Welcome, everyone. Welcome to IQE's 2022 Capital Markets Day. I'm Christine Dunbar. I lead the global sales team here at IQE, and it's my great honor and great pleasure to be here welcoming you today. Welcome to all of you here in the room with me in London, and a warm welcome to all of you out there online as well. Thank you for being with us today. We really appreciate this opportunity to tell our story. Today, you're gonna hear from us a vision, and we'll take you on a journey of discovery. My colleagues and I, along with some of our strategic partners, will tell our vision of compound semiconductors and how IQE is uniquely positioned to be a leader in this space as the architects of tomorrow. I've been with IQE a short period of time, actually, just a couple months, and I, I've been in the industry a long time, as many of you know, 26 years and counting, at IBM and then most recently at GlobalFoundries. I had been watching the compound semiconductor space from my vantage point in Silicon, and seeing that in the most important markets to mankind, and this is no exaggeration, you'll see it in the presentations today, the performance attributes that those markets and those technologies require, some of them are only gonna be able to be met by compound semiconductors, the materials that make up that compound semiconductor family. I've been watching that, and I really decided I wanted to be a part of it and ride this wave, and I'm telling you, I can't be more excited or more happy to be here right now in this role. You know, and what I learned after joining IQE, and what you're gonna all learn today during the course of our presentations, is that not only is this market super exciting and there's a lot of opportunity in it and it's critical to the world, is that IQE is uniquely positioned to support. It's from that vantage point that we bring you the presentation today, and we just can't wait to share it with you. Let me tell you, or describe how we're going to tell the story today. Here is our agenda. Americo, Rodney, Keith, and Tim will all tell portions of the story from their unique vantage point. You'll also hear during the course of the presentation from some of our strategic partners, some of our most important customers, suppliers, other partners in the industry. Some of them are actually here in the room with you and some are also online, and thank you all for taking the time to be a part of this presentation and help us tell this story and are critically important to us. At the end of the presentations, we'll have an opportunity for questions and answers. I know I saw some of them already coming in via chat from the online session. So there'll be opportunities to continue to post questions that way, as well as take questions from the room. That's the flow. I should mention while we're on this slide, and those of you who've been around IQE for a while will notice right away that we have a new logo. We love it. I'm sure you love it as well. It's bold, it's new, it signals the point in time that we are in this company. You'll hear from us today, you know, about that. We're unveiling it today here at Capital Markets Day. That's our new logo. Before I hand it over to Americo, I also wanna share that one of the reasons why I'm so happy and optimistic about this company is because of our CEO. Americo and I got to know each other a bit at a previous company, working together, and I believe he's one of the top strategic thinkers in our industry. I'm also in awe of what he's accomplished over the course of his career, and I honestly couldn't think of anyone better to be leading this company through this exciting next phase. With that, I'll hand it over to Americo. Thank you, my friend. Welcome. Happy to have you. Hello, everybody. Thank you so much for joining us. I've been waiting for this moment for a long few months, okay? I'm sure you, too. I know time is the most precious element we have, so thank you very much for prioritizing us, as well as those online and those who will be watching afterwards. I wanna thank the IQE team for putting this event together. My board is here. My shareholders, large and small, are here. I wanna thank you guys a lot for your support, and we're gonna try to share a lot of information with you today. I hope by the end of the presentation, it will all make sense. If it doesn't, feel free to ask us questions or this is just the beginning of a long conversation we're gonna have. All right? Few good reasons why we meet. One, IQE has not had a Capital Market Day for maybe four years. It's a long time. We have a lot to say, a lot had happened. Second, it is the first Capital Market Day for a new CEO. You guys all know my friend Drew Nelson has built this company, has led it for 33 years. I think he's got the record in the books. It's an honor and a privilege for me to take whatever Drew and his teams have built, which is a fantastic base, and make something great with it, with the help of everybody here, okay? Thank you so much for having dedicated so much of your life creating this company, okay? Third reason that I think is very important is the world we live in. 2022 is very, very different for this industry. Some of us have been in there very long. You may all have noticed that our world today is very, very different in many shape and form from where it was a few years ago. You all hear the news, trade tensions, geopolitics. It all boils down to us trying to decouple an ecosystem we spent 50 years to build. Right? We spent 50 years to build a global