including included the net impact of merger contract termination
What do they think brokerage and that's appropriate for the quarter, including included the net impact of smelter contract termination fee.
Speaker 4: with a shift from Intel in the amount of $314 million net of associated costs. This amount is included...
We received from <unk> in the amount of $314 million net of associated costs.
This amount is included in the operating profit.
Speaker 4: The net profit impact after tax is $290 million based on a 7.5% preferred income tax rate that applies to us in Israel.
That's perfect you can bucket I felt docs is $290 million based on a seven 5% preferred income tax rates that apply to us and England.
Speaker 4: Including determination fees, operating profit for the quarter was $362 million, as compared to $51 million in the prior quarter. And net profit was $342 million, or $3.10 basic earnings per share, compared to net profit of $51 million, or $0.46 per share of basic earnings in the prior quarter.
Including the termination fees operating profit for the quarter was $362 million.
That's compared to $51 million in the quarter and that's profit was $342 million or $3 10 basic earnings still shale.
Build to net profit of $51 million.
46, 46 cents per share.
Basic earnings in the previous quarter.
Speaker 4: Our balance sheet, as of the end of September , totalled $2.8 billion, primarily comprised of $1.1 billion of fixed assets, mostly machinery and equipment, and $1.7 billion of current assets, 72% of which were cash deposits and marketable securities.
All of the balance sheet.
The end of September totaled $2 $8 billion, primarily comprised of $1 1 billion.
Fixed office, mostly machinery and equipment and $1 $7 billion of current us, it's 72% of which were the cash deposits and marketable securities current assets ratio reflected reflecting their multi bench play which caused us it's allowed to have a larger than short term liabilities.
Speaker 4: Current assets ratio, reflecting the multiple by which current assets are larger than short-term liabilities,
Speaker 4: very strong by a multiple of 6.7x as compared to 4.8x in the pre-quota.
He was very strong by a multiple of six seven X compared to 48 in the prior quarter.
Speaker 4: Shareholders' equity increased by 17% quarter over quarter and by 24% as compared to its amount in the end of FY22 and reached a total of almost $2.4 billion.
Shareholders' equity increased by 17% quarter over quarter and by 24%.
Compelled tweets amount, Indiana.
FY 'twenty, two and reached a total of almost $2 $4 billion.
Speaker 4: Our strong financial position enables us to plan the following investments in growth opportunities that are aligned with our vision. 1. Approximately $500 million of total aggregate cash was allocated to make investments in equipment and other CAPEX items required for the 12-inch factory in Agrate, Italy.
Our strong financial position enables us to blend the following investments in growth opportunities that are aligned with all of his vision one approximately $500 million of total cash was allocated to make investments in equipment and other capex items like wild for the 12 inch fab.
Because I think it'll be.
Speaker 4: required for a tailored portion of the ST-micron partner.
Like wild for a portion of the SD micro partnership.
Speaker 4: Of which, 100 million dollars were already invested in FY22, and an additional 150 million dollars were invested today.
Which one hundreds of millions of dollars already invested in FY 'twenty, two and an additional $150 million, we're interested to do till date.
Speaker 4: Two, as announced two months ago, we will invest $300 million to buy equipment and other CAPEX items that we will own in Intel CERN in New Mexico, enabling Tower to ramp up production and manufacturing for its customers.
Two other announced two months ago, we will invest $300 million to buy equipment and other capex items that we will own in Intel serving new Mexico, enabling stowell limp up production and manufacturing fully it's comfortable.
Speaker 4: Three, we expect our maintenance capex baseline level to remain as previously announced between 180 and $200 million per annum. And four, we will continue to invest to refine our product mix in the technologies and markets Russell previously described to enhance our flexibility, to cross-manufacture at our multiple factories. All should result in a richer mix from a margins point of view and all in accordance with our growth strategy.
We expect our maintenance capex baseline level to remain a previously announced between one eight and $200 million and four we will continue to invest to refine our product mix in the technologies and markets for US are previously described.
Our flexibility to gross money a fixture at multiple factories.
This was the result, you know each other my.
From a margin point of view and the all in accordance with our growth strategy.
Speaker 4: Russell described previously the market, technologies, and customer demand which drives our need to increase our capacity.
They're often described previously the market technologies and.
Customer demand, which drives the need to increase capacity.
