ENTG - Earnings call 3 2023

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Operator

Welcome to Entegris Third Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Bill Seymour, Vice President of Investor Relations.

Bill Seymour

Good morning, everyone. Earlier today, we announced the financial results for our third quarter of 2023.

Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. number materially and the from a results and forward-looking involve differ could those statements of uncertainties, risks actual statements. These projected in

defined in financial information report this also regarding the most Regulation with that presentation. by the information these On refer and call, measures disclaimer filed is Additional refer G. to slide Please the the risks we have will recent the and to subsequent and contained annual as SEC. quarterly on non-GAAP reports we SEC uncertainties our in

You can table website in page release news at on today's our as our find a of reconciliation as well entegris.com. IR

On the and CEO; our Bertrand call today Loy, CFO. Linda LaGorga, our are

over I'll the call Bertrand. that, hand to With

Bertrand Loy

that In pleased solid the our Thank were quarter we line of industry I an Entegris another commitments. that in you, to better our all and by or am team morning. Bill, with be performance. good key that I environment made on than continues will results good challenging, progress and delivered saying guidance start

financial squarely performance. both and margin exceeding million, EBITDA Sales was guidance guidance $XXX Non-GAAP were XX.X%, $X.XX, our range. our of EPS the was range. midpoint at on our First,

both additional across down most few that product areas with down a and our make bottom. utilization Sales similar continue on logic to in were memory along were decline the me Let guidance. The performance. our for X% products, unit-driven sales line in to of sequentially, comments our drivers last bump rates quarter as

we clean in deposition we of In customers' that road increasing growth are see importance advanced product particular, our in [indiscernible] technology liquid lines and However, to maps. materials filters. did growth saw

segment the that quarter market another slurries in had and industry pads, we growth reflecting our SiC position. addition, strong strong of and In

products, and contrast which CapEx-driven construction. for control were new to systems to our gas in solutions. In fab was purification last for in other and tied our performance down WFE sensing the Sales products steady to FOUPs quarter, our are mixed and tied addition, like demand

the team an Next, like provide would on. I focused to is the commitments key update on

First, on the this and up ERP is within a $XX are the achieve to and conversion This We rate ERP XX target synergy CMC executed for wrapped August, to testament team accomplishment on in the our X closing on track the integration. We conversions cost we quarter. the million months CMC integration a the all of of major capabilities. run time acquisition.

common operational our streamlined ERP Having better one allow serve with platform us the capabilities. customers whole and chain supply company to on will end-to-end

seen module, filters. products On wins revenue pads, synergies, formulated the combining have early in in CMP and we the including slurries, cleans

end-to-end Looking from our and further in our to other out, to the precursors. adoption and growing interest codevelop of ability materials solutions customers solutions molybdenum like there's our support

they improve solutions market. enable in as see which faster for Our means them Entegris speed, development benefits and times customers ultimately great faster time to

pay and divestitures down. Next,

made we on On progress Electronic Here, Chemicals our to we Fujifilm. significant closed October the have of X, sale business our commitments.

with termination is up customer almost Solutions, and are deal the distribution wrapped largely our transitions agreement complete. of Regarding Element the

of balance the the this receive end proceeds to year. We of for by expect the the transaction

PIM have on as will the mentioned we update more we and the oil remains Finally, which for agents ongoing, quarter, we when sells are of PIM working the and gas to last sale business, drag-reducing share. the you process industry, we The on sale business.

significantly those sales not PIM this businesses, debt, to would. we far up, sold so year, $X our we billion business. in down have proceeds using the just we we including from and And bring as X are Summing the said

gross margin transactions these and EPS will In you addition, are as hear both accretion. Linda, from driving

a this in our Linda also for more focused inventory good turns. bit which discuss in play We on saw inventory of quarter. are we free reductions put pressure discussed, margin, flow we will improvement cash but cash contributed improving in very to third and shortly. as on the detail Lastly, improving flow gross quarter, the

