Q1 2025 Entegris Inc Earnings Call
Thank you very much.
Speaker Change: Good day, everyone. Welcome to the Entegris First Quarter 2025 earnings conference call. At this time, our participants have been placed in a listen only mode and the floor will be open for your questions following the presentation.
Speaker Change: If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you can remove yourself from the cube by pressing star 2.
Speaker Change: So others can hear your questions. Clearly, we do ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star and zero. But now like to turn the call over to Bill Seymour.
Bill Seymour: Good morning everyone. Earlier today we announced the financial results for the first quarter of 2025.
Speaker Change: Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements.
Bill Seymour: These statements involve a number of risks and uncertainties and actual results could differ materially from those projected in the forward-looking statements.
Bill Seymour: Additional information regarding these risks and uncertainties is contained in our most recent annual report and subsequent quarterly reports we have filed at the SEC. Please refer to the information on the disclaimer slide in the presentation.
Bill Seymour: On this call, we will also refer to non-GAAP financial measures as defined by the SEC and Regulation G. You can find the reconciliation tables and today's news release as well.
Speaker Change: is on our IR page at our website at integrity.com On the call today, our Bertrand Loy, our CEO and Linda LaGorga, our CFO With that, I'll hand the call over to Bertrand
Bertrand Loy: Thank you, Bill, and good morning. Our first quarter revenue grew 5% year-on-year excluding divestitures, slightly below our garden's edge.
Bertrand Loy: Taking a closer look at our quarterly performance by division, material solution sales were up 8% year on year excluding divestitures. As expected, CMP slurries and pads delivered its strong year on your growth, up almost 20%.
Bertrand Loy: Advanced purity solution sales were up 3% year-on-year. This growth was driven by solid demand for our microcontamination control solutions offset by a sharp contraction in foops and fluid handling revenue.
Bertrand Loy: In the quarter, we also continued to make solid progress on several fronts.
Bertrand Loy: At our new Colorado manufacturing site, we are on track with initial equipment qualifications and our first milestone associated with our Chiefs Act grant now complete.
Bertrand Loy: We expect to initiate customer qualifications in the second half of this year.
Bertrand Loy: Our facility in Tau Shum Taiwan also continued to make progress in the first quarter and we expect to complete most of the liquid filter qualifications by the end of this year.
Bertrand Loy: These facilities are good examples of our strategy over the past decade to invest in a broad global manufacturing footprint, offering redundant manufacturing sites for our major strategic product lines.
Bertrand Loy: In addition, we have developed well-integrated supply chain clusters around our largest manufacturing centers.
For example,
Bertrand Loy: Approximately 90% of the raw materials used by our Yonizawa plant in Japan comes from Japanese suppliers and our KSP site in Taiwan uses approximately 90% regional suppliers.
Bertrand Loy: Likewise, once up and running, we expect our Colorado facility to rely predominantly on US suppliers with nearly 95% of its needs served from domestic suppliers.
Bertrand Loy: You can expect us to continue to build on this strategy and evolve our business model to better serve our global customers, to shorten our returns and the risk of supply chain.
Bertrand Loy: In the current trade environment having a comprehensive global manufacturing footprint with regionally integrated supply chains represents a significant strategic advantage.
and Entegris
Bertrand Loy: All of the necessary building blocks are in place. We now need and will capitalize on our global manufacturing network.
Bertrand Loy: During this uncertain time for the semiconductor industry, we continue to prioritize engagement with our customers to help enable their technology road maps.
on that note.
Bertrand Loy: We are making good progress ahead of commercial volumes of molly deposition materials. We have excellent engagements with all major 3D nan players, and we are very pleased. With the POR wins we have achieved to date.
Bertrand Loy: Our Mali deposition film offers the best film of conformality and the best cost of ownership in the industry.
Bertrand Loy: In addition to the film material, we are also making great progress in developing novel wet edge chemistry for money edge as an alternative to the current dry edge process the industry is using.
Both opportunities are very promising
Bertrand Loy: They will be first adopted in 3D Nan Manufacturing, and in a few years in DRAM and Advanced Logic.
Bertrand Loy: Another recent win I would like to highlight is with IPF Purifiers.
