Q4 2023 Tower Semiconductor Ltd Earnings Call
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[noise], ladies and gentlemen, thank you for standing by and welcome to the tower semiconductor fourth quarter and full year 2023 financial results Conference call. All participants are currently in.
The only mode. Following management's prepared statements instructions will be given for the question and answer session for operator assistance. During the conference. Please press Star Zero as a reminder, this conference is being recorded February 14th 2020 for joining US today are Mr. Russell Ellwanger towers.
C O and Mr. Oren Shirazi, CFO 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.
Thank you and welcome to Tower financial results conference call for the fourth quarter and full year of 2023.
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 ice class vessels that could cause actual results could be different from those currently expected.
Risk factors are fully disclosed in our form 20-F, and 6K filed with the Securities and Exchange Commission filings.
Or any securities authority. They are also available on our website STAAR assumes no obligation to update such forward looking statements.
Please note that the fourth quarter and full year of 2023 financial results have been good.
With U S GAAP.
Financial paper, and that's adding to the earnings release and in this earnings call. Also include certain adjusted financial information that may be considered non-GAAP financial measure.
G and related reporting requirements as established with the Securities and Exchange Commission and the financial tables include a full explanation of these measures and the reconciliation of these non-GAAP measure to the GAAP financial measures.
Please note we have a supporting slide deck this country much today's conference call.
Presentation is accessible on our company's website and is also integrated into today's webcast for your convenience now I'd like to turn the call to our C O N E.
Please go ahead.
Thank you all right.
Welcome everybody and thank you for joining our call today.
During today's call, we will discuss our financial results for the fourth quarter and the full year of 2023.
And share our strategic direction and expected growth outlooks for 2024.
To begin <unk>.
None.
Larry first of this year, there was an earthquake in Japan.
Surrounding area to our facilities at Hope Creek.
We are grateful that no employee.
Any physical harm through this event.
Due to the state of the art building practices, we did not suffer facilities structural damage.
Did suffer toll damage and scrap of some percentage of work in progress at both factories.
As well as succession of operations are.
Our dedicated.
And most capable employees have recovered both factories to full operation and start levels currently to the level set the annual plan.
Okay.
2023 was marked by an industry wide slow down resulting in an agile revenue of.
$142 billion.
As we transition into 2024.
There are clear indicators of market recovery.
We are realizing redo demand across several of our key market segments.
Give more color on this as we continue the call.
Revenue for the fourth quarter was $352 million.
At this revenue level fab Utilizations were.
Fab one six inch was about 60% fab.
Fab two eight inch.
It was about 75% sub threes remained at about 40%.
Shaft five eight inch it's about 40% fast 712 inch was about 70%.
Fab nine eight inch was also about 70%.
As a validation of our value add products and next generation customer aligned roadmaps.
Only maintained our blended average selling price per layer.
For an increase of about 4% in 2023 over 2022.
This was not due to price increases, but rather due to value add products, resulting in a richer mix.
And there's a reason for maintaining good margins in a period of industry pulled back.
Anticipating shifting market dynamics and customer demand.
We are actively optimizing our operations through a consolidation of our six inch activities into our eight inch operations in Migdal <unk> Israel.
As part of this optimization process, we will.
Phase out certain lower margin products in our six inch offerings.
Aligning to our long term strategic goals and financial model.
Porting certain activities to the fab two eight inch for example, the high value technology sort of a next generation advanced computer tomography E. C. T scan machine until our 200 millimeter factories and.
Ensuring continuity and even greater efficiency for this technology.
Which will require several hundred 200 millimeter wafers for Cte machine.
A breakdown of our 2023 revenue for end market is as follows shown in slide three in our.
The supporting slide deck.
Central time displays represented 20% RF mobile business, 22%.
Our infrastructure business, 10% collar.
Power IC business, 24%.
Discrete <unk>.
15% mixed.
Mixed signal Cmos, 7% and Theres about 2% of miscellaneous for this period.
Revenue breakdown by end market as follows please.
As referenced slide four.
Infrastructure revenue, which is predominantly RF optical with a certain amount of it faster streets at 11%.
Wireless was.
Approximately 22% Automd.
Automotive <unk>.
