Earnings call transcript Q2 2023

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Operator

Good morning, and thank you for standing by. Welcome to the ACM Research Second Quarter 2023 Earnings Conference Call.

As this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Zhai, conference Blueshirt Managing like speaker to Group. now Yujia today, Director would hand over the your I of The Please go ahead.

Yujia Zhai

us Good you discuss operator. everyone. quarter on joining second you, to today's results. Thank XXXX call morning, for Thank

during the well portion we released as deck today. The our from posted prepared supplemental of slide newswire that services. our to market release We U.S. reference opened investor available our is website will before on a the results as website remarks. There's also

On with David today Feng, our Wang; operating are our of Lisa subsidiary, CFO the and me call CEO, ACM Shanghai. CFO, Dr. Mark the our McKechnie;

to we please turn Slide Before continue, X.

be ACM's during the me call other predictions, may considered you current future. These include might and forward statements forward-looking judgment remarks Let looking. remind for represent made this estimates that that information

and they SEC. under are that uncertainties could to cause risk risks ACM's the with subject factors in However, results Those described differ elsewhere filings are materially. risks to actual and the

Please call. do as of these any statements. reliance date to statements, forward-looking obliged the of opinions these this reflect revisions on ACM's is update which you only not forward-looking to on not ACM place undue

results be gain which financial provide the of trading non-GAAP loss call excludes will securities. we Certain in this on stock-based on or compensation that unrealized basis, a and

in our website For our our which release, earnings is to XX. amounts, GAAP section posted refer of results and the should reconciliations non-GAAP between GAAP you on IR and Slide

with over X. David With David? me that, Wang, who the let Slide will begin turn to now call

David Wang

to conference ACM's Thanks, second Yujia. quarter call. welcome Hello, earnings everyone, and XXXX

X. Slide to turn Please

market and million, last China and XX% year. node new as new years XX% margin margin largely penetration of from driven by strong XX.X%, our share COVID-related a year. Shipments and new XX.X%. record industrial from million, the several mature by supply returned product, quarter, second were [indiscernible] same results the of up following operating revenue quarter These gain achieved chain customer, For quarter We was and a Gross was normal to operating EPS, was same $XXX.X last up disruption. $XXX a revenue were our customer.

touch beginning each node mature China. of on Let me with investment this, in

following that year, adjusted a WFE will predicted spending export by quicker between regulations, to our dramatically. to on shift new prediction playing in At China market indeed China's market we now declined be industrial gap out some time, China's restriction, appear up analysts capacity mature that the sped the U.S.-China nodes pause, we fairly China. sign expected substantial in seeing mature mature capacity driven as Last industry as is This trade be are expansion and its predict broader has to nodes. After nodes consumption.

nano XX see nano and investment We continued in front-end and capacity. fab XX above

of power a market capacities production a tailwind technology, leading the We share stage, driver also EV our as we as multi-product market its devices believe effort our China nano ramp further intensify for positioned portfolio. -- and see are to semiconductor capabilities. XX and due investment we to other position, domestic in that in both early China boost the well is This broad differentiated still and increase benefit We creates good believe in to strong us XX and up China-based devices.

Over product introduced past we In And year, last bench. our we to and turn XX%. please SPM product, few tools. semi-critical grew dry. COX supercritical to last cleaning ramping Single Bevel line, Etch the and Moving Slide and auto began quarter, including introduced Tahoe cleaning, we X. semi-critical high-temperature wafer introduced years, then,

forward. nodes XX% product Now, in in nodes, step. among all and play going of industry, We China mature portfolio ACM one development the has this process product believe effort role a the of in broadest will advanced nearly portfolio cleaning key our cleaning international covering

other furnace due declined quarterly ECP, X% to fluctuation. and technologies

However, primarily XX% driven cycle grew category ECP year-over-year. months the in with was product Growth six ECP, for this technologies furnace. XXXX, by other of and some furnace first contribution from