Let me on now cover a few outlook. to items before other important moving the

Taiwan, from remain facility very have the local new begun planned, our These as progress reflect volumes shipments team making. facility. initial in Kaohsiung we small, steady the is on First, our but

expect volumes We ramp continue to to production during second XXXX. higher half to the of of

to third combination the Taiwan division capacity is facility been new needs. called in SCM completed. has were starting combining The that Solutions. and new Last the quarter, long-term Our EPS and we quarter. critical is This addressing shared we divisions new Material our in

believe I and leverage believe by we superior time expansion. and Material will Solutions has device our providing that accelerate to opportunity will opportunity maps the capabilities, road cost reducing end-to-end performance ownership. division growth better this of margin for our their tremendous which their by yield provide customers to and

Chips in Last line our originally an we with in the Commerce on ecosystem which Colorado domestic week, office resiliency goals we for of look application improve chain. domestic submitted project. our clearly strengthen announced doing Department is with Act the to the semiconductor funding our engagement project XXXX. of Chips facility, for of Springs We believe this new the that program to the and We supply the forward December

new recently direct our business. to the for Turning not do China, expect controls impact export to any we material released see to

our our next be publishing corporate updates few latest Next, report. program. social the on responsibility weeks, we In CSR will a few

even we we have we is and of recognizes climate XX%. by a but progress X and note, am to proud Scope greenhouse new is commitment issue introducing one know our [indiscernible] our that critical reduce the do X gas made that for can announce emissions Scope On communities. pleased change I also the goals to are since We program the launching more. of our XXXX, Entegris world are we the in

EcoVadis, companies top that strong awarded Gold puts all social In colleagues addition, of Entegris us our in and corporate values. to from corporate our pleased we the which are recently the sustainability X% demonstrating rating commitment was responsibility,

the logic and reached a rest changed likely of market. has XXXX, the of industry, at We view for little our the of bottom in Now rates. utilization both less memory in terms looking believe the

the in not do term. we any However, short in expect meaningful market the improvement

our strong As long-term to Despite expect doubling market The market trillion. very the return least growth about market XXXX. prospects for challenging we $X way in to pertains and the the in outperform Entegris, by it optimistic continue at short-term we semiconductor to remain to to size Entegris. the for market X position, points growth given conditions, the industry will to on

and architectures. the time, is proliferation entering with Chips of toward industry industry device this value moving the means solutions wafer a customers' yield. period the increasingly technology of nanometer change material device Entegris. that to especially because in At content across growth will faster time superior road is translate the structures enable Entegris with important and in proposition per and the unique for and same below of materials ultimately XD into X expanding complexity and to purity areas science, This unprecedented our is rapidly end-to-end maps, our shrinking And most

Let to me Linda. the turn Linda? over call now

Linda LaGorga

morning, you Bertrand. everyone, and Good thank

QX. $X Our sequentially. second the approximately a XX% sales year-over-year about $X sequentially FX in negatively X% year were million and by revenue in quarter and impacted by revenue $XXX impacted over down negatively million million, down

Element reminder, full business impact the still business a included Electronic revenue Chemicals the and of selling Solutions. original the the third we As our quarter to and guidance results are

quarter, on and non-GAAP a volumes on Solutions the our termination continued the plant distribution our and Element our facility The focus was the basis XX.X% lower the third in of of guidance by temporary a XX.X% from decline margin our expected basis agreement GAAP margin within the inventory in new non-GAAP with was on Gross in was gross reduction, continued driven impact range. Taiwan. of ramp sequential

expense basis a negative below at tax basis the $X.XX for in allows credits. QX range. per in our the foreign was QX. driven certain non-GAAP by was $XXX interest in offset below by diluted tax in our line. negative GAAP the QX and guidance. by This Adjusted the $XXX impact $XXX EPS rates additional FX or partially our rate impacted guidance million of million were tax Both tax was was and Operating Operating lower of revenue lower expenses were guidance. recent of our on was expenses tax GAAP a positive third and guidance GAAP share lower rate. on positively X.X% The the modestly our expenses, our that was million the impact The expense IRS in our EPS per GAAP and operating were announcement share Non-GAAP in other XX.X% non-GAAP midpoint of quarter. non-GAAP QX. rate temporarily $X.XX above EBITDA income