Speaker 4: I will now outline our target financial model, which is based on the assumption that the presently expressed and forecasted customer's demand for the products, technologies and markets Russell described would result in 85% utilization of our capacity, including the ramp-up of Agrate and New Mexico.
I will now outline.
Our target financial model, which is based on the assumption that the presently expressed and forecasted customer demand for the products technologies and markets are also describe.
Well the result in 85% utilization of our capacity, including the ramp up of our garage and new Mexico.
Speaker 4: I refer to the target financial model, a summary of which is presented in slide 14, in this course slide 8.
I referred to was a target financial model affirmative, which he as presented in slide 14 in this slide deck.
Speaker 4: Based on this assumption, we believe we will have the opportunity to achieve annual revenue of about $2.65 billion. Achieving this level of revenue should, according to this model, result in an annual gross profit of $740 million, an annual operating profit of $560 million, and an annual net profit of $500 million.
Based on these assumptions, we believe we will have the opportunity to achieve revenue of about two points or $2 65 billion.
Hello.
Achieving this level of revenue should according to the small didn't result in and I don't want a gross profit of 740 million below an.
And on one operating proceeds of $560 million and then I don't want a net proceeds of $500 million.
Speaker 4: To provide context, reaching revenue growth at a level of 1.9 times of our last published quarter annualized revenue run rate would result in gross profit, operating profit and net profit to be 2.1x, 2.9x and 2.4x respectively as compared to the last published quarter annualized run rate, excluding the accretive one-time impact as outlined in the model.
To provide context, reaching revenue growth at a level of one nine times.
Our last published quarter I don't know what is the ROI of any run rate would result in gross profit operating profit and net profit to be two points, one X to Nymex in two full weeks respectively.
Compared to the last published quarter annualized run rate, excluding the accretive one time impacts of outlining the motive.
Speaker 4: Our model demonstrates several key indicators of our efficiency and effectiveness as follows. One, we are showing an increase of 86% in revenue while keeping OPEX costs below 10% of revenue.
I wouldn't model demonstrates several key indicators will follow the efficiency and effectiveness of photos, one real showing an increase of 86% and revenue, while keeping opex growth below 10% of revenue.
Speaker 4: Our incremental growth operating at net margins as a percentage of the added revenue of $1.2 billion stated in the model should be 32%, 30% and 24% respectively, which are higher than our current baseline margin.
Our incremental gross operating and net margins as a percentage of the added revenue of $1 $2 billion of stated in the model should be 32%, 30% and 24%, respectively, which are higher than all of the current baseline margins.
Speaker 4: 3, by increasing our revenue by 86% from the last reported quarter run rate, we should increase our operating profit by 187% and our net profit by 140%.
By increasing our revenue by 86% from the lovely bolted quota Sunday, we should increase our operating profit by one other than 97% and all of the net profit by 140%.
In summary on achieving this plan targets.
Speaker 4: Achieving this planned target would result in annual revenue of about $2.65 billion, annual gross profit of $740 million, $560 million in operating profit per annum, and $500 million in net profit per annum. And now I'd like to turn the call back to our CEO , Mr. Russell Elwanger. Thank you, Oren.
Now turning to this Brent targets, we'll do it.
On a revenue of about $2 65 billion gross profit of 740 million below $560 million in operating profit on them and 500 million in net profit on them.
Now I'd like to turn the call back to our CEO, Mr. Russell Ellwanger.
Thank you Lauren.
Truly very exciting.
Speaker 2: To close, I'll speak to the situation in Israel. October 7th was an act of pure evil, a direct and purposed attack on civilians by
To close I'll speak to the situation in Israel.
October 7th was an act of pure evil a.
Direct and purpose attack on civilians buy them all.
Using the tools of murder rape and mutilation.
Speaker 2: same tools used by Putin in Ukraine that have been employed by other depraved despots throughout
The same tools used by putting in Ukraine that had been employed by other depraved desktops throughout history.
Speaker 2: In this precious instance, under Hamas leaders who lived the life of billionaires, harbored and shielded safely in foreign nations, caring nothing for any God-given authority.
And this precedent instance, under Hamas leaders, who lived a license billionaires, Harvard and shielded safely and foreign nation.
Nothing for any God given human development.
No value for life at all.
Speaker 2: certainly not for Israelis, but also not for their own people, who they used to be.
Certainly not for Israelis, but also not for their own people, who they use as Paul.