Bertrand Loy: Customers in Korea recently came to us, concerned about trace metal contamination in IPA chemistry that impacted yields in HBM production.
Bertrand Loy: Our teams were quick to respond and promptly developed the required solutions.
Bertrand Loy: This is the perfect example of how our customers use integrative unique capabilities to solve emerging complex yield and process challenges and how we continue to increase our self-demarket over time.
Bertrand Loy: As these winds illustrate, we are very well positioned to capture incremental content for wafer and continue to outperform the market in the years to come.
Looking forward to the rest of 2025.
Bertrand Loy: The environment created by new tariff regimes is the source of significant uncertainty.
Bertrand Loy: and makes it very difficult to precisely quantify the direct and indirect impact on our customers and on our business.
Bertrand Loy: In that context, we are providing a broader than normal revenue guidance for Q2.
and will not update our 2025 outlook for now.
Bertrand Loy: That said, in this dynamic environment you can expect us to remain focused on what we control.
Bertrand Loy: Practively adjusting our cost structure and investment levels, focusing on improving free cash flow, putting M&A on pause.
Bertrand Loy: Staying committed to reducing of that level. And of course, we will continue to closely collaborate with our customers by supporting their no-transitions in second half of the year and by engaging on their long-term technology world maps.
Let me now turn the call over to Linda Linda Linda
Good morning and thank you, Bertrand.
Bertrand Loy: Our sales in the first quarter of $773 million were up 5% year-over-year, excluding the impact of divestitures.
Bertrand Loy: On an as reported basis, our sales were flat year-over-year and down 9% sequentially.
Bertrand Loy: Foreign Exchange, Negatively Impacted Revenue by $5 million year over year, and negatively impacted revenue by $2 million sequentially in Q1.
Bertrand Loy: Gross margin on a gap and non-GAAP basis was 46.1% in the first quarter.
Bertrand Loy: Grossmargin was at the midpoint of our guidance range and was up sequentially driven by strong cost management across our supply chain.
Bertrand Loy: Operating expenses on a gap basis were $234 million in Q1
Bertrand Loy: Operating expenses on a non-GAAP basis in Q1 were $186 million better than our guidance range.
Bertrand Loy: The gap tax rating Q1 was 11.5%, and the non-GAAP tax rate was 15%.
Bertrand Loy: Gap Deluted, EPS, with 41 cents per share in the first quarter [inaudible]
Bertrand Loy: non-GAAP EPS was 67 cents per share, at the midpoint of guidance.
Bertrand Loy: Sales for material solutions in Q1 were $341 million, up 8% year-on-year, excluding the impacted
Sales were down 5% sequentially in line with normal seasonality.
Bertrand Loy: Adjusted Operating Margin for MS was 22% for the quarter, up modestly sequentially.
Bertrand Loy: Sales, for example, purity solutions in Q1 were $434 million, up 3% year-on-year, and down 11% sequentially.
Bertrand Loy: The sequential sales decrease was driven by CAPEX products, including fluid handling products and suits.
Adjusted Operating Margin for APS with 25.4% for the quarter of the quarter of the quarter of the quarter.
The decline in margin was driven by lower volume.
Bertrand Loy: As we navigate this dynamic environment, we are focused on controlling what we can control, including our cost structure.
Bertrand Loy: For example, we've elected to retain approximately 75% of the previously announced $15 million of cost savings from the formation of the APS division, instead of fully reinvesting those savings.
Bertrand Loy: As always, we remain committed to delivering results in line with the framework of our analyst published day target model.
Bertrand Loy: Moving on to Cash Flow. Free Cash Flow was $32 million.
Bertrand Loy: As we mentioned in our last earnings call, we are committed to improving our free cash flow margin and have made free cash flow a
Bertrand Loy: In 2025, we expect our free cash flow margin to be in the low double digits
Bertrand Loy: Over the next several years, you can expect steady improvement as we aim at returning to levels similar to where we were pre-pandemic.
Bertrand Loy: One of our major focus areas is working capital optimization, in particular inventory, where we have the greatest opportunity as we look to improve lead times and optimize stock levels across our entire network.
Bertrand Loy: In addition to working capital improvements, we now expect our capital expenditures to be approximately $300 million in 2025.