17%, which we serve with power Ics.
<unk> with Imagers and with RF radar.
Consumer and which we considered compute power management for general accessories, and home appliances and home use security cameras was approximately 13%.
Industrial about 7%.
Image sensors for high end photography, and medical applications is about 7%.
Aerospace and defense about 4%.
And there was about 2% of mixed signal Cmos, where we do not have exact end market knowledge.
Additionally, about 14% of power device revenue for which we do not have granularity on the exact end market application, which serve multiple of the above mentioned segments, such as automotive industrial wireless and consumer.
And lastly, an additional 3% divided among the end markets that we've spoken.
But of which we cannot ground.
Yes.
Specific on RF mobile.
We are experiencing a rebound in the mobile market.
Running presently at high utilization for both 200 millimeter and 300 millimeter RF soi capacities with additional capacity coming online throughout 2024 and 2025.
Our capacity planning is and will continue to pay off having.
Having met our initial targets at the a grotty, Italy facility.
Having qualified and shipped our first products with a planned ramp throughout this year.
Supported by an already executed double digit number of production tape out.
To meet the increasing demands shown in our customers' forecasts.
Wisely partnering with S T.
And hence leveraging the S T buildout and reduce the impact on margins of the new manufacturing activity.
But as is and any new capacity ramp from scratch. There's an initial headwind on margins there should be fully absorbed and become accretive margins within the first half of 2025.
Planned completion of the present phased capacity to ramp in the of grafting facility.
Looking forward, we are prototyping, new 200 millimeter and 300 millimeter technologies. Please.
Please see slide five.
With best in industry efficiency as measured by our M C off and output power as measured by breakdown voltage winning new customers and design slots.
Whilst beginning conversations with customers about 60 requirements.
Prior to the adoption of new wireless standards, such as six G. We see additional AI and mobile applications.
Applications, having the potential to drive a stronger handset refresh market over the next several years to further benefit our RF business.
RF infrastructure.
We are strongly positioned supplying AI infrastructure growth in part by our previously announced Silicon Photonics partnership with end of life. The global number one optical module provider at Marvell a.
Tier one optical connectivity provider as well as with a total of over 50 additional customers.
Using our silicon photonics foundry platforms.
In addition to our current Silicon Photonics production supplying 400, G and 800 G H.
Data center and data comm infrastructure, we're investing with our lead customers and new technologies, enabling more efficient one six T systems through innovation in both material and architectures, including options for co package optics.
We continue to expand silicon photonics application space.
By working with leaders in automotive and commercial lidar to enable silicon photonics based future frequency modulate it continuous wave.
That can create solid state cost effective lidar solutions with better resolution and capability and possible with other technologies. Please.
Please see slide six.
Leveraging our incumbent position, we continue to work with our previously announced silicon germanium customers, including May Com Broadcom and some tech and many others to develop next generation optical components for applicable transceivers.
<unk> cables and for L. P o's linear programmable optics to not only support faster data transmission rates for single wavelength, but also to reduce latency and power consumption for data centers supporting generative AI and machine learning applications.
Finally, we just recently announced our partnership with Renaissance.
Global conglomerate and market leader in supporting the rapidly growing satellite broadband market.
Today, our silicon germanium products can go into beam, former terrestrial and tenant terminals, where each user terminal requires more than 250 silicon germanium transceivers.
For reference please see slide seven and eight.
Longer term the industry is exploring ways to incorporate satellite reception into handsets, which could create an even larger market opportunity, including a change of cadence and next generation mobile platform refresh adoption.
With multiple fab qualifications for Silicon germanium, we are well positioned to support the capacity needed for these expanding markets.
Looking at our power business.
While 200 millimeter power is undergoing some level of inventory correction driven in part by automotive.
We continue to see very strong demand for 300 millimeter power management BCD platform.
Where our gas power performance and increased digital processing creates the ideal match for the smaller sizes needed for power audio battery management Ics with a broad feature catalog pick and choose modular platform. Please see slide nine.
In addition.
The advanced power performance makes it an excellent technology solution to deliver high power to computing processors, and AI accelerators within data centers.
Platform fixed many power mixed signal applications and is therefore being chosen by tier one companies for wide range of applications, which are now running at high volume and our Wuxi factory in Japan.
