ICHR Ichor

Claire McAdams IR
Jeffrey Andreson Executive Director & CEO
Larry Sparks CFO
J. Ho Stifel, Nicolaus & Company
Craig Ellis B. Riley Securities
Mitch Steves RBC Capital Markets
Quinn Bolton Needham & Company
Sidney Ho Deutsche Bank
Tom Diffely D.A. Davidson & Co.
Krish Sankar Cowen and Company
David Duley Steelhead Securities
Call transcript
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Good day, ladies and gentlemen, and welcome to Ichor's Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions].

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. Please go ahead.

Claire McAdams

Hillary. you, Thank thank conference and joining fourth today's Good you XXXX call. quarter afternoon, for

our are read many release about subject both cause of As listen risks file materially uncertainties with earnings those and statements, operations the our in beyond you press which report are These laws. of of from XX-K fiscal conference such those subsequent include the in within meaning and out forward-looking please on SEC. risks described differ and COVID-XX results federal statements our Securities to to annual for those and number call, release, year recognize control, impact forward-looking actual to that spelled in made the which press statements. a and our filings contain on XXXX with SEC including the uncertainties, our Form supplement of described the this you and as on These earnings those prospectus

noted our As create industry, filings, our that you longer-term in uncertainty continues remind limiting COVID-XX we pandemic to statements. the to provide forward-looking those abilities in aforementioned

You should those other of in consider statements uncertainties. and forward-looking light risks and all

this will certain financial we conference non-GAAP Additionally, call. measures providing during be

measures. financial Our these provide financial a our most non-GAAP their supplement earnings reconciliation financial and press IR release the GAAP comparable of to posted website each measures to

questions. now Andreson. our CFO. a prepared begin After results to call are call the and details turn and first CEO; then will outlook, our will open today over Jeff quarter Larry Jeff? me guidance. Jeff On I'll fourth and Sparks, the with for an will our we additional our results provide Larry line remarks, the of of the our update Jeff quarter Andreson, with review business on and and

Jeffrey Andreson

and express want and safe. -- customers their QX in to are begin, of I suppliers healthy our hope you, our as all their and staying Thank appreciation to welcome XXXX. To you for and dedication your thank you my navigated work all earnings and and for to collaboration our execution employees to and we our I say that call. through you families way and Claire, extraordinary environment a challenging support

million optimism the Today, begun have for from sequential XX% over high earnings and were the straight strong marked and Gross points QX we points, quarter exceeding this earnings from XXX per margin emerge increased third another seventh basis with forward results, XXXX the share more environment employees health XXX high end basis operating that up guidance. towards the of $XXX per share quarter. expectations, of reported we'll and We margin with year and end COVID-XX and X% a worldwide. partners our Revenues quarter our from revenues move normal of of at revenue growth. QX increased of crisis increased

WFE and X, total had the our million. led underlying range cash overall XXXX. environment key amongst our demand of fourth on extraordinary witnessed end strong strong The with the businesses. and each also of strengthening each the or to of in flow in free the market, high late compared QX to of yet the quarter very culminating with demand growth month through an flow a year. industry very a strengthened wafer fab In in of We of upticks at all, finish among of year challenging quarter, through QX XX% estimated each quarter The our marked in demand provided revenues customers November each to equipment year a cash $XX

with in entire well XXXX operational challenges Nonetheless, of compared global record XXXX, tremendous equipment environment, supply XX% the XXX% stemming Ichor, semiconductor of earnings over face revenues, to of backdrop the as growth a from as the and growth global Within demand results. year-on-year we pandemic. healthy achieved chain very

stated market the indicating is result, enter the on revenue from recent And results levels our execution so. continued midpoint customers. at $XXX earnings now and to million revenues calls our objectives, uptick as growth. X guidance revenue. outlooks demonstrate quarter very environment outgrow of key months WFE provided our eighth still continued The a year industry -- both XXXX. The as for our customer historic a earnings over QX or see visibility QX as well in and as $X key strong million, the their OEMs straight good, we aligned extending pre-announcement, is of Our our our remains with faster X% to our and than demand The in from our about grow growth we guidance

