Q2 2024 Axcelis Technologies Inc Earnings Call

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Please be advised that today's conference is being recorded.

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David Ryzhik: I would now like to turn the presentation over to your host for today's call, David Ryzhik, Senior Vice President of Investor Relations, Incorporate Strategy. Please proceed.

I'd now like to turn the presentation over to your host for today's call David Ritchie.

David Ritchie: Senior Vice President of Investor Relations and corporate strategy. Please proceed.

Operator: Thank you, operator.

David Ryzhik: This is David Ryzhik, Senior Vice President of Investor Relations and Incorporate Strategy, and with me today is Russell Low, President and CEO, and Jamie Coogan, Executive Vice President and CFO. If you have not seen our copy of our press release issued yesterday, it is available on our website. In addition, we have prepared slides accompanying today's call, and you can find those on our website as well. Playback service will also be available on our website, as described in our press release.

Russell J. Low: Playback services will also be available on our website, as described in our press release. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business.

David Ryzhik: Please note that comments made today about our expectations for future revenues, profits, and other results are forward-looking statements under the SEC's Safe Harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K Annual Report and other SEC filings, which we urge you to review. Our actual results made differ materially from our current expectations. We do not assume any obligations to update these forward-looking statements.

Russell Low: Now I'll turn the call over to President and CEO Russell Low. Good morning, and thank you for joining us for our second quarter of 2024 call. As you can see on slide three, we deliver strong second quarter results above our expectations, with revenue coming at $257 million and earnings per dollar to share of $1.55. Our results were driven by better and expected conversion and evaluation units into revenue, as well as continued robust amounts of iron implantation systems into the slipping carbide market. I am also pleased with how we executed our margins, which Jamie will touch on a bit later.

Russell Low: On slide four, we show the breakdown of systems revenue by segment, which totaled $109 million in the quarter. Now let me touch on some key trends by market segment, starting with the mature segment on slide five, which comprises 98% of total system revenue in the quarter. As a reminder, our mature segment represents power applications, including silicon carbide and silicon ITBTs, as well as general mature and image sensors. Within power applications, demand for EVs and hybrid EVs remains a key driver. To demand for silicon carbide applications remain strong as customers continue to expand capacity to meet the domestic production goals of the EV market.

Russell Low: We believe we are still in the early innings of this trend. Meanwhile, demand for silicon ITBT applications remains soft in the quarter, consistent with our expectations. While EV and various forms of hybrid EVs are a key driver of our power business, we see other emerging applications requiring energy efficiency, such as power sources for data sensors, which are trend and we are keeping a very close eye on given the increased demand for power associated with artificial intelligence. In fact, just in the second quarter, we've seen customers announce new silicon carbide-based trench MOSFET products targeting AI data sensors, which is an attractive opportunity to recell us, given the high implant intensity and associated with trench technology.

Russell J. Low: Meanwhile, demand for silicon IGBT applications remains soft in the quarter, consistent with our expectations. While electric vehicles and various forms of hybrid EVs are a key driver of our power business, we see other emerging applications requiring energy efficiency, such as power sources for data centers, which is a trend we're keeping a very close eye on, given the increased demand for power associated with artificial intelligence. In fact, just in the second quarter, we've seen customers announce new silicon carbide-based trench MOSFET products targeting AI data centers, which is an attractive opportunity for Axcelis given the high implant intensity associated with trench technology.

Russell Low: Looking to the second half, we expect demand for certain carbide customers to remain healthy. In general, mature in the first half, demand remained relatively consistent, but we may see some moderation in the second half depends on the macroeconomic environment and its impact on our customer spending patterns. In its sense, demand has been robust in China, but has been subdued in the rest of the world due to consumer spending. But we are seeing some signs of growth in this market as customer-quoting activity has picked up.

Russell J. Low: In General Mature, in the first half, demand remained relatively consistent, but we may see some moderation in the second half, depending on the macroeconomic environment and its impact on our customer spending patterns. We're in the early stages, and this is a multi-year effort, but we are encouraged with the progress of our engagements, and this will remain a focus for us moving forward. Moving to memory, in line with our expectations, we did not generate any revenue from the market in this quarter.

Russell Low: Turn to slide six. In advanced logic, revenue is 2% of total system revenue, yet we made significant progress in our advanced logic strategy. We successfully closed a pure and dragon evaluation unit that was an advanced R&D for leading edge application, received a follow-on pure age order for volume manufacturing at three nanometers, and we received an order for a pure and end production unit from a new customer. As discussed, our investor of an in July, the advanced logic market is an under penetrated opportunity for Excelis, where we are driving interest with our evaluation units and investing R&D to solve some of the interest growing challenges, where in the early stages, and this is a multi-year effort, that we are encouraged with the progress of our engagements, and this will remain a focus for us moving forward.

Speaker Change: It's early stages and this is a multiyear effort, but we are encouraged with the progress of our engagements and this will remain a focus for us moving forward.

Russell Low: Moving to memory, in line with our expectations, we did not generate any systems revenue from the market in this quarter. Our implantation is a critical process step in the production of DRAM and NAND chips, and it's worth noting that increments demand is expected to be driven by new wafer starts rather than technology transitions. In DRAM, given the surge in demand for high bandwidth memory chips for AI applications, which is absorbing DRAM capacity, we expect DRAM customers to start adding capacity as we exit 2024 and into 2025. In NAND, overall wafer front end spending remains soft; however, we are encouraged in proving pricing a bit demand fundamentals, which needs to happen before customers invest in additional capacity.

Speaker Change: Moving to memory inline with our expectations, we did not generate any systems revenue from the market in this quarter.

Russell J. Low: Unimplantation is a critical process step in the production of DRAM and NAND chips, and it's worth noting that incremental demand is expected to be driven by new wafer starts rather than technology transitions. Turning to slide 7, in summary, I'm pleased with the execution of the Axcelis team in the second quarter. As we look to the second half of the year, we expect revenue to be slightly better than the first half, with momentum expected to build into 2025.

Speaker Change: Unemployment is a critical process steps in the production of DRAM and NAND chips, and it's worth noting the increments demand is expected to be driven by new wafer starts rather than technology transitions.

Speaker Change: In DRAM given the surge in demand for high bandwidth memory chips for AI applications, which is absorbing DRAM capacity, we expect DRAM customers to start adding capacity as we exit 2024 and into 2025.

Speaker Change: And then overall wafer front end spending remains soft. However, we are encouraged improving pricing a bit demand fundamentals, which needs to happen before customers invest in additional capacity. We currently expect revenue for NAND applications.

Russell Low: We currently expect a revenue for NAND applications to begin picking up in 2025. It's worth noting that memory customers typically place purchase orders shortly before shipment. As a result, we have started to pre-build some inventory for implants for the memory market and stand ready to respond once demand returns.

Speaker Change: To begin picking up in 2025.