Speaker 2: Since this time, I've been extremely moved by the outpouring of warm thoughts and prayers for Tower and our employees in Israel by many customers, shareholders, suppliers, and as well as from employees in other geographic regions.
Since the time I've been extremely moved by the outpouring of warm thoughts and prayers for tower and all employees in Israel.
By many customers shareholders suppliers.
And as well as from employees in other geographic regions.
A special thank you to a customer who accompany this one mission.
Speaker 2: with a sizable donation towards the extra support Towers is providing for our employees.
So I spoke with a sizeable donation towards the extra support towers, providing for our employees.
Speaker 2: as either the employee themselves or the employee's spouse is serving their country to defend the principles they believe in, similar to the support towers offer to our employees in Ukraine. Thank you.
With either the employee themselves or the employee spouse.
Serving their country to defend the principles they believe it.
Similar to the support calories offered to our employees in Ukraine.
Thank you all.
My heartfelt thanks to our employees worldwide.
And specific at this time for our employees in Israel.
Speaker 2: of those sacrificing comfort and possibly life to serve their country.
Sacrificing comfort and possibly life to serve their country.
Speaker 2: To those in the factories, Jewish, Muslim, Druze, and Christian, taking additional burdens on themselves, having enabled that we have not missed a single customer commit, and doing all in their power to ensure that we will not miss any in the future. We have a long way to go.
And to those in the factories Jewish Muslim Drews and Christian.
Taking additional burdens on themselves having enabled that we have not missed a single customer connect.
And doing all in their power to ensure that we will not miss any in the future.
We have robust business continuity procedures in place in the company, including multi site qualification of major process loans.
Speaker 2: very strong external expert advice and audited IT safeguard system. I have always appreciated and valued Towers corporate culture. In times such as these,
And got very strong external expert advice unaudited.
Safeguard system.
I have always appreciated and valued towers corporate culture.
In times such as these.
One of the few upsides and positive emotion.
You've seen the unswerving dedication of our employees.
And the loyal support of our customers shareholders and suppliers. Thank you.
Operator.
Speaker 2: Thank you. Ladies and gentlemen, at this time, we will begin the question and answer session. If you have a question, please press star one. If you wish to cancel your request, please press star two. If you are using speaker equipment, kindly lift the handset before pressing the number. Your questions will be polled in the order they are received. Please stand by while we poll for your questions.
Thank you ladies and gentlemen at this time, we will begin the question and answer session. If you have a question. Please press star one if you wish to cancel your request. Please press star two.
We're using speak real quick when kind of lift the handset before pressing the numbers questions will be pulled in the order. They RSV. Please standby, while we poll for your questions.
Speaker 5: The first question is from Kody Akri of Benchmark. Please go ahead.
The first question is from Cody Acree of benchmark. Please go ahead.
Speaker 6: Yeah, thank you guys for taking my questions and best of luck with everything going on in Israel.
Yeah. Thank you guys for taking my question.
And best of luck with everything going on in Israel.
Speaker 6: Okay, Russell, if we could start with the utilization trends when you flattened down in all of your locales. I think that's right, yeah. And so is that indicative of the magnitude of the revenue contribution from those in markets directly? And then if you could also provide some discussion of your revenue concentration per
Thank you Russell.
With the utilization trends.
Plot.
All of your locales.
Yeah.
And so.
Is that indicative of the magnitude of it.
Revenue.
Contribution from the mall.
Okay.
Directly and then you could also provide some.
Sure.
The revenue concentration per.
Speaker 2: facility, knowing that you've got specific facilities that are going to be more broadly utilized among your revenue. Tony, you're really mumbling right now. I can't make out what you're saying at the moment. Could you restate your last few sentences?
Similar to <unk>.
No you've got.
Absolutely.
More broadly utilized.
Among your revenue.
Saudi Arabia really mumbling right now I can't make out what you're saying at the moment could you restate your last few sentences.
Speaker 6: Yeah. I guess what I'm trying to focus on is your revenue capacity per facility, knowing that you've got some facilities that are more dedicated to one of your revenue segments versus others. And then just what do you contribute the declining utilization rates across the board that have flattened down these last two quarters?
Yeah.
What I'm trying to.
To focus on.
More rather than capacity point.
Port facility.
Got some facilities that are more dedicated to one of your rivals revenue segments versus others.
And then just.
What do you do contribute.
Declining utilization rates across the board.