The MC slides. third X in financials We've clean liquid and driven CapEx. said, reflect up our last results which and sequentially. were from SCEM the divisions X% provided new are quarter solutions, primarily the EPS facilities-based into recast Now of tied and the the combination was quarter million the modest for now growth our division, sequential year, $XXX in Material earnings which X% and Solutions. edge by sales divisions historical driven of to wet up gas [indiscernible] unit sales purification are filters,

like X% was MC and last for AMH and the in of quarter, to more like which products control solutions similar construction XX% Products, $XXX to quarter. The to sequentially. decline sensing for and flat declined. sales sales AMH margin versus sequentially. down FOUPs down tied in of were grow, XX.X% sequential operating to tied WFE An year fab were the last million essentially QX are continue more drivers

Adjusted by primarily volumes. down lower operating was driven for AMH margin sequentially, XX.X%,

sequentially. Materials was slurries the by certain This down pads decline XX% particularly materials X% down in applications. offset of sequential memory new lines, Solutions, was The deposition year-over-year growth by specialty lower million SIC advanced and were division in strong and modest volumes QX across For coatings. sales and $XXX product driven sales in

the our margin agreement Solutions. XX.X% Element for The the temporary primarily of Adjusted margin modest with sequential for MS driven impact was was termination decline quarter. of the by operating distribution

Moving cash on flow. to

improving have quarter for great are $XX be $XX the million. with as committed almost on flow. And lowering We continue [indiscernible] we put end. that QX. free organization, to inventory cash lot to a in was focus sequentially inventory down showing results of million an to CapEx

to to in in $XXX expect CapEx spend We continue XXXX. approximately million total

cash goal year to free progress $XXX by significantly $XXX this toward to inventory improved primarily was flow by reduce approximately quarter million. our This Third million. our driven

and Gross announced our was billion, $X.X synergies. pro debt of Next, cost let's the forma was net X.Xx was our our our leverage net billion. was discuss structure. leverage X.Xx for growth capital and end At $X.X QX,

payment During points the million a $XX and term our we made XX basis debt executed a loan. quarter, in voluntary third reprice

down proceeds During will the from million $XXX the fourth debt proceeds remainder we chemicals Element the pay divestiture electronics of transaction. approximately of quarter, and with the the the from

gross and down, will The leverage to this our of to be year, portfolio the that by debt of and our of will to to pay $X.X result X. debt end the the expect on proportion gross rate a variable portfolio close billion is Xx. drop interest approximately be X.X% As blended approximately the we approximately

Moving our QX on to outlook.

I minimal include only to be fourth the the Before our start, Element and and sold to sold business Electronic will the impact guidance our will Chemicals business include not results we clear, for quarter a from Solutions. P&L

We expect this range made, just include Element to from in million To $XXX $XX million sales QX. $XXX and million sales sold Electronic approximately I does from to Chemicals the not of point businesses. the

of X.X% implies QX comparable the sales midpoint guidance So a on for basis, QX. decline to approximate an it from our

EBITDA XX%. We to XX% to expect margin be approximately the

per to be be to share GAAP EPS non-GAAP EPS share. expect to We $X.XX $X.XX $X.XX $X.XX to per and

me some provide modeling Let additional items.

a to the and divestitures of and basis. to We impact margin expect compared both the The positive reflects margin to strong further by the on inventory XX% GAAP gross cost XX% impact in QX, reductions. higher non-GAAP be offset of controls, QX

QX $XXX to We $XXX expenses to million range million expect from operating operating $XXX GAAP $XXX expenses to million. range and in non-GAAP from million to

$XX approximately QX. be to expected is Depreciation in million

be to of pay amount not in approximately a down. That full QX. expense million expected include interest the impact quarter $XX expect debt We does

update moving are We brief in Meeting approximately forward. the Early coming information do we will financial the where more few expect send XX%. fourth a this the non-GAAP tax on planning for quarter Analyst model next be to year, virtual months. to the rate We'll we