Russell Low: Turning to slide seven, in summary, I'm pleased with the execution of the Excelist team in the second quarter. As we look to the second half of the year, we expect revenue to be slightly better than the first half, where momentum expects to build into 2025. I want to also thank many of you who joined us in July for our investor event.

Russell Low: We hope you came away with a better appreciation of Excelist's long-term growth drivers, which are as follows. First, secular growth in power, particularly silicon carbide, which we believe will be ubiquitous in applications that require energy efficiency, including EVs, renewables, and the insatiable power demand for AI base sensors. The second carbide device market is estimated by a year to grow at a 25% CAGR from 2023 to 2029. We are the leading iron implant provider for this market, which is one of the most critical steps in the manufacturing of these devices. Second, while memory spending is at exceptionally low levels today, we expect spending to recover as costals will also need to add capacity to meet global compute and storage needs driven by AI, EVs, Internet of Things, and the continued growth in electronic devices.

Russell J. Low: Second, while memory spending is at exceptionally low levels today, we expect spending to recover as customers will ultimately need to add capacity to meet global compute and storage needs driven by AI, EVs, the Internet of Things, and the continued growth in electronic devices.

Russell Low: Third, once consumer industrial spending recovers, we expect general mature spending to follow suit as well. Fourth, as mentioned, we have an opportunity to gain share in advanced logic as new applications are opening up beyond just the front end, but also in the middle end of line as well. For example, as we move from 7.9 a minute to 2.9 a minute technology, we forecast a more than doubling of iron implantation steps in the middle of line processes. And finally, a geographic expansion in Japan, we have focused on increasing penetration into this market by leveraging our customer relationships, while also growing our physical presence in the country.

Russell Low: With this backdrop, our long-term model calls for growth to approximately $1.6 billion by 2027. I'm very excited about the opportunity to rely on electric sellers and how that translates into attractive long-term earnings growth and value creation for shareholders.

Jamie Coogan: With that, let me turn the call over to Jamie. Thank you, Russell. And good morning, everyone.

David Ryzhik: Thank you, Russell, and good morning, everyone. I'll start with some additional detail on our second quarter results before turning to our third quarter outlook. Turning to slide 8, second quarter revenue was $257 million, with system revenue at $199 million and CS&I at $58 million. This exceeded the outlook we provided in our first quarter call of $245 million and included some pull-in activity from the third quarter. We benefited from the better-than-expected conversion of evaluation systems into revenue as well as a customer pull-in to meet their production needs. In addition, we saw continued strength in our power market, particularly in silicon carbide.

Jamie Coogan: I'll start first with some additional detail on our second quarter results before turning to our third quarter outlook. Turning to slide 8, the second quarter revenue was $257 million, with system revenue at $199 million and CS9 at $58 million. And succeeded the outlook we provided in our first quarter call of $245 million and included some pull-in activity from the third quarter. We benefited from the better-than-expected conversion of evaluation systems into revenue, as well as the customer pull-in to meet their production needs. In addition, we thought continued strength in our power market, particularly from silicon carbide.

David Ryzhik: Our CS&I revenue was relatively in line with our expectations. As a reminder, CS&I is driven by our installed base and represents consumables, spares, services, and upgrades. The typical life of an ion implant system can be as long as 20 years, and CS&I provides a stable and growing revenue stream with an attractive margin profile. As we continue to grow our installed base, we expect CS&I to deliver sustainable and profitable growth in the coming years.

Jamie Coogan: Our CS and I revenue was relatively in line with our expectations. As a reminder, CS and I is driven by our installed base and represents consumables, spares, services, and upgrades. The typical life of an ion implant system can be as long as 20 years. And CS and I provide the stable and growing revenue strain within an attractive margin profile. As we continue to grow our installed base, we expect CS and I to deliver sustainable and profitable growth in the coming years. From a geographic perspective, China continues to remain our strongest region at 55% of total system sales.

Jamie Coogan: In the second quarter, system bookings told $105 million and we ended the period with system's backlog of approximately $1 billion. We are bouncing along the bottom from a bookings perspective, and while it can fluctuate from quarter to quarter, we expect bookings to improve as our end markets recover. As a reminder, systems are not included in our bookings or backlog until we have received a firm purchase order. Moreover, our backlog may not include bookings received from memory customers, given the short lead times following the receipt of order, and also do not include expected revenues associated with our CS and I business.

Jamie Coogan: Turning to slide 9 for additional detail on the second quarter. Second quarter gross margins were 43.8%, slightly above our outlook of 43.5%, owing to better volumes as well as favorable systems mix. Operating expenses totaled $60 million for 23.2% of revenue. We continue to invest in the organic growth of our business while prudently managing our cost structure. As a result, operating profit was 53 million dollars. Reflecting a 20.6% operating margin. It is worth noting that in the second quarter we incurred restructuring charges of approximately $1.4 million associated with our retirement incentive program, which had an estimated 50 basis point impact on operating margins for the period.

David Ryzhik: Operating expenses totaled $60 million, or 23.2% of revenue. We continue to invest in the organic growth of our business while prudently managing our cost structure. In summary, we're very pleased with our financial performance. Our strong margins and cash flow are a testament to the critical and proprietary nature of our ion implant technology, which is differentiated to serve multiple market segments while driving our CS&I aftermarket solutions. Our product positioning and our disciplined cost structure provide a solid foundation on which to grow revenue and profitability as our markets recover and we execute on our growth strategies.

Jamie Coogan: We generated approximately 4.5 million in other income, primarily as a result of interest income on our cash balance. Our tax rate in Q2 was 11%; for the balance of the year, we estimate a 15% tax rate. Our weighted average diluted share count in the quarter was 32.8 million shares. And this reflects continued execution on our share repurchase program. In fact, over the past three years, we have reduced our diluted share count by approximately 5%. We exited the second quarter with $160 million remaining in share repurchase authorization.

Jamie Coogan: This all translates into a diluted earnings per share of $1.55, well above our outlook provided in the first quarter call of $1.30. Moving to our balance sheet in cash flow, we ended the second quarter with $548 million of cash, cash equivalents, and short-term investments on hand. And we generated $38 million of free cash flow in the quarter, driven by our earnings for the period and our focus on working capital management.

Jamie Coogan: Now let me turn to our third quarter outlook on slide 10. Given the strength in Q2 systems revenue compared to our forecast, which benefited from some pulling activity, we expect Q3 revenue to be fleshed with Q2 at approximately $255 million. As we think about Q4, we expect revenue to be slightly higher than Q3. We expect third quarter gross margins to be approximately 43.5% with operating expenses estimated at approximately $60 million. We expect our tax rate to be approximately 15%, leading to an estimated diluted earnings per share of approximately $1.43.

Speaker Change: Tax rate to be approximately 15% leading to an estimated diluted earnings per share of approximately $1 43.

