Operator: After the presentation, we will arrange for President Zhao Ji, PhD, and Mr. Wu Kuowei, Vice President of Finance, to take your questions in English. In addition, we will reserve the last 15 minutes to take your questions in Chinese. Now I would like to introduce Mr. Yo-Ming Chang, investor relations of Parade Technologies. Mr. Chang, please begin. Now I would like to invite Mr. Yo-Ming Chang, Investor Relations. Yo-Ming, please.
Yo-Ming Chang: Thanks, Jason. Welcome everyone to Parade Technologies 2026 Q3 Webcast Investor Conference. Parade Technologies Q3 2026 consolidated revenue was $130.83 million, and the net income was $18.49 million. Its both basic and fully diluted after tax earnings per share were $0.24 and $0.24, respectively. These results compare to consolidated revenue $146.14 million, and a net income of $27.24 million, or $0.35 and $0.35 per basic and fully dilution in the year ago quarter. US dollars, the Q3 revenue decreased 2.71% sequentially and was down 10.48% year-over-year. The gross profit in the Q3 of 2026 was $52.7 million, a decrease of 2.50% from the previous quarter and a decrease of 15.14% compared to the same quarter of last year.
Yo-Ming Chang: On 1 September 2026, Parade announced its PS9010 USB-IF certified USB4 dock controller has been integrated into the Acer ProDesigner PE320QX, a professional-grade monitor for creators. Designed to meet the rising demand for high speed and multi-protocol connectivity in creative workflows, the PS9010 enables the Acer ProDesigner PE320QX to serve as both the ultra-high-resolution display and a high-performance single cable USB4 docking hub. The Acer ProDesigner PE320QX is built to optimize the user experience in workflows where high bandwidth data transfer and multi-display connections are critical. By integrating the PS9010, the monitor seamlessly supports USB4, DP 2.1, and SuperSpeed USB, ensuring robust compatibility with a wide range of host systems and peripherals. With the dedicated USB4 upstream and the downstream facing port supporting 40 gigabits per second bandwidth.
Yo-Ming Chang: The Acer ProDesigner PE320QX enables effortless daisy chain of secondary high-resolution displays and high-speed storage arrays over a single USB-C connection. On 7 September 2026, Parade announced in cooperation with FIT, a leading cable manufacturer, the successful deployment of a Parade Ultra Linear Redriver in the OSFP ultra small form factor protocol for inclusion on the June 2026 PF43s InfiniBand Trade Association Integrators' List at both XDR 224 Gb per second and the NDR 112 Gb per second data rates. Such lists ensure seamless operation with key AI server, XPU, and switches. OEM can now feel confident employing Parade LRDs in copper cable solution from 2 to 4 meters to reducing power, latency, and the rack weight, as well as improved rack routing.
Yo-Ming Chang: Parade Ultra Ethernet series of linear redrivers are capable of supporting latest 802.3dj Ethernet specification as well as InfiniBand, UALink, NVLink, and the OIF standards and extends our commitment to enable the short-reach, high-performance AI scale-out market with low power, low latency solutions. On 5 October 2026, Parade announced UGREEN has selected Parade's chipset solution for its flagship USB4 hub. Powered by Parade's USB-IF certified PS9010 USB4 dock controller and the PS5513 dual port USB Power Delivery controller. The hub delivers certified multi-protocol high-speed connectivity, comprehensive peripheral expansion, and robust fast charging in a single compact form factor. The new UGREEN USB4 hub address the connectivity demands of modern workstations by equipping users with all-in-one expansion interface.
Yo-Ming Chang: In addition to host pass-through charging, the hub provides a dedicated USB4 downstream port for daisy chain multiple USB 3.2 10 Gb per second and 5 Gb per second ports, a 2.5GBASE-T Ethernet port, dual SD and TF card readers, an HDMI display output, and an integrated audio headphone jack. Based on the current business outlook, Parade is providing the following guidance for the Q4 of 2026. Revenue is between $95 to $105 million. Gross margin is between 41% to 45%. Operating expense is between $33 to $36 million.
