Q3 2024 Camtek Ltd Earnings Call
This meeting is being recorded.
Kenny Green: Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to CamTec's Results Zoom webinar. My name is Kenny Green and I am part of the Investor Relations team at CamTec. All participants other than the presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded and the recording will be available on CamTec's website from tomorrow.
Kenny Green: You should have all by now received the company's press release, if not, please view it on the company's website.
Thank you very much.
Speaker Change: With me today on the call, we have Mr. Rafi Amit, Camtec CEO, Mr. Moshe Eisenberg, Camtec CFO, and Mr. Rami Lange, Camtec COO.
Speaker Change: Rafi will open by providing an overview of Camtex results and discuss recent market trends. Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe and Rami will be available to take your questions.
Speaker Change: of the Private Security Litigation Reform Act of 1995. Such statements may use terminology such as believes, expects, may, will, should, anticipates, plans, or similar expressions to identify forward-looking statements.
Speaker Change: Such statements reflect only current beliefs, expectations, and assumptions of CAMSEC.
Speaker Change: However, actual results, performance or achievements of Cantech may differ materially as they are subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, those that are described in Cantech's most recent annual report on Form 20F.
Speaker Change: and as may be supplemented from time to time in CAMFEC's other filings with the SEC, including today's earlier filing of the Earnings PR, all of which are expressly incorporated herein by reference.
Speaker Change: CAMTEC undertakes no obligation to update any such forward-looking statements unless required by law.
Speaker Change: Also, today's call will include certain non-GAAP financial numbers. For a reconciliation between GAAP and non-GAAP results, please see the table included in today's press release, which is also posted on the IR section of CAMSEC's website.
Speaker Change: And I would now like to hand the call over to Rafi, Camtec CEO. Rafi, please go ahead.
Okay. Thanks, Kenny.
Good morning or good afternoon everyone.
Speaker Change: Comtech ended this quarter with a record quarterly revenue of 112 million dollars.
representing 40% growth compared with Q3'23.
The distribution of revenue in this quarter is as follows.
Speaker Change: Around 50% of our sales were for HPC or high performance computing related products for the third quarter in a row.
Speaker Change: approximately 20% for other applications of advanced packaging and the rest were split between other segments.
Speaker Change: This trend in product myths resulted in favorable profitability parameters of 51% gross margin and slightly over 30% operating margin.
Speaker Change: The main gross driver in the semiconductor market continues to be HPC modules for generative AI for which we are a key equipment provider.
Our future forecasts take into consideration a positive HPC trend.
Speaker Change: From order we have on hand in our pipeline and from discussion with customers, we expect demand for our system for HPC related products to continue into 2025.
Speaker Change: We also see increased demand for our systems for a wide range of other applications.
Speaker Change: Based on our current order flow, backlog, and pipeline, our revenue guidance
Speaker Change: for the fourth quarter is around $115 million, representing about 30% growth year over year with sequential growth in Q1, 2025.
Speaker Change: Given the guidance for Q4, we expect 2024 to be a record year for Comtech with revenue around $427 million, representing 35% gross year-over-year
Speaker Change: Our expectation is that 2025 will be another year of growth.
Speaker Change: During Semicon Taiwan in early September, we introduced our fifth generation of the Eagle system.
Eagle G5
Speaker Change: The new system offers superior wafer throughput coupled with improved optical resolution, meeting both current market demand and the customer's future roadmap.
Speaker Change: Since the introduction, as we announced last week, we have already received orders for over $20 million, with delivery starting in Q4 this year.
and many more. Thank you. Thank you.
This system is the first in several new products
that we have been developing in the recent years
and will provide inspection and metrology solutions.
Speaker Change: for the upcoming advanced packaging technologies that are characterized by the fine pitch or micro bump and hybrid bonding interconnects.
Speaker Change: In addition to the Eagle G5, which has been officially presented, we also introduced our new and advanced system for the next generation of advanced packaging to several key customers.
Speaker Change: Some of them have already installed the new system for qualification while others have placed initial orders for it.