As around XXXX, the cyclical, fab and which raise. the net website expected for growth proceeds very industry, presentation, result, this Acquisitions home has offering resulting being capital strategic an story. in prepared We we our capacity. rise shares a on supplier in are flows. XXXX in We a for helps from place us but to having great expectations the growth outlook month WFE. outlook With this to now We're as XX%. In intensity been in to a computing, at enter overall to IR somewhat to a completed focus altogether at which from an ability our opportunistic industry important ago key and our XX% our With work to million strategic illustrate year in and the industry track increased continued M&A. of story outperformance, be. strong another markets pleased we of strategies higher of the the a on strong and growth industry WFE part for of with industry integrating equipment in semiconductor to of good backdrop performance to growth for market for are the a our be our to a of XXXX investment high-performance around AI fab $XX.XX is begin as some as propelled that growth Ichor. by outperform and of a convergence now cash multiyear essential turn a and to the the XXXX, other to that levels operating I'll and wafer with drivers, the per issued and, balance the X.X on have and businesses put growth providing technology We IoT, nearly is XXX% vehicles growth investor words, I'll appear deliver technology as total which XG, be have secular the to cycle within identifying related of multiple as progression second year autonomous of equity such growth $XXX on in a we industry of well and the leverage strengthening into our framework great posted with record sheet presentation together our new recently million. useful share time with strategies of strongest December focus provides our company a and accretive growth continue turn, for widespread

years. period, and Same X increase technology intensity. the well in has node, X as from the a and been These X, of DRAM, of control growth gases for There's the XX%, with and is and X and the compound the markets and growth for deposition, in as deposition process, technology for layers geometries fluid them these past takeaway, overall faster precise multiple years, layers advancements of more geometries for an to is annual system, and logic outpacing while of XXX more logic Ichor key X that in rate transitions XX%, the Same in In Xy the Over more to etch that. been to grew the annual go require both industry our XX X EUV case, the used it faster to number as at key has over that are percentage content the been deposition as NAND, to And more few complex fluid The particularly twice we points processes. and layer etch three At logic, revenue our require also each where to Xz DRAM this lithography grew nodes of All growth delivery. markets, complex, WFE precise In need more etch alpha technology advanced step these is that as capital for take WFE. relates rates, control are same several a in then X-nanometer DRAM. selectivity and of material beta. to per drives the than X-year the products. become these better higher last due delivery overall XXX etch from beyond and devices. technology EUV each more drivers. industry there the investing will that

future, Beyond opportunity for for with each to is etch witnessed technology is we continue expect our that deposition, year. so we across rate key have to foreseeable run transitions steady deposition driving these device EUV. in shipments increases increased all gas types far EUV increase and etch, What of EUV each and delivery sales X the

the years, Over in our share revenues as XX% or industry. we've percent from WFE the increase of a of X.X% X.X% grown last X our than more a to

footprint. our further benefiting expansion gains acquisition Our and increasing and our the share product as and due of global etch, complementary well is and the deposition -- technology trends share customer continued WFE to offerings the market EUV as of accretive enable

to our I'm product made progress challenging on initiatives. in environment. pleased operating our and turning a in the growth Now XXXX with we progress regional

qualifications half moving capacity We that of business product capability. in machining well, region acquisition end of precision machining Mexico along X the the the in see of low-cost new the well we'll additional Our incremental a in as technical are growth customers, adds revenue programs we initial and year. second as expansion nearing completed are the that

or We to in capacity expanding and investing facility's in are expect X months complete so. the that already next that

liquid geographic well on in resulting And a to for impacts continue court base business. work move weldments our expansion on as in delivery Asia. customer. be we and these have active our of COVID-related customer our with visits our OEMs this But putting delay of limiting qualification across our still full in large limitations, in at will press. are us. is to opportunity share gas past system Korean for we a the In customer we delivery dialogue a major as the once We continue gaining several initiatives, travel new

our continue increased our products new well to Finally, our towards share to of levels our expansion the strategy to model portfolio profitability. operating as on longer-term engineering of of make as drive we drive IP leverage capabilities to and markets develop to served proprietary progress