semiconductor industry, out of which goods, people, technology could travel freely. We used to travel the world every month, every week sometimes, and we try to decouple that at light speed. That creates tremendous opportunities for companies like IQE. We will see the regionalization of supply chain. The times where the benefits of large scale, low cost sites is gone. Now, the new supply chain would be based on global footprint, supply security and supply resilience. That creates value for us. Second, semiconductor manufacturing has come under the spotlight. When was the last time any of us here or online heard the word chip shortage? Never before. Never before the industry understood the cost of not having wafers. We only knew the price, the quantities, the delivery time. We could not build cars because there was no chips. Car factories came to a halt. We could not get other electronic devices. That really is a very critical element to understand. I know the ecosystem is complex. There are design, there are IPs, but the bottleneck has shown itself at the manufacturing. The amount of investment going into manufacturing, the amount of attention from political leaders going into manufacturing of chips is unprecedented. The U.S. passed the CHIPS Act. E.U, India, China, Korea, Japan, every nation has taken that issue in its hand to build a secure and resilient supply chain. The amount of investment going into that is tremendous. It's billions, hundreds of billions of dollars going into manufacturing of not only silicon. We're gonna see how the compound plays into that. The third normal is the global issues we face. Global warming and its consequences, net zero requirements, energy crisis that we all begin to experience. That was not there before. The days where energy was cheap or free, I think we all can agree, it's gone. Therefore, we as an industry have the moral obligations, I would even say, to come up with solutions to those global issues, and that is an opportunity for us. When I look at the geopolitical issues, the need for more capacity onshore, the global issues that require the technology, there was no better days for our industry than today. There have never been as many opportunities for us to build, to create jobs, to advance technologies than we have today. We are very excited. As we said, connectivity is no longer an option. Our industry has become vital to the world economy. Would we agree? How many of you guys would leave your cell phone out for a day? A week? A month? I know only one person. I was in France a few weeks ago. I was driving with a friend of mine, and then one of our common friends who was on the car dropped his phone. It was Friday. Then we called his home. We said, "You dropped your phone in the car." He said, "Yeah, give it to me on Monday." Maybe that's the only exception. We all go around, we have our devices. I got two. How many of you have two? Our homes are connected, especially after COVID. That's the new normal, the way I call it in 2022. We shop online. We learn online. We eat online. We entertain ourselves online. A lot of people tried to learn how to cook during the pandemic, right? During the lockdown. I think Uber Eats was a lot more successful than cooking classes. Everything is online, and it's gonna stay that way. Let alone the population growth in some part of the world, that we're all gonna be digital. I don't know if you guys realize, but a continent like Africa is 1.2 billion going to two or maybe three. The average age on the continent, I played that game last week in Asia, less than 20 years old. 1.4 billion people that young. That's all the next wave of consumers that need technology from us. That's the scene, right? Manufacturing is critical. Geopolitics force for decoupling into regional supply chains with resilience. Investment, public-private partnership is coming in to help solve the capacity crunch. We as consumers depend on it. Our system depend on it. That's great for me at IQE. That's great for us. What are we gonna do with it? Before we dive into the presentation, there are few things I would like you guys to take away. We are gonna shift our focus from technology-led to market-led. We are a technology company, and we have been doing that for 20 years. As Christine said, I came from the business background, and we are pivoting this company to be completely market-led. We'll show you how. The way we define value is gonna change. It's no longer wafers, it's knowledge. We're gonna sell knowledge in addition to wafers through strategic partnership, our customers. Therefore, we're gonna capture value that will show to our shareholders that our margin would be at the right level. We'll talk about that. Given the demand and what it takes, we will grow and scale the business. We have the right infrastructure around the world to do that as long as we implement the market-led strategy. Not everybody knows what epitaxy is, including folks, my friends in the silicon space. I'll let Rodney explain the technical aspect of it because he's more qualified. Let me show you where we sit in the ecosystem of supply. It's very important because that is where innovation starts, right? We are essentially a manufacturing services company in the semiconductor space. We are no different than the other names you hear in the foundry space. All right? We create value through epitaxy, which is a very complex steps where we begin to define the spec of a device, okay, the characteristics of a device. But because of what we do, we partner with every