Speaker Change: This new system will be officially launched in Semicon Korea in the beginning of 2025 and is expected to contribute tens of millions of dollars already within 2025.
Speaker Change: estimates regarding the growth forecast of the HPC segment in 2025.
Speaker Change: Our understanding is that the demand for HPC modules continues to be high.
Speaker Change: And the reason some see a slowdown is due to a lack of production capacity.
Speaker Change: The cornerstones of HPC modules are logic and HBM components and the 2.5D substrate that pack all the components into one module.
Speaker Change: In our caution opinion, the bottleneck is currently due to missing capacity of 2.5 D substrates.
We estimate that this bottleneck will be released in 2025.
Speaker Change: The strong order flow and backlog for delivery in 2025 gives us a relatively clear long-term vision.
which allows us to organize our operations
Speaker Change: efficiently to meet the expected demand, and as indicated in previous calls, we are adding new manufacturing capacity in Europe that will start operating in 2025.
Speaker Change: To sum it up, I am excited about our business and outlook and expect 2025 to be another year of growth.
And now, Moshe will review the financial result. Moshe.
Moshe Eisenberg: Thanks, Rafi. In my financial summary ahead, I will provide the results on a non-gap basis. The reconciliation between the gap results and the non-gap results appear in the tables at the end of the press release issued earlier today.
Moshe Eisenberg: Revenue for the third quarter came in at a record $112.3 million, an increase of 40% compared with the third quarter of 2023, and a sequential increase of 10% from the second quarter of 2024.
Moshe Eisenberg: The geographic revenue split for the quarter was as follows, Asia was 87%, U.S. and Europe accounted for 13%.
Gross profit for the quarter was $57.1 million.
Moshe Eisenberg: The gross margin for the quarter was 50.8%, similar to the second quarter of 2024 and improved from 49% in the third quarter of 2023.
Moshe Eisenberg: This is within our expected range with the changes from prior periods mainly due to product mix in the quarter and increased revenues from last year.
We expect similar levels in the next couple of quarters.
Moshe Eisenberg: Operating expenses in the quarter were $22.9 million, compared to $18.6 million in the third quarter of last year and $21.6 million in the previous quarter.
Moshe Eisenberg: The increase is mostly due to a planned expansion to support growth of operations and the continued investment in the development of new products referred to by Rafi.
Moshe Eisenberg: We expect a similar level of OPEX in Q4 as well.
Moshe Eisenberg: Operating profit in the quarter was $34.2 million compared to the $22.2 million reported in the third quarter of last year and $30.8 million in the previous quarter.
Moshe Eisenberg: The increase is mostly due to the increase in revenue and the improvement in the gross profit from last year.
Moshe Eisenberg: Operating margin was 30.4% compared to 30% and 27.6% with Technia.
Moshe Eisenberg: Financial income for the quarter was $6.4 million, compared to the $5.7 million reported in the third quarter of last year, and $5 million in the previous quarter.
Moshe Eisenberg: The increase is mostly due to the increased cash balances and the positive impact of exchange rate differences.
Moshe Eisenberg: Net income for the third quarter of 2024 was $37 million or $0.75 per diluted share.
Moshe Eisenberg: This is compared to a net income of $25.2 million or $0.51 per share in the third quarter of last year. Total number diluted of shares as of the end of the third quarter was 49.4 million.
Moshe Eisenberg: Turning to the balance sheet and the cash flow matrix, cash and cash equivalents, including short and long-term deposits and marketable securities as of
September 30th, 2024.
Moshe Eisenberg: were $489 million, this compared with $454 million at the end of the second quarter.
Moshe Eisenberg: We generated 36 million dollars in cash from operations in the quarter on the back of an increased revenue and profitability and strong collection.
Inventory level increased by $7 million to $116 million.
Moshe Eisenberg: The increase over the previous quarter is to support the anticipated sales growth in the coming quarters. Accounts receivables increased slightly from $68.2 million to $70.7 million in the quarter.
Moshe Eisenberg: I'm especially pleased to report that our day sales outstanding continue to improve and they now stand at just 57 days, down from over 100 days last year.