In in summary, and operational to a expect to months. the midpoint XX% development XXXX through delivered have good in proprietary year. deliver of our gas growth next-generation managing our continue continue challenges so We expectation beta are year, making off continued a solution in revenue the versus guidance the and progress our this strong X XXXX. to initial of to in units for and did of the invest QX last our job revenue team of above to to area of are next phenomenal delivery first sequential The indicates quarter far a record very QX growth start year-over-year we and X

and are a brings margin performance our healthy making margin environment, details target of also and further discussion gross We Larry's us in financial our focused Larry? our continued driving outlook. model on steadfastly we progress which in as meaningful on are continued to improvements towards incremental very business operating

Larry Sparks

Thanks, Jeff.

unless end discussed GAAP this tax metrics very helpful non-GAAP from measures acquired a expenses, and non-GAAP would for we measures in expense, quarter, were a of adjustments. the summarizing R&D the high measure call. up revenues items Business quarter conditions you P&L I share-based exclude for during nonrecurring result, from and the to section First, impact continued results, line compensation and today individual of schedule are the guidance. website These to during identify the Fourth as as charges our and conference and intangible is in such the There strengthen non-GAAP like including our $XXX GAAP of amortization remind financial assets, based. revenue QX I discrete QX items that of up of came million, and at SG&A, Investors operating as reference XX% X% XXXX. the

reported we growth. challenges, quarter operational sequential of revenue present to continued straight COVID seventh our While

points margin share. We the and quarter also programs points for from fourth combined a QX earnings XXXX. Gross increases margin with mix, in exceeded forecast benefits to and in our more achieved basis operating product significant margin, basis due the to our a margin quarter-over-quarter accelerated XXX up up from cost quarter deliver improvement. favorable reduction XX.X%, Gross sequential per QX XXX was from gross

costs COVID-related to impact XX expected, gross continued around basis As points. margin by

half face normalized sourcing pre-COVID higher first health this costs costs the levels. material largely we safety global and with While are our year, ensuring versus freight workforce the of and associated higher still of costs now since

margin from drive came We we million, in a incremental improvements further Operating spending expenses flat healthy to continued was the continue the XXXX. QX, result progress points certain basis over to through of as improvement XXXX quarter, and primarily and up XX% a lower-than-expected environment. XXX Operating our customer of operating $XX.X margin program timing in as at into gross shifted in income that expect demand R&D QX. improved

higher credits. exports rate tax the lower which quarter rate, The was U.S. forecast was XX.X%. to year tax fourth to larger-than-planned true-up year reflects slightly than tax XX.X% credits to for effective R&D our rate Our and of due tax related full certain a full

shares a This for the the of of to range. end by a quarter XXXX With guidance, of inclusive average by the above operating of tax at the the shares reflected be in with along expected additional favorable fourth high to as guidance which be continues over were planning to was of next couple offering years the in end $X.XX. slightly rate, equity of forecast, high high Our per with increased share count our shares. of XX%, gross revenues expenses result $X.XX range lower to end earnings our tax about rate XXX,XXX share of weighted outstanding and the margin XX% at that

We sheet. $XXX Now X.X I issuance balance QX shares, million. the of the to balance proceeds our in sheet net to the strengthened with turn company will million of

to million increase a additional our quarter reported also We in of the $XX strong QX cash balance contributing cash million over flow in with $XX flow cash free QX.

flows total, compared turns we of compared with were end to cash XX inventory million. by of $XXX increased million strong X.X as helped our last days position cash debt X.X compared well days higher the year QX sales million to $XXX XX lower in In total QX, Our in the as of to by outstanding to -- $XXX quarter.