element of the ecosystem as shown on this presentation. We partner with our substrate providers, tool vendors, to define the best optimum value of epi to substrate to tools. Then upstream, we partner with device makers, fabless, even OEMs, because if they want to innovate at some level, that innovation starts at the epitaxy. That's where the value is. It positions really well to understand a few things, the market dynamics, the technology trends, and the acceleration of time to market. Extremely important. We serve very, very important markets that we all depends on, as shown here. Now, that's not enough. As I said earlier, our world economy depends on electronics, right? The entire GDP is literally supported by devices. You get thousands of companies who build devices, phones, computers, data centers, cars, appliances, et cetera. You have less companies that build the chipset that goes into those devices. You have fewer companies who do foundries of those chips, who manufacture those chips. If I do the analogy here on the silicon world, if you need a 5nm FinFET, just a very simple technical acronyms, there are two companies who know how to do it in the world, right? Same in compound manufacturing. If you don't wanna build your own fab, there are two companies who do manufacturing of devices. When you fast-forward to the epitaxy, there's only one global company that knows how to do it. The problem is simple. For any customers who want to have a secure and resilient and global supply of epitaxy wafers, there are two options. They build it themselves, or they come work with us. There isn't any third. Okay? That's how strategically positioned this company is in the ecosystem of supply chain. Now, we need to go capture value for it, okay? Which is possible in this new norm. Let's look at the global industry. Semiconductor has always been a fascinating space because it has always been growing, right? What I'm really interested in here is the current phase of growth that's unprecedented. It's growing a lot faster than it used to. Why? Because of all the innovations, because of the mega trends that we will discuss. The overall industry is growing. Regardless of geopolitics, regardless of recessions, regardless of supply chain that may be having some inventory, temporary inventory issues, overall, the industry is growing. I think it's forecasted to be a trillion-dollar device-level business by the end of the decade. One may ask what compound represent into that. Compound is really interesting because the compound at device level is growing twice faster than the semiconductor industry, which is where we are. That's where we should be. Okay. Why? Because of all the trends that require compound electronics to solve. We'll talk about it later. Now, when we zoom into the device and look at what our market looks like, our epitaxy even growing faster. Picture this. Semi is growing, compound is growing twice faster than com-semi industry, and the epitaxy piece is growing even faster than the compound device. Fantastic opportunity for us. Now, our new strategy, you see a box here called outsource epitaxy. Up to now, IQE addressable market has been seen as the outsource epitaxy market, which is GBP 0.8 billion, meaning the remaining is captive market, right? That's no longer the case. We look at our market as the total epitaxy market. Our addressable market now is the total epitaxy market. We'll tell you why. That immediately double our addressable market, and it put us north of $4 billion in five years. That growth is fueled by things that have not been created by IQE. Those are the mega trends that we all know. 5G accelerations. Everything we do is wireless, and that wireless creates a lot of data that goes into data centers, et cetera, et cetera. We have several structural mega trends that are fueling the demands of devices that require silicon and compound at the same time. The market is growing. Let's hear from the expert. Today we are talking about compound semiconductors. These are devices that are the heart of the evolution of multiple systems that are key for our day-to-day activities. This compound semiconductor industry is at the heart of the evolution of all the mega trends. 5G communication is enabled by laser devices. Silicon photonics is bringing to data center higher data rates but also lowering the power consumption of these systems. 5G enabled also new type of devices in handsets in order to get better performances. Power devices based on silicon carbide and gallium nitride are here to enable electric vehicle to have better range and optimization of the systems with the battery, the electric motors in an electric vehicle. MicroLED is here to bring a new revolution to display industry. The applications that are driving all these mega trends are based on compound semiconductor. The quality of the epi layer is what is defining the performances of such devices, either a laser or RF wireless device. With a good epitaxy layer, you can reach the performance that are needed, and in addition to that, have much better yield linked to the manufacturing of these devices. This is really the key added value of epi layers. With its epitaxy process, either using MBE or MOCVD, IQE is at the heart of the evolution of the semiconductor industry, providing key added value for the device makers with adapted epi layers that are providing function evolution at the device level. What is the market size we are talking about today? If we are taking the captive and the open epi wafer markets, it's a