Yo-Ming Chang: 各位投资界的朋友，大家午安。欢迎大家来参加谱瑞公司2026年第三季线上法人说明会。首先由我跟各位报告谱瑞公司2026年第三季财务数字。本公司2026年第三季合并营收为美金130,830,000元，税后净利为美金18,490,000元，除权后基本与稀释每股税后盈余为美金0.24元，约当新台币7.69元，及美金0.24元，约当新台币7.67元。而去年同期合并营收为美金146,140,000元，税后净利为美金27,240,000元，除权后基本与稀释每股税后盈余为美金0.35元，约当新台币10.45元，及美金0.35元，约当新台币10.43元。2026年第三季合并营收较前一季减少2.17%，较去年同期则减少10.48%。在营业毛利方面，本公司第三季营业毛利为美金52,710,000元，较上一季减少2.5%，较去年同期则减少15.14%。西元2026年9月1日，谱瑞公司宣布通过USB-IF认证的PS9010 USB4扩充基座控制晶片，已导入宏碁专为创作者打造的专业级萤幕Acer ProDesigner PE320QX。因应创作工作流程对于高速与多协定连线日益增长的需求，PS9010让Acer ProDesigner PE320QX同时支援超高解析及高效能单缆线USB4扩充基座。Acer ProDesigner PE320QX，针对高频宽资料传输与多荧幕连接为关键需求的工作流程，最佳化使用者体验。透过导入PS9010，完整支援USB4、DisplayPort 2.1以及SuperSpeed USB，与各式主机系统及周边装置具备高度相容性。专属USB上游连接埠与下游连接埠，支援40Gbps传输频宽，让Acer ProDesigner PE320QX仅透过单一USB-C连线，即可轻松局链串接多台高解析度显示器与高速储存装置。西元2026年9月7日，谱瑞公司宣布与知名揽线制造商FIT展开合作，已成功将谱瑞超高效线性讯号重驱器导入OSFP 8通道小型可插拔模组，并于2026年6月列入InfiniBand贸易协会PF43s整合厂商清单，支援XDR 224Gbps及NDR 112Gbps两种资料传输速率。此类清单确保产品可与主流AI伺服器、XPU以及交换器无缝协同运作。现在OEM厂商可以安心在2到4公尺铜缆解决方案中，采用谱瑞线性讯号重驱器，除了降低功耗、减少延迟与机柜重量，同时也优化机柜内的揽线布线作业。谱瑞超高效Ultra Linear Redriver系列线性讯号重驱器，可支援最新802.3dj以太网规范，同时相容InfiniBand、UALink、NVLink以及OIF各项标准，持续以低功耗、低延迟的解决方案，投入支援短距离高效能AI扩充的市场需求。西元2026年10月5日，谱瑞公司宣布绿联旗舰级USB4扩充基座选用谱瑞晶片组解决方案。此扩充基座搭载通过USB-IF认证的PS9010 USB4扩充基座控制晶片，以及PS5513双埠USB电源传输控制晶片，提供通过认证的多协定高速连线能力，完整的周边装置扩充功能，并将强大的快速充电整合至单一精简机身当中。全新绿联USB4扩充基座，因应现代工作站的连线需求，为使用者带来一体式扩充界面。除了主机端直充充电外，此扩充基座配置专属USB4下游连接埠，支援局链串接功能，多组USB 3.2 10Gbps与5Gbps连接埠，2.5GBASE-T以太网络埠、SD与TF双读卡机、HDMI影像输出，以及内建耳机音讯插孔。基于目前对2026年第四季的展望，我们预期合并营收为美金95到105百万元，合并毛利率为41%到45%，合并营业费用为美金33到36百万元。以上是本次2026年第三季财务报告。现在转由CEO Dr. Jack Zhao回答各位的问题。Jason，请开始。
Operator: Yes, thank you, Yo-Ming. Ladies and gentlemen, we will now begin the English question and answer session. If you wish to ask the question, please press star key and number 1 on your telephone keypad and you will enter the queue. After you are announced, please ask your question. Should you wish to cancel your question, you may press star key and number 2. Thank you. Now first question will be coming from Annie Chen of UBS. Go ahead please.
Annie Chen: Hi, this is UBS Annie Chen, on behalf of Jerry Su. Thank you for taking my question. My first question is, could you provide the revenue mix for Q3 2026 and also the outlook by each segment into Q4 2026? Thank you.
Jack Zhao: I understand your question is about Q3, what is the percentage of each segment? The answer is, for DP was slightly lower than 30%. The PS, our high-speed product line is around 45%. The PC, our source driver, was about 10%. TT, which include our TTED device, exceeds 15%.
Annie Chen: Got it. Thank you. Maybe as a follow up, or as a next question, could you give us some color on the near term notebook demand and your outlook for 2027?