Jamie Coogan: In summary, we're very pleased with our financial performance. Our strong margins in cash flow are a testament to the critical and proprietary nature of our ION implant technology that is differentiated to serve multiple market segments while driving our CSNI aftermarket solutions. Our product positioning and our discipline cost structure provide a solid foundation on which to grow revenue and profitability as our markets recover and we execute on our growth strategies.

Speaker Change: In summary, we're very pleased with our financial performance, our strong margins and cash flow are a testament to the critical and proprietary nature of our ion implant technology that is differentiated to serve multiple market segments, while driving our C&I aftermarket solutions, our product positioning and our disciplined cost structure.

Speaker Change: Provide a solid foundation on which to grow revenue and profitability as our markets recover and we execute on our growth strategies.

Russell Low: With that, I'll now turn it to Russell for his closing comments. Thank you, Jamie. As I think about the defining transfer time, AI, Internet of Things, electrification, including power efficiency and clean energy, is semi-ductors that serve as a foundation of all of them.

Speaker Change: With that I'll now turn it to Russell for his closing comments.

Russell: Thank you Jamie.

Russell Low: In fact, as the performance, such as power efficiency and cost of semi-ductors that matters the most, an excelous is unimplantation technology, if a critical and labor of that, and why I'm really excited about the future for excelous.

Russell Low: I want to thank our employees, customers, shareholders, and partners for their continuous support, trust, and excellence.

Operator: With that, operator, let's open it up for questions. Thank you. At this time, we will conduct a question-and-answer session.

Operator: With that, Operator, let's open it up for questions.

Operator: As a reminder, to ask a question, you need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit your inquiries to one question and one follow-up. Please stand by while we compile the Q&A roster.

Jed Dorsheimer: Our first question comes from Jed Dorsheimer, from William Blair. Please go ahead. Hi, thanks for taking my question. I guess it's been less than a month since your Capital Markets Day.

Operator: Our first question comes from Jed Dorsheimer.

Jonathan Dorsheimer: Hi, thanks for taking my question. I guess, you know, it's been less than a month since your capital markets day. I'm curious, you know, as you look at the business, and you kind of segment the systems, it seems like, you know, the power business continues to maybe bounce on the bottom or get a little bit worse while you're seeing, you know, continued strains from silicon carbide. You know, has there been any changes since your capital markets day, recognizing it's relatively recent, that would change that opinion or give you more or less confidence, you And then I have a follow-up.

Russell Low: I'm curious, is you look at the business and you segment the systems? It seems like the power business continues to bounce on the bottom or get a little bit worse while you're seeing continuous trains from Silicon Carbide. There have been any changes since your capital markets day, recognizing it's relatively recent that would change that opinion or give you more of less confidence in terms of near-term as well as going into next year and then I have a follow-up.

Russell Low: Yeah, so Jed, good morning and thanks for jumping on the call here. You know, as you zoom in, out and look at the full year, our expectations for the full year have not really materially changed since our Q1 call. We continue to expect a second half to be slightly higher than the first half, you know, despite seeing some pulling activity into the second quarter. We also, you know, had expected the second half to be weighted towards the fourth quarter, and that continues to remain the case here for us for the period. As we think about the market segments, and as you noted, power continues to be strong, led by Silicon Carbide.

David Ryzhik: Yeah, so, Jed, good morning, and thanks for jumping on the call here. You know, as we kind of zoom in on and look at the full year, our expectations for the full year have not really materially changed since our Q1 call. We continue to expect the second half to be slightly higher than the first half. You know, despite seeing some pulling activity into the second quarter, we also had expected the second half to be weighted towards the fourth quarter, and that continues to remain the case here for us for the period.

David Ryzhik: As we think about the market segments, and as you noted, power continues to be strong, led by silicon carbide. General maturity was consistent in the first half, but we do expect a little bit of moderation in the second half, but this is going to depend largely on the macroeconomic activities and impacts on our customer spending patterns, as Russell mentioned in a pair of remarks, specifically around consumer, industrial, and the auto end markets.

Russell Low: Gender mature was consistent in the first half, but we do expect a little bit of moderation in the second half. But this is going to depend large on macroeconomic activities and impacts on our customer spending patterns, the sort of Russell mentioned in a pair of remarks, specifically around consumer, industrial, and the auto end markets. You know, memory, it's been quite soft. You know, we had, you know, no memory activity here in the second quarter, although we do expect some initial spending for DRAM as we exit the year, and so we're seeing some opportunities potentially in the fourth quarter for that to pick back up.

Russell Low: And the end is going to continue to sort of be dormant for us, you know, probably into 2025, where we do expect some level of spending to commence. You know, in short, we really do feel pretty good about revenue growing slightly in the second half. Our backlog remains really healthy. Our conversations with our customers suggest the slight pick up in revenue in Q4, and we expect that momentum to continue to extend into 2025.

David Ryzhik: You know, in short, we really do feel pretty good about revenue growing slightly in the second half. Our backlog remains really healthy. Our conversations with our customers suggest a slight pickup in revenue in Q4, and we expect that momentum to continue and to extend into 2025.

Russell Low: Well, thank you. And that kind of leads me to my follow-up. I mean, all of that sounds very reasonable and, you know, but as we look at 25 and the 1.3, it seems like the pathways to that are getting, you know, narrower and narrower. So I'm just curious, at what point do you reassess that expectation? in 25. Yeah, so, you know, we laid out that new long range bottle jet in the, you know, in the July event that called for the 1.6 billion in 2027. We really are now entering the, you know, phase of our process where we, you know, through the third, fourth quarter here, you know, is where we go through our annual planning, profit planning process.

David Ryzhik: Yeah, so, you know, we laid out that new long-range bottle jet in the July event that called for $1.6 billion in 2027. We really are now entering the phase of our process where we, you know, through the third and fourth quarter here, you know, is where we go through our annual planning and profit planning process. You know, for the course of this year, we've really provided specific guidance on, you know, looking...

Russell Low: You know, for the course of this year, we've really provided specific guidance on, you know, looking one quarter out. But when we think about achieving the 1.3 billion dollar model in 2025, it's possible, but it's going to require a step up in demand across our segments, particularly in memory and general mature. And the timing and magnitude of those recoveries is hard to predict, especially given the uncertain macro environment. Naturally, as we get closer, we'll have a better sense and we'll be able to provide some kind of color on 2025 as part of our Q4 call as we enter into that annual profit planning process.

Russell Low: But, you know, we really do feel good about the long-term opportunities that we outlined in that investor event. Power is going to continue to be a key driver for the business, particularly Silicon carbide. We expect memory to eventually recover from the current levels. And as we noted, it's basically zero, you know, here in the second quarter. General mature can recover back to those prior levels as the macro environment improves. And ultimately, we're focused on executing on those market share opportunities we talked about in advanced logic in Japan. And so, you know, long short, we're really focused on everything that we can control.