Our and ARD and higher customers expanded under LPCVD multiple are evaluation. to including temperature poly and furnace, have silicon and nitride anneal

excluding QX and performance packaging important higher service such such XD spares the advanced Advanced to including AI offers set ACM X.XD, grew for service and out both our as ECP, applications PR of a category and packaging, plating looks includes new as spare full and This the [year-over-date] We is wet and packaging tools etcher, of more XX% as industrial tool. packaging fan in drive wet advanced of that [and and will company only XX% innovations and tools, for developer, believe scrubber, become (ph) coater, further] range GPT. parts. and (ph). stripper,

plating furnace on customer, outside we a in continue our on line, up to Track Finishing Track make believe planning tools have and major sales discussion and We're and we technology our efforts key and China. we cleaning, platform PECVD this winner that making progress our we're them new both platform. proprietary year. with evaluation our and China to deliver with in products, product more good Similar with to active customer PECVD are

the Moving please X. to on to customer, turn Slide

ACM make are by nearly semiconductor We the continue of both to internationally. manufacturers. and inside In customer now on China, believe all China tools progress we used

growing of team our of each service across product to working base. are sales our the line Our deployment customer and major expand

addition seeing our In current a of to customer, well-funded entrants. good also new number we're

date. for a product customer, a done of getting until has acceptance job be good shipment new our This, reflecting [indiscernible] good these year our team customers. our this traction at with later Our customer

the at have pricing Market their as were expected and IPO Hong customer, total optimistic The for and of proceeds strategic a later its soon. of well, trading XX, we is billion this customer greater Hua to progressing Also, key July may announced or billion. qualification In $X you RMBXX.X start our approximately U.S., Semiconductor, heard, evaluation XXXX, Shanghai year. STAR some on remain

local quarter The tool -- build our an are tool to service semiconductor in planned for announced effort. a order of we the major year. first team a for QX, deliver from In to we and support this evaluation beginning is in early Europe, first to manufacturer

for making and Zhangjiang To region. for this new our support a area Slide China of expected the completed later R&D a Production customer initial with SK the and Oregon is to we year, production key growing strong to improve begin land relationship completed and increased as and center In others. and in to expansion site prior turn will we Korea, this QX quarter, progress a of believe our and other Korea In commitment on in In to in as R&D have China, our purchasing Lingang last to high-tech support this the a year. commitment U.S., nearly initiatives, our leased of a regions. we Production call, noted region. X. construction the facility Please we outside demonstration activities noted center. in In as capability facility our and continue our add hynix custom in R&D in service We

and a investment the for headquarters This includes expect Shanghai, spend about million U.S. new other Korea we facility, As ACM for in XXXX, to and continued Lingang $XXX reminder, for investment our remodeling in in CapEx.

year the to policy, The range of full in with a customer, international assessment timing $XXX current management's spending scenario [indiscernible], the of together supply constraint, impact expect key continuing from field. first and trade acceptance for the evaluations the chain among the We XXXX I for $XXX reaffirm of now in other the outlook things, the outlook to million the will of reflects, our be our million. please of Slide XXXX, revenue outlook provide turn range X. to two

details review Now who let me results. our turn please. quarter over to call the will Mark, of CFO, our second Mark,

Mark McKechnie

Thank everyone. you, David. Good day,

unless turn loss which on these stock-based I refer to non-GAAP figures trading comparisons to refer to and to GAAP otherwise are noted, following XXXX. second the our release. the unrealized earnings is of Unless note I Please will included the securities. XX. Reconciliation of with Slide financial compensation second quarter measures comparable non-GAAP measures, in XXXX measures exclude quarter otherwise, of Also,

for I'll and the financial other single quarter. was $XXX.X XX%. down provide second $XXX.X cleaning million, XX.X%. X.X%. up tools Revenue Revenue cleaning furnace wafer $XX.X Total million, for million, shipments semi-critical up $XXX.X ECP, and Revenue highlights up were for was was now XX%. technologies million,

first and by XX.X% advanced $XX.X category versus packaging, six was services grew of the Revenue period. spares for excluding this ECP, For prior-year the XXXX, million, months up XX.X%.