I'll over back now to closing additional hand for Bertrand some remarks. it

Bertrand Loy

to with very we continue quality our Thank things you, that are we pleased execution. that And in within on Linda. environment, context, the In the soft of the are industry our control. focus

the CMC year-end. wrapped the to expect cost full successfully synergies up have realize integration by We and

assets noncore down We to have the made using debt. great divesting in proceeds progress and are pay

have their strong future. with technology value of We are growing maps, we this road importance of downturn for growth our cost proposition. industry on balancing potential making management critical and conviction the effectively short-term while investments to We're the customers using long-term our actively in industry engage the and the

the that, line questions. let's for With operator, open

Operator

for Instructions] from Toshiya Our The now questions. Goldman coming Sachs. is is Hari open first floor [Operator question with

Toshiya Hari

had questions. I X

overall just Bertrand, the on First, market backdrop.

that I respective think the curious leading seeing logic edge hasn't applications trailing changed. you markets, foundry end your what or really But and you're edge. in mentioned NAND, importantly, and outlook DRAM, the

I seem down be little things to a think slowing bit.

you're seeing a it's and . premature the market, about about swing expect I know also those we talk but market give 'XX, buckets, of you factors what XXXX importantly, monitoring terms and your us as forecast. what in that So don't the But are of outperformance? some think of key both we across X should rate be to to

Bertrand Loy

we really expecting assumptions what comes When Toshiya. is for the market, the largely half it our of with QX, and the you, in year. second both Thank terms QX into going this in line to are of

modest We some logic. recovery are advanced in seeing

good for X seeing a But bit and side, a is the it's that and is mainstream on an a acceleration fabs. of particular offset in saw that mainstream steady in or of that this in logic that We contraction continuation this QX, X in fabs expect So we QX. after stabilizing segment we are contraction little by quarters. the decline

depressed as remained We mixed. but to NAND fairly in starts remains down DRAM recovery QX. and no with real in expected, we has Memory QX expect improving saw wafer continuing come XD

us it to that QX previous industry lot we it's comes into outlined would So earnings more probably in provide bit go specifics. when we we'll limit for of wafer February. my conditions But call. saying we I XXXX. report quantification a in a again, early on more expect to largely, to only that comments XXXX, starts be again, some statement our to that When the of

Toshiya Hari

one on Great. And gross then maybe Linda. as follow-up, question for my margins

points the guess improvement I is guidance, guiding sequentially. XX.X%. about basis QX of guess, midpoint to I So you're XXX

cost X headwind. inventory controls Can all? a curious impacting You the work talked kind and divestitures, break also some tailwinds guess, the then about is how and down your of playing if drivers at as as they're on . guide those those and and a you're doing FX you I side of role

Linda LaGorga

absolutely. Yes,

So couple a things. of

the at utilization, we by As gross reductions divestitures, inventory the full margin from because time but said, be The is reduction focused reductions. we're incredibly a will which quarter. the important have this free the on incredible accretive to We're accretion it's are driven the us, with of had not seeing plant partly allowed the flow. cash to an cash very quarter We right? this flow third and $XX million strong number us inventory inventory

the inventory of have reduction. core that some slightly you by tailwind the our offset So from initiatives, including divestitures

and initiatives offset, headwind. as looking that between some always of driving we controls with So evolve, continue the divestitures as right will now bit as do to we're across thinking P&L. But we the you balance be of we're continue And done about to another right, plan that mentioned, our a to at it is that. going and you're and cost that we have key

Toshiya Hari

be Linda, that And to inventory this the that XX'? year? exiting reductions, fair sorry, into assume done Or it is could calendar continue you'll

Linda LaGorga

Well, focus to working on cap we're important. working always is to me, cap. always a maintain going And

things because level into aren't stop head a higher we definitely, We inventory, of when bigger we on but this have started focus that with year a opportunity to 'XX. going

$XX continue. incredibly is So see number. you'll big numbers I an it come But will the think down. million

with Analyst is another effort. then continuing go try giving And we'll $XX Bertrand As our into to it's into but targeting QX, XXXX we be color to we're inventory $XX said, a Day, as as million to we more go what million see reduction.