Russell: Can recover back to those prior levels as the macro environment improves and ultimately we're focused on executing on those market share opportunities, we talked about in advanced logic in Japan.

Speaker Change: And so.

Russell: Long and short we're really focused on everything that we can control. So we're making sure. We've got the right people the right inventory the right capacity in the right technologies to be able to go after those opportunities that we outlined.

Russell Low: So we're making sure we've got the right people, the right inventory, the right capacity, and the right technologies to be able to go after, you know, those opportunities that we outlined. Yeah, just to reiterate, I mean, that's exactly right. So there's still a possible path to the 1.3 billion dollars next year. It's going to require, you know, market cooperation. So continues to empower, as you mentioned, recovery and memory and general mature. I think at this stage, you know, the secular growth drivers are still very much in place. Growth in AI growth and electrification, the long-term trends are definitely there.

Speaker Change: Yes, just to reiterate that's exactly right. So it's still there's still a possible path to the $1 $3 billion next year, it's going to require market cooperation continues to empower as you mentioned recovery of memory in general mature I think at this stage.

Russell: The secular growth drivers are still very much in place.

Speaker Change: Growth in <unk> growth in electrification the long term trends are definitely there and as we said at our Investor day.

Russell Low: And, you know, as we said at our investor day, that, you know, the path to 1.6 billion dollars is something we believe we could achieve in the next few years. So I think it's definitely a win-the-market recovery, not an F. I think, yeah, that's fairly apparent. So the exact layering of revenue year-on-year to get to 1.6, we'll comment more about that as we get closer, but we do obviously see that as the market recover, and it grows that this path is 1.6 billion dollars.

Operator: Thank you.

Tom Diffley: One moment for our next question. Our next question comes from Tom Difflee from DA Davis Indian Company. Please go ahead. Yeah, good morning. Thank you for the question. Just curious on the backlog and bookings. It looks like the backlog fell by more than the delta between the bookings and the revenue. And I'm just curious if there were any cancellations or pushouts that you saw. Yeah, there was, you know, we will see from time to time, you know, some purchase order of movements. Tom, nothing overly material there. You know, generally it was largely, it was the revenue load plus the bookings that drives the differential load backlog.

Operator: Thank you. Please take a moment for our next question.

Unnamed Speaker: Yeah, good morning. Thank you for the question.

Unnamed Speaker: I'm just curious about the backlog in bookings. It looks like the backlog fell by more than the delta between the bookings and the revenue. And I'm just curious if there were any cancellations or pushouts that you saw.

Russell Low: So okay, so nothing to note. All right.

Tom Diffley: And then Russell, I hope you could maybe point us towards a few of the end markets that you're really paying attention to or end market products to drive the general mature business over the next year. I mean, there are certain key product launches out there that you think are kind of key to your recovery. So, you know, when I say like macroeconomic trends for general mature, I guess really we're talking about consumer spending, industrial of automotive. I think it's fair to say that automotive and industrial are lagging consumer spending at this stage. I mean, obviously we love automotive because it's just it's a computer on wheels, but really at this stage we're looking at consumer.

Speaker Change: Business over the next year I mean, there is certain.

Speaker Change: Key product launches out there that you think are kind of key to your recovery.

Speaker Change: So when I say like macroeconomic trends for general mature I guess really with whom that consumer spending industrial and automotive I think it's fair to say the automotive and industrial are lagging consumer spending at this stage I mean, obviously, we love automotive because it's just it's a computer wells, but really at this.

Speaker Change: States, we're looking at consumer we are seeing consumer spending picking up.

Russell Low: We are seeing consumer spending picking up. It's hard to say what all chip devices are going to be driven by consumer improvements, and, you know, I can't say that Apple phones are going to take off crazy, but I know that I'm, but even the next version, especially if Siri gets smarter. But yeah, we definitely are seeing a firming up of consumer spending if that makes sense to them.

Speaker Change: It's hard to say, what the killer App is but I do think that.

Speaker Change: Ooh Ooh chip devices are going to be driven by consumer improvements and.

Speaker Change: No.

Speaker Change: I cant say that Apple phone is going to take off crazy, but I know that.

Speaker Change: But the next version, especially of steering against get smarter.

Speaker Change: But yeah, we definitely are.

Speaker Change: We're seeing.

Russell Low: Okay, and then just finally on the automotive front, do you need to see an art of motor recovery before you make more progress in the Japanese market, or are those two things not necessarily tied together? I think the automotive recovery at the consumer level was probably further down the line compared to the investment in chips required for those machines. So we've actually had some pretty good success in Japan, particularly with power. And, you know, supply the all customer applications for say Silicon carbide and silicon, and that wasn't locally available. So that's given us our opportunity, which we're now capitalizing upon.

David Ryzhik: I think the automotive recovery at the consumer level is probably further down the line compared to the investment in chips required for those machines. But we've actually had some pretty good success in Japan, particularly with power. And it's partly because, one, we have a full portfolio of products to supply the all-customer applications for, say, silicon carbide and silicon, and that wasn't locally available. So that's given us that opportunity, which we're now capitalizing upon.

Russell Low: So that's one point. The other part, I'd say, is that we're actually making progress beyond just power in Japan. So we have been making progress in memory. We did actually get it receive a PO, this last quarter for a advanced logic tool going to a new customer. So, you know, we are making progress in Japan, and I think that's going to be a bright spot for us.

David Ryzhik: So that's one point. The other part, I'd say, is that we're actually making progress beyond just power in Japan. So we have been making progress in memory. We did actually receive a purchase order this last quarter for an advanced logic tool going to a new customer. So we are making progress in Japan, and I think that's going to be a bright spot for

Unnamed Speaker: Great. Well, thanks for the extra color.

Operator: Great. Well, thanks for the extra color. Thanks, Tom. Thank you. One moment for our next question.

Operator: Thank you. One moment for our next question. Our next question comes from Craig Ellis from B Raleigh Securities. Please go ahead.

Craig Ellis: Our next question comes from Craig Ellis from Be Rally Securities. Please go ahead. Yeah, thanks for taking the questions and nice execution into you guys. Jamie, I want to start by following up on one of the questions. It's more near term. As we, as we look at the potential for modest tap on half gains, it seems like what we're saying is the revenues for the full year could be around 1.25 to 1.45 billion. So the question is, is that the right range? And I know you indicated that there was some pull-in activity in 2Q. But beyond that, is there any change to what you're expecting in the second half versus three months?

Craig Andrew Ellis: One of Jed's questions, it's more near-term, as we look at the potential for modest half-on-half gains, it seems like what we're saying is that revenues for the full year could be around $1.25 to $1.45 billion. So the question is, is that the right range? And I know you indicated that there was some pull-in activity in 2Q, but beyond that, is there any change to what you were expecting in the second half versus three months ago?

Speaker Change: Probably half gains it seems like what we're saying is the revenues for the full year. It could be around 1.25 to 1.45 billion. So the question is is that the right range and I know you indicated that there was some pull in activity into Q.