a normal to margin rate. our XX.X%, from exceeded increase U.S. and expected favorable XX% Gross from improved specific renminbi of to lines, in impact to favorable exchange for fluctuations margins a in XX.X%. due XX%. The range mix, primarily gross This was up dollar margin product was the product gross

variety currency volume, to expect from We due product factors, to to period vary and of to a period gross impacts. such as sales margin mix continue

higher the to travel. million, increase Operating activities and from our up support new marketing in R&D, and G&A customer The post-COVID $XX.X due costs and $XX.X of a and was sales million. boost in new expenses product were

Operating income the of Operating was the earnings. realized of recorded Recall quarter. that from XX.X%. $X.X a the up gain million securities gains non-GAAP $XX.X We realized margin included was from trading XX.X%, $XX.X for up million, million. sale are in from

Income from Code, of in Internal result Section of and change million. the deductible due down tax that XXX to U.S. elevated requirement experimental the previously primarily research expense $X.X the our was capitalize remain tax Revenue expenses. $X.X does and amortize effective million, to Recall a as

up million. from Net up income ACM $X.XX. Research to income $X.XX, per from diluted attributable Net million, was was share $XX.X $XX.X

second review versus end I'll about flat expenses million versus second inventory Total some the of quarter the cash at of the was million. first $X.X quarter. selected equivalents, time cash at restricted the the million quarter. balance deposits generally first second at Now, of $XXX.X million and end were the Cash were quarter, items. end the for the sheet $XXX.X of end and quarter $XXX.X Capital the

effective earlier auditor informed a, engage our us filing statement providing we companies. an XX, as our services or, third quarter public it the provide now XXXX, advised decision this of when XX-Q of Armanino b, year's auditor. practice the report. this update will to independent a that to They new due on was to as us from July auditor, all financial their audit On exit resign I'll of, the

other our a XXXX. new XX, the from committee on clients. And has select similar details begun As and July result, I number appoint filed note a to process audit we've full of Armanino that We a would X-K filings seen an the also with auditor.

Regarding and we for a new U.S. auditor, China-based are considering options several auditors. the search including

That concludes remarks. our prepared

may Operator, please open ahead. the that for call questions let's have. Now, any you go

Operator

Needham first [Operator comes with Bolton Company. Instructions] from question The Quinn &

Your line is open.

Quinn Bolton

you much very but may at XXXX looks it share guidance, second rate are Congratulations since the second slower year, not thoughts revenues quarter guys. you're for half? normalization your that results. increasing sort of you're now? up catch or really grow you would more second just out I second like shape be guess second much, in the revenue of half in know on on Was Hey, helpful. any strong half. you question picture kind chain the How could the about guidance, thinking the increasing Or see or the and half, I at of big the half supply second quarter the of not second the the a least flatten COVID

David Wang

couple of at half I will okay, should improve I half than feel years, that this components -- supply I some will last last for Yes, but the And probably chain. get better first the much -- was and year, Quinn. constrained. mean, still stronger year supply it's second year, chain, first further than trend that looking our their half In year, continue. general, I'm year actually, maybe to thinking right? regarding think second say, of

Mark, to on? you want anything add

Mark McKechnie

bet. you Yes,

a overall overall outlook our at So, flattish factor -- in for China. overall we obviously, CapEx we're Quinn, looking

I see think debate gains that, lot products, there's a but new new about and customers. from we growth our of share better

about First you can at it's look numbers, half/second half, but I the mean, XX%/XX%.

to be is normal year out, on up, could where type the be seasonality And depending that's QX QX us. down, Yes. -- which so, and we'd the expect plays for

Quinn Bolton

Got it.