Walk you down the past two quarters.
Speaker 2: Yeah, I don't mean this tongue-in-cheek, but certainly I attribute it to less market demand. I mean, that's...
Yeah, Hi, I don't mean, this tongue in cheek, but certainly I attributed to less market demand I mean, that's the 100%.
Speaker 2: focus of utilization. I think you had asked if it was indicative of revenue. Obviously, the revenue is very much in line with what utilization looks like.
Because of utilization I think you would ask this is indicative of revenue obviously the revenue was very much in line with what utilization levels are so the market is weak the markets that we serve is in very strong at the moment.
Speaker 2: So the market is weak, the markets that we serve isn't very strong at the moment, although we are seeing rebounding and we've been able to, as I stated, see increases in the, specifically,
Although we are seeing rebounding and we have been able to as I stated.
We see increases in the.
Specifically demand for.
Switches.
Speaker 2: amplifiers tuners within that go into
And amplifiers tuners within that go into front.
Front end modules.
Speaker 2: But in general, obviously utilization is very indicative of market and our revenue is tied to the utilization.
But in general obviously utilization is very indicative of market and our revenue is tied to the utilization.
And I gave a a revenue forecast that's predominantly flat for Q4, which shows that by customer forecast as I clearly stated we have not yet seen big upsides.
Speaker 2: gave a revenue forecast that's predominantly flat for Q4, which shows that by customer forecast, as I clearly stated, we have not yet seen big upsides. We have, however...
We have however seen in some end markets.
Speaker 2: increases in orders that we'll be able to realize within Q1 and beyond, specifically in Q2.
Increases in orders that we'll be able to realize within Q1 and beyond.
Specifically I mentioned silicon photonics.
Speaker 2: a concentration, and I think I, well I know I said it in the script, FAP3 Newport Beach is...
The concentration and I think well I know what I said in the script Fab three Newport Beach is.
Predominantly.
Speaker 2: doing the silicon germanium activities, the most advanced platform for silicon germanium are in Newport Beach and data center is weak at the moment.
I'm doing the silicon germanium activities. The most advanced platform for Silicon Germanium already Newport Beach and data center is weak at the moment. So that I think if that is the color that you're asking for.
Speaker 2: in Japan, 200 millimeter factory in McDowell-Hemmick.
In Japan, 200 millimeter factory it make don't panic.
Speaker 2: both we have a good amount of BCD and in the MIGDAL-MH 100mm factory we also do a lot of RSA.
And both we have a good amount of P. C. D. And then the Mcdonald I make 200 millimeter factory you also do a lot of RF Soi.
In San Antonio, we do a lot of discrete.
Discrete.
And a good amount of.
Power activities serving automotive.
Speaker 6: Thank you for that, very helpful. Oren, can you just walk through your timing of your outlays for the FT micro and the Intel properties? I know you've given more details on the Italian spending patterns, but just wondering what your plans are for the Intel fab.
Thank you Ross.
One example.
Can you just walk through your.
Timing is always a board.
Two micron and Intel properties, I know, you've given will be.
On the Italian.
Spending patterns, but just wondering what your plans are.
Telephones.
Yeah, Yeah, Italy, right like you said I outlined at our that we already paid the 250 out of the 500 and the reminder, you'll may expect it in becoming one of our field you can maybe if you want in the model to a multi vitamin early.
Speaker 4: Yeah, Italy, like you said, I outlined it that we already paid 250 out of the 500 and the reminder, you may expect it in the coming one and a half year. You can maybe if you want in the model to amortize it linearly.
Speaker 4: On Intel, we still don't have specific details of that, because we just announced it two months ago. So, we are now forming the CAPEX equipment list. Following that, we will exactly calculate the exact timing of the spend of the investment of the $300 million. But obviously, it should be done in the coming two, two and a half years.
On the Intel we still.
Don't have a specific details of that because we just announced it two months ago. So.
We all know it.
Informing the Capex equipment list following that we will exactly.
Calculated the exact timing of the spend of the of the investment of the $300 million, but obviously it should be done in the coming two two and a field.
Speaker 6: And Oren, I guess I asked this on the last conference call, but I'm going to hit it from a different angle maybe, your supply relationship with FPMicro and Intel, they're just based on a set labor price to you, assuming different technologies provide a different labor cost. But
And I.
I guess I asked this on the last conference call.
If you look from a different angle maybe.