free expect continued XXXX. and a continued healthy environment cash We in flow demand generation

capacity expect be which revenue capital range to X% However, range to and we X%. XXXX this investments support necessary given of to beyond of the exceeds revenues growth, investments of to in historical X% the X% year our

of of to million range guidance to $XXX turn equity our well $X.XX due guidance. around earnings an operating increase The approximately per R&D an seasonal payroll expected previously. timing Now reflects quarter guidance With taxes, of EPS to $XX.X our quarter is and range I will increase the revenue share of share primarily $X.XX costs of of gross the first and margin million, operating expenses points in reflects midpoint in The impact mentioned $XXX in audit million. of to spending the legal the expenses million increases sequential as as XX project basis full X.X our offering. the

we drives audit become which SOX addition, must incremental fees. year, In compliant this

system new plan spending with to R&D We development also additional our associated have and product new ERP to expenses increase support programs. will

reasons, operating expense higher than For slightly expect remainder QX's XXXX. the level to rate we our for these run quarterly of be

guidance quarter. Our ongoing and interest an of million quarter first and million XXXX of for EPS outstanding per $X shares expect XX% expense the diluted for tax approximately assumes XX.X rate

as again to from reiterate that assumption questions, This additional call XX gross impact want costs. turning move sequential continued an quarter COVID-related I XXXX. to of Before includes point each we the a basis anticipate improvements in over margin through we

margin outperformance is objective revenue to continued toward by operational flow-through strong in target Our our and leverage key model. gross drive with financial increases combining

incremental continue and higher-margin gross programs, now cost drive line. share our our business growing our open ready within are margins components Please questions. within higher we reduction through proprietary the expect IP increasing of Operator, We content take our to to products. to


[Operator Instructions].

Our first Patrick with Ho Stifel. press is question from

J. Ho

the go your see weldment last are Congrats starting talked on side as you Jeff, Are year. over businesses, about year, you to end. the products machining customers maybe and particularly things, new share on those their into on introducing gains nice terms quarter your of in now off, or months to so. XX OEM first volume, and of the precision the

Jeffrey Andreson

know, basis. we we Yes. a -- a And XXXX, we award. I in of won since then, went mean, as on kind kind in large you of product-by-product

rolling that's that the some So pretty about some are manifest wins in to we'll of second volume we're as start year address stuff that of And will quarter go say ready seeing yes, so out. talked and the specifically, We've in both quarter fourth products the that those. rolled wins actually about we seen will of effects that. in get And products as precision as into we that complete but themselves well. first to I'd far, been good the some of the some see new half later two that's growth machining I

So on we're really the with the happy component side of business. really our progress

J. Ho

see That's gross maybe, it forward. a volume Larry, margin was side, going QX is What outlook continue drive going good the -- key gross increases. of helpful. the the over to variables some help are to in comments on machining? grow on provide the there to the margin the Or you you to the Obviously, Is to precision and wellness projected contributor have improvements Great. the it mix margins gross that in shift and that's other outlook will are help XXXX? variables? other to And

Larry Sparks

Thanks, Patrick.

few things. other there's think a I

go we factory we saw materials QX. reduction XXXX. into that we of programs, continue nicely coming of in both the that have we side see do benefit in We'll some cost in that As lot efficiency the mentioned, a as to and

And in that and quarter, announcements kind will our the We up rightsizing so first That of with should progress Jeff help bit. in of be both numbers. little market a City seeing mentioned, the Union on wins. for facility. starting plastics the facility the also show business They're to talked that closed share components precision weldment about business, as machining, up us in in the continued those

should And through mentioned, volume you I volume in the through getting business, this that leverage is with on that key. comes we as just it and go expenses the bullish in healthy the XXXX. on think outlook think accelerate an And I to addition pretty as eye we're keeping then year. our


Our next of Riley is from B. question Craig Ellis Securities.