Speaker Change: As Rafi said before, we expect revenue of around $115 million in the fourth quarter with sequential growth in Q1 of 2025.
Speaker Change: And with that, Rafi, Rami, and I will open the call to take your questions.
Moshe Eisenberg: Thank you, Moshe. At this time, we'll begin the question and answer session. If you have a question, please raise your hand on the Zoom platform. I'll introduce you and ask you to unmute, after which you may ask your question.
Moshe Eisenberg: So, we will now pause your questions for a few seconds.
Charles O'Keefe
Moshe Eisenberg: Our first question will be from Charles Shee of Needham. Charles, you may go ahead. Yes, good afternoon. Thanks for taking my question. Thanks for the color. The context understanding about the HPC market going forward with respect to the
Moshe Eisenberg: There's pretty much a lot of noise about HVM overcapacity concerns.
Moshe Eisenberg: So I do want to ask a little bit more on this topic.
because of...
Moshe Eisenberg: From your perspective, it does sound like the chiplet side of the HPC.
Moshe Eisenberg: demand. Maybe it will be stronger next year given that it seems like it's the bottleneck.
Moshe Eisenberg: for the industry, but on the other hand, it does sound like on the HBM alone, not just the overall HPC, on the HBM alone, you're still expecting a good year next year.
Speaker Change: I want to understand if this is the understanding of the management. Maybe chiplets grow a little bit faster next year, HBM still grow, but not growing as much as the chiplet side. I wonder if this is the case. Thanks.
Speaker Change: Hi Charles, this is Rami. No, look, this is Hans and I think Rafi has prepared the notes.
The HPC includes, you know, the triplets.
Speaker Change: and the HBMs, and they basically go hand-by-hand and the growth will be together.
now
Speaker Change: What we do see, you know, it's a quarter by quarter and, you know, it depends on the order entry. So, it's not that every order we get exactly the same percentages. They may differ from quarter to quarter.
Speaker Change: But as we go into 2025, we expect to see a similar pattern as this year with growth on both the chiplet side and the HBM side.
Speaker Change: and Nicole Kinnan, who are also here with us. We're so pleased to have you here. Thank you for joining us and we hope to see you soon. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
Speaker Change: Thanks. On the other hand, I think I want to ask about China used to be contributing more than 40% of the revenue for Chemtech last year and the year before. But what's the expectation for China this year, the percentage of revenue and any early view on 2025, whether that the China contribution will go up or stay where it is this year or go down? Thanks.
Thank you.
So first of all, this year it will be lower.
Going into 25, China in general.
Speaker Change: Seems the business seems to be solid, seems to be healthy.
Speaker Change: So we expect it will be at least similar or maybe a little bit larger than this year.
But all in all, China continues to invest.
The End
Thanks.
The
Thanks, Charles.
Speaker Change: Our next question is going to be from Brian Shin of C4. Brian, you may go ahead and ask.
Brian Shin: Hi there, good afternoon. Thanks for letting us ask a few questions.
maybe given what that the commentary around
Speaker Change: kind of explain some of the confusion about whether, you know, a slowdown or pause that some suppliers maybe have referenced around AI advanced packaging is more supply or demand related. You talked about constraints for advanced packaging substrates. I'm curious, when in 2025 do you think
Speaker Change: Those constraints will be relieved, and do you see that impacting either your 4Q revenue outlook or revenue trajectory into Q1 of next year?
Speaker Change: So, let's see what we see today and what we said. So, first of all, we continue to see a positive trend of the HBC, which means both the 2.5D substrates and the HBM.
Now
Speaker Change: We continue to see the pattern. We feel very comfortable based on our backlog and our pipeline regarding the business in Q4.
and we said that there will be a sequential growth.
Speaker Change: into the first quarter of 25. And you know, this is something that is very visible to us.
Speaker Change: Looking ahead, definitely we believe that HPC will be a main contributor to our business next year. To go into better or more accurate numbers, obviously it is a little bit too early.
Speaker Change: But we are very confident about the fourth quarter and the first quarter.
Yeah, that's helpful. And then maybe...