Bertrand Loy: As a reminder, our capital expenditures are weighted more to the first half of the year driven by strategic investments, including phase one of our Colorado facility.
Bertrand Loy: As an aside, I am pleased to share that we have achieved our first Chips Act milestone and expect to receive $9 million in the second quarter.
A quick overview of our capital structure
Bertrand Loy: At the end of the quarter, our gross debt was approximately $4 billion, and our net debt was $3.7 billion.
Gross Leverage was 4.4 times
and Nat Leverage with Four Times.
Our dad is well-structured and de-risked [inaudible]
Bertrand Loy: The blended interest rate on our debt portfolio is approximately 4.9%.
Bertrand Loy: Since our term loan is fully hedged, currently 100% of our debt is fixed.
Bertrand Loy: and there are no majorities on the debt until 2028 and no maintenance covenants on the debt.
Weathers, Entegris Inc.
Bertrand Loy: From a capital allocation standpoint, our single priority remains paying down our debt.
Bertrand Loy: We will use all levers at our disposal to reduce our growth leverage to below four times.
Bertrand Loy: Looking forward, I believe we are well positioned to navigate through the dynamic care for an economic environment.
Bertrand Loy: We expect to see a temporary impact our top line related to our sales to China.
Bertrand Loy: We are actively working with our customers and suppliers to mitigate to the greatest extent possible the direct tariff impact by leveraging our global footprint and regional supply chain.
Bertrand Loy: Moving on to our Q2 Outlook, we are widening our revenue guidance range to reflect our current assessment of the direct tariff impacts.
Bertrand Loy: We expect our Q2 sales to range from 735 million to 775 million.
Excluding China, our business remains strong.
Bertrand Loy: Let me be clear, the lower sequential sales guidance is driven entirely by the uncertainty of shipments of our U.S. made products into China.
Bertrand Loy: We expect a gross margin of approximately 45 percent, both on a gap and non-GAAP basis.
Gap Operating Expenses of 225 million to 229 million
and non-GAAP operating expenses of $179 million to $183 million.
We expect EBITDA margin of approximately 27.5% We expect EBITDA margin of approximately 27.5%
Net Interest Expense of Approximately $50 Million $50,000.
Bertrand Loy: And we expect our non-GAAP tax rate to be approximately 12 percent due to the expiration of a tax reserve.
Gap EPS between 34 and 41 cents per share
and non-GAAP EPS between 60 and 67 cents per share.
Bertrand Loy: I'll now hand it back over to Bertrand for some closing remarks.
Bertrand Loy: Thank you, Linda. In closing, the industry environment remains dynamic. In that context,
Bertrand Loy: We will remain focused on what we can control, engaging with our customers, managing our cost, delivering strong profitability, improving free cash flow, and paying down our debt.
Bertrand Loy: In 2025, we are prioritizing critical investments that enable our customers, no transitions, and technology road maps needs.
Bertrand Loy: Our customers' technology road maps are calling for new materials and ever greater purity levels to improve device performance and achieve optimal yields.
Bertrand Loy: Our expertise in material science and material security is increasingly valuable.
Bertrand Loy: The R&D investments we are making are translating into key wins in new nodes and are expected to fuel our growth and market out performance in the years to come. With that operator, let's open the line for questions.
Speaker Change: Absolutely, the floor is now open for questions. At this time, if you have a question, please press the star and one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the cube by pressing star and two. Again, we ask that you pick up your handset when posing your question to provide for best sound quality.
Speaker Change: Our first question is coming from Melissa Weathers with Deutsche Bank. Please go ahead, your line is open.
Melissa Weathers: Thank you so much for letting me ask a question. Good morning, everybody. I guess on the comments that you guys have made on the direct impacts from tariffs and China and your outlook, could you help us understand?
Melissa Weathers: is the main message that excluding those direct impacts, everything else is pretty much going as planned as you talked about last quarter, or just help us, we get a little bit more context on how you're guiding and how much of that is.
Melissa Weathers: Terrific impact on how much that is any cyclical weakness. Thank you.
Speaker Change: There's good morning, Melissa, and good question, and let me put, actually, there's this Q2 guidance in the right context, and I may provide a little bit more details than I usually do, but I think the circumstances weren't that.