Craig Ellis

nice I question. the margin gross execution well, Larry, a follow-up And quick guys, do the congratulations on in wanted prior on quarter. the to as just

there things in about XX gross our drove You in to relative two points. quarter, that were factors upside mentioned was fourth model, that significantly? up margins the was the the What which contribution basis so two push

Larry Sparks

chunk. even cost were wins this a And and weighted. mean, you product programs that some They're we've that at I fairly some the reduction big mix the another had and if large machining the look contributor components, pretty of in contributed share quarter. of

it in I'd So balanced we was say saw. pretty what

Craig Ellis

Got what it. color And on sequentially can the this nice happen year. to get

So and you the seeing year I'll ask in my full we're some really question industry. is that and to matters talked the of related that strength the it you, about Jeff, to

you magnitude years. of for calendar mentioned outgrowing as We done potential company Ichor? the job the look a headwind see growth at by continued has even of think What for the Xx and are question I tailwinds we to some over So that that. the XX% would industry that exist industry is, The the excess 'XX industry growth. certainly good

Jeffrey Andreson


acquisitions a that I having the giving that in success opportunity is the the to we're develop added to stream, last component you some plus years, products as revenue there's think other with. five us look over

that on we're M&A accretive M&A the equity obviously, M&A, on raise to focus the specific after going IP being without and brings to table. strategic and M&A So

with from believe some you the we're and multiyear along we're dep Whether we belief that keep will year that because continued do could are and help positioned it's just But acquisitions. very you also, well. at cycle it, and of tell I and that that we second etch that came drivers our could in very, gains. that is up that EUV, very as this I that seeing during of look the don't market share as So we're that of some customers can across well, doing the well rate growth double our that know

we could the to that if as continue do on side, we do possibly acquisition something Now well.

Craig Ellis

follow-up that if And and further a ask into issue. could Yes. I question just

that Some provide a front-end bit seeing more got linearity view Ichor? color have of for Can thoughts weighting industry? be is year expressed on you little to could for And what mean what that would we a view it. any any that's your a on

Jeffrey Andreson

is one think an -- about thing obviously, say week. a is question. from last to call is percentage I good Yes. I'd that of earnings our Maybe you're this really alluding And WFE X.X%.

But you to top billion, will that of the exposure can there a the know you vary, going those bias linearity to I change I XX not. also get are at customers, there people look and of so X don't the or obviously. when that see And maybe XX, towards are say or comments. if and applications to potentially X would forecasting that if above we're that markets the our $XX to now they get

so or also memory some of exposure logic, and change that have a kind that would for between better for it. exposure bit outlook balanced foundry more and example, And

that customers. necessarily of I Ichor just draw wouldn't for our based conclusion So outlook, on one the

Craig Ellis

billion count And $XX thinks group possible helpful. the that me That's year. is in this


of Our Steves Mitch next question Capital RBC from is Markets.

Mitch Steves

the as XXXX bit? revenue maybe baseline, balance first shift out a Research to Lam applied materials is on start Can historically, bigger be just qualitative qualitatively, tends more. to side. to percentage on And mix, DRAM expect comments is just kind wanted I going then that's do sort to go expect a a the of through 'XX, if you I of customer? 'XX, mean, they us and I XXXX but give mean, balance were? to I numbers a apply when don't the of a exact for going that you guys customer any we little what cycle, maybe that

Jeffrey Andreson

customer the Yes. with our XX-K. mix We typically report

going preannounce shifts to don't bit year see our year customer this dramatic a mix. that. last maybe to you're from I in early to think So

I that have kind of the think size that I -- history, the X has low their to kind and you mid- of the would of low come see customers assume you'll that down top back X, our Mitch, XXs, kind -- continue which now largest as of of we're think to customers grow. go those in to in from XXs our you

So we see growth there.

Some of market see share that shift mix, at will mix this we we the depending which that get XXXX. stage. significant to and that gains see we're be going two specific customer for gains not obviously at, on those don't between any But shifts we

Mitch Steves

Okay. Because lot and selling back these some people that, calls, smartphone I improving the environment, of half markets, And end one, then to talking guys of is have on on and half you think heavy? meaning year. which the the consoles which you're in a a smartphones you Do of no products improving expect just sort be second very you're commentary of into, front comment? it what in that kind with are on conference kind have environment guys sales visibility do half, type any of about can't would due those of more front along weaker of console drove the an or X to

Jeffrey Andreson

don't that visibility is down level. have The answer we to

derivative but our Our customers track customers. a that, we're of may

from hear you what it exactly. general, in we'll we will -- almost be them, with associated So

things continuing. that, bullish say, I foundry cetera. general, things largest seeing of computing, edge of but strength XG, in et some transition that So we I the have pretty the data side I applications, the about centers, still -- commentary you're AI, around to is And it, that HBC some on particular pointed just talked which out, the would seen IoT the strength like know And those areas.

those of all this believe bode think for well in. we're that I cycle I multiyear

Mitch Steves

just one then I And Okay. one if last, clarify could.