the out post return COVID sort quarter a think of Got down was I of to a perhaps more years fourth So a of window. seasonality couple where it. largely of

select mark, through for place this where now I you your I that just, question, has has a probably oversight can for us China-based been China-based the couple auditors. there's of in believe you years auditor, that of side you in To know walk a PCAOB now. just Second -- a process of the on auditor. sort a thorn extent

any raised have U.S. you in if listing that so, know your But And select shouldn't I status China it's lots a questions. impact been subject on of the that's

select do extent So, implications us you the auditor? can walk Thanks. you just latest a to through China-based the

Mark McKechnie

question, that for Quinn. bet. you Yeah, Thanks

think, positive completed as the our know, rules, to officially they're But the good did audit Armanino, was I auditors. -- they XXXX, signed a U.S. was last a So, auditor. late a you auditor, a development last over cut by for inspect to U.S.-based the able we year, there PCAOB yes, China year, and

And so for the if list years certain believe PCAOB delisting has moot HFCAA a row, result we in on least at the that the the would been foreseeable in so, a China. called Act, you which became that granted a three now were inspections in consecutive

a So, that's in point. listing and auditor, auditor we could as U.S. why our go range pointed well, China-based we maintain of with terms out possibilities at but our certainly this

Quinn Bolton

able any of quick be how an expanding your Track David, an expanding to a placements this existing with go and Track And Great. those year. one customer to you mentioned me. base, of broad base final give PECVD within customers Can for to may then, evaluations PECVD? sort expanding you you and with of sense us or sort

David Wang

Yeah. mentioned, memory right? Actually, foundry one the with application. application, also So another have as for differentiated do I technology we're we logic, one model; right, for have PECVD, two real actually now

in we're working market with evaluation other [indiscernible] get PECVD is of come to side and the really also customer next So, So, this has huge a obviously, revenue on. going both right, try furnace. we right? And year, year, product, than our and probably will

ACM high expecting grow to lot growth and continue at rate. expectation both outcome, put really -- in effort few of high future on a good to we have We the year and and product a and drive good next this also a very put

it's an So, product. exciting

Quinn Bolton

David. Thanks, Thanks, Mark.

David Wang

Quinn. you, Thank

Operator

comes The ROTH Instructions] next Capital. with question [Operator from Desilva Suji

Your line is open.

Suji Desilva

Mark. on Hi, David. here. Congrats Hi, the progress

there bit the to little So, category, or just still chain here. sure furnace uptake products -- And the across within, I the catch uptake what's a furnace want ramping? supply product to that in just [indiscernible] is on Was ECP dig up decline category? make

David Wang

of only customer. by Great. end last year, -- Actually, we have our furnace have [indiscernible]

we're year, However, end to to -- digit. by expecting probably really our base increase customer hoping this year, customer, this we're we're right, double more becomes of

So, qualification revenue process, we LPCVD call copper tool our, promised And them, dramatically, base show quite also other we on wise, as ALD contribution -- plating, anneal our poly have as the not quickly nitride right? very and the customer also increased yes, now process data. we they also however, have high-temperature poly. as Also and of and two customer and

it this be, to right, also But would probably play year, we'll that, of us. more for So, see is growing next a revenue. contribution as said, market I quickly

Suji Desilva

great. keep look there that good there. of milestones then, to sense out? several a what's the us build the Okay, start as could for give try to And the operations, and kind of? you Korea David, things quarters to us give get land some for are next That's to Just progress you track

David Wang

FAB. site. to effort, Korea. development That's market. And in also we're furnace, and they investment Korean in customer right? long-term most hynix Korean still we're the our lot Great. and joint Shanghai advanced of going and focus tools that's on why a on Wuxi couldn't of they're real folks to really hire is building people. really to going to factory more more SK -- Actually and nodes, sell between more more building because And, We obviously, And, the likely Track their PECVD probably probably became our team the like, relationship. Korea increase XXXX, It's now

and we'll Track, in and their we're further, copper] fully with our the also also engage also also in to we'll were We'll major not probably XX% expanding Meanwhile, the Hynix. really the Korea furnace to. future market. process actually their in supplier being a for Taiwan strong the -- Hynix be (ph) copper step only plating. right, just we're about engaged So, and and become obviously U.S. base R&D technology Europe try also PECVD And now really us further manufacturer regarding [within cleaning, helping cleaning with of also

dual to be make real a situation. is a center So, fab flexible, new dynamic really we what which R&D-manufacturing ACM have is in