Speaker Change: But beyond that is there any change to what you're expecting in the second half versus three months ago.

Jamie Coogan: to go.

Jamie Coogan: Yeah, so, you know, again, Craig, as we look at it, we're not providing specific guidance for the full year as of right now. You know, our commentary is, you know, we gave the third quarter expectation here, and we do expect the fourth quarter to be slightly higher, you know, than what we saw here or what we expect to see in the third quarter. You know, as it relates to, you know, the initial commentary around expectations relative to Q1, you know, the year still looks relatively similar, you know, in terms of what we were expecting as we were exiting the Q1 call.

David Ryzhik: Yeah, so you know, again, Craig, as we look at it, we're not providing specific guidance for the full year as of right now. Our commentary is, you know, we gave the third-quarter expectation here, and we do expect the fourth quarter to be slightly higher than what we saw here or what we expect to see in the third quarter. You know, as relates to, you know, the initial commentary around expectations relative to Q1, the year still looks relatively similar, you know, in terms of what we were expecting as we were exiting the Q1 call.

Speaker Change: Yes, so again.

Speaker Change: Greg as we look at it we're not providing specific guidance for the full year as of right. Now our commentary is we gave the third quarter expectation here, we do expect the fourth quarter to be slightly higher than what we saw here are what we expect to see in the third quarter.

Speaker Change: As it relates to.

David Ryzhik: We talked about the fact that we had a little bit of pull in activity into the second quarter, which, you know, moderated that sort of Q2 to Q3, step up in expectations. But largely speaking, the year is still relatively intact to what our prior expectations were.

Jamie Coogan: We talked about the fact that we had a little bit of pulling activity into the second quarter, which, you know, moderated, you know, that sort of Q2 to Q3, you know, step up in expectations. But largely speaking, the year, you know, still relatively intact to what we, what our prior expectations were.

Jamie Coogan: That's really helpful. Thanks, Jamie, and then the second question is more of a longer-term question, and it also follows up an earlier increase. So I totally get where you are in the annual planning process, and that leaving the company challenged with making a call on next year's 1.3B potential, but I'm wondering if you can comment on where the business might be if we just set aside, you know, the potential for end market improvement, which requires a crystal ball from here to your end, but absent any improvement and kind of a market neutral environment, any color on what calendar 25 might look like so we can better interpret how it might shake out as we go to the next three to six months.

Unnamed Speaker: And it also follows up an earlier inquiry. So I totally get where you are in the annual planning process and that leaving the company challenged with making a call on next year's 1.3b potential. But I'm wondering if you can comment on where the business might be if we just set aside, you know, the potential for in-market improvement, which requires a crystal ball from here to your end, but absent any improvement and kind of a market-neutral environment, any color on what calendar 25 might look like so we can.

Jamie Coogan: Thanks. Yeah, so again, difficult to predict that, Craig, right? You know, again, we look at where the markets are today. You know, we need to see memory recovery. You know, in order for us to get to those numbers, we need to see some incremental strength in general mature for us to get to those numbers. So, you know, again, from where we are today, we would need to see those markets recover. You know, I think those markets are in various stages of their recovery. You know, we talked about the fact that we are starting to see the opportunity here in the fourth order for some memory sales, which we think will build some momentum into 2025, and we're watching the general mature space, you know, kind of just like everybody else is, you know, to see, you know, when the spending is going to kick back on there.

Jamie Coogan: Yeah, sure help to get better PCs and smart phones.

Unnamed Speaker: Yeah, true.

Jamie Coogan: So appreciate the help, Jamie. Good luck, guys. You got it. Thanks, Craig. Thank you.

Speaker Change: Yeah.

Craig: Got it thanks Craig.

Operator: One moment for our next question. Our next question comes from Ross Cole from Need a Meant Company. Please go ahead.

Speaker Change: Thank you one moment for our next question.

Operator: Our next question comes from Ross Cole from Needham Inc. Company; please go ahead.

Speaker Change: Our next question comes from Ross coal from Needham and company. Please go ahead.

Ross Cole: Hi, and thank you for taking my question on behalf of Charles Sheet. I was wondering, looking into the third quarter, do you expect the breakdown of system revenue to remain rather consistent with what you're seeing this quarter? And then do you expect any shifts in the revenue by segment going into the fourth quarter or four year? Thank you. Yeah, Ross, I mean, as we think about the system segments, right? I mean, again, this quarter, we saw, you know, little to no memory here, you know, through the first half of the year. You know, again, we're predicting the memory to really kick back on in the fourth quarter. You know, to some extent, we were starting to see those early signs of that.

Ross Coal: Hi, and thank you for taking my question on behalf of Charles Chi.

Ross Coal: I was wondering looking into the third quarter do you expect the breakdown of system revenue to remain rather consistent with what Youre seeing this quarter and then do you expect any shifts in the say in the revenue by segment going into the fourth quarter or full year. Thank you.

David Ryzhik: Yeah, Ross, as we think about the system segments, right, I mean, again, this quarter, we saw, you know, little to no memory here, you know, through the first half of the year. Again, we're predicting the memory to really kick back on in the fourth quarter, and to some extent, we're starting to see those early signs of that. Yeah, as a result of that, you know, we did have some advanced logic.

Speaker Change: Yeah, Ross I mean, as we think about the systems segments right I mean again this quarter we saw.

Jamie Coogan: Yeah, as a result of that, you know, we did have some advanced logic. Is, you know, advanced logic does sort of, you know, pick around from quarter to quarter based on the progress that we're making with our customers. So I did, I did still expect power, you know, specifically silicon carbide to be strong for the period and general mature, you know, broadly to be the lion's share, you know, of the revenues for the period, but overall with, you know, some potential, you know, uptick and CS9, but we'll up to see how that plays out. Yeah, I think that that's, that's correct, right?

David Ryzhik: As you know, advanced logic does sort of, you know, tick around from quarter to quarter based on the progress that we make with our customers. So I'd still expect power, you know, specifically silicon carbide, to be strong for the period and generally mature, you know, broadly to be the lion's share, you know, of the revenues for the period overall, with, you know, some potential, you know, uptick in CS&I, but we'll have to see how that plays out. Yeah, I think that's correct. Right?

Russell Low: So, so certain carbide continues to be strong. We talked about general mature outside of China; it seems to be a little bit softer. We actually have seen a little bit of business on image sensors within China, and that actually has been very positive, and that would be focused on consumer, and that I think the other one is we have got it to talk with customers about firming up their plans regarding DRAM. So, you know, the total of the conversations is changing, which is giving us a little bit more confidence.