Speaker Change: referencing the new product and then being sensitive that it hasn't formally or won't be formally introduced into Q1 until Q1 of next year but since you have referenced it in the slide, can you share some details on maybe the types of applications?
for this new product or
Speaker Change: and or maybe the size of the addressable market. You did reference that you can have tens of millions, maybe 20, 30 million, something like that. Contribution 25. What's the addressable market and I guess also in terms of that tens of millions, do you think it will be more, you know,
Speaker Change: Q1 first half or second half or kind of across the year.
Speaker Change: So, first of all, of course, we will start the launch and gradually ramp it up to production so there will be an increase in revenues over the year, because this is a new product.
Speaker Change: And I think Rafi discussed it in his prepared remarks. This is a high-end product that will
Speaker Change: Go side-by-side with the eagle, it will go to the higher-end applications.
Speaker Change: We're talking about here, obviously, inspection, what we call 2D capabilities.
where we are looking at much.
Speaker Change: faster machine and also with the ability to see much smaller than defects than we are currently that we currently inspect on the Eagle machine. So basically this is application such as the hybrid bonding and other applications in the advanced packaging such as
Speaker Change: The discussion, you know, the number of bumps is going up to hundreds of millions of bumps per wafer with very fine pitch going down to five micron pitch. These are the kind of applications that this machine will address.
Rafi, you want to add anything?
Rafi Amit: No, I think actually you summarized it very well and okay, if they understand the roadmap of the customer.
Rafi Amit: where they want to go, or what does it mean, you know, small peach...
Rafi Amit: to go from 15 micron to 5, 6, or 8 micron, what does it mean in terms of amount of bumps?
Rafi Amit: All of it, you cannot do it with the current system because you need much more, I would say, better accuracy and also customer expect higher throughput. So this is totally a new platform that can meet this type of demand.
Speaker Change: Just one quick clarification on that. Do you think that in terms of this increased sensitivity?
Speaker Change: and productivity. Do you think that sort of is ushered in with HBM4 as an example and maybe more TSV interconnects? Is that sort of an example of where these capabilities would be required?
[inaudible]
Speaker Change: Well, you know, I wouldn't go now to specific applications as TSVs, but in general the capabilities of this machine in the inspection space are far more superior than what we can achieve on our current machines.
Speaker Change: From the total available market, definitely it will substantially increase our total available market. It's hard for us to say at this stage to take a number, but definitely it will significantly increase it.
Okay, thank you.
Thank you very much.
Speaker Change: Thanks Brian. Our next question is going to be from Tom O'Malley from Barclays. Tom, you may go ahead and ask.
Hey guys, thank you for taking my questions.
So, this is Kyle Blustein on for Tom.
Speaker Change: The first question I have is, last earnings you guys kind of talked about countries investing in domestic manufacturing as one of your growth drivers and it seems like most of your geos were up sequentially.
Speaker Change: So my question is how much of like that sequential growth was from like
Speaker Change: the memory guys in each country either increasing orders or versus some of those domestic initiatives that you guys talked about last time.
[inaudible]
Speaker Change: We're not sure that we fully understand the question, if you can, you know, just repeat it for us.
Speaker Change: Sure, so like one of, on the last Ernest call, you guys mentioned...
Speaker Change: sovereign growth being like a potential driver that companies invest it like independent like semiconductor assets to build up their domestic manufacturing so with all your geos pretty much doing better sequentially I was curious like how much of that is from like are you seeing from those countries like initiatives for domestic manufacturing versus just some of your large like memory customers in Korea or the U.S. increasing their own orders like if there's kind of sizing the split of what causes sequentially increase?
Speaker Change: So I think our discussion on longer term geographic diversity of manufacturing, this is something that is ongoing, but it's not something that happened this quarter. And I think we will see probably, you know, new facilities in different geographies going up. It will take some time.
Speaker Change: But I think definitely from longer term prediction, this is definitely will contribute to our business, but it's not in the short term.
Okay, that makes a lot of sense.
Speaker Change: And then just a quick follow up on that. You talked about like your new capacity that you guys are building in Europe. What is like the total revenue number that you guys are able to support? I think last time I had it was greater than 600 million.