Speaker Change: Let's start with a few facts. I mean, entering you to our business is strong. The filerate is steady. Quoted to date, our book to be ratio is strong. It's actually approaching 1.2. So that's good. That's actually very good.
Another important fact, ex-China are…
The second quarter forecast is also solid.
Speaker Change: Actually, we expect the extra business to be up sequentially in line with…
Speaker Change: In Q2. Specifically, we expect sequinsure growth in our consumable product lines consistent with the expected sequinsure improvement in wafer starts.
That's going to be upset slightly by the sequential contraction.
Speaker Change: In the, you know, in our CapEx product line, and that's also consistent with the expected sequential contraction in the industry CapEx. But again, NetNet, our ex-China business.
Speaker Change: He's solid and is expected to be up sequentially so that's good as well [inaudible]
Speaker Change: So, and then to your question, I mean, we certainly have this China tariff situation to deal with. China introduced new tariffs on imports from the US. Our products, unfortunately, do not qualify for the temporary exemptions granted by the Chinese government.
Speaker Change: And as a result, as of right now, Chinese customers have put...
Speaker Change: So the impact for us, just for Q2, worst case could be up to...
Speaker Change: $50 million again, just for Q2, and that's the bad news. Now, the good news, as Linda stated multiple times in her prep, you know, prepare comments.
is that we have alternate Entegris manufacturing sites across Asia.
Speaker Change: that our China customers could use. Actually, they have studied qualifying time and we are ourselves in the process of hiring and training, additional staff, ramping up our local supply chain.
Speaker Change: Realistically, we expect to be able to mitigate some of that impact in Q2, and that gets you somewhere at the midpoint of that guidance range for Q2.
Speaker Change: And, of course, we expect to make more progress in Q3, Q4 and at high level, we expect these initiatives.
Speaker Change: to have substantially mitigated the China tariff headwinds by the end of the year. So hopefully, Melissa, that provides the context you were looking for when thinking about the overall business trends and going into Q2.
Great. Thank you for all that color. That's really helpful.
Speaker Change: And I totally understand you guys pulling your 2025 guide, given that uncertainty. Maybe a bigger picture question then. On the MOLLE side, it was good to hear that you're engaged with all of the main memory players on MOLLE. But given the macro uncertainty and the tariff uncertainty, has there been any change in your customer discussions about their willingness to adopt MOLLE?
Speaker Change: How has the timing of that Molly Ramp changed in your mind at all?
Well, it's a great question, I think, that despite...
Speaker Change: The uncertainty that we are all experiencing, the good news is that all major no transitions are still untracked, it's true.
Speaker Change: for the Molly Adoption in Memory as a matter of fact.
Speaker Change: All our discussions with the market leaders and in 3D nan suggests that actually not all of them but most of them will be transitioning to Mali in the second half of the year. So it's good for Mali, but that statement also applies to logic. In logic, we also expect
N2 and 18A.
Speaker Change: to ramp in the second half of 2025. And for all of those note transitions, both in logic and memory, we are very well positioned.
Speaker Change: We are ready to capitalize on the incremental opportunities and backup of the year, and then of course, as you know, more if you are produced at those nodes, going into 2026, that should have a positive impact on our business in 2026 as well.
Great. Thank you.
Speaker Change: We'll take our next question from Charles Shee with Needham. Please go ahead, your line is open.
Charles Shee: Thanks, good morning, Patron, Linda. Maybe I want to go back to the question that China terrorist retaliatory terrorist impact on the blast of the sales for Q2.
Speaker Change: I recall going back a few quarters, you were expecting maybe China, revenue as a percentage of the total to go above 20% from somewhere around the mid-teens, given the increased production, semi-production in China but the...
Speaker Change: How much of the 50 million loss, let's say in Q2, is recoverable, let's say in Q3 on Q4, because
Speaker Change: Do your Chinese customers really have alternatives? Or do you think there will be some Makishya loss going forward? The reason why I'm asking this really is about how much of the loss is irreversible and how much of that you think is irreversible, maybe give it a two or three more quarters. Thank you.
Speaker Change: Yes, Charles, fair question. We believe that this is a temporary impact, as Linda mentioned. And I absolutely believe it is, as we've said.