Does of basis Just are freight to you getting too? include basis XX said that stuff, like impact the margin clause? point all COVID in How points the costs guys like and you a that impact.

Jeffrey Andreson

cleaning, in chip which the more XX the premiums. of now distancing, additional have social up Yes. our It where and impact includes additional impact coverage freight factories coverage, shift in in X shows we by

So enchilada. whole it's the


of Our next is & Quinn Company. question Bolton from Needham

Quinn Bolton

to nice and on Great just congratulations wanted with the on LDM. the Larry, I see. start Jeff margin the to question performance.

some Should of be you you're result year, those maybe think qualification mentioned of You shot at now delays revenue year? green or second might some with revenue thinking half in still largest seeing from customers we Asian you into the XXXX have your the maybe of later from this delays of a customers. that recognizing this your

Jeffrey Andreson


I the year, going half in in for it's of definitely second second mean, think some qualifications. that and half. I the the later think lightly to these half second be I of

So I will closely revenues easier. a at think significant from XXXX. customers, working are still be We is little U.S. which any qualifications our with

opportunity expansion some there's think those to still I sides on So see in XXXX.

Quinn Bolton

And follow-up. just a quick

seeing similar we I Japanese customers the also to COVID? think delays you had should think mentioned due -- the Korean customer with are you those delays. that Did

Jeffrey Andreson

for far restricted travel essentially, say is dialogues, I -- Like It's I wouldn't not off mean, very the Japan. mean I think, ground them. technical need restricted get But on into commitment I to speaking, like the of the I track given get there are active. and with Yes. within We're restricted. to level that the we're that kind the to evaluations it's generally Japan. going people COVID. said, to things we're

So beta stage. of be this in units half think associated anything question a probably would the out at those I the don't XXXX. But out getting is second again, some with

Quinn Bolton

prices still of health Are give issue of it. stock the you just have valuations thoughts sort an second us given you then sort pretty seeing Got M&A of company's the a given what on a Can your right raise. question, public equity And Are just the now? the pipeline? done? Great. active dialogue

Jeffrey Andreson

can't presented look We get the as like did invest. specifically looking at certainly these month. Yes. EBITDA at. approach. know, we're we're pretty you we typical disciplined of are capacity I small we afraid them. them environments, the growth increase. us really number to comment A footprint and Having each at speak. companies which of opportunities, activity reasonable if in But that mean, deal, about we said see buy types We obviously, We're does a not obviously that, increasing in to I in our any of November, as actually to multiples. in the good We very

So business, the footprint customer while can a that was from a which relatively so good-sized business grow to we synergies, it us small our reasonably speak. through gave

which So on that businesses we level for IP, means look. higher have focused accretive gross us. generally a continue to We're margin more of really

raise. So flexibility sheet we Obviously, equity balance have better activity the on the the better. with is now

move And see so opportunistic -- relatively the I we think if quickly we're right be and we very opportunities. can


question is Ho from Deutsche Sidney of next Bank. Our

Sidney Ho

Congratulations in for things. XX%, -- of this close of the a how XX outgrow continue you that difficult already basis. XX% on percentage XX% to given talk My is products. and is and be like gains points. think about to to guide right range can your you of in some XXXX based outdo How And year confident impressive year-over-year mentioned you full much new WFE product will have in the by XX lines that customers various comp a first the side that market you on more XXXX. WFE are your quarter share and now, Or very basis right question I a in growth footprint you largest on