Jack Zhao: Yeah.
Annie Chen: Do you see like
Jack Zhao: Yeah, it has been better on the past Q3 from the IDC report of our own results. Refurb notebook had a pretty big reduction in the Q3 or in the H2. That pretty much resulted from the H1, many OEMs expected the components or DRAM increase, so they pre-order quite many parts in the H1 of 2026. In addition, the OEMs also increased their notebook price in the July timeframe this year. So, which also reduced the demand from the consumer space of demand. Certainly the current AI spending squeezed the IT budget for the commercial notebook, the purchasing. So those are the factors impact the Q3 or the Q4 notebook demand reduction. Moving forward, what do we expect? The notebooks still in 2025, the productivity important, the tools, especially for the current, the AI, the computer demand.
Jack Zhao: Recently, AMD introduced those notebooks for AI computing. We think those will expand the notebook market, hopefully from traditional consumer commercial to more on the computing inferences. So all the notebook. In notebook, unit-wise, as the research report will be flat type of thing with 2026, but we think the value-wise will increase, as the higher notebook demands run more high-speed devices.
Annie Chen: Yes, understood. As for the third question, could you provide some updates about your ASIC-like business? Is it taped out, and should we expect this to contribute revenue in H2 2027 or more likely in 2028? Thank you.
Jack Zhao: We are working very hard to tape out those chips, and the progress very well, and those are the two, the big chips. We did a lot of system verification with our customer, so the development progress well. In terms of whether the H2
Annie Chen: Sorry, I think it is breaking out a little.
Jack Zhao: Can you hear me clearly right now?
Annie Chen: Yes. Perfect.
Jack Zhao: Okay. Yeah, the customer schedule did not change, and we do not expect much of change on the 2027 H2. Yeah, that is the current schedule we have.
Annie Chen: Thank you. Understood. As for our final question, may we know your initial view on the overall revenue growth outlook for 2027, how should we think about the OPEX?
Jack Zhao: The spending side, we do not expect much change, maybe a couple percentage increase, but that is about it. On the revenue side, we hope the revenue will be better than this year, really driven by our multiple program, especially our in-cell TTED, our hub device. As we said, we may start to have some ASIC revenue contribution. That is what we view. Of course, the 2027, our revenue also will very much depend on the broader market demand. Hopefully, the broad market, the components, the DRAM, for notebook will stabilize.
Annie Chen: Yeah, got it. Thank you. Very clear. Thank you, Jack and Yo-Ming. I will head back to the queue.
Operator: Thank you. Next one, Joey Lee, HSBC. Go ahead, please.
Joey Lee: Okay. Hi, Yo-Ming and Theo. Thank you for taking my question. I would like to ask some question about the. In August, you indicated that Q2 might be this year's gross margin drop and supported by the price adjustments and relocation part of your backend supply and foundry. I would like to know, has the broader price adjustment now been accepted by your major customers? In which quarter should we expect the backend savings to show up in gross margin? Third, how many percentage in the price increase is transferable to customer from your point of view? Thank you.
Jack Zhao: Yeah, I think that is a good question. We do the product line by product line to adjust the price reflecting our manufacturing cost increase. We started to do the end of Q2, Q3, and from now pretty much are completed. Those adjustment reflecting into our financial is gradually going up, because if the effective day is not, you adjust, you affect it. Some of the customer will negotiate with you. They accepted it, but adjust a few months later. That is the typical business process. In today's market, the demand is reduced. It is a tough process to increase the product price. On other hand, our customer understand the manufacturing costs broadly increase. Even though it is tough to them, they largely accepted the price increase. The price increase range is dependent on our cost range.
Jack Zhao: We basically share some of cost increase with our customer. They may not be full range considered, and that is a lot of negotiation in between. We will see the recovery, our gross margin, in coming quarters. Hopefully, we are more into our guidance to the instead of a bottom to the more center place and those kind of. Yeah, that is sort of what we do, is try to achieve that goal.
Joey Lee: Okay, thank you. My second question is about the auto business. Can you share about the progress of the auto business comparing to Q2, and are there any new customers?
Jack Zhao: Actually, auto business is particularly good from Q2, Q3, and moving forward. It is very encouraging. I think our designing are more associated with more EV car or more advanced cars. Recently, the gasoline price has been up quite long. The EV demand actually going up, and we have a top brand name in US with multiple chips. We have a top China EV guys, and are using our chips. Also, we have a more designing or different device designing to those auto customers. We are start to shipping our DP hub, auto-grade DP hub, to the well-known auto manufacturer, and that probably will expand more. Yeah, auto is a lot more encouraging, and it is growing up after many years. We expect the auto will have a double-digit growth year over year. That is the sort of bright point for our business.