Speaker Change: Many times before our China business is strong. They are competitors in China for sure, but we believe that we've been competing.
Very Effective Deal, Brandy Strong,
They are years
This is really at the heart of our value proposition.
Speaker Change: And this value proposition is appreciated in China as it is anywhere else in the world. So
Speaker Change: We are in active discussions with our China customers, and when I said China customers, by the way we're talking about international companies operating in China as well as domestic Chinese customers, right? And they have...
Speaker Change: Practical Experience of some of our other Asia Manufacturing Centers, they just need to fully
Speaker Change: Certain products coming from those centers and stop placing their future demand on those manufacturing centers. So, we know it's going to take a little bit of time, but we believe it's entirely irrecoverable.
Thank you.
Speaker Change: Thank you. Maybe a follow-up question. Really want to go back to the Q1 results. I think we're focused on a lot on the Q2, what the tariff impact could be on the Q2 guidance, but your Q1 results still coming a little bit below. I believe the low expectation and
Speaker Change: I think you mentioned the Capac's products, fluid handling, foods, we want some of the weakness, but what exactly you are seeing in terms of customer behavior, assuming Q1, that's all pre-tariff, right? Thank you.
Speaker Change: Yeah, Charles, yeah, so the Q1 performance has nothing to do with tariffs, indeed. The top line came in slightly below guidance and as we've said, it really comes from
Speaker Change: Much softer demand than originally expected for fluid handling and food products.
Speaker Change: You know that these products, I'm in demand for these products, is linked to new fab construction.
Speaker Change: especially to in China, in Japan, in Korea. And as a result, we've seen a much more significant contraction in the revenue for those products in Q1. Having said that,
Speaker Change: I remember that in a wee brew in spite of this
Speaker Change: Strong Performance of APS, I mean microcontamination at a very solid quarter, it was offset obviously by the decline in the capex products that I mentioned and then finally one one thing that I just want to be sure you remember Charles when you're looking at our q1 performance.
Speaker Change: Especially the year-on-year. Remember that there were new U.S. export restrictions announced in December and we had quantified that impact.
Speaker Change: to be about $10 million on a quarterly basis, so we saw that in Q1. And then we had some adverse impacts from chronic change as well. And I think Linda mentioned that year on the year, it was about $5 million. So...
Speaker Change: Certainly, those last two points don't explain the myths, right? I mean, we're expecting these impacts when sending guidance, but I think it's useful context when you look at Q1 results on a year on your basis, and I would argue that the overall performance is pre-solid in that context.
Thanks. Let's watch one.
Speaker Change: We'll take our next question from Atif Malik. Please go ahead. Are from City. Please go ahead. Your line is open.
Speaker Change: Thank you for taking my question. The first one for Linda. Linda, can you walk us through? You talked about the revenue impact from China, but on the gross margin, the 100 basis points sequentially declined to the June quarter. Can you help us understand the puts and takes on the cost side impact from tariffs?
Speaker Change: Yes, thank you for that question. So let me first, since you framed it, let me frame it overall, we're in a dynamic environment.
And our guidance is capturing that dynamic environment.
Speaker Change: To your point on how to tariffs play into gross margin, we do have tariffs on US imports.
Speaker Change: and we do import some raw materials and finished goods. So we are very confident in the plan we have to mitigate those tariff impacts over time on U.S. imports through select pricing surcharges.
Speaker Change: and different duty programs focused on regionalized in sourcing to limit that tariff impact.
Speaker Change: But in the near term, there's likely to be some modest impact to our Q2 gross margins as we progress our mitigation plans.
Speaker Change: because there is a bit of a timing lag, and this is reflected in our guidance. So getting back to a little bit more of a big picture between Q1 and Q2 on the margin, you're correct in saying there's a bit of an impact from tariffs, but as we look across gross margins and look forward,
Speaker Change: There's going to be puts and takes. I want to bring you back to looking forward. There's the volume lever just we've progressed throughout the year. We're going to continue to focus on productivity.
Speaker Change: We'll continue to have inefficiencies this year in Taiwan and Colorado but we're going to get most of that behind us by 2026 and we're going to continue to manage our cost structure including Gross Margin in the context of our analyst day.