Speaker Change: Do you have an expectation of, I know this is a longer term trail question, when you might be able to get closer to filling that capacity or when you would need to increase it again?
The
Speaker Change: So at this stage in our current capacity, in our current facility, we can go over 600 million. We're adding at least 10% in this European location, which will happen next year. So this will bring us closer to 660, and that capacity can be grown further. So definitely from capacity point of view.
Speaker Change: We don't have any limitations to grow in the foreseeable future.
All right, awesome. Thank you guys for taking my questions.
Thanks, Tom.
Speaker Change: Our next question will be from Craig Ellis from BeRighty. Craig, you may go ahead and ask.
Yeah, thanks for taking the question guys and congratulations on
Speaker Change: the nice execution. I wanted to start just by asking a contextual question for some of the nice comments around the fourth quarter guide and the first quarter strength. And that is, can you comment a little bit on what you've seen over the last three months with
Speaker Change: just pipeline discussions with customers on the chiplet and HBM side and and the degree to which activity is
Speaker Change: Trending versus what you saw in the first half of the year or or accelerating or decelerating as we think about the implications for 2025
and the other.
You know, it's a...
Obviously there is a lot of
Speaker Change: discussions about HVN and you know how much the capacity will grow and the 2.5 D substrates.
Speaker Change: From the discussions with our customers, most of the players are very optimistic and continue to add capacity.
So, we don't see, at this stage,
Speaker Change: something that is going slow or less optimism. I think there is a lot of the discussions are ongoing. Then it goes to a customer by customer. Sons are ready to commit and asking for slots.
Speaker Change: Some are a little more hesitant, but overall, I think the atmosphere, specifically about the HPC in general, is positive.
That's helpful, Rami, and that clarifies some of those comments.
Speaker Change: Are you seeing yet, because we're seeing it reported especially out of
Speaker Change: and Eastern Press intends to pull in either HBM4 or 16 high or 20 high stacks. Are you seeing customers engaged at the pipeline level for those things or is that still further out in time?
Speaker Change: I think it's a little bit further out in time. I don't think there is a pulling at this stage.
Thank you very much.
Got it. And then.
Speaker Change: looking at the color on calendar 25 continuing to read rate growth potential the question is after all the attention on chiplets and HBM can you comment on the degree to which other things whether it's
Speaker Change: a recovery in the CMOS image sensor side of the business.
Um.
Speaker Change: things like the potential benefit from specialty materials or silicon carbide or other things are going to contribute to growth next year. Thank you. So that's interesting you're asking. Yes, it is. Actually, CMOS image sensors is a
Speaker Change: It's starting to, we're seeing a lot of interest, a lot of discussions from customers, and it seems that this market is going to contribute a lot more than it has contributed over the last couple of years, that this business was pretty down. So definitely there is...
Speaker Change: We are seeing more and more, you know, front-end applications, and we're getting more market traction, and I think we will make some progress or increase our market share.
Speaker Change: and definitely silicon carbide, which was very low in the last 12 months or was not really in a good shape. I think it's starting to pick up.
Rami Lange: Got it. And is the silicon carbide point a point that dovetails with growth in China next year or is that in other regions, Rami?
I think it's also China.
Got it. Thanks guys. Appreciate the help. Thank you. Thanks.
Speaker Change: Our next question is going to be from Gus Richard of Northlands. Gus, you may go ahead.
Gus Richard: Yes, thanks for taking the questions and congratulations on the strong results. I'm curious about the increase in demand for FanOut. Can you provide any more color on what that application is?
Gus Richard: You know mobile phones, you know regular old PCs. Can you just talk a little bit about where that's coming from?
Speaker Change: You know, this is coming from OSOT, and here we don't really see the application, they're sort of very careful about letting you know, sometimes they need support in the application, sometimes they don't even need that, but what I'm seeing is
Speaker Change: More requests for fan out. I did not have the information about the specific applications here.
Thank you.
Speaker Change: Got it, and okay, I think that's it for me. Thanks so much. All right, bye Gus. Thanks Gus.