Joey Lee: Okay, thank you. My last question is about the data center opportunities regarding the ACC driver. Can you share about the current competitive positioning of Parade ACC driver in this market, and how many percentage of shares do you expect to gain, in the future? Thank you.
Jack Zhao: I would think, as we announced, we are Engage with a cable or leading cable guys to making those ACC cables, and to get a certification qualification. We are pretty much about to complete all those processes. We are also in the designing to CSP guys and for their application. We have a more customer on the 800 gigabit side, and seems the 800 gigabit is a lot more stable, a lot more easy to use, those cables. Hopefully we will create some revenue in the 2027 on those electric high speed ACC cables.
Joey Lee: Okay. That is all my question. I will go back into the queue. Thank you.
Operator: Thank you. Next one, Daniel Yen, Morgan Stanley. Go ahead, please.
Daniel Yen: Hello. Good afternoon, Yo-Ming and Jack. Could you hear me?
Jack Zhao: Yeah.
Daniel Yen: Yeah. Hi, Jack. Thanks for taking my question. The first question I want to follow up on the ASIC-like business. I recall you do provide some of your target total addressable market opportunities for this ASIC business into next year. Could you give us your updated thoughts on how should we think about the opportunity? Maybe not only for next year, but for the next few years.
Jack Zhao: Yeah.
Daniel Yen: Yep. Thank you.
Jack Zhao: Okay. I think previous, the ladies asked a question, when we expected to start have a revenue. We expected the H2 or, yeah, the customer schedule to create some revenues in 2027. When you full scale range to ramp up those product in the full range based on the customer forecast to us, will be over 100 million or more. I probably have to give some discount, but well over 100 million for sure. That is why we spend so much effort, so much engineering resource to do it. We would like to do a good job to not only the performance, the cost, and the power. I think very important, the power. Those are the things, besides, we are doing multiple the ASIC-like business. I think you are focused on something many people talk about.
Jack Zhao: We have others, and those also will create a revenue later for 2027 and early 2028. It is multiple product going on. It is not just one or two. There are multiple there. I know what you are referring to, but I would try to say we have a multiple there, and some of them already taped out on the six nanometer and those kind of things are already out. It is less for people to pay attention to.
Daniel Yen: I see. Thanks. When you are referring to this 100 million opportunities, is this only one product or that also includes all the chips? You said multiple.
Jack Zhao: Yeah.
Daniel Yen: Multiple chips.
Jack Zhao: There are multiple products there, some of high-end, some of middle-end, and some of low-end there. Multiple products there.
Daniel Yen: Okay.
Jack Zhao: Added together exceed 100 million, I would think, based on what we understand and our customer told us.
Daniel Yen: I see. In your view, how should we think about Parade's growth in 2027? On one hand, we have these new opportunities. On the other hand, I think it's a spend demand for notebook. Maybe still a little bit, I would say lukewarm. So how should we think about what could be Parade's growth in 2027? What could be new growth drivers?
Jack Zhao: Okay. Basically, I explained to the previous question as well, that the market is similar to 2026. The growth engine for us is really one, very clear our in-cell TTED will have a large volume shipment this year already, have quite successful many millions shipped out. Next year, we will have a lot more. So those are the high single digit, the TTED device. But less people talk about. We have a high-speed device, multiple being used for those high-end notebooks for AI application, right? I thought those are the pretty source for those systems. We do hope those systems, even though the price now is high, we all understand. But it will take more inference computing since it can stand alone to run the AI inference, right? So it has its value there. Those we think will generate the more attractiveness there.
Jack Zhao: And of course, our high-speed product, the retimer, DP hub, and USB hub all will have to contribute. Besides what you have said, later on the ASIC and those kind of things. We are also getting a lot more excited for the current USB4 v2 market, in which we are pretty prepared for those market.
Daniel Yen: I see. Thanks, Jack. Maybe my last question more on the near term. Based on your guidance, your gross margin still improve. Actually improved, I think, pretty well in Q4. Is it more on the product mix or is it more on the pricing versus the cost? How should we think about that?