Jeffrey Andreson


obviously, I would it XXXX. I'm with think very great as team a large good was The did gain job. big of the performance, say, share, very chunk. I did -- a as happy XXXX. We

tremendously you pushed XXXX, have of They help to versus in the looking in ramp. types customers for we opportunities. hard really those bandwidth more environments, think are I in

larger-than-expected of kind our to attributed growth. that So

very again. wouldn't you to plans. I could that So versus we do XX% an have But XX% indication want good we give

we to size We XXXX. these share of have a in similar of did that of gains line lot sight

So of any very we rate. year. can growth And again the grow on good WFE in said confidence we the that's above have that acquisitions --

Sidney Ho

Okay. Maybe question related Great. margin. is follow-up a gross to

calendar You in year. guided second the a improvement quarter like going that's to think the year? what's XX half throughout can you you And about, towards first basis looks mind this there talked us up maybe points. that help margin the lot in initiatives right your Is kick year. gross It of target the there's something about exiting of

Jeffrey Andreson

stay I assuming think -- stays the Well, healthy, mix healthy. revenues

a we We in QX end improvement continue get bullish go that's that but to everything components made very And very can assuming progress our should we've the from and the quarter through to of XX be expect and points expect the the continue we that to basis last year. each can XX of business, probably optimistic the we're we we of we share kind to as gains do in quarters. couple able


Davidson. next from Diffely of comes Tom D.A. question Our

Tom Diffely

that foundry when look a growth Maybe at, to call growth, come lot year, and this seems Cindy's a like it, going EUV. follow-up both from of it question. Jeff, you it's the to XX%

few? So etch I'm over this last have they curious, do again like the year you think dep significantly outperform and the markets

Jeffrey Andreson

Obviously, But foundry, I is growing high capital our think has to I closer of level look obviously, it, well. it. are again mean, year-over-year, customers we as intensity at very as a

a operations. Korean that, DRAM see I We being selling pretty into XD our year. see obviously, think through actively we strong NAND --

see etch definitely will I think and you deposition, again, So improving.

technology regions. I some there's think

you're good at well. think growth of seeing as success I very and customers our X share market a

So from we benefit that.

Tom Diffely

about you of X% semiconductor that up and expansion to there? CapEx X% to most be Is going the for being going of is then, And Great. in specific? most Larry, And the range that this Mexico expansion into talked Okay. year.

Larry Sparks

There's both America. into it's a integration in in good some but our North and Asia going sites, in portion also Mexico, of

out. So it's spread

and integration investments kind machining telling We seeing. what for it customers for what the also the and us it's and other have in portion is to we're large are very, and things. needs But a the of both precision of of some meet IT capacity, very for

Jeffrey Andreson

when had in but significant of the put the and higher capital bought that footprint not into we'd be over. Mexico, end X% going probably a knew it pull I'd in Yes. amount to at and us we to happen, operation of we X% up range, we our did were say the

Tom Diffely

a what to Okay. low-cost It's facility like said, it's costs? is or And longer rate -- that tax to going your do region. term, your I either labor to

costs going Singapore, example. different in don't for the rate. of labor from a to are have than I certainly tremendous think amount on little profile a having So is -- it's holiday not we the It impact it's our bit U.S. a the in higher have Tax, tax based

But tax range as small a think, So about, rate typically say of higher factor talked end XX%. that's talk in we'll that relatively be towards Larry I'd that I the to XX% it. we about


question Krish Co. is Cowen Our next & from of Sankar

Krish Sankar

visibility. spoke revenues a I to question quarter would first X-month relative the Jeff, like kind you of your had way you look about can is, been March? any Has there quantify June what

Jeffrey Andreson

that guidance, a would I QX. Chris. I tell demand appreciate very don't strong want you still in environment effort. I give see to the we QX you

second and -- year I it's obviously, that the -- lot healthy, that QX. variables it can of at It's of so talked some I a earlier And there's second it over in I'll there's for in a above think and XX% our remains leave half towards continued is, this level, bias WFE today, bit that about half we growth so... think better the little the make which

Krish Sankar

have I for than it. ASML point down of next quick the or think or road? follow-ups. because it it. Got two EUV Got can the what greater will customer at get Jeff, XX% year year you, And do then other to this trend is it or you be EUV's