Operator

next Shi We'll take Needham. our Charles from with question

Yu Shi

want out below looks in the a guidance was Bertrand, is like off, about back provided to and guidance million that your I First $XX with contribution because kind what QX to have ago. you Solutions quarter Element slightly ago, implied it of agreement quarter ask if you relative EC still I the a distributor from

memory backed mostly related So into there the number. of lighter I foundry for into exactly the wonder mature Is is weakness still the what QX? is [indiscernible] outlook or it logic relatively the some

Bertrand Loy

Yes.

the few guidance, so that's X% our reflection I -- I sequentially, if answer. to again, mean, first, my of a down million. at that's good of midpoint factors. That's about market as continues So about and you really soft, $XXX look a implied in the be previous

is little is for weaker I of for that mainstream customers, be again, the then this level utilization versus that we We some industry. final And the steeper excluding XXXX quarter also of quarter and which basis bit the factor we both a of really quarter to solid that a want what the comparable a essentially we QED on few a on a seasonally But business see about continue to you think that reduction mentioned, months to balance, as were expecting expect expect at Electronics, the XXXX from ago. QX numbers. down And to if is if we our maybe outpace is you the to recognize in in look than us. take expect where our X% and we context Chemicals broader year, again, Enthone

a down against the along be all have the again, which, X% line essentially commitment the XXXX, of is basis line in will outperformance comparable XXXX the made over we X year. is top industry, Our points since that on with which beginning of

Yu Shi

of the for side and I costs Obviously, for? MSI you just course, what's mentioned mature follow-up. a the this MSI memory year? terms latest maybe of just wonder side. What's So thinking production assumption on quick very some in the there's

Bertrand Loy

right about year. for down Yes. now to MSI we the the in low about mid-teens think The it way is we think

the industry mid-teens. and to expect approximately to the in so We down XX% low down CapEx be

teens, and down low down industry MSI approximately down low blend to mid-teens. CapEx So the XX%

Operator

Seaport our take Mike from Harrison We'll next Partners. question Research with

Michael Harrison

bit update the Taiwan morning. it's few still facility ramp-up and of Good Bertrand, the process, on little going gave you a sounds more to take like quarters. an which a

. about margin in is of can through if drag that curious how be next Is that up it think quantitatively, of that Just half volumes and drag to going similar compare how going to the QX? how those think about we walk we until starting commercial in you had we should then pretty QX kind and in second impact it the that? should Or get year? a

Bertrand Loy

Yes.

margin QX, QX very beginning on will and very, enter year. at similar drag we for expect The reason as next the be we is in the our pace which the qualification. to complete of So really that

that there are intend major remember we products to that X Taiwan. types in manufacture of So

first material The our gone one be for deposition have products qualification would or well. those products extremely

We starting orders complete deposition for are and from accept to we're essentially purchase materials. customers

would our Next our fluid be handling specifically drums. products, high-purity

products have to take but can customer We qualifications, X our qualifications to internal completed months. those up for the X

next largest least, last Taiwan. the next far, expect the that So significant qualifications, of our until This don't be, to priority but mean, then And we in to internal will the will the second the I production completing filtration any be volumes quarter liquid very last And expect second value of see but do completed by we not customer be coming qualifications manufacturing actively until year. are year. out not half of building. we of

a significant that of relief that means and expect the second P&L on time. be won't of half until until lot don't in really there year, the really point of really the we drag again, So volumes that

Michael Harrison

Linda. very That's number And the a right. then housekeeping regarding interest expense question for All of kind helpful.

that refinancing. of collect that doesn't paydown maybe some in $XX you've made really with flow cash from some mentioned obviously and QX the million divestitures, You changes guidance all the

the expect made in XXXX the So . with that you you've what point the starting make modifications to paydown is year-end? before that and

Linda LaGorga

Yes, that million. interest be number would expense $XX approximately

the wasn't it all throughout on reason million $XXX because quarter quarter, the is down the this So paid was it that hedge. based staggered