Your supply relationship with Dell.
Based on.
Nuclear plants to use.
Technologies widely different they took off.
But I.
Speaker 6: I assume that there is some discounted contribution or discounted price that's factored in with your contribution of the hardware and technology to this batch. I guess, how is that process going to work and?
I assume that there was some.
<unk> contribution.
Just kind of a pricing factor.
Whoa comprehension, it hardware and technology.
So I guess, how is that process going to work.
Speaker 6: Do you expect that to be very accretive to those margins, to those workers, and those revenues?
Do you expect that to be.
Very accretive to gross margin.
Okay.
Yes.
Speaker 7: Yeah, Cody, thank you. So I think this is exactly why, because of this type of questions we presented, I presented the long term financial model, it really shows you in the right column of the financial model that the incremental margin
What do you think youll. So I think this is exactly why our cause of these type of questions. We presented I presented the long term financial model. It really shows you.
In the right column of the financial model that the incremental margins.
Speaker 7: are baked in everything all in is a 32 percent
Bakes in everything all in either a 32% gross margin and 30% of right Shannon My mouth, even though of course this is better than the current.
Speaker 7: gross margin, 30% operational margin. Now, of course, this is better than the current gross and operating margins that we have. And this is lower than the 50% incremental margin that we always discussed about organic growth. So this gives you the answer that while this is a very nice incremental contribution, it is not an organic, because it's not from our existing.
Gross and operating margins because we have in D C.
The lower than the 50% incremental margin that we discussed about all done in golf.
If you go down and said that while this is a very nice increase.
Rental contribution it is not an organic because it's not from our existing space now we cannot disclose the exact cost what do you feel that we pay to Intel O. Two S departmental she'd be clubbed under of course confidentiality.
Speaker 7: Now, we cannot disclose the exact cost per wafer that we pay to Intel or to ST partnership because this is under, of course, confidentiality, but you'll see that in the financial model. These are the results. This is the incremental is mostly because of Intel and, not Intel, because of the capacity corridor and Agratefeb, as well as other growth in the company. All right.
But you'll see that in the financial models. These are the results using the incremental is mostly because of Intel and nothing.
Because of the capacity globally, though and I got to him as well.
There's other growth in the company.
Alright. Thanks. Thank you very much very helpful. Thank you Cody.
Speaker 5: The next question is from Richard Shannon of Bench of Jeff.
The next question is from Richard Shannon.
Well.
Ben Jessica.
Excuse me.
The next question is from.
Speaker 5: Richard Shannon of Craig Hallam. Please go ahead.
Richard Shannon of Craig Hallum. Please go ahead.
Speaker 2: Well, great. Thanks, Russell and Oren, for taking my questions. I did want to preface them with two quick things here. Thanks for the investor presentation on that. Some of the detail is very helpful to see it that way. And also, I do want to congratulate the promotions here in particular. I haven't gotten a micro marker over the years. I think it's a very appropriate promotion. So, congratulations on that. Thank you. With that said here,
Well, great. Thanks, Russell and Oren for taking my questions I did want to preface and two quick things here. Thanks for the the investor presentation like that some of this detail. It's very helpful to see it that way and also do you want to congratulate our the promotions here in particular haven't gotten micro.
Marco over the years I think it's a very inappropriate promotions. So congratulations on that thank you Oh is that Oh, that's out here.
Two questions that come to mind, I guess I'll ask it bottoms up to your questions on the data center market here, where you're seeing a bit of weakness and I think if I heard your comments correctly, you're not necessarily seeing a upside here improving directly even though we're hearing from a lot of participants in that market about some great deal of strength here.
Maybe help us understand is there some inventories still left to be burned here and then do you have any visibility into when that ramps and do you expect that to be more of a ratable ramp or something more.
I don't know if you want to use the word spiky or not but certainly we've seen some of those dynamics in the market wondering if we should expect that overtime.
Thank you for the question.
I did state that we are seeing.
Inventory levels, having burned off quite substantially and they have and in particular in the RF space and particularly with data center.
Speaker 2: to where our customers and their customer is down now to levels at or before the market, if you would say, went weak.
Where our customers and.
Their customer.
It is down now to levels at or before.
The market isn't it.
If you would say went weak.
Every time that we've experienced.
Speaker 2: data center market coming back, it is a very steep function when it comes back, it's a step back.
The data center market coming back it is a very steep function when it comes back it's a step function.