Russell Low: Great, thank you, and then if I can follow up on your expectations for a man to recovery, as the market does remain stock, are you expecting the demand to drive growth in earlier 2025, and maybe later on in the year? Thank you. Yeah, so I guess, so I want to think about that, but things are looking back to for Ned in the sense that the ASPs are going up, and obviously before people want to expand their CAPF, they want to actually make a little bit of money. So those things are happening; Ned will trail the demand recovery, and I think at this stage, it's fair to say it's a 2025 event.

Unnamed Speaker: Demand to drive growth in early 2025 and maybe later on in the year.

Unnamed Speaker: Yeah, so I guess when I think about NAND, things are looking better for NAND in the sense that the ASPs are going up. And obviously, before people want to expand their CapEx, they want to actually make a little bit of money. So those things are happening. NAND will trail the D-RAM recovery. And I think at this stage, it's fair to say it's a 2025 event.

Speaker Change: I guess, so I don't think about it then but.

Speaker Change: Things are looking better for NAND in the sense of the Asp's are going up and obviously before people want to expand their capex they want to actually make a little bit of money. So those things are happening Nancy woo.

Speaker Change: DRAM recovery and I think at this stage. It is fair to say, it's a 2025 events.

Operator: Great, thank you very much. Thank you. One moment for our next question.

Nancy: Great. Thank you Ross.

Speaker Change: Thank you one moment for our next question.

Duksan Jang: Our next question comes from Duksan Jang from Bank of America Securities. Please go ahead. Hi, thank you for taking my question. I'm just following up on an earlier polling question because you've already pre-announced results for Q2 in early July. I was just curious what changed since then, and then if you could just provide a little bit more color on the customer profile, how much the polling was, and if it's a one-time phenomenon. Yeah, so again, that Duksan, I think on the pre-announced, was really done ahead of the investor event, broadly speaking, as we talked about in our commentary.

Speaker Change: Our next question comes from Dukson Jain from Banc of America Securities. Please go ahead.

Dukson Jain: Alright. Thank you for taking my question just following up on an earlier polling question.

David Ryzhik: Yeah, so again, Duksan, I think the pre-announcement was really done ahead of the investor event. You know, broadly speaking, as we talked about in our commentary, we were early on in our closed period, it was really representative of a flash, and we needed the team to go through and finalize all their procedures. We've got other revenue buckets that can ebb and flow based on estimation deferrals and others that can change from time to time.

Jamie Coogan: We were early on in our close period; it was really representative of a flash. We needed the team to go through and finalize all their procedures. We've got other revenue buckets that Evan Flow, based on estimation, deferrals, and others that can change from time to time. So, we wanted to make sure we provided you some level of indication of where the quarter was going ahead of that investor event while we finalized our processes and procedures. Ultimately, the evaluation units that came in, that was a really, honestly, a good thing for us. Getting those closed sooner actually closes down our obligation to continue to provide costs and support for those units.

David Ryzhik: So we wanted to make sure we provided you some level of indication of where the quarter was going, you know, ahead of that investor event, while we finalized our processes and procedures, you know, ultimately, the evaluation units that came in, you know, that was really, honestly, a good thing for us; getting those closed sooner actually closes down our obligation to continue to provide cost and support for those units, and it allows us to begin the process of really fanning And on the one that got pulled into the period, you know, from, you know, that customer has actually already started to talk to us about follow-on orders ahead of the ultimate sign off.

Jamie Coogan: It allows us to begin the process of really fanning out, and on the one that got pulled into the period, that customer was actually already started to talk to us about follow-on orders ahead of the ultimate sign-off. The other unit represented a customer need for production requirements. So, when you take the overperformance for the period, it was largely attributed relative to guide. It was largely attributable to those two units.

David Ryzhik: The other unit, you know, represented really a customer need for production requirements. And so, you know, when you take the over performance, you know, for the period, it was largely attributed, you know, relative to guide, it was largely attributable to those two units.

Speaker Change: Relative to guide it was largely attributable to those those two units.

Russell Low: Understood. And then, one on silicon IGBT, and hopefully my math is correct, but I think in Q2, you've done around 39 million in sales, and that's quite an uplift from Q1, it seems like. So, do you continue to see that strength going into the second half, and over the long term, how much of a contribution does this have to be to get to your 1.3 billion model, and then your 1.6 billion? Thank you so much. I'm not sure we've given a breakdown about our business between silicon carbide and silicon IGBT. I think what we've said is that our silicon carbide business continues to be strong, and the silicon IGBT business is actually soft, as we expected.

Speaker Change: Yeah.

Speaker Change: Understood.

Speaker Change: And then one on silicon LGBT and hopefully my math is correct, but.

Speaker Change: I think in Q2, you've done around 39 million in sales that's a quite an uplift from Q1. It seems like so do you continue to see that strength going into second half.

Speaker Change: And over the long term how much of a contribution does this have to be to get to your $1 3 billion model and then or 1.6 billion. Thank you so much.

David Ryzhik: I'm not sure we've given a breakdown of our power business between silicon carbide and silicon IGBT. I think what we've said is that our silicon carbide business continues to be strong, and the silicon IGBT business is actually, as we expected, soft.

Speaker Change: Oh sure we've given a breakdown of our business between Silicon carbide is second only to <unk> I think what we've said is the silicon carbide business continues to be strong and the silicon.

Speaker Change: <unk> business is is actually soft as we expected.

Speaker Change: Okay.

Russell Low: We can't, there's more to the question. Yeah, as we think through the numbers overall, is power continued to be strong broadly for a silicon carbide continues to be very strong, you know, relative to our expectations. You know, we were watching the transitions, you know, here relative to the EV hybrid EVs and what that ultimately means for silicon IGBT in the marketplace, as we talked about as part of our investor day. As we think about what it means for the long-term model, right, power is going to be a very significant contributor to our long-term model into the future, both on the silicon carbide and the silicon IGBT performance. You know, ultimately, you know, what we are monitoring and what we're working with our research, you know, folks both internally and external research third parties is, you know, and exactly what the magnitude of silicon IGBT, you know, opportunity set looks like with this new portfolio approach that the automakers are ultimately rolling out specifically here in the United States. Ultimately, the, as we think about our Q3 expectations, we kind of bring it back to 2024, you know, our expectations are that, you know, power, you know, is going to really continue to be strong for us at position of strength, both within the Q3 time frame and the Q4 time frame, with that being in line with our prior expectations, with silicon carbide being higher than silicon IGBT for the full year.

Russell Low: Patty, and then if I just may have one more, we've been hearing a lot that China EVs are doing quite well, but the Western demand is a little bit more subdued. So I'm curious if you're seeing similar profiles out there just around that demand would be great, thank you. So, hey, Dexter, just to clarify the last point, we did discuss the IGBT ratio; sorry, we didn't specifically guide the Q3, so I'll clear that up regarding demand for silicon carbide. So yes, China has a really strong demand for silicon carbide. I think we've talked in the past that they're currently supplying 10% domestically to their own vehicles, but they have a goal of achieving 25%, and probably beyond that, they'd like to probably supply the entire world, because this is a really great opportunity for them.