Suji Desilva

good And lastly, want like sounds Okay, a opportunity. then great. one just question to sneak And in. last that

gen talk Intel, of do [indiscernible] just TMSC your to the that exposure an I'm Just may in you with just AI, to market see is these leveraging curious, memory sense AI, packaging or of and lever growth the may in -- trailing you nodes advanced there? on areas. be the nodes, packaging, me able high AI a and have advanced may you be versus the you there advanced all bandwidth give opportunity

David Wang

packaging. really really, product for advanced we for have Yes, plating. we And real of actually also, ACM [flagship] have good line copper I it, up, And tool has right, their good. call (ph) developer, copper application. do have and SFPs, process wet this wider also wet real also cleaning, etcher, tool, just preparation, right? including astonishing, So, and stripper well we coater, for package it's advanced

with like, with well And So, China, we too. are we engaged positioned. the most in fully we are the customer top-tier customers. also, yes, are And other engaged

really very like of -- driving I packaging I GPT end application. said, advanced high it's see the market and definitely a So, and growing is AI

So, our prefer product this really for application.

Suji Desilva

Okay. Thanks, David.

Operator

The Instructions] Schwab with comes question Craig-Hallum from [Operator Capital. next Christian

line Your is open.

Christian Schwab

we prepared Any market taking great. there us In for we an product furnace? -- talked Or think gaining ECP give is color be my on that it and about share more elaboration gains cleaning at of Thanks can China. the across you Great. all you Do question. inside market lines? that? targeted would comments, share Are and

David Wang

cleaning, you wafer mean, three tool, right, side. single we semi-critical mostly ago, increased years single if were I and only look XX%. or have the Actually, wafer at Yes. products cleaning

for which and bench, power is above, really device. including XX auto three two, last call, introduced major, market technology also the nano However, their years I

copper plate Now their really right? mentioned, base. also few also, lot, And be a and gain in outside copper I in cleaning China. the next increase. cleaning -- it right? increased that see will top-tier also customer is local than driving spread in gain look that tool, their one will quite -- continue More customers from the will too. Obviously, as big like we're number also driving or also our furnace years we I'd this say, that That's a definitely increase is outside cleaning really one. to supplier, And revenue, become and one, China, the copper continue in number number now We to our plating, the I So, intention also the wise, interest bigger their sign. plating for

Christian Schwab

Great. And then, a question for Mark.

Given COVID the raise it and kind us basis? point? Or mix just gross in a or the much time too to margin costs to on supply are behind there least chain the of potentially greatly diminished, at raise for issues is target range volatility at it still consistent company is this

Mark McKechnie

Yes, I'll take that.

at on have range upper correct, new the Christian, think, mean, you're the or and margin, quite are that quarters we've of So gross and little range margins upon products maybe products in better them. dependent in a product past I gross end we come a old I few so. mix, our our or across

keep I think going to now, XX% for XX% to we're range. our

range always do we to can, not we move to that but we're course, well higher. like ready Of as as

Christian Schwab

Great guys. Okay, questions. great. No Thanks, other quarter.

Mark McKechnie

Thanks, Okay. Christian.

David Wang

Thank you.

Operator

Chaolien question The Tseng with Suisse. Credit comes from Instructions] [Operator next

is line Your open.