Speaker 2: Will that be the case now? I don't know. That's hard for me to predict.
Will that be the case now I don't know that's hard for me to predict.
Speaker 2: we do believe that we'll come back and we'll be back within the next quarters and we're well prepared to take care of that growth.
We do believe it will come back and we'll be back within the next quarters.
And we're well prepared to take care of that growth now.
Speaker 2: Now part of the reason that we're very optimistic about data center is really our
Now part of the reason that we're very optimistic.
About data center.
Is.
Really our partnerships with the leaders.
Speaker 2: into not just what we have served in the past, but into those technologies that are serving the future.
Into not just what we have served in the past but into those technologies that are serving the future.
I had mentioned.
Speaker 2: very strong ramp being forecasted by customers within silicon photonics and additionally that analysts
Strong ramp being forecasted by customers within Silicon Photonics.
And additionally that analyst reports.
That are fairly recent seem to be very far off on the adoption of 800 G and 800 G. Driving many activities that were not in Hunter G. So we see that as very very positive.
I stated that I cannot overstate the importance of the partnership that we have within our light on driving.
Very state of the art solutions.
With our silicon photonics platforms.
Speaker 2: So we're pretty bullish on that. If you look at the other activities that we spoke about with, for example, the
So we're.
Bullish on that if you look at the other activities that we spoke about with <unk>.
For example, the.
Linear applicable optics.
Speaker 8: We have many things coming into play right now that are technological upsides that have the benefit of.
We have many things coming into play right now that are technological.
Upsides that have the benefit of the innovation of cost reduction.
And those.
Speaker 2: get implemented relatively quickly if one's doing a new build out of a 400G or an 800G.
Get implemented relatively quickly if one's doing a new build out of a 400 G or an 800 cheap and you have the ability to reduce cost in so doing.
Speaker 2: and you have the ability to reduce cost in so doing, that is implemented very fast. So that's part of the reason that we would see and believe.
That is implemented very fast so that's part of the reason that we would see and believe.
Speaker 2: that the rebound will be extremely strong because of new technologies where we have really very
That's the rebound will be extremely strong because of new technologies, where we have.
Very strong partnership with leaders.
Speaker 2: So exactly how steep that ramp will be, I cannot say. Will the ramp come? It appears from inventory levels presently, it will come, and it should come fairly shortly.
So exactly how steep that ramp will be I cannot say.
<unk> com that appears from inventory levels presently it will come.
And it should come fairly shortly.
<unk> I don't know.
Speaker 2: But I did state we have not yet seen the increase in purchase orders, but we're very prepared.
But I did state we have not yet seen the increase in purchase orders, but we're very prepared other than in silicon photonics, but we're very prepared to capitalize on it when it comes.
Speaker 2: but we're very prepared to capitalize on it when it comes. Hopefully that answers your question, Richard. I really don't.
Hopefully that answers your question Richard I really don't have more colors that did not.
Speaker 2: That was very helpful. We appreciate your position of visibility. So thanks for portraying that one.
Uh huh.
That was very helpful and we appreciate your position of visibility still thinks for portraying that one.
Speaker 9: I guess that's a question maybe for Russell or Orrin here, but I think some of the big questions we get and I think you've had posed to you many times in the past here.
I guess, just a question maybe for Russell or in here, but I think some of the big questions, we get and execute you've had posed to you. Many times in the past year I think are especially important given we're going through an inventory cycle in parts of your markets as well as the typical calendar.
Speaker 9: I think are especially important given we're going through an inventory cycle in parts of your markets as well as the typical calendar seasonality that you experience. So I think the question we're getting is how do we think about
Calendar seasonality that you experience. So I didn't get any big question. We're getting is how do we think about your first quarter seasonality you typically don't give guidance more than a quarter out but are you seeing anything that would suggest that's going to be meaningfully different than normal, which I think has gone up a little bit down sequentially the first quarter.
Speaker 9: your first quarter seasonality. We typically don't give guidance more than a quarter out, but are you seeing anything that would suggest it's gonna be meaningfully different than normal, which I think is kind of a little bit down sequentially in the first quarter?
Speaker 2: You are correct, we don't give guidance longer term than one quarter.
You're correct, we don't give guidance longer term in one quarter.
Aye.
Speaker 2: honestly think that Q1 seasonality is an impact that everyone faces each year.