We have recently delivered successful first silicon from our most advanced and feature rich 65 nanometer BCD platform to a tier one customer and are working together, bringing initial products to market on this most of the jobs platform.
Regarding progress in Albuquerque, we have initial full flow material completed while making meaningful progress in qualifying new technology to enable further ramp of both existing customers as well as new high volume power and mixed signal customers.
We will begin customer prototyping in the second half of 2024 towards full qualification and production in 2025 and obviously beyond.
Moving to sensors and displays.
Our machine vision market is expected to get back to high demand levels in 2024.
This rebound.
Is mainly driven by the Chinese machine vision camera market, where our customers and their customers are gaining significant share in factory automation and embedded robotic camera systems.
For this market we are completing the development of a small pixel global shutter roadmap scalable to various resolutions from mainstream a five megapixel to 12 megapixel sensors to very high resolution sensors of up to 325 megapixel enabled by our proprietary stitching technology.
Printing sensors larger than the lithography frame size. Please see slide 10.
In the medical market, we have developed a new 12 inch 65 nanometer link smoke.
As a comparative answer.
Two non Cmos non silicon NGO indium gallium zinc oxide thin film transistor technology.
These reference slide 11.
This enables customers to retain a high performance of Cmos imagers, namely low dose extra sensitivity at high frame rate at cost levels now competitive IGZO.
As mentioned as a key technology the move from six inch to eight inch we are producing new photon counting sensors for next generation C. T scanner, a new market for us with the silicon Sam of about $300 million in this market, we partner with an absolute leader to provide a unique technology.
Which allows scanning at lower doses with much higher resolution due to energy separation.
In addition, we are expanding our high end photography portfolio.
Capitalizing on our leadership position and learnings and the cinematography and broadcasting market.
In one instance, she end customer is an iconic industry leader.
Revenue guidance for the first quarter of 'twenty 'twenty, four is $325 million plus minus 5% in line with industry seasonality and in spite of the impact of the earthquake in Japan.
Looking throughout 2024, we target notable quarter over quarter sequential growth.
We left 2023 with multiple power powerful doors, having been opened catalyzed through the unrealized merger deal.
Power is in the best position in its history based upon financial strength techno offerings operational performance tied with growing operational capacity and backed by strategic customer partnerships, the strength of which cannot be overstated.
We enter 2024 with a strong focus on strategic value add growth addressing both immediate and longer term objectives.
What is the strategic value add value add drove based upon.
Market expansion with borrowing capacity and innovation.
Both based upon strategic partnerships.
Yes.
For market expansion, we continue intensifying our efforts in several markets, where we see substantial demand and opportunities are of infrastructure with very strong focus on silicon photonics and a complete power offering are two areas poised for robust growth that we are well positioned to serve.
In order to meet the evolving needs of customers and to outpace the competition innovation remains at the core of our value proposition in this call. We've discussed several areas are best in industry figures of merit.
Strategic partnership.
We believe in the supernal power of collaboration.
We are expanding our partnerships with existing customers.
Leaders in their respective markets as well as new customers with ideas and excitement pausing them to become leaders as well.
With that I'm pleased to turn the call to our CFO, Mr. Oren Shirazi Orange suits.
Hello, everyone wordless today also earlier.
I'm sorry.
So a few thoughts where interest rate, we reported revenue of $352 million gross proceeds of $84 million and that's appropriate to $54 million.
For the full year.
Reported revenues of $1 42 billion below gross profit of $354 million and this brokerage or $518 million, which included $292 million net brokerage embarked of the military contract termination fee received from Kimpton.
I will start my review by analyzing the P&L highlights followed by our balance sheet and Capex plans.
Oh for Q4 was $352 million as compared to 358 million until early in the quarter.
And gross profit for Q4 was $84 million as compared to $87 million in quota.
Operating profit for Q4 was $45 million below.
And that's profit was 54 million go at all.
49 since they see.
And 48 cents.
Basic and diluted earnings special.
Operating the net proceeds for the third quarter included Dennis impactful military conflicts termination fee, we received from inkjet in the amount of $314 million.
Net of associated cost included in operating profit.