Chaolien Tseng

and David taking thanks Mark, question. for Hi, my

first Can this -- you Do [by talk year? that back-end compared thinking The corrected. half customer you And earlier momentum Again the with you equipment we (ph)? of order that order customer about new about new recent the can momentum. far] talk because the had order order are see first about momentum? question the is improving

as some Thank that that, have customers. the may you. from now, order improvement, thinking especially are We of back-end Chinese

David Wang

front-end that's significant they Okay. driving our Actually, third-tier also continue That's obviously, of really become spending, growing. the customer, -- see shipments coming, our our we customer, right, Also, existing order and our driving our revenue, also driving and second-tier, customer too. actually right? you as see,

So that's on sign.

really the bank-end, it in depends. also, And

say this pausing, kind customers forward, back-end, still still keep some still year, right? last customers I some and as for are looking should customer customers year, still then right? but invest say, going, slow too, down, maybe some but should not of see. Some invest but good we'll So, obviously I

Chaolien Tseng

Okay.

that revenue But -- fabs do if ASML from or of customers X, half would Tier right we look many, So revenue X we weeks momentum, contributions we you. the one-third or new would talked you a China. Thank the from say merger maybe X about X, orders that even X mean, you maybe in understand exposure, order Tier many you Tier Tier these the ago. say from customers? few from same to about the the at now are -- thinking I it's X there just are front-end already,

David Wang

is cannot really the I give real this I real right? mean moving. breakdown, Yes. dynamic

the But the break shipment mean, come moment, -- nodes. down our second-tier say, some really our, customer top become, tier give whatever, can right? XX, of this significant customer it the tier because third-tier a they end obviously, the above I That I for can customer, For end see grow. at the XX% the customer mature XX% really say and tier, adding can I from second all right? year, second percentage-wise. we revenue you can to people will driving third year, you what's are all I this But of this of cannot

Chaolien Tseng

from, Okay. Significant and okay. shipments revenue

David Wang

rate and Yes, bulk rate] [increased (ph).

David Wang

Okay. X, significant mean increase... do Do customers? Tier the X from revenue you mean you Or significant the shipments

David Wang

Increase.

Chaolien Tseng

Increase.

six next any And that lead look months XX over small suppliers number when international still cleaning, there time. lead plating, question lead We a some that tools still XX, copper time, do from even equipment Okay. furnace, months tools is, product with remain across over across your with say still have time? hear you six of months you

it's for the if ACM? wondering Thank same you. So I'm just

David Wang

components seven last time depends year, in product. right, than the even sometimes leading Actually, have months, right? get XX specific shrinking, that months, of also five on Actually, actually, some -- we long depends product, we have real It been right, time, a every hand. This your months. do more to year, has experience between on XX Yes.

and So, continue to we're expecting it been improve. improved, has

Chaolien Tseng

I you, grew see very from quarter, revenue look is when Thank second revenue. still by to the that question in the next revenue just at recently X% And region, that's great quite that David. although it's China actually

So, business. back-end increase mainly from wondering, I'm just or is the this front-end

David Wang

outside You mean China?

Chaolien Tseng

about the In X% revenue. quarter, second Yes. you talked

David Wang

also same our efforts. from in we customer our play that for there say, And I in So, customer, Yes, tool. and I international also outside efforts. and But have years, our expecting international customer, the China also could and as other Korea. Korea, U.S. plating application come a right? mentioned, they thing, happen interest other major -- still said, a in are for we plating few sales driving customer revenue we'll where furnace, also a our lot the more see right? majority European have a Also, packaging have from Korea, expecting far, traction in And continue Hynix we're the China right interest customer. cleaning, for will next as from now, activity And as grow, so we we attention tool we in see also the and another

Chaolien Tseng

just Okay. Understand. possible Thank some growth ask I furnace. I from the expecting -- about been was if decent because And I have you. revenue furnace may David

it that new still in a seems not see furnace. revenues I the from yet So, lot second quarter, of

from be -- or XQ the revenues about revenues, I year new furnace I'm perspective, thinking, but the the from I So, from furnace? more a maybe I'm mean this will about XXXX? already, this know major can revenue talked coming earlier bit just just you you from share thinking

David Wang

to as So I again, the new this right? we'll by for will will by end And can tell, last of mentioned take it's more right, increase, we to have number year, we we're year, say, total end have base hoping earlier. furnace. revenue-wise, of customers time. right, year, digits, this three hard increase And customer customer double probably customer

of say I contribution. revenue more of is for So, kind expect the next year we will

Chaolien Tseng

understood. Thank you, Okay, David.