Honestly I think that Q1 seasonality is an impact that everyone faces each year.
Speaker 2: been a few years where we've been able to capitalize against it by having entered into a new strong market with
Theres been a few years, where we've been able to capitalize against it by having entered into a new strong market with offerings, but I think the industry itself expects that Q1 seasonality I don't think that this year will be different as far as what the industry will be experiencing.
Speaker 2: But I think the industry itself expects a Q1 seasonality. I don't think.
Speaker 2: Okay, fair enough. That's helpful. And one more question. I'm sorry, because you asked about data center.
Okay Fair enough that's helpful and one more question I'm, sorry, because you asked about data center.
Speaker 2: Data center is data center and that is where it's at, but I had mentioned specifically one other area. It's not data center specific.
Data centers data center and that is where it's at but I had mentioned specifically one other area.
Not data center, specifically, but it is the.
Speaker 2: phased array that is used for satellite. That is a very, very big market that has come about, that we're very active in and got a
Phased array that is used for satellite.
That is a very very big markets that we're that has come about that we're very active in and got a.
Speaker 8: strong design win with a first-year provider. So we see that in addition to a data center rebound.
Our strong design win with a first year provider. So we see that in addition to a data center rebound as a strong.
Speaker 8: tailwind for what we're doing with silicon germanium. It's not data center itself, but it really is.
Tailwind for what we're doing with silicon germanium.
And it's not data center itself, but it really is.
Tied into the same application space.
Yeah.
Speaker 9: I'm going to ask one more question, and I will jump back into the queue here. But kind of big picture, you had some really interesting comments across a number of markets, obviously, so like the Atomics, Power, Display, Sensors, and I probably missed some here. When you think about over, say, I don't know, pick a time frame, like, say, two years, are any of these going to be much more powerful to your revenue contributions than any others, or they'll kind of be in the same area? How would you characterize them or even rank them?
Okay. So like the additional detail Russell I'm going to ask one more question I will jump back into the queue here, but.
Kind of Big picture, you had some really interesting comments across a number of markets, obviously silicon photonics power display sensors and I probably missed some here when you think about let's say I don't know pick a timeframe like say two years.
It's going to be much more powerful tier revenue contributions than any others are they all kind of with M. B a.
In the same area, how would you characterize them or even raise them.
What we're doing with advanced <unk>.
Speaker 8: 300 millimeter, 65.
300 millimeter 65.
Speaker 2: nanometer BCD and a very advanced and aggressive road map on our BCD platform, and as I stated, the major catalyst for what we're doing.
Nanometer BCD and a very advanced and aggressive roadmap on our BCD platform.
And as I stated a major catalyst for what we're doing.
And.
New Mexico factory.
I think that that was probably will be the biggest incremental growth in the company.
Yeah.
Okay perfect. Thank you.
Yeah.
Yeah.
Speaker 5: The next question is from Natalie Winkler of Jeffries, please go ahead.
The next question is from Natalie Winkler of Jefferies. Please go ahead.
Speaker 10: Hi, thank you for taking my question. I have a couple. One is on the silicon photonics. Russell, could you please speak about the market share dynamics you guys are seeing in silicon photonics? Obviously, you can hear your market share in silicon germanium has been the leading. I'm just curious if you're seeing similar or any different competitive dynamics in silicon photonics.
Hi, Thank you for taking my question and I have a couple one is on the silicon Photonics and Rocco could you. Please speak about the market share dynamics, you guys are seeing and focus on it because obviously you can you know your market share in infant germanium has been the leading I'm just curious if youre seeing.
Or were any different.
Competitive dynamics in Silicon Photonics.
Speaker 2: It's a very good question and one that I don't have the greatest answer for you because the silicon photonics market is not as mature as far as its establishment.
It's a very good question and one that I don't have the greatest answer for you because the silicon photonics market is not as mature.
As far as its establishment hazards of silicon germanium.
Speaker 2: We're certainly in with the leaders there. I think what we do with SIFO.
We're certainly getting with the leaders there I think what we do with FIFO.
Speaker 2: very strong. I couldn't give you an exact market share number at this moment. I expect that we will have
It.
It's very strong I Couldnt give you an exact market share number at this moment.
I expect that we will have.
A substantial if not the major market share of stifle.
Speaker 2: As the ramps occur as the 800 G and beyond really extraordinary.
As the ramps occur as the 800 G and beyond really start moving quickly.