Jeffrey Andreson

down of I business we and at higher in we growth component growth, of some the see of versus the think see it's process targeted tools but the side not the don't levels lithography tools sector. road because

continue going to it's So grow. to

that know, investor I as think there's the think year-over-year, I good to transparency customer you pretty community. from

aligned very projections. with growth So our we're

Krish Sankar

Larry. question final then And it. for a Got

from spoke forecast? gross You in of margin of you through it upside revenue? the that improving improvement Or turning is part any margin gross about baking some to your margin Korean Are the not Japan, came in year. evals gross

Jeffrey Andreson

little XXXX. very into our plan It's a for Yes. overall impact

some Chris, of the of the to think customer I of customers, pushed that just visiting and some that some and -- into -- travel we -- of due talking, later limitations we're that is year.

detrimental. it won't it be it will will be a small Obviously, helpful, but component. So be


Steelhead is question of next from David Securities. Our Duley

David Duley

I couple. have a

the about have idea you in is mentioned an increasing process intensity. Do you content tools? for think delivery generation the older tools, versus you delivery gas next-generation is gas I that First, with how much intense more

Jeffrey Andreson

say, -- were XX I'd gas were go We Dave, on we're I using or probably average, example, if gases, Yes. X back closer DRAM, probably sticks for about for really talk and years, But ASPs they things. to now. to don't XX and

ASP. certain that you just mean in It's certain components speak. a your XX% just components doesn't increase get and that get increase Now enlarged, to so

the So of business. over the seeing it's logic that period gases time. side largely, in the beneficial And DRAM and of higher level of been you're

David Duley

delivery the share elaborate you next-generation business that product product have Will carve And when or it you mentioned customers? to to your of out piece increase Could market also with coming. expect higher have be gross to think you available? just you then going on a a Okay. do timing new that's gas also Or I margins? you allow of bigger

Jeffrey Andreson


talked potentially X the to I think X months. we in about first next our unit beta

let think I kind are we're we'll are may a with there by XXXX something timing we that gas formally the where to once the you top what we're a qualifications. win along get the a can at beta. we're months move beta accretive as we onto looking X they you're to manufacture. the progressing steps These know said the and of And boxes. is In that to very XX Having to -- how can in to The probably allows tracking to line, bring you general, full from you that, purchase margin accretive frame. are still to get kind yes, third-party update be out, highly but on quarter, months win time gross we of components that. for you way doing you have that's that each Because applications, probably to But full solution, guys margin. incremental but going long them not content Should business. you application more qualification. But these these product-by-product, the application. you're

So stack that. if we gross on keep the margin

So well. these some of that's of that's And is tied types year. -- this accretive to improvement margin our the margin activities to as gross

David Duley

into could X the for certainly When Okay. you is you into top Final you assortment opportunities. the calendar growth you will what -- ball current think just at question look your growth year perhaps link crystal me opportunities have X,XXX be? of for you XXXX, an

Jeffrey Andreson

there Talking we're I'd thinking side. about on -- half-ish. targeted going we're side, on maybe that's to the be I components revenue think the say,

this of we for There's -- a doing, the pretty it. geared market some of of -- us And half to we're where other to activities I grows, is we're as business year. new reefer year, probably some percentage obviously, that The our business around -- that's gas the us contributor that's going mean, piece example, we delivery. we're some be this a of out for all good support there. for continue get doing larger incremental

probably half and So but gas there's the a solutions limited it's areas, number of and probably success component second delivery. then have. that And in of some we delivery the the business liquid of side the with plastics is following the that away


remarks. I no call Ladies and questions. for And like Andreson Jeff I turn to see to closing further would gentlemen, back the

Jeffrey Andreson

us customers look support on updating execution again in but XXXX. and call and growth our suppliers in forward year earnings you an like joining for Operator, that our challenging, for operationally in you next thank call Thank call. their on May. our our this early strong employees, quarter. I'd We to strong concludes to


conference. today's concludes This

your You and you lines thank at may this your participation. disconnect time, for