Mark McKechnie

right. All

Next operator. question, please,

Operator

Mark comes Benchmark Miller with The [Operator The Instructions] Company. next question from

Your line is open.

Mark Miller

a Congratulations on strong very quarter.

David Wang

Mark. Thanks,

Mark Miller

revenues? that them probably? in expect question U.S. about is you be to the The be When Would and year eval Europe next would also tools

David Wang

get beginning end Good end question. we or either of expecting, the that's year, year, evaluation, Actually, are expecting So, our this record this tool have tool year become qualification of right? we to -- this and a revenue. next

Mark Miller

Are tools? there and outside any and of China other in U.S. are eval Europe that especially tools

David Wang

China? China Outside or inside

Mark Miller

Inside China.

David Wang

eval tool, foreign China. we right, also right, in We the in we those cleaning China, continue foreign China. also tool, their have have tool, inside those plating, also copper some too. the in base tool Chinese have and they our a company, also we also we that is supercritical have has Obviously, which advanced furnace too, I tool also and into a have about quite the right, etcher bit customer, for a evaluation And the factory instance, We'll company, right? variety plating in and have tool, have packaging cleaning manufacture For also -- COX, and two Bevel mentioned our a expanding in and of customer which evaluation.

Mark Miller

stock-based What couple cash a questions. comp from Just housekeeping of operations? was and

Mark McKechnie

in Stock-based cash Hey, comp for was press Yeah. in then operations QX. flow release, And Mark. it's million million. about the QX about positive, but $X about was $X -- from

Mark Miller

you. Thank

David Wang

Mark. you, Thank

Operator

Blue comes Lotus. Instructions] Robert with McKay [Operator from next The question

open. is line Your

Robert McKay

to Hey, for high And inventory and wanted I a for I for you that Yeah, of taking my expect come what quarters? couple the just is? see was little bit to They've levels. Thank a David if ask about thanks. later down kind can quarters. reason that question. And in we of Mark. wondering been

David Wang

Hey, to question? Mark, that do want take you

Mark McKechnie

hear Yes, the didn't question. I

David Wang

he little quarters question. reduction going the in to regarding questions our speak was and few or his are louder? you next higher, be -- his I inventory is there Can said, think not, that

Mark McKechnie

hear our -- on that us not We Yes, question. you didn't Okay. end? can did we hear

Robert McKay

can you. hear Yes, I

Mark McKechnie

Okay.

question. the repeated David So

the about it's So inventory. that Is correct?

Robert McKay

Yes, exactly.

little a it's why bit wondering high. Just Yes.

Mark McKechnie

Okay.

the So has with again, didn't think address it I the well, but inventory. if to question hear can do I it I

quarter, were the it. to our the June three So, inventory of end there at factors

was It in raw split million. $XXX.X goods was million, $XXX.X finished work between $XXX million. was materials, $XXX it about So was process inventory and then million,

customers. -- evaluation are is by of lot did we tools the our inventory, goods that under being a that So, finished evaluated

that an important is so for And us. metric

working In based the David tightness. bit. of chain inventory, looking inventory to more but bringing levels. inventories on noted, of down We the normalized levels, also as them are our a to some But bring one we built our some supply chain up, those forecasts, overall down loosening we're so supply terms on given is

Robert McKay

I know Got it. you clear. can don't now. if me hear Super

David Wang

is light. speak Can you sound speaker? still to Your close

Robert McKay

headset. Hua on share speak Are I already into of expansion my from can wondering was as our we factoring the Hong guidance? new as this there's loud kind information can. revenue on year? I'm orders Yes, I any on if I'll you that its