Speaker 2: but I could not tell you right now what our exact market share is. I really couldn't. I know that we're very.
I cannot tell you right now what are the exact market share is.
I really couldn't I know that we're very well positioned but it's a little bit difficult to know I think set them.
At the moment.
The major market share belongs to an IBM.
Speaker 10: Thank you. That's very helpful. And then if I may, I'm just kind of, if we're thinking about the long-term model, how should we think about the mix?
Understood. Thank you that's very helpful. And then if I mean, I'm just kind of as we're thinking about the long term model how.
How should we think about the mix within that long term model and I guess another way to put it is if we're thinking about the capacity additions that you guys are doing you know crossing and Intel.
Speaker 10: within that long-term model. And I guess another way to put it is, if we're thinking about the capacity additions that you guys are doing in Alcarate and Intel, are there any kind of silicon-germanium additional capacity that's coming online, or is that largely kind of focused on the non-silicon-germanium, non-silicon-photonics applications such as the CMOS and analog?
Are there any kind of silicon germanium additional capacity, that's coming online or is that likely to kind of focus on the non silicon germanium non silicon photonics applications.
Applications such as that.
In analog.
That's a very good question the.
Speaker 8: The bulk of the reasons for driving the capacity increases in Agrate is the RSSOI and in the
Bulk of the reasons for driving the capacity increases in a draft day.
Is the RF soi.
And in the.
511 extra new Mexico.
It's for the P C D as I mentioned before.
Speaker 2: That's not to say that we're not doing activities to expand silicon photonics both at 200 millimeter and at 300 millimeter. We are.
That's not to say that we're not doing activities to expand.
Silicon Photonics.
With the 200 millimeter and 300 millimeter we are.
But the.
The biggest growth drivers right now.
And impetus for the Ah graph day as well as the new Mexico. It was RF Soi and power management.
Speaker 2: as well as the New Mexico, it was RFSOI and power management.
65 D C D and extendable roadmap for now.
Speaker 10: This is really helpful. And if I may, just a quick follow-up on this. On the 300 mm silicon photonics, is that something you guys are already shipping, or is that kind of part of the future roadmap?
This is very helpful and if I may just a quick follow up on that on the 300 millimeter Silicon Photonics is that something you guys are already shipping or is that kind of part of the future Road map.
We have shipped prototypes.
Speaker 2: So yes, we have shipped, and yes, it is part of the future.
So yes, we have shipped and yes. It is part of the future roadmap.
Speaker 8: Thank you. So it's not something that doesn't exist now. We do have.
So it's not something that doesn't exist now we do have.
Prototypes I've gone out.
Okay.
Thank you.
Speaker 5: This concludes the question and answer session. Mr. Elwanger, would you like to make your concluding statement?
This concludes the question and answer session.
<unk> would you like to make your concluding statement.
Yes, Thank you firstly again.
Really.
Speaker 2: Much appreciation to everyone that has given well-wishing during this period of war.
Much appreciation to everyone that has given Walt wishing during this period of war.
Secondly.
As far as the company.
Speaker 2: I don't believe we've ever been in a more exciting position than we are now.
I don't believe we've ever been in a more exciting position than we are now.
So much advancement in technology platforms.
Speaker 2: So much advancement in technology platforms, so much advancement in customer partnerships.
So much advancements and customer partnerships.
We sit extremely confident.
That's.
Speaker 2: In areas where there has been market weakness, the market will return.
In areas, where there has been market weakness the market will return.
Speaker 2: we will return with higher market shares than we had in the past.
And we will return with higher market shares than we had in the past.
Speaker 2: and that's how you outgrow the market. So we thank everybody.
And that's how you outgrow the market. So we thank everybody.
Speaker 2: And my biggest appreciation as stated to our employees that still come to the factory.
One of my biggest depreciation as stated.
Employees that still come to the factory.
Speaker 2: everything they can to take up for the burdens of those that can't presently come to the factory.
And put everything they can to take up for the burdens of boats that can present, they come to the factory here in Israel.
So thank you very very much.
Speaker 5: Thank you. This concludes Tower Semiconductor Conference Call. Thank you for your participation. You may go ahead and disconnect.
Thank you. This concludes tower semiconductor conference call. Thank you for your participation you May go ahead and disconnect.
Speaker 1: Thanks for watching!
Okay.
Yeah.
[music].
Okay.
Okay.