And.
And I'm out of $290 million of metal stocks included in net proceeds.
Just on a seven 5% preferred income tax rate is applicable to us and he's with us.
Including the termination fee operating profit for the first quarter was 362 million and that's appropriate to a $3 and 42 million or.
$3.10 basic.
And $3.07 diluted earnings picture.
For the full year revenue was $1 $42 billion compared to 168 billion in 2022, and gross profit was $354 million compared to $466 million in.
'twenty two.
Operating profit for the full year was $547 million and included $314 million net from.
From the Intel merger contract termination fees.
Compared to operating profit of $312 million.
In 2002.
And that's appropriate for the full year was 519 million rollout.
<unk>.
Dollar and 70 cents basic and $4.66 diluted earnings they'll shale.
And included $290 million of net due to the payment of our medicines contract termination fee compared to a net proceeds of 265 million or $2 42 basic and $2 79.
Diluted earnings per share in 2022.
Moving to the balance sheet and future Capex and catch plants.
Our balance sheet.
So at the end of December 2023 totaled $2 9 million $2 $9 billion, primarily comprised of $1 2 billion of fixed assets, mostly machinery and equipment and <unk>.
One $7 billion of Collins office.
Assets ratio, reflecting the multi pillared by which current assets are larger than short term liabilities is very strong for a multiple of six two eggs as compared to $3 Nymex.
The end of 'twenty two.
Shareholders' equity increased by 29%.
Comparable lease amount at the end of 'twenty, two and reached a total of $2 4 billion.
<unk> financial position enabled us to blend the following investments in strategic opportunities that are aligned to our vision.
<unk>.
Approximately $500 million total aggregate cash was allocated to make investments in equipment and other capex items required for the 12 inch Victorian Aglossia, Italy.
Following the previously announced SD Micro partnership agreement signed in 2021, we.
We already invested $100 million in 'twenty, two and additional $200 million in 2003.
And the remaining $200 million will be paid during 'twenty four and 'twenty five.
As previously announced we will invest up to $300 million to buy equipment and the other capex items that's what.
We will earn in Intel fab in new Mexico, enabling power to ramp up this fab capacity and capabilities for all those customers.
In addition, we expect maintenance capex baseline level to remain as previously announced its about 200 million rolled out there on them.
And lastly, we expect to invest additional cash to acquire more capability capex tours and other assets to expand our future technology offering including increasing the outside U S.
Saiful capacity and technological offering to enhance our flexibility to support our customers from all the different sites.
<unk> our product mix to result in a richer mix from a margin perspective.
All the above is aligned to our business strategy as well as our financial model.
As presented by the company you know people call in November.
Well each financial model outlines our revenue target of $2 66 billion dollar bill on them that could be achieved by loading our existing fixed at least 85% utilization.
And the children, resulting in $500 million of annual net profit based on the specific especially if our the assumptions about will outline.
Now I'd like to turn the call back to our CEO, Mr. Russell Ellwanger.
Oh.
Maybe we would open up to questions and from there. We can go ahead and I'll give the closing.
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.
Handset before pressing the numbers two questions will be pulled in the order. They are a seat. Please standby while we poll for your questions.
The third.
Question is from Tony a creed of benchmark. Please go ahead, Hey, Cody.
Hey, good afternoon or good morning, this sector, David Williams on for Cody This morning, Oh, Okay.
Well, thanks for all the great color.
But wanted to dig in a bit on the impact on the revenue side and maybe even on the margins from the the transition or the shutting down of that six and to move into Adi's. It seems like there should be some nice margin tailwind there, but also just kind of what that revenue impact could look like over the next couple of quarters that U S port that over.
Okay.
Yeah, Orange, yeah, it will not impact the margins at all this a favorite one because anyway.
The oldest paper we had a beat its full deals are growing 1984.
It was very nice highly utilized.
But in recent year or two.
It's about the breakeven points. So we did not really contribute to the margin. So they will not be any deficiency to the margin. So it would be pretty much breakeven. The revenues, we didn't disclose publicly but it's even might be they already to the total amount and it's already baked into our financial model that we presented in previous plan.
Okay.