David Wang

It's great Hua relationship, Actually, lot a has in in strategic our building have really our fab it have starting cleaning -- acceptor a revenue in contribution said, and So year, the furnace, year, our quite codify right? right, for this something a different next years. Hong Group. next we and in it's our So tool, is also happened, then cleaning of right? multi-fab of so And two I tool, the future, a And [indiscernible] Yes. customer, [indiscernible] customer. Hong locations, Hua wider, as strategic also, been, bit they evaluates

the with also better and We're our continue great. So to Hong portfolio a give to we'll Hua service Group. grow looking customer product it's supporting for continue

Robert McKay

I just Got clear. quality. on again, Once sorry it. the for follow to up question microphone guidance. my Very revenue a wanted

wide? anything it wondering about revenue if still is wide. so think guidance quite And remains share there's can I our you I why just

David Wang

uncertain, (ph) I in mean not give So, we'll probably wider. a think changing. you mean, And timeline, this QX you're I I the at right, right? of keeping, we'll probably, Well, [narrow] still there's Yes. guidance. moment, the -- more be little

Robert McKay

Got it.

the uncertainty Is So, the from some orders is about for customers? your reason wide that range? just of there some some

David Wang

repeat Can repeat sound again? you You you the too question? Can small.

Robert McKay

just is I uncertainty the customer be information to range for more wanted about some to the of year? or wide if Yes. due orders our about we need know what to maybe certain some guidance kind do --

David Wang

Yes.

us both wider are of right, of that you still probably give orders, right, some think still right together, I now. each, components some kind projection probably

Robert McKay

the and Great. And in dividend. ask, last maybe is I'll I'll the go then it. Got after, question the queue about back

it? I finally just thanks. wondering that If And -- was issued going what quite with And Shanghai we're what dividend. subsidiary we what plans I Yes, invest to dividend. large our think that? do are a we'll for

David Wang

all have to the Great. we shareholder which XX.X% USA. Actually, a is to the Shanghai and announced, right, ACM go of as ACM company, comes dividend, we

the use We the customer other build continue in center right? this go our well in enhance regions, invest the money we're and to to in are put our the investing and product U.S., activity, and in -- in money world. other going we're into also sales to marketing applying marketing, also R&D to first-tier going helping a So capability, demo the

Robert McKay

Got it. you very much. Thank

into for audio the I'll quality. the Sorry results. on back my Thank queue. go congrats you, and good

David Wang

Thank you.

Operator

Company. next Miller Instructions] Benchmark comes Mark Our with The [Operator question from

Mark Miller

the second this of think question. Thank remainder How I should year? you modeling the for about for R&D

Mark McKechnie

can sorry, you repeat Mark, question? I'm the

Mark Miller

about How should year? I modeling think the R&D rest the for of expense

Mark McKechnie

R&D expense, overall thoughts non-GAAP R&D XX.X% on yes, let me that. in about XXXX. XX.X% was give XXXX, in some

range for right would to XX% for So, year, the we're looking about R&D. be at XX% the

Mark Miller

Thank you.

Mark McKechnie

thanks, Yes, Mark.

Operator

no this time. closing I back show show questions at hand remarks. I questions... to call I to the Wang additional like would for no over now Again, David further

David Wang

you operator. all Thank your for participating for on you, today's Thank and call supporting.

Yujia close, please. Yujia, is events. mention we Relations Investor our upcoming Before going to

Yujia Zhai

we XX we Thanks, Chicago. Conference. be August XX, Needham will in at Annual to Annual XX Benchmark be we at present XXth to David. On the Semiconductor City. TMT August Conference presenting in SemiCap Jefferies XX, XXth September Annual Conference New Semiconductor and From will the will at XX, From York presenting

by is conference the at attendance reminder, a As invite-only.

contact sales please schedule one-on-one attendant investors, team. your respective with interested For register meetings management and the to

All right.

call. the concludes this So

You may disconnect. now Thanks.

ACM Research (ACMR) 4 Aug 232023 Q2 Earnings call transcript