Jack Zhao: I would think the previous, also ask a question was, we had a price adjustment to reflect our manufacturing cost increase. So previously, we are almost getting close to the bottom of the guideline. That is part of result of this. Of course, the product mix towards our high-end, especially those TTED, those the high-speed, the retimer, is helping a lot.
Daniel Yen: I see. If I may follow up then. Given that you are mentioning there are several new products into 2027, I know it is still a little bit far away, but, yeah. How do you think about your gross margin profile into 2027?
Jack Zhao: As we said, we will adjust to our guidance, like more middle point and hopefully. That is the goal. This thing is dynamic. Why the dynamic? The manufacturing cost continues to increase. I think you heard that people raise the price pretty frequently. We are mitigated to the issues, especially on OSAT. We have to put into a more efficient, more cost-effective area. That is all in the process to do it. Basically, we have to survive or to have to serve for our customer, to serve for our investor. This dynamically changes, and that is the goal. Our manufacturing environment is pretty inflationary.
Daniel Yen: I see. That is all my question. Thank you, Jack. I will be back in the queue.
Jack Zhao: Okay. Thank you.
Daniel Yen: Okay.
Operator: Next one, Lucas Liu, KGI. Go ahead, please.
Lucas Liu: Hi, Jack and Yo-Ming, and thanks for taking my question. The first question is regarding the integrated touch and display solutions. Could you quantify that integrated touch and display shipments in 2026 and your target for 2027? Because now that oxide panels are supported, I am curious about, does the adoption still depend on touch notebooks? Because we are seeing substrate shortage and higher PCB costs, is that possibly to accelerate the adoption by the panel makers in terms of your integrated solutions?
Jack Zhao: Yeah. You said many correct things. You did a lot of good study. What you had said exactly is our thesis for we do integrated solutions to TTED. We also consider it as pretty successful in 2026. We are shipping more than 5 million units. You consider 2025 is almost zero and 2026, it is quite impressed to move up. The TTED price is high. TTED has many advantages in which you lower power, simplify the manufacturing. Now you can make a thinner panel, then you can make a narrow border, then you actually, as you said, you can really almost, you do not need the PCB for the T-Con board. Now it is getting a lot more expensive. We have a technology breakthrough, and we are entering the oxide space, which will be massive address for notebook panels.
Jack Zhao: We are very exciting for 2027, and we think that we will continue growth in that segment in 2027. We know leading customer are getting very excited for us to move to the oxide base. Previously, I do not think anybody believed we could do TTED in the oxide panel, but we did it, and the chip is already sampled to the customer, and hope this we can deploy quickly and with volume. The good thing is that TTED qualification is very long and it is very difficulty. We have all the customer with us, so we build up the infrastructure as well. Our solution is so superior, we not only can support touch, we can support active pen, Wacom pen. We all pass the Wacom pen.
Jack Zhao: Yeah, overall, the customer is very exciting for those, the panels, and there are many efficient improvement included. Your T-Con board is almost, you do not need to, and reduce a lot of cost.
Lucas Liu: Sure. Got it. Very clear. I have a follow-up question. Regarding your standup customer, which is recently introducing their new OLED iPad and maybe touch notebooks, based on my understanding, we are still mainly doing our eDP T-Con business with them. Is there any possibility that we could do some touch IC business regarding their IT products going forward? Is there any color that you can share with us?
Jack Zhao: We are more focused on their T-Con side of it. The standard plus customer has its own strange way and defines their supply. So the majority of our business is two portions. One is on the panel and even higher panel, we are doing quite a lot and continue doing a lot. As we have talked, we have three projects running. Besides, we are also doing their high-speed side, but we are shipping their large volume, the converter chip, and we have more opportunity. We are not on the touch, or even we promote our touch many times whatsoever, and they just define you on those areas, and we are at a best. That is what the case is. You never know because they love our touch, and they knew our touch doing very well. So I do not know how they define their supply.
Lucas Liu: Sure. Okay. That is very clear. Earlier, you cited higher back-end costs and tightness in maybe T-glass, lead frames, and testing. How much further cost inflation, including gold and substrates, do you expect in 2027? How should we think about Parade's margin profile moving into next year?
Jack Zhao: As we said, the manufacturing environment is very inflationary, especially the Taiwan side of it. Because they are squeezed by the AI application, I think it is difficult to measure broadly what it looks like in 2027. However, as we said, we will improve our gross margin to hopefully recover from our previous move to the more middle historical level. We are doing a lot of adjustment to stabilize the capacity, to stabilize the price, and include from the different OSAT and the manufacturer. Even our customer asks us to search for those that more long-term can work with or people more like the consumer type of business to support us. We are starting to adopt the policy in the back end. For big customer, we would do supply, manufacturing supply.