Speaker Change: So while there's slightly lower growth margins in Q2, we still expect that in 2025 our overall growth margins will be modestly compared to 2024.
Speaker Change: Very helpful. And one for Bertrand, Bertrand, I fully understand you guys are not commenting on full year given the macro uncertainty.
Speaker Change: But just got broad strokes. How do you see the capex environment?
Speaker Change: Going on, for a second half, some of the capex fears have talked about, maybe slapish outlook for capex and second half, some of them are down in second half versus first half, if you can just give your big picture thoughts on the capex trends.
Yeah, I mean, look, I mean, remember that when we started the year pre
Speaker Change: You know, pre-impact from tariffs and the growing uncertainty around that, we probably already had some fairly conservative expectations when it comes to the industry cat-packs.
Speaker Change: I would argue that the current prevailing uncertainty is, in my opinion, going to put some additional pressure on CAPEX in the second half of the year.
The steady improvement that we expect to see in.
In We For Start. So, again, all of that is...
or high-level considerations that do not really incorporate...
Speaker Change: Any considerations or any changes coming from the uncertainty around the tariff and the indirect impact from tariff?
Thanks.
Speaker Change: We'll take our next question from Timothy Arcuri with UBS. Please go ahead, your line is open.
Timothy Arcuri: Thanks a lot Bertrand. I also wanted to ask about how quickly this revenue can come back. I mean why does this not sort of is this not the match that lights the fire for?
Timothy Arcuri: them to qualify local alternatives. I know that not all the way you sell, there's not a local alternative for you know all the way you sell obviously but there are local alternatives for some of what you sell.
Timothy Arcuri: And so do they actually have enough inventory on hand to just outright be able to continue to operate with China not accepting shipments? I mean this is a pretty big number relative to what your China exposure is. So yeah, thanks.
Timothy Arcuri: Yeah, look at this fair. There's a fair question, Tim. I think the burdens could be on us to be very proactive and very effective in transitioning the China demand to some of those alternate
Timothy Arcuri: Asia, Asia Sides, I think that those Asia manufacturing alternatives have a lot.
Speaker Change: to offer them and think about the big investment we made in Taiwan. Recent investments in Japan and Korea. So we are really offering
State of the Art, Manufacturing, Capabilities, We Believe
Speaker Change: of our customers and that has value and we certainly hope that this is one of you that our trying to customers share with us. And again, all the indications are based on discussion we've been having.
Speaker Change: With them in the last month, all indications are that they are very eager to qualify those alternatives. I mean the proof will be in the pudding obviously but I am optimistic.
Speaker Change: Okay, I got it. And then just a two per question. So one, what is the clean revenue guide then for June ? So is the clean revenue guide something like 800 million minus this issue? So is that?
Speaker Change: The baseline that we should then kind of, I mean, you know, obviously we have to assume how quickly this 50 comes back.
Speaker Change: But is the 800 million, like, that's the real sort of demand-based guidance for June ? That's the first part of the question.
Speaker Change: And then the second part is, what is your NAND exposure right now? Do you think any of the week June quarter is related to NAND? Thanks.
Speaker Change: So in reverse order, the non-exposure right now for us is about 10% of our revenue roughly.
You know, in terms of breaking down, I'll keep the guidance
Speaker Change: between China and on China. I mean, I think we've provided a lot of details. I'm not going to go into a lot more details than my answer to the first question. But, but directionally, the way you think about it is not too far off.
Okay. Thank you.
Speaker Change: We'll take our next question from Chris Parkinson with Wolf Research. Please go ahead, your line is open.
Speaker Change: Thank you so much. You hit on a few of these, but just to dig down a little bit deeper. In terms of your second half assumptions of just what you're looking at from the customer level, do you sit on some non-tariff-related factors?
Speaker Change: You know, Molly, no transitions. You know, is there anything that has actually changed in the last, you know, five to six weeks that would, you know, ultimately further evolve your views on those and then perhaps just a quick update on the Taiwan ramp as well would be very helpful. Thank you.
Speaker Change: Major note transitions for expecting and memory in logic seems to be...
Speaker Change: Still on time. And that's positive because it provides an opportunity for us to increase our content. But wait for...
Speaker Change: And that should actually help us sustain very attractive revenue levels in the second half of the year.