Speaker Change: Our next question is going to be from Vivek Arayeg from Bank of America. Vivek, you may go ahead and ask.
Speaker Change: Hi, this is Michael Mani on for Vivek Arya. Thanks for taking our questions.
Speaker Change: So, to start, it seems like it's been well-reported that one of your customers may be encountering some issues in the qualification process for their latest HBM products. So, in the scenario that, you know, they might be unsuccessful in qualification,
Speaker Change: How should we think about any impact to your ability to grow next year? And, you know, should we think about this demand potentially being made up somewhere else at another customer? Thank you.
www.mustwatch.eu
Speaker Change: You know, this is a question that we've always been asked.
Speaker Change: If I can look at 24, I think all the players made investments.
Speaker Change: But I don't think this will make a major change next year.
Speaker Change: I see, thank you. And just on gross margins, just what are the puts and takes for gross margins heading into next year, especially as you release these new products and they ramp into production? Should we think about them as potential tailwinds, given that they're coming at higher ASBs and what I'm assuming is a more margin accretive profile? Thanks.
Moshe Eisenberg: Hi Michael, this is Moshe. In the last year and a half we've made, you know, we took certain initiatives to improve gross margin, but the main factor around gross margin is, as you said, you know, it's a product mix.
Um...
Moshe Eisenberg: We are currently operating at a range of, I would say, between 50.5 to 51.5, could be even 62. So that's kind of the range.
Moshe Eisenberg: It would be, you know, highly impacted by the product mix.
And yes, the new product offering may be cross-margin accretive.
Moshe Eisenberg: But still early to assess the contribution, and yes, we did mention that we expect tens of millions of contributions, but in the big picture it's not going to be the majority.
Moshe Eisenberg: So, it can have a slightly positive impact, but not much.
Great, thank you very much. Thank you.
Thanks a bit.
Speaker Change: Our next question is going to be from Vidvati Shrathra from Evercore. Vidvati, you may go ahead and ask your question.
Vidvati Shrathra: Hi, thanks for taking my question. So the first one I had was, I think last quarter you talked about the HPC contribution being 50 to 60 percent for the total year.
Vidvati Shrathra: and now it's 50%. Is there something in the second half that sort of pulled it down to 50% just trying to make sure I fully understand that change?
www.mustwatch.eu
Vidvati Shrathra: Hi Vidvati, this is Ram. So you know when we looked at the beginning of the year we had this discussion and we said we'll do
50-60% in revenues for the HPC.
Vidvati Shrathra: At that time, the revenues we assumed for this year were lower than what we eventually finished the year, or going to finish the year.
with our estimates for the fourth quarter.
Vidvati Shrathra: So actually, from the numbers we anticipated that we will do for the HPC, we're very close to the target. And therefore, the 50% is really for the good news of the whole business this year, and rather bad news. It's not a bad news for the HPC there, we're really on the target that we're anticipating.
Speaker Change: Noted. The second question that I had was more longer term. So you know we're transitioning into HBM 3e and then potentially HBM 4 maybe end of 25, 26.
Speaker Change: How is this impacting the inspection or the 3D metrology intensity you're seeing on your tools? Maybe are you seeing more color on how that's shaping up to be?
Speaker Change: No, I don't think that we are going to see any change in the intensity.
Speaker Change: In general, we are looking for the non-good guys in this part of the business and therefore even if the yield changes, we are still going to inspect the entire wafer to make sure there is a non-good dye.
promptly.
Speaker Change: What we are seeing, obviously, is that the HBMs are having more stacks and this really means that we are going to scan more wafers. So from that point of view, if they continue into 12 and 16 stacks, this is good news for us from the business point of view.
Speaker Change: And yes, we are involved in the development of these generations. We're working very closely with our customers.
Speaker Change: trying to add more steps in inspection and metrology. And that's something ongoing that hasn't changed in the last year, and I don't think will change, at least in 2025.
Understood. And then on the HBM side, are you...
Speaker Change: Is there a hypothesis that, you know, it's been, you know, one year where the capacities has doubled and tripled and now next year seems like the demand will be strong?