Operator

from Sidney with Deutsche Ho take We'll next Bank. question our

Sidney Ho

areas inflection will good in point or it's expect guys kind about better. were increase? some you more or get could see the half. first do the you think second of Are For for start hear that that maybe of that a cyclical CapEx-related any half, may the . seasonal there to But strength about talk your view as any are of wafer seeing mature same you see XXXX, areas notes this that reiterating specifically we risk year? you How like

Bertrand Loy

curious I will but will we as But I being about earlier, promise early that I appreciate you XXXX. that XXXX, It's in you stick too said to us and to February. for about do Sidney, that. talk I

Sidney Ho

Well, business? some [indiscernible] carbide the a over I'm to a In slurries just I'll [indiscernible] curious ask strength leading you Bertrand, weakness carbide. few different come? your in are there? are you then. hear to Or and started for where business remarks seeing that past prepared what sense question a weeks, in pad. we highlighted to And Is . things tend give of your indicator be things us

Bertrand Loy

Yes.

good for this to So us. indeed, been very mean, sides be I one to related business would things X construction. are the growing There rapidly fab the And question. new opportunity. has

purification wafer gas the very that products are large solutions. in slurries highlighting that are carriers, all They familiar really area post-CMP well so But as quarters we've SIC consumable been last cleaning the one So products. as with. you're systems,

SIC and rapid obviously of as level to our adoption are very slurries Specifically, function of a comes solutions the being fab pads, activity. we've seen And it when of used those solutions.

that some that online coming just So capacity talking bringing is true much don't business. we are but impact customers it's expect so about adverse a to there's very new to rates, that that see down utilization

something as be matter about rapidly, expect significant adding for ahead fact, very we business solutions. growing mean, in but of It's we and actively of it's think million XXXX demand I like It's adding XXXX. -- are small. this those annually, doubled essentially about very a what has we still As to compared to $XX capacity. are capacity it

Sidney Ho

last the on the X.X from what's impact it And distribution Maybe gross of you drag I agreement helpful. have on think the That's I quickly Taiwan on but being margin facility? just question being the a point talked the can missed terminated? that what's the call, potentially about a quarter, quantify for you may Linda. headwind.

get to those numbers want Just in.

Linda LaGorga

quarter drag you're approximately on Element distribution to agreement basis from transition the of XX correct. Last the Solutions the Yes, be points.

or dollar from the facility, as specific far Taiwan drag As percent haven't that. drag we quantified the

gross be As to we've fully impact facility. ramped until on up an Bertrand said, that it margins is going

Operator

We'll take our next with Capital from question KeyBanc Yefremov Aleksey Markets.

Aleksey Yefremov

This is on for Ryan Alex.

on Just start congratulations up Materials a name Solutions. to want new with with coming for

So nice work there.

First me. you're of I wanted in from bit to the like question for do better. the peers just dig seems chain? where on mean little what some some side memory sit into seeing you kind of a little inventory I a bit. kind commentary has It think been industry

there? like So seeing you what . of are just guys wondering kind

Bertrand Loy

-- of the which customers been levels fab from And effectively another indeed Look, perfect seen memory. are same of hearing and demand in of update channels. balance would suggests we also the reducing have our extensively inventory I on actually pricing, some rely utilization, most we and obviously of very their and in we of which mentioning, up customers is level We're firming is some between we mean again, typically happening. don't have supply is seeing level indicator in memory this of what our I stabilization type that visibility, have what hearing that are think directly, we you're

about we said, talk don't that of too to So just to the we're indicators at leads early as as to again, yet. have I believe but are green it's bottom, shoots visibility, have that you perfect close just visibility are, level that really we looking and We recovery. us and don't

Aleksey Yefremov

then just for Great. here. one last That's helpful. And me

what us can any you Just preview And currently any next of update on year? . into seeing? transitions, terms give you're early node