Having said that, I mean, you're right that today…
Speaker Change: Question, which usually could correlate with a slower demand environment for semiconductors but nobody has been able to really quantify that and I'm certainly not equipped to do that either, so that's something we're going to be obviously.
Speaker Change: Keeping an eye on. And then there was a third part to your question, which I…
Speaker Change: Taiwan Taiwan Taiwan Taiwan Taiwan, we are making a few really good progress in our calcium facility.
Speaker Change: Remember that in 2024 we completed a number of product qualifications.
Speaker Change: Hi-Purity Containers, Deposition Materials, and we initiated qualifications for liquid filters. In 25, the focus is...
Speaker Change: You know, when it's all said and done, I would say that would expect a revenue-run rate in 2025 out of Kao Shung.
So we're supposed to exceed $120 million for $120 million.
Speaker Change: Remember, the last year of the revenue on a failure basis was something closer to $15 million. So, a lot of progress is expected in 2025.
Speaker Change: and their families. We hope you'll join us for the rest of the day. Thanks for joining us. Be safe out there. Be well. Stay home. Stay safe. Stay safe. Stay home. Stay safe. Stay safe. Stay safe. Stay safe. Stay safe.
Speaker Change: It's very helpful and just in terms of the intermediate term obviously once again I understand the world's changing but as we sit here today
Speaker Change: How are you thinking about the US market just given the rhetoric of the current administration, trade, the potential for increases in foreign investment? Any updated thoughts just holistically on this topic would be helpful and just how that relates to your thoughts on the Colorado Springs opportunity. Thank you.
Speaker Change: Yeah, that's a fair question. I think this is something that we are keeping a very, very close eye on.
Speaker Change: External Market Research and our own views is that the new FAF construction activity will be significantly down this year in 25.
Taran
Speaker Change: It's true, as I mentioned, in China, Japan, but also we'll be likely to hear in North America.
Speaker Change: We have actually hit a number of milestones so feeling really good about the progress and we're going to be starting customer qualifications in the second half of this year we expect production late this year early next year.
Speaker Change: Now, when it comes to the timing of phase two, so the next phase of investment, we're going to be looking at the level of new fabric activity in the US, we're going to take that into consideration.
Speaker Change: And we will finalize our decisions later this year, so no decision at this point.
Very helpful. Thank you so much.
Speaker Change: We'll take our next question from John Roberts with Mizzouho. Please go ahead, your line is open.
John Roberts: Thank you. Sometimes you characterize your business at a high level in terms of mainstream versus advanced applications. As soon advanced as not that affected by China or much less affected, but maybe you can just give us kind of the tone of business in those kind of two big buckets.
John Roberts: Yeah, I mean, let's look at our advanced logic. This is remain very, very strong. I mean, if you look at Q1 performance,
John Roberts: Our revenue in Taiwan was very strong year-on-year as we would expect, as we...
John Roberts: Capitalized on increased demand linked to AI and an advanced logic application but it's true that we continue to face some headwind from
John Roberts: Still failure-reduced levels of operations in mainstream farms and it was true pretty much around the world, including China in Q1.
Speaker Change: Yeah, and then I think the comment period ends today for the new student conductor, Terrace, and the consultants summarize that for you, or is there anything that kind of maybe sticks out as unexpected in what may have been submitted in terms of all the comments?
Thank you.
Speaker Change: No, as I said, a thing right now there is just a lot of unknown, a lot of uncertainty.
Speaker Change: I think most of our customers are taking a very good approach, frankly, when they think about
Speaker Change: The balance of the year, and that's the reason why we didn't feel equipped to update our annual guidance. I think, hopefully,
Speaker Change: We'll settle down and hopefully in a few months we will be in a better position to update for your guidance.
Thank you.
Speaker Change: We'll take our next question from Mike Harrison with Seaport Research Partners. Please go ahead, your line is open.
Mike Harrison: Hi, good morning. I was hoping we could dig in a little bit on the growth that you're seeing within the microcontamination control portion of the APS.
Sigmund, I feel like sometimes you have...
Pretty good visibility.
Mike Harrison: on your ability to grow in that business. How is visibility today?
Mike Harrison: Compared to what you think of as normal. Are you seeing any delays or changes in customer order patterns? Any change in filter usage or anything that suggests?