Speaker Change: Are the Korean manufacturers sort of looking for local suppliers within Korea that kind of help their process? Is that something that's shaping up? Are you seeing more competitors come out?
I hope this continues to be strong.
Speaker Change: You know, there is in Korea a small competitor that we know very well, but I don't think we've known him for, I don't know.
Ten years he's been out there.
Speaker Change: But no, I don't think that he is here a major contender in this market. I think it's really...
from most of the businesses between us and Onto.
Speaker Change: and they are also you know a little bit with KLA but I think it's a we are near the main players. I don't think there's really anything drastic changing in the
Speaker Change: from this point of view, and I don't see any local contenders in Korea at this stage. Understood. Thank you. That's all from my end. Thank you. Thanks, Batty.
Speaker Change: Our next question is going to be from Blaine Curtis of Jeffreys. Blaine, you may go ahead and ask.
Blaine Curtis: Hey, thanks so much. I have two questions. I just wanted to go back to the outlook for HBC. I mean, this has been much covered that there's, you know, lack of clean room space. If you look at...
Blaine Curtis: the additions of co-op capacity does seem to incrementally go up every quarter. So I'm just kind of curious is the equipment order is a little bit more lumpy and when you say growth in March are you expecting it to resume there or is it further in 25?
Speaker Change: So, yes, first of all, you're correct that there is also a discussion about clean room space and how they are going to make and find the capacity. This has been ongoing in Taiwan for the past few quarters, but I think they are managing to find a place and getting hold of clean room space, and that's at least the information that I have. And, you know, there are not too many...
Speaker Change: competitors, they're all players there, so I think from a capacity point of view, they are on track.
I think that they, from
Speaker Change: The forecast that we are seeing, and you know, I said it earlier, you know, we have very good disability
Six months forward.
Speaker Change: And, of course, we understand how the business is going, but our visibility is not as good when we look further into next year. What we are saying today is, as we said, we gave
the guidance for the fourth quarter.
Speaker Change: a positive outlook into 2025 that we feel that it will be and we expect it to be a growth year.
Speaker Change: And this is more or less what we can really see today or can discuss it. I mean, more details about it.
Speaker Change: I think things will become more clear as we go into the beginning of, finish this year, get into the beginning of next year. People will make their plans, and obviously the picture will get clearer, but always it's around.
Speaker Change: Thanks, and then maybe I'll inverse the question for my second one just if HBM it sounds like
Speaker Change: You're not seeing a huge pickup even in Q1. So can you talk about the strength you're seeing outside of HBC, particularly September quarter? I think you mentioned compound savings. What else grew in kind of September? Where are you seeing the strength that's giving you this growth while you wait for HBM to reaccelerate?
Speaker Change: So first of all, let's let's clear it. HBM is on track and the business is healthy
Speaker Change: into the first quarter. As we said, the fourth and in the first quarter is HPC, which includes the chiplet business and the HBM. Both are healthy.
Speaker Change: Where we are seeing, we're starting to see some pickup in others, as I said, signals-image sensors picking up, fan-out, and other smaller applications.
Speaker Change: that we have, and definitely so, so we see a lot of interest from many other customers, a lot of ones and twos, you know, we're shipping machines to about
Speaker Change: Close to 40 customers every quarter, so we have a lot of smaller players that are starting to buy QuickPens.
Speaker Change: for all kinds of applications and obviously a few big ones.
Speaker Change: for the agency and other applications that obviously take a larger number of machines. So if we look at the entire picture, this is where our positive outlook is coming from.
Thank you.
Speaker Change: Thank you, Blayne. And that will end the question and answer session. Before I hand back over to Rafi, I would like to let you all know that in the coming hours we will upload the recording of the conference call to the Investor Relations section of Camtech's website at camtech.com. I would like to thank everybody for joining this call and hand back to Rafi for his closing statement.
Rafi Amit: Okay, I would like to thank you all for your continued interest in our business.
Rafi Amit: I want especially to thank the employees and my management team for their tremendous performance.
Rafi Amit: To our investors, I thank you for your long-term support. I look forward to talking with you again next quarter. Thank you and goodbye.