Bertrand Loy

transitions to we've and news and year, to you this that architectures high-volume hoping performance originally for place that evidence year that. the really node the it layers are transitions happening, saw We're in which on plus of to taking to memory, we news we in of good logic in it's the not we're see signaled saw into was we important in time, end comes many in year. us, our to before and the When QX that business of NAND, XXX for We expecting no early us, layer all you expecting Taiwan. So and all of seen XXXX. transition delays expecting were XD customers at productions but going XXX-plus for

on update in XXXX a But months. few again, specifics we'll more you with

Operator

Arcuri our take with next from question We'll UBS. Tim

Timothy Arcuri

I'm to I'm seasonal going Can not and you're tie but lot of a just normal March would 'XX, us of sort sort million all parts some you to what trying that about sell normal of I like speak PIM, can about you into is consider normal there to -- like seasonal to you way Bertrand, if just a March? just a what be . about there's mean, maybe a but of of -- you ask wondering know I if for think sort guide be margin?

Bertrand Loy

I seasonally every typically, recently. would the QX strongest year. question March. regular And has been I see unique our what becomes, be little again, normal we see So we bit a would without it in a But being March, But will QX. is like quarters down typically then a That call mean, mean normal year QX -- QX feels then and versus I what in not again, year a normal would XXXX. be not or and in down see utilization steady I normal pattern going to and just XXXX? may that normal conditions is go we increase be But and I'm path. And that starts may the going would what want fab caveat Or to we that in actually to impact XXXX? in see steady wafer a

Timothy Arcuri

that competing companies. of about And China. a We be keep I seem these to then materials with can -- mean subsidization you is talk they're lot competition in of materials the hearing there supply but chain in don't much, they China. not you about all

Do so, if with they're . where? So becoming about can them? And you? how think you you you just competitive see speak

Bertrand Loy

solutions able we mean I not we're that lot have really been develop, Chinese their far, mean loudly similar of that them match and the products. the see we provide and right. helps Chinese sticking the and a competitors they improve seeing competitors are They so are their integral available. you're I using of improve solutions the performance to them Chinese But our they of hearing paper that that of customers. types to would -- value from our performance yields helps clearly solutions when device on

very again, But close in keeping in position so we on feel our China. are And about far, happening China. competitive so what's eye a we good

Operator

next with Loop Chris question Markets. Capital our take We'll from Kapsch

Christopher Kapsch

the solutions on focused segment. Question new material

basis, sequentially. if it was on you the year-over-year, the down think I It the XX% wafer X% pro sounds the forma rates, function the as drivers, softness, a key So utilization starts. fab mentioned you though will, revenue

little a to deal. I then as memory. reflect those weren't you more to staying the Did variances? And for looking Enthone Enthone the assume forma called color. out transaction Just contribute pro

just segments? it Or the that, or that for products towards material perhaps nodes if a wondering were is it . segment different SCEM solutions legacy balanced NAND within slurries CMP technology it skewed deposition is And across is within this formerly towards memory. new weakness So more those and module architectures? is for XD product skewed function maybe

Bertrand Loy

Yes.

division actually, polishing the right? new performing from has number us, that with from the you XX% you look for array division And down they're greatest this China, our the if year-to-date. we you when [indiscernible] customers at to suffered to is enacted XXXX, restrictions that, develop engage So that film and co-optimized But remind exposure correct, recast the October solutions the memory, would one. the post-CMP about to Material also this line Entegris impact to the is So And for in for across to remember division been is that with export those solutions Solutions, with focus I materials you're the greatest the capabilities the the in division those XXXX, cleaning in way all chemistries. the to solutions have and trying on of that expectations.

see And engagements, we with quality this validating I potential would we are the been that which say have for of pleased those the that very division.

of new but materials cleaning etching really for not you to under chemistries. reasons in new opportunities year, mentioning, particularly was again, a and ancillary lot So of this the China, impact memory, and opportunities terms exposure slurries, and of exciting the exciting hood, if I look

Christopher Kapsch

Fair enough.