Okay, great Yeah. It seems like that might have been margin dilutive and you might get a tailwind from that as well and in addition to the economics of moving that some of that success to the eight inch is that fair to say.
It is but over the next few quarters that actually.
We've been well aligned with with customers and getting prepared for this and if anything revenues will be higher through some pull ins of end of life activities.
For the next two or three quarters, if anything it's going to be beneficial not negative but on a small level.
Okay Alright, great.
Great. Thanks, Thanks, so much for that and then maybe just on the rebound that you're talking about what is maybe can you point, you're just getting your bet at cognizant.
The near term order rates better forecasting customers or are you getting better longer term visibility.
The customer demand.
That's a combination of both.
Had stated.
That we're targeting.
Notable.
Quarter over quarter growth throughout the year.
If we look at our forecast on most all of the core businesses that we have theirs.
Good strong double digit growth in the year, but really driven off of the second half not very much off of the first half with the exception right now the RF Soi is very strong.
And as well we have certain mixed signal and power also going into mobile platforms, that's very high at the moment.
So that's two areas.
Really increase in forecast had.
I had mentioned that I think.
Fortuitous, but based upon good planning.
When we started the activity.
In Italy, the dropped a facility.
We had.
My plan going to be shipping our first quad wafers in the fourth quarter of 2023.
That is right now an area, where we really do need capacity and as the capacity.
Is coming on line quarter over quarter, its fully spoken for us throughout this year and by forecast for the 2025 as well.
When it hits the full capacity of this ramp.
Stays at the trend in the second quarter of 2025.
So in the area of the RF Soi and some other mobile applications, we have seen a very big pick up in orders.
In the area of Silicon.
Silicon germanium, which and silicon photonics.
<unk> very strong.
Forecasts for which we've not yet received the P OS but really.
In Q2 Q3 Q4.
And that's very real if I look at CFO year over year growth in silicon photonics by forecast, there's multiple hundreds of percent.
And then our 300 millimeter power is also very strong growth year over year as well as the 300 millimeter mixed signal, which is serving some of these mobile applications that I had said.
And if I look again at our core C. I S activities had mentioned the industrial sensors.
And that's.
You know doubling from present run rates in Q3 Q4, now I'll say these are customer forecasts are not yet P. O's.
Our customers are pretty good about forecasting and we are fairly good about what we put into the system.
Across many of our segments, we see very strong growth coming in this year, but back in the second half and that's what gets us very exciting and so that.
Either with new technologies that are now getting new market shares for us and for our customers or a rebound in the market itself. Both have the same accretive benefit on revenue and ultimately margins.
One area that we do have weakness now and we don't see an increase coming quickly is that of our 200 millimeter power management predominantly being done in our factory and tsunami Japan.
And I think you know anyone that looked at the Ti.
Release noticed that.
Sure.
T is a pretty good bellwether of across the board power management.
That market is weak right now.
And a big portion of what was being served in that market for US was automotive in particular battery management and that has pulled back. So that's the one area that I don't see yet by customer forecast a rebound.
But most everything else that we're doing I think looks very good at least in the second half and some already I think starting in the first half.
Hopefully that answers your question I tried to make it very complete.
No very very great color. Thanks, Thanks for that Russell and then maybe just one last one for or and I'm, just kind of given that the trough that we're seeing in revenue next quarter. How should we think about that gross margin and just given the mix in that revenue base. There at all the moving pieces and I appreciate the help here and thinking.
I believe you should assume that the baseline off the Q4 two hour.
Which resulted in a 24% gross brokerage.
The baseline and from.
For Q1 and now it seems the revenue guidance is indicating that about 25 27 million lower.
Revenue and so then you should apply the 50% incremental margin, whether we'd go up or down.
Thanks again.
Thank you good question.
Yeah.
The next question is from Richard Shannon of Craig Hallum. Please go ahead, Hey, Richard.
Russell Hi, how are you hi, it wants alright, thanks for taking my questions.
And second I heard from one of your two about.
There's some sort of impact here from the SC microbes outside fab ramping up here I'm wondering if you know what that effect might be because it doesn't seem like you're necessarily seeing it here in the first quarter. How do we think about that and then as the a lower margin products and fab one roll off does that give us any thought process for a higher.