Jack Zhao: And hope that will stabilize and we can leverage the two sides to help that was stabilized because otherwise, yeah, the increase just single source. Yeah, very difficult. And our big customer, everybody is encourage us to do this and encourage us to find other alternative and which has a more stabilized or more eager to do those kind of business.
Lucas Liu: Got it. Very helpful. And that will be all of my cues, and I will be back to the queue. Thank you.
Operator: Thank you. Next one, Jamie Ye, KGI. Go ahead, please.
Jamie Ye: Hi, Jack, Yo-Ming. My first question is about, I think in earlier call, you mentioned that there should be some edge compute AI, because the token now is quite expensive thing in the cloud. So, do you see that happening, and do you see that Parade can benefit from that other than the existing ACC project? Do you see any more developments in AI or Parade?
Jack Zhao: I think in the Silicon Valley, more general talk, as you say, the talk is getting a lot more expensive. Enterprise environment, the inference computing, we are getting popular stuff from the Silicon Valley. We think once those will go to your server room instead of data center, we will have more opportunities. It is more edge computation. Whether you have a notebook here, right? The NVIDIA's high-end notebook can take care. Or few days ago, or a few weeks ago, Apple with Meta demonstrated they are using Mac Studio through USB4 v2 or what is called Thunderbolt 5 to connect multiple two or four the system together to run the Meta, the most leading new model, and that the result looks very good. In fact, Parade also using quite a lot of AI, interpret AI model. We have quite a lot of light.
Jack Zhao: We decided to go ahead and try those models internally to use. Those method, basically doing the offline AI, become very critical. We have this market there, and if you USB4 v2 connection, yeah, we can do very well. We have all the IPs. We are starting and work with customers to look into whether those computing will have led to continue to grow in the enterprise environment, in the company, those kind of thing. You could back and forth with Apple, the Studio today, sure will help the RDMA, the software, and you can run the AI very well via that, and you do not really need to go out anywhere else. We try to learn our design flow on it and see how it goes. Yeah, I think those will be 2027 work group.
Jack Zhao: If you read the report carefully, those through the USB4 v2, the latency is very low.
Jack Zhao: Compared with those Ethernet solutions. Of course, I think Ethernet has much more power, can do training and those kind of things. If you want to have control your token spending and sensitive for your budget, those solutions definitely is alternative. We think, as I talk to the people, the enterprise, the edge, the AI, will start to become a market for company to use that model. Almost every company in the Silicon Valley is thinking about this because the token just too expensive, right? Even ourself, Parade, we start to have AI to use it, I think the March, April timeframe. Now the budget already, especially design team, going up very quickly. Yeah, it is real. Token is not cheap, it is expensive. Today,
Jamie Ye: Thank you. Mm-hmm.
Jack Zhao: Yeah. Using the
Jamie Ye: If
Jack Zhao: Edge tropical.
Jamie Ye: If that
Jack Zhao: Yeah.
Jamie Ye: If that happens, the players will be your notebook customer?
Jack Zhao: I think it will be somebody like AMD, NVIDIA. They all work. Apples, we are thinking about those solutions.
Jack Zhao: Yeah. But technically, very much doable.
Jamie Ye: Mm-hmm. I see. Okay, cool. My second question is about tax.
Jack Zhao: Apple already
Jamie Ye: Sorry.
Jack Zhao: Apple already demonstrated to the market, yeah.
Jamie Ye: Okay. Is that using our solution?
Jack Zhao: No, today it is using the Intel Thunderbolt.
Jamie Ye: Okay
Jack Zhao: Those very much we can do.
Jack Zhao: You have people, they cannot use Intel Thunderbolt. Whether AMD or NVIDIA or Qualcomm, they cannot.
Jamie Ye: Yeah.
Jack Zhao: That is why they use our stamina, do not use Intel's stamina, right?
Jamie Ye: Mm-hmm. Okay. I see. Cool.
Jack Zhao: But-
Jamie Ye: Second question.
Jack Zhao: I do not even know where leading to, but those are the exciting areas, right?
Jamie Ye: Mm-hmm. Okay. Second question is very quick about the tax. I think Q3 tax kind of smaller than expected. Can we expect that kind of credit in the future?