Unnamed Speaker: Got it. And then, if I just may have one more.

Unnamed Speaker: We've been hearing a lot that Chinese EVs are doing quite well, but Western demand is a little bit more subdued. So I'm curious if you're seeing similar profiles out there just around that demand would be great. Thank you.

David Ryzhik: So, just to clarify the last point, we did disclose the IGBT ratio, sorry, we didn't specifically guide for Q3, so I want to clear that up. Regarding demand for silicon carbide, so yes, China has a really strong demand for silicon carbide. I think we've talked in the past that they're currently supplying 10% domestically for their own vehicles, but they have a goal of achieving 25%, and probably beyond that, they'd like to supply the entire world because this is a really great opportunity for them.

David Ryzhik: However, like I say, our silicon carbide business is very global, so we have multiple customers in every region, so North America, Europe, Korea, Taiwan, Japan, and obviously China, but I'd say that silicon carbide remains strong in general. China is certainly a very bright spot for us.

Russell Low: However, like I'd say, our silicon carbide business is very global, so we have multiple customers in every region: North America, Europe, Korea, Taiwan, Japan, and obviously China. But I'd say that some silicon carbide remains strong in general; China is certainly a very bright spot for us. Thank you.

Speaker Change: The Europe, South Korea, Taiwan, Japan, and obviously, China, but I'd say that.

Speaker Change: Silicon carbide remained strong in general.

Speaker Change: China is certainly a very bright spot for us.

Speaker Change: Thank you.

Operator: Thank you. One moment for our next question.

Operator: Thank you one moment for our next question. Our next question comes from Jack Egan from Charter Equity Research. Please go ahead.

Speaker Change: Thank you Juan when reform next question.

Jack Egan: Our next question comes from Jack Egan, from Charter Equity Research. Please go ahead. Hey guys, thanks for taking the questions. So, you got it for a slight increase in revenue in the fourth quarter, and then you mentioned memory is probably going to kick back in that quarter and in the fourth quarter. So, does that imply that with the flat-top? for a slightly up revenue guide, that there might be some weakness elsewhere, or is it just that the actual impact of the memory rebound in the fourth quarter is pretty small?

Speaker Change: Our next question comes from Jack Egan from Charter equity Research. Please go ahead.

Jack Egan: Hey, guys. Thanks for taking the questions. So.

Jack Egan: You got it for a slight increase in revenue in the fourth quarter and then you mentioned memory is probably going to kick back in.

Speaker Change: In that quarter and in the fourth quarter, So does that imply that with.

Speaker Change: With the flat to up slightly up revenue guide that there might be some weakness elsewhere or is it just that the actual impact of the memory rebound in the fourth quarter is pretty small.

Russell Low: Yeah, hey, Jack, it's Russell. So, yeah, just to kind of reiterate, so power, that's a significant carbide to remain strong. We do see a little bit of weakness outside of China regarding general mature, but that's not being more than made up for, we believe, by image sensors within China, and only in China, that's where we see the image sensor, business, firming up, and also the firm up of memory as well. So I'd say that image sensors and memory are looking a little bit firmer; general mature outside of China has come down a little bit. We believe, I mean, there's still five months of the year to go, but both of the visibility we have, that's what we're seeing.

Russell J. Low: Yeah, hey, Jack, it's Russell. So yeah, just to kind of reiterate, power, particularly silicon carbides, will remain strong. We do see a little bit of weakness outside of China regarding General Mature, but that's kind of being more than made up for, we believe, by image sensors within China and only in China. That's where we're seeing the image sensor business firming up, and also the firming up of memory as well. So I'd say that image sensors and memory are looking a little bit firmer. General Mature outside of China, of course, has come down a little bit, we believe. I mean, there are still five months of the year to go, but based on the visibility we have, that's what we're seeing.

Russell Low: Okay, that makes sense.

Russell Low: And on the IGBT softness, there have been a few prominent trends there over the past few years. Obviously, we've seen China build out a pretty good bit of capacity for IGBTs. And then also some of the leaders in Europe and the US have kind of started moving to 300 millimeter power wafers. So can you kind of give us a general idea of where that IGBT softness is coming from? I mean, it sounds like it's probably outside of China, with China being pretty strong. But, you know, is it just kind of a general slowdown after a few years of strong growth, or is there something else to play?

Russell J. Low: Um, so, okay, so... IGBTs, I think we've said in the past, if you compare IGBT to silicon carbide, the absolute markets historically have been for silicon carbide, so the IGBT has been a lot bigger than silicon carbide. And you've kind of seen from our own revenues, we transitioned, I think, this year to be more of a silicon carbide producer than IGBT, and So that's our own business.

Russell Low: So, okay, so IGBTs, I think we've said in the past, if you compare IGBT to Silicon Carbide, the absolute markets, historically, the Silicon Carbide, so the IGBT has been a lot bigger than Silicon Carbide. And you've kind of seen from our own revenues, we transitioned, I think, this year to be more Silicon Carbide than IGBT, and IGBT has continued to soften. So that's our own business. Outside of that, IGBTs, I actually believe there's going to be an uptick in demand, but I also believe that you're going to see the upper end of IGBTs being cannibalized or replaced by Silicon Carbide.

Speaker Change: Some of our own revenues, we transitioned to think this year to be more silicon carbide <unk> has continued to soften so.

Russell J. Low: Outside of that, IGBTs, I actually believe there's going to be an uptick in demand. But I also believe that you're going to see the upper end of IGBTs being cannibalized or replaced by silicon carbide. So I think it's a relatively complex dynamic.

Speaker Change: Arrow business outside of that <unk>.

Speaker Change: We believe theres going to be an uptick in demand, but I also believe that you're going to see the upper end of <unk> being cannibalized OPE replaced by Silicon carbide. So I think it is a relatively complex dynamic so.

Russell Low: So I think it's a relatively complex dynamic. So, you know, when we think about EVs and hybrid EVs, there's going to be a combination of silicon carbide and IGBTs going into those vehicles, for example. The higher end is probably like to use Silicon Carbide over IGBTs, but, you know, we're relatively agnostic. We don't mind whether they use IGBTs or Silicon Carbide, because they're both very implying intensive. So that's kind of the first thing, and obviously any of that is taken away market share from internal combustion engines. But I do honestly believe that you're going to see a lot more use of power devices in general, whether it's going to be because of, you know, electrification or AI. I think you're going to see a growth there, but you're also going to see quite the dynamic where Silicon Carbide pricing is coming down quite rapidly.

Russell J. Low: So, you know, when we think about EVs and hybrid EVs, there's going to be a combination of silicon carbide and IGBTs going into those vehicles, for example. The higher end is probably going to like to use silicon carbide over IGBTs. But, you know, we're relatively agnostic.

Speaker Change: Yes.

Speaker Change: We think about.