Our feeling of gross margins in your model I think I heard you say no on but I just want to make sure.
Yeah, I think my previous answer or a doctor.
50% incremental on the revenue will increase or decrease.
In.
Considering all the dots meaning.
Let's say currently the gross profit was whatever it was $84 million and if one assumes 25 Canadian revenue reduction so it should be up to 50% of that yeah.
Gross profit.
Instead of 80, 450% of 24 72 may deal.
Yes, what Russell mentioned is true about the fact that we will start since we stopped like Arthur said fronts glitch there go out perfectly.
It will ER until it will reach the breakeven point withdraw some indicators.
You also know may influence a little bit on the margins.
We didn't specify them out it could be.
Some lower margins, but it will be offset by other activities and richer mix. So I think it's already in the number specified before.
Okay fair enough thanks for that clarification.
Russell Ah kind of going on your press release and your commentary on the call about a notable growth. After this first quarter here and you were clear in saying more in the second chance here and I'm trying to put numbers together and think about the total year I think that's a fair question to ask here is do you think youre going to grow your total revenues are in.
In 'twenty four 'twenty three it seems like you'd be right in that range, but just wanted to get a sense of of how do we interpret notable.
Uh huh.
I would expect that we grow our revenue 24 over twenty-three yes.
Okay.
That's great to hear.
What's your maybe a couple of questions you know actually I'd be very disappointed if we don't [laughter] okay excellent.
That's great to hear a quick question on the data center area here it sounds like you're seeing some pick up here.
I wanted to get a sense of kind of exposure and some of the growth drivers here you talked about higher end Datacom and 800 gig I'm wondering if there's any way that you know where you can quantify how much of your business is 800 gig and then you've talked about today and in the past about when you plug in the optics L. P. O is that do you think that's going to be sizable part of the market down the road.
What I think is unnecessarily.
Critical yeah, I I believe that Theres, a major advantages in it that should.
It should be implemented.
How big it will get I don't know I think it could and it does have benefits that certainly would be beneficial for us and the offerings that we give but I'm not a market analyst I think that's really more of a question for you than me, but.
But it's from the tactical benefits, yes, I think that there's strong benefit there.
As far as what you said about data center, though.
I did want to state what I have not yet seen other than in silicon photonics, we have not yet seen a big uptick in P. L. A as we've seen an uptick in forecast.
And there's a sometimes a difference between the two but I'm confident in the forecast and that will be picking up in the second third and fourth quarter as far as P o's and ultimately shipments.
Or what we're doing in the.
With our customers and what's being done in the end customer.
I was.
Delightfully surprised and.
Executive meeting with a big integrator.
In the second half of 'twenty three to hear how much of their present volume.
It's going into 800 gene.
And it was certainly much higher than the.
Standard.
Analysts reports were saying was 800 G. So.
That's I think very obviously driven by AI.
So.
How much is now going into 800 G.
I would.
Again, that's an overall market analyst day, and not mine, but quite a bit of what we're shipping will be going into that I believe most all of what we're doing in FIFO is added at the 800 G and obviously targeting into 116.
Okay. That's helpful. Two quick questions I will jump out of line.
You talked.
Very positively about silicon photonics, and I think it's a very serious I think it's a very small piece of your revenues within the company much less in data center, how should we think about this over the next couple few years Big picture about how much. This becomes part of your data center business I don't see but a good percentage of that business.
How fast that can grow or just any context there.
You seem very excited about.
So.
I see.
By all of our own plans and by customer alignments.
That FIFO.
There'll be a predominant portion of data center market and elsewhere as well, but data center definitely.
And realize that we have.
Both passive and active cycle.
The activity that we have going on.
On.
Integrated laser is pretty exceptional and we are the only.
Sure play foundry that has stopped.
And those are very very high dollar high value systems as well as what we're doing now with FIFO that for example, we're shifting to end of life.
But I wouldn't say that just an insignificant amount of our revenue presently.
If I look at.
What we're having in our forecast for 24.
The the cypher revenue was not insignificant.
Yeah.
Okay, well thanks for that clarification Russell My last question I'll jump on the line here. Obviously, you have a very strong balance sheet here and I think you're probably going to be free cash flow positive to some degree this year, how do we think about your plan for the cashier.