Jack Zhao: I think I would like to invite Guowei to explain. Our VP of Finance. Guowei, could you jump on this please?
Kuowei Wu: Yeah. Can you hear me?
Jamie Ye: Yes.
Jack Zhao: Yeah. We can.
Kuowei Wu: Well, thanks for your question. I think you are looking at the lower tax rate in Q3. Well, that probably just a one time, because you know, we have the onshore/offshore tax model, and it highly varies, depends on where the sales are made. We are also constantly adjust the rate based on what we see for the current business environment. This is probably just one time, and I will not count it as going forward.
Kuowei Wu: For model purpose, I would still suggest using 9% plus.
Jamie Ye: Okay, 9% plus. Okay, great.
Kuowei Wu: Yes.
Jamie Ye: Thank you.
Kuowei Wu: I think that will be still, eventually will converge. Yeah. Thank you.
Jamie Ye: Mm-hmm. Okay. Thank you very much.
Operator: Thank you. Next one, Jennifer Yee, JP Morgan. Go ahead, please.
Jennifer Yee: Hi, Jack. Hi, Yo-Ming. Can you hear me?
Jack Zhao: Yes, go ahead.
Jennifer Yee: Yeah. Thanks for taking my question. I just have a quick follow-up on the near term margin and notebook demand. We are seeing that we are seeing some destocking for notebook in Q3 and into Q4. Do we have an expectation on how long the destocking will be, like an actual view into, let's say, Q1 next year?
Jack Zhao: We do not know exactly, but we do get opportunity to talk to the OEM executive for procurement side of it, right? They are also disappointed for whatever the current situation. We, of course, complain a lot. They told us, and they expect the overall 2027 should be similar to 2026. This thing is largely subject to the DRAM price. The good thing is the DRAM price in China is already stabilized, or if not, reduced somewhat in the Q3, Q4. Yeah, if the DRAM continue price elevated, notebook price will be in trouble. If the DRAM price stabilized, I think will be better. That is the information. That is the talk I got with those OEM procurement people. Yeah.
Jennifer Yee: Understood, very clear. Second question from me is on the gross margin. When we are saying that we expect gross margin to recover and following quarters, do we price in the potential, let's say, foundry price hike or OSAT, since I think we have some initial discussion now for 2027 pricing? Are we trying to, let's say, negotiate some kind of LTA to stabilize the pricing at this moment? Are the suppliers not willing to take the LTA yet? Thank you.
Jack Zhao: Lucky enough, we have a bigger LTA on the 22, 28 nanometer, that price are fixed on the way. Other were subject to change. The business for everybody or consumer are not good, so price increase is a tough sale. But we understand that what is the current situation is pretty inflationary, and we have to adjust it, whether through we dodge it, whether through price increase, whether through other thing, we have to adjust it. We also want to see what is going on. Yeah.
Jennifer Yee: Understood. Very clear. Thank you.
Operator: Thank you. Ladies and gentlemen, we will now move on to the Chinese question and answer session. Thank you. 中文提问时间现在开始。如果您需要提问，请在您的话机上按*键以及数字1。当我们读出您的名字后，请开始发问。如果您需要取消发问，请按*键以及数字2。谢谢。目前中文第一位提问的是Cathay Securities Raymond Guo，请提问。
Raymond Guo: 好的，Jack、国威、佑鸣，大家好。我有两个问题想要请教。第一个问题是我们怎么看Parade cable业务在明年的成长性，或者是营收的贡献。比方说，Jack可不可以针对ACC，或者是一些外部的高速界面的一些线缆，像Type-C、USB4、HDMI，还有像DP等等，跟大家分享一下这些业务明年怎么看？这是我第一个问题。
Jack Zhao: 我想 USB-C 的 USB4 v2 或者 USB4 的那些 cable, 我们已经 ship quite a bit 用在 silicon germanium device. We are talking about few hundred K this kind of thing. 这个问题跟 ACC for ultra fast ACC for 100G 跟 1.6T 是不太一样的 market, 或者 PCIe Gen 6, we are working on the PCIe Gen 6 的那些 cable as well. PCIe Gen 6 has a more design opportunity, relative 比较简单一点, 因为这些是我们的 current customer. Most simple 是 USB, 这些都是我们的原来的 customers, 我们很熟. 接下来就是 PCIe 的这些, 然后再下面一层是 Ethernet 或者 InfiniBand, 这些 ultra fast 100G 的 1.6T 的 cable. 我相信我们已经 gone through 一个 qualification 的阶段, 我们已经比较有信心说我们这些 just on Spectra7 acquisition 的那些 product, quality, performance are good, 所以我们这个已经蛮有信心的. 那我们已经 design in, 跟有些 customer 的 cable 已经统统做完, 已经在送去 CSP 的这些 customer, 去做 system level test. Hopefully we will have, 我们自己也有 test, 我们自己有 equipment, 包括我们有 high speed 的 BER, 包括我们有 high speed 的 NVIDIA 的 switch, NVIDIA 的 card, NVIDIA 的 switch, Broadcom 的这些 switch, 在我们 lab 里都有. 那我们自己 test 已经不错的, 我们就看这个. 但是我应该有信心, 这些 ultra fast 会有一些贡献 for 我们的 revenue in 2027.