of memory layered one of on architectures. HVM about Xxx your out ramp the push follow-up the Just market and and the comments for sort

the the now just these -- memory given makers memory, there's to layers. road XXX-plus downdraft where accelerate I'm enough way to layers, the Just it's if map look pronounced the road the X,XXX-plus advanced all wondering map because to right to instances in that goes

beneficial before Or Obviously, transition to . it an you at there's that playing instances given if per soft XXX look at disproportionately they of they to accelerate as that curious sort XXX just dynamic to walk where is out? they advanced layers how crawl is opportunity nodes? wafer. I'm really have the content to backdrop layers this that's or at

Bertrand Loy

mean, I -- levels a but fabs. reduction, again, true. of low this was utilization year capacity it's year also decommissioning at So difficult memory for older some

all devastating So business. some our that of of on part had impact particular this

Now that thinking are true some customers it's a skipping about node.

months several over that with them past. that seen So that will we is all the be next And of and we've in the quarters. discussing something

be, they it. to will on have question execute conviction when that? plan to enough the do do confidence And they and So do

as supplier as Of new role on introduction the a if choose chip, node NAND will a layers more is a to pointed, better you for them be to course, and the be XD our of for it the accelerate they ready Entegris.

focused those. about to us need they will be on very it's And skip comfort sure, them for giving potentially to really the for we, early talk it. too So

Operator

Bhavesh BMO Our with Markets. next Capital question from Lodaya

Bhavesh Lodaya

XQ. sequentially down X% to You be mentioned like-for-like sales expected in

EBITDA versus As share how you we underlying Taiwan noise maybe your or are thoughts If actions moving there? on EBITDA have some can pieces, ramp-up up, Any price those additional been the or facility taking. about from performing margins we reduction are color we around flat? exclude think they cost, have the some inventory specifically, trending down, you margin how

Linda LaGorga

me let and this about your this way, Well, it addresses hopefully, talk just question.

on about getting we But some a the divestitures think margin distribution looking reduction other I all see pressures through from lower transition are cost as margin you EBITDA transitional OpEx QX the agreements with As down completed The the way. how company. at on I of accretive the divestitures this I'm quarter, and inventory we margins being the about stepback, we In about and gross gross the and as as just investments. divestitures, EBITDA, our going we're businesses. think of period from talked the well CFO, balance its to always the

be we're of the to make need and level balance to We're the to SG&A we make going to SG&A, of what regarding to the structure. we that ongoing have for looking going support we're ongoing sure always the right the forward, need cost our R&D business. Going at we critical investments make in going and

transition most I -- EBITDA what in think we cost where term, this would committed we still about about the and we it area structure XX% flow long this deliver incredibly over are So the about through. we think as remain importantly, now to think

just year this takes. So and a with is gives transitionary

Bhavesh Lodaya

Springs believe us And still of IRR early investment the Chips the been mentioned get Is Understood. in there or in any funding, timing you the that? And the million Has Springs be update the with of dealers for project size next had does maybe the mid-XXs close the the one. it . in project? change to Act I to Colorado you XXXX? given $XXX start Can the Taiwan then some Colorado an give there industry. on the

Bertrand Loy

question let So Colorado Springs. answer me the on

over approximately be So next that several will you're right investment total right? million, the $XXX the years

that facility, And U.S. Act. XXX,XXX are the $XXX the really to that's we upon going funding Now be seeking foot which phase be -- million. going first Chips we basis about square initiated the have the under to it's is

from And We And be returns commit need we discussion million to that's in returns help continue to phase that XXXX. investment. what to Taiwanese be to similar but the attractive, U.S. the expect administration. expect a we to that basis we get to able will the in for production order for our the were first early for U.S. the

Operator

There Bill closing I'll the any floor over comments. back are turn Seymour to further questions. no for

Bill Seymour

with day. Have good questions. have joining a you follow any additional our for up directly Please if me you call Thank today.

You can now disconnect. Thank you.

Operator

Thank you. Conference this And Call. this disconnect does conclude today's and your time, wonderful lines Entegris Third have Earnings day. Quarter a at XXXX Please

Entegris (ENTG) 2 Nov 232023 Q3 Earnings call transcript