Mike Harrison: that maybe your customers are trying to thrift or extend the life of some of those filters. Any color there would be appreciated.
Bertrand Loy: It's a good question, Michael. As I think you know, the answer to the question, I think, in advanced logic.
Thank you.
Bertrand Loy: We are seeing that same behavior now in HBM, and I mentioned that in my prepared remark highlighting
Bertrand Loy: In the case of this HBM opportunity, we were asked to...
Help reduce the level of trace metal contaminations from...
today.
Speaker Change: that our products offer, and we're pleased to see this greater level of focus on purity, but
Speaker Change: Utilization levels are low as they are right now in mainstream. Customers will try to...
Speaker Change: Stretch, the lifetime of the filters, and that's one of the many reasons why our mainstream business has been sluggish and frankly in the last couple of years now.
Speaker Change: leading to some margin weakness in the second quarter as well.
Mike Harrison: Thanks, Mike. First, historically, we have not had a meaningful impact on our business from F-AX.
Speaker Change: and again you're asking about other parts of the P&L but as I mentioned on the sales side greater than 75% of our sales are USD.
Speaker Change: When you get the low sales into the growth margin, which could flow down into e but da, when we do have significant fast moves, we do see some impact, but it has been manageable. So there could be a little bit of impact in Q2, but that is not the primary.
Speaker Change: reason why I'm projecting what we're projecting for Q2 in our gross margin. As I said, primarily I'd focus on some of the volume-delivered gene, and then the impact of the direct tariffs from U.S. imports and a bit of a timing leg.
Thanks very much.
Thank you.
Speaker Change: We'll take our next question from Aleksey Yefremov with Keybank Capital Markets. Please go ahead, your line is open.
Speaker Change: Thanks, and good morning, Bertrand. This is Ryan Onfer, Aleksey. I just wanted to ask one on China first. Did you guys see any evidence of pre-bying kind of ahead of all the restrictions that I've gone in? I understand. You mentioned that they're eager to qualify some of your product from alternative sourcing. Just wondering if there was any pre-bying. You kind of saw ahead of all this.
and many more. Thank you. Thank you.
Speaker Change: No, we didn't really see much of that. And when it comes to Q2, obviously, as I said, I think right now all of our shipments, ex-US, are on hold so there is absolutely no pre-buying going on right now. And there was none of that in Q1 either.
Speaker Change: Understood. Okay. Thank you. And then I just wanted to ask on advanced packaging. I mean, it seems like growth is kind of accelerating across the space. It was hoping you might be able to remind us what the size of that business is for you today. Maybe growth kind of looked like in one queue and kind of what your outlook is like. Thank you. Thank you.
Speaker Change: Yeah, good question Ryan, so Transpackaging for us is still a fairly small market, but as we have mentioned, multiple times it's growing very fast, it actually did more than double.
Speaker Change: In 2024, we saw actually a doubling, you know, in Q1 versus actually more than a doubling in Q1 of this year versus Q1 of last year.
When we think about...
Speaker Change: The full year 2025, we expect this business year-on-year to grow more than 25%.
of high viscosity dispensed solutions, that's an APS.
Speaker Change: for tears of the applications. So, again, feeling good about the momentum, feeling good about our ability to uncover.
Speaker Change: New Areas, where we can contribute value, still small but growing very fast.
Speaker Change: And there are no further questions on the line at this time. I'll turn the program back to Bill Seymour for any closing remarks.
Speaker Change: Thank you for joining our call today. Please reach out to me personally if you need to follow up with that. Have a great day and you can disconnect.
Speaker Change: Thank you. This concludes today's Entegris first quarter, 2025 earnings conference call. Please disconnect your line at this time and have a wonderful day.
Speaker Change: . . . . . .
or
of Boston.
Speaker Change: Troops were divided into 30 squadrons and building fragmentationhells were applied, bigger craters were placed on the ground, more months later theIDS were properly equipped for the choice of weapons. The troops were now shaping the ground as well as their own to build Machine-gun Unit. From that minute on, the bloodbath spread in Togetherness International Fort, as the American military prototypes came to life. From there to today, the International military planes are And Togethernessvyd אומר,
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