Raymond Guo: 那Jack我可以再follow一下，像ACC cable的话，有没有一个大概的想法，比方说明年我们可以怎么估？就是说它的TAM或者是说——
Jack Zhao: 我觉得这个还是有点比较，我不想misleading，因为这个Google用得最多，Google用的1.6T的data center用得最多。每个provider用的这些number、cable都不太一样。对我们来说，需要估一个number出来，有一些difficulty。因为毕竟我们是new comer，到这个market上面，或者说这个本身的market也是一个newly established的market。
Raymond Guo: 好，谢谢Jack。我的第二个问题是我想再追问一下我们在PC这一块，现在如果各家研究机构看明年，PC产业还是会面临到一些逆风，大家都会觉得说我们Parade营运跟PC还是等于是说比重比较高，那我们有没有什么样的一些策略去克服，比方说今年营收应该就是一个小幅度的衰退，明年现在看起来大环境对我们来说也不是太友善，我们怎么明年去追求一个比较好的成长，有什么样的策略吗？
Jack Zhao: 当然我们也在做一些是diversify out from我们的PC position，PC notebook position。比如我们说的auto，完全跟PC行业没什么关系，对吧？
Raymond Guo: 嗯 。
Jack Zhao: 我们也在high-end edge computing上面做一些事，去engage into the AI，这个是我们一定想在做的一件事，因为很大的一部分成长会在这一部分，包括edge computing，这个是我们在努力的一个方向。但比较realistic，比较看得到的就是我们的in-cell的TTED，我们可能比较很快的就会有solution，everything。所以这个大概是比较确定。今天的这些DP hub、USB hub，都在bring new customer into我们自己的这个area。因为这些DP hub跟USB hub过去都不是我们的business，都是我们newly developed。
Raymond Guo: 好，谢谢 Jack。Jack，我可不可以 follow up 一下刚刚同业在问那个 ASIC-like，刚刚很多人问，我想我可不可以再请教你，比方说我们如果讨论是这一颗南桥晶片组，这个 ASIC-like 这个业务的话，因为我们的友厂在近期大概都有分享一些他们的一些突破，他们的优势，可能他们拿到多少份额等等。那我还是想 Jack 你可不可以针对技术面的角度，从科技的角度来跟大家分享，我想听听看您的观点，友厂讲了一些比较蛮乐观积极的一些订单的配比等等，我倒想说 Jack 可不可以从技术角度，你觉得 Parade 其实还是有什么样的优势等等。
Jack Zhao: 我想我们的优势，我们的 PCIe Gen5 都是我们自己 developed，也蛮成熟的。我们在 12 nanometer 上面，power is much much lower。我们 chip 不有可能的，因为我们有些 function，老的 chip 根本没有。这个不是一个 one, two，这个是 orange 跟 apple 在 compare。我们有些 leading function，我想过去的 chip 根本没有。所以我也不知道怎么去比，那个 power 根本没办法比。我想我们的 PCIe is the most stable。所以我不知道怎么去比较合适地比，因为有些 function 它根本不 support，过去的根本不可能 support。
Raymond Guo: 好的，谢谢 Jack。谢谢 Yo-Ming。
Yo-Ming Chang: 谢谢。
Operator: 非常感谢各位的提问。目前没有其他问题，我们将结束今天的会议。感谢各位参与谱瑞科技股份有限公司2026年第三季线上法人说明会。今天的会议将到此结束，您现在可以离线了。谢谢，再见。
Jack Zhao: Thank you everyone.