Continues to grow.
Alright, so first I don't forecast, whether it would be positive free cash flow.
Because we did not and do we let them know that also in Q4.
In Q3, because of the big Capex that we have for a while get out there and also fall into.
Are they all exceeding all of the different positions not for rental for the alpha.
Albuquerque capacity of Intelsat.
All of the capacity all of the others stood at all of the equipment.
It will be.
They're in the into the third and Albuquerque.
So with these 300 million in the remaining of 200 million plus the other topics that we have Uh huh.
It'll be it'll start with maybe on the succeeding exceeds the catch one solution. So I don't think so it will not be positive, but still it's good that we have the cash on the balance sheet. So we can fund it hold up.
And then like I mentioned in my in my prepared remarks is we still have to pay we didnt pay if anything towards the $300 million fall.
February 11th 14th of February 11th hour towards do.
And we still have 200 meter, Florida, and we have 200 million for maintenance and in addition to that like I mentioned, we are planning to invest to increase the capacity of the site.
Sorry for inside you in all of the various sites. So we have flexibility.
Yeah.
Okay, great. Thanks for that clarification, guys and keep up the good work. Thank you. Thank you Richard.
The next question is from Lisa Thompson.
Zacks investment research. Please go ahead.
Hello, and I just had a quick question a little bit about the finances.
So given your plans for this year, what would be the capex expenditure by quarter.
And then given that and your nights one 2 billion in cash what can we expect for interest income.
Yes.
Okay interest income.
You can see in the balance sheet. The cash amounts. We have you can assume that we on the other hand, we have 200 million on the phones.
The loans over the carrying 2%.
Our investments are currently I mean, we enjoyed this year also form rates of between 6% to 7% interest on deposits and the yields on our marketable securities. So we did really good.
Phone currently the interest rates are a little bit lower than in the world. So instead of getting extra.
Excellent, 6.5% to 7% that we got last year, or maybe used with us one 5% or 45%.
And of course, not on data, okay. So I'm not because some of that is there for working capital required about at the time.
But for the majority of all the cash we invested in the building.
And the optical and about 150 million in marketable securities. So I will just went five for 45% of that.
For Capex.
Yeah, So I actually said in the beginning we have a $200 million.
For maintenance Capex.
Stable level, so it's $50 million per quarter right.
On top of that the you should assume I mean, I said to one of the Canadian dollar remaining photographs, there does seem to coming a one in a field. So she wanted who can provide anybody fix to reach the quarterly capex for the update.
And for the February 11.
Sure.
That said, Oh man that surrounds us millions of dollars.
We'll be paid.
In the coming to join our field.
Oh, so everybody can make your assumptions overall, social with the capex should be more than $100 million.
Water.
Between one another 250.
Okay, great. Thanks.
So I'll just take that off the cash balance no because you're going to generate a little bit nonoperating income right, yes, but like I answered before did a great job to catch one installation is typically lower than 100 to 150 million on a corporate right.
Right right, so definitely negative cash flow obviously.
Alright, great. Thank you that helps a lot I can't like sitting on my question.
Yeah.
This concludes the question and answer session. Mr. <unk> would you like to make a concluding statement.
Hum.
Thank you. Thank you for joining the call.
Really is a very exciting time for the company.
As stated in the press release itself it is.
Probably the best positioned tower has ever been in its history.
In all aspects and our financial strength.
And our technology offering.
And in our operational capability.
And.
That then all underpinned by the customers partnerships is.
Amazing place to be.
We look forward to tracking our progress over the year.
And reporting on it.
And.
Okay.
Upcoming.
Short period on February 29th Dr.
Doctor Rock in L. A.
Our president will host one on one meetings at the Susquehanna Technology Conference in New York.
On March 19th we will be hosting an investor conference in Tel Aviv stock exchange at the task of building itself.
Overall I appreciate your continued support and confidence.
Our team is eager and ready to seize opportunities ahead.
And to drive value for our customers and stakeholders. Thank you and look forward to follow up conversations.
Thank you. This concludes tower Semiconductor's conference call. Thank you for your participation you May go ahead and disconnect.
Mhm.
[music].