Speaker Change: <unk> and hybrid Evs, there's going to be a combination of silicon carbide and <unk>.

Speaker Change: Those vehicles for example, the higher end is probably like to use silicon carbide over <unk>.

Operator: We don't mind whether they use IGBTs or silicon carbide because they're both very implant intensive. So that's kind of the first thing. And obviously, any of that is taking away market share from internal combustion engines. But I do honestly believe that you're going to see a lot more use of power devices in general, whether it's going to be because of, you know, electrification or AI. I think you're going to see growth there, but you're also going to see a dynamic where silicon carbide pricing is coming down quite rapidly, so that might temper any growth you see through replacement. Thank you.

Speaker Change: But we are relatively agnostic, we don't mind, whether whether they use <unk> also can come up but because they are both very employee intensive so thats kind of the first day and then obviously any of that is taken away market share from internal combustion engines, but I do honestly believe that youre going to see a lot more use of.

Speaker Change: Power devices in general, whether it's going to be because of.

Russell Low: So that might temper any growth you see by replacement.

Jack Egan: John, thank you. Thank you.

Operator: As a reminder, to ask a question, please press star 11 and wait for your name to be announced. Please let me hear inquiries to one question and one follow-up.

Operator: As a reminder, to ask a question, please press star 1 1 and wait for your name to be announced. Please limit your inquiries to one question and one follow-up. Thank you for your question.

Mark Miller: Our next question comes from Mark Miller from the Benchmark Company. Please go ahead. Thank you for the question. I just wonder if we can give some detail of the emails that are currently underway. Oh, we need a further email. Sorry, the e-vows. So we currently have a number of e-vows underway. They're obviously in areas where we're looking to grow our business. Were you interested in the ones that we have underway, or the ones that we closed out in Q2, Mark? The ones underway, please. Okay, so we do have an e-vow for what I'd considered people are.

Russell J. Low: Okay, so we do have an eval for what I consider to be, well, so I think we mentioned this in July, there's a tool in the field for high-energy proton implantation into IGBTs. So that is, basically, would complete our full portfolio of products for power devices with that product. Actually, that product, I think we mentioned that, has an opportunity for about $50 million per year of additional revenue. And we're actually quite excited about that.

Russell Low: So I think we mentioned this in July. There's a tool in the field for high energy proton implantation to IGBTs. So that is basically would complete our full portfolio products for power devices with that product. Actually, that product, I think we mentioned that. That's why it has an opportunity of about $50 million per year of additional revenue. And we're actually quite excited about that. We had a lot of inquiries about that. The other one is a Silicon Carpet tool in Taiwan that we're looking at. And that we actually started yet another e-vow with a large customer in Taiwan for general mature.

Russell J. Low: We had a lot of inquiries about that. The other one is a silicon carbide tool in Taiwan that we're looking at. And we actually started yet another eval with a large customer in Taiwan for General Mature. So last quarter, we closed an eval with this customer for General Mature. And now we're doing a second eval in a different location with this customer. So we're getting some traction there.

Speaker Change: Inquiries about that.

Speaker Change: The other one is I silicon carbide <unk> in Taiwan that we're looking at and.

Speaker Change: We actually started yet another eval.

Speaker Change: A large customer in Taiwan for general mature so last quarter, we closed any of that with this customer agenda with Shaw and now we're doing a second leap out in a different location with this customer so we're getting some traction there.

Russell Low: So last quarter, we closed an e-vow with this customer for general mature. And now we're doing a second e-vow in a different location with this customer. So we're getting some traction there. And as I might have already mentioned, we did sign off last quarter a dragon, a pure and dragon at an advanced logic research location. We did get an H-200 Silicon Carpet tool, pure and tool signed off in North America for Silicon Carpet. And there was actually an H-200, a pure H-200 that was signed off in China for general mature. So we continue to have quite an active funnel.

Russell J. Low: And as I might have already mentioned, we did sign off a dragon last quarter, a Purin dragon at an Advanced Logic Research location. We did get an H200 silicon carbide tool, a Purin tool signed off in North America for silicon carbide. And there was actually an H200, a Purin H200 that was signed off in China for General Mature.

Speaker Change: Might have already mentioned, we did sign off last quarter dragged in the Purion Dragon and advanced logic research location, we did get an H 200, silicon carbide tool Purion, So signed off in North America for Silicon Carbide, and there was actually an H 200, a pure.

Russell J. Low: So we continue to have quite an active funnel, and even though there are a few going on right now because we closed so many, Mark, we are looking at the next tranche as well. We find this is a really useful strategic tool for us to break into.

Speaker Change: 200 that was signed off in China for general mature. So we continue to have active funnel and even though that there's a few going on right now because we closed so many mark we are looking at the next tranche as well we find this is a really useful to strategic tool for us to break it and so there's a number of <unk>.

Russell Low: And even though there's a few going on right now because we closed them any mark, we are looking at the next branch as well. We find this is a really useful strategic tool for us to break in. So there are a number of customers, whether it be additional memory customers or advanced logic, where we're looking to use the evaluations as a way to demonstrate our ability to our customers and build that relationship.

Russell J. Low: So there's a number of customers, whether it be additional memory customers or Advanced Logic, where we're looking to use the evaluations as a way to demonstrate our abilities to our customers and build that relationship. I think those will be signed off on before the end of the year. The proton tool, I think, is imminently coming up. And also, the silicon carbide tool in Taiwan is imminently coming up. So I expect to have news on those in the near future.

Speaker Change: <unk> whether it be.

Russell Low: What do you expect the tools currently under evaluation to be signed off on? I think those will be signed off before the end of the year, I believe. The proton tool, I think, is imminently coming up. And also the Silicon Carpet tool in Taiwan is imminently coming up. So I expect to have news on those in the near future. The one that we just shipped out for general mature in Taiwan, obviously that's going to be a one-year evaluation. So that won't be until the middle of 25 to late 25 that will have any update there.

Russell J. Low: The one that we just shipped out for General Mature in Taiwan, obviously, that's going to be a one-year evaluation. So it won't be until the middle of 2025 to late 2025 that we'll have any updates there. But we do have a very high success rate with evaluations.

Operator: But, you know, we do have a very high success rate with evaluations. Thank you. I'm showing no further questions at this time.

Operator: Thank you. I'm showing no further questions at this time.

David Ryzhik: I will now turn it back over to David Ryzhik for closing remarks. Thank you, operator. I want to thank everyone for joining the call. We look forward to seeing many of you at some investor conferences this quarter. With that, operator, let's close the call.

David Ryzhik: I will now turn it back over to David Ryzhik for closing remarks. Thank you, operator. I want to thank everyone for joining the call. We look forward to seeing many of you at some investor conferences this quarter.

Operator: With that operator, let's close the call.

Operator: Thank you.

Operator: Thank you for your participation on today's call. This does conclude the program.

Operator: You may now disconnect.