market that will reach today, this year, a $2 billion level, and is expected to reach $4.6 billion in 2027, which means almost 30% compound annual growth rate for the next five years. What's driving this growth? Optical devices and RF devices made on gallium arsenide and indium phosphide are the key markets of this compound semiconductor industry, followed by power devices using silicon carbide. In terms of application fields, of course, telecommunication is the key market, followed by industry, but also automotive applications as well as mobile phone and consumer systems. Behind that, wearables, medical applications will be the next driver of the industry that will push the limits of this compound semiconductor industry. All the systems we are using on a daily basis are based on compound semiconductor, and in order to reach their performances, they need a very good epitaxy layers. This is the added value of IQE to its customer. Thank you, Jean-Christophe, from York. We know there's a market. We know epi has value in that market. How are we gonna capture that market, right? That's the question we all have. We have a strategy that is focused on three key growth markets, right, where we will bring tremendous value to our customers through partnership. One is the smart connected devices. Second, communication and infrastructure. Third, automotive or call it intelligent transportation and industrial is very important. Those three markets fuel the growth in compound electronics. They are complex markets to get in for a company of our size, right? What we do, we look at these markets, we look at the sub-markets and identify key strategic capabilities that they all require, okay? Focus our energy on those capabilities, and then partnership. When we look at these three growth markets, they all require connectivity. Smart devices to cars, to homes, to industrials, they all require connectivity. They all require efficient power management systems because energy is becoming more and more critical, and carbon footprint is becoming more and more critical. They all require sensing because sensing gives those products intelligence that they need to be able to be even more efficient. There's no safety in a car without the sensing. There's no driverless car without the sensing. Industries need sensing for defect testing, improvement, et cetera. As Jean-Christophe says, we need to revolutionize the display space. These four capabilities are at the core of our strategy to grow the business in those three vertical markets. How are we gonna do that? Two vectors of our strategy. One, we need to maintain our position on connectivity and sensing, which are essentially the two markets IQE is serving today, the wireless and the sensing markets. We need to maintain our position, continue to innovate, continue to capture shares. That's not enough. That's vector one. Vector two, we need to diversify. We need to diversify into high-value growth market, which are power and display. This is fundamental to our growth strategy. As we diversify, we establish new business models, new value creations, and new value capture. Okay? Two vectors, maintain and diversify. Why those two markets? The power electronics is a very interesting one because it is a very fast-growing market. It is a demand that is there today in pretty much every part of the electronics sector. Imagine if we have to replace every electric motors system in the world, right? That's a lot of semiconductor products. Rodney Pelzel will show you some of the inefficiencies in today's power electronics market is staggering. You guys remember what LED did to the lighting industry. That's compound electronics. Power in industrial market, in automotive market. Display market is a fast-growing market. It's a little bit far out, but there are many great technologies coming up that would revolutionize the display from two vectors. One, energy efficiency, and second, usage model. It's easy to envision transparent displays all around us, to envision your car having only displays around every window and windshield. Don't watch Netflix while you drive, okay? It's not safe. Imagine the amount of display product we have on our wrist, in our pocket, computers, signage, whatever. All that market is gonna be changing when that technology matures. It's a tremendous opportunity for component electronics. We'll focus on three vertical growth market. We'll have a two-vector strategy. As Jean-Christophe says, "The market is growing from 2- 4.6 in the next five years." That's the landscape. Exciting. What does it mean for IQE? We'll take our revenue by 3x over the next five years. That's our target. Ambitious one, but the market is there for us. This is very, very important. We believe there is tremendous amount of opportunities that are fueled by the need of what we do, the decoupling of the supply chain, and the investment made not only by government, but by private sector as well. I know there's a lot of investors in the room or listening. Yeah, it's great to grow your revenue by 3x, but what about your margins? We target over 20% EBITDA margin by 2027. Three x revenue growth. Tim will take you through the details how we're gonna go do that. Okay. Now, if I zoom into some of those markets, you remember I said we're gonna focus on three vertical growth market, right? They are complex markets. When we look at the smart and connected devices, it's safe to assume that every device out there would have few capabilities embedded into them, connectivity and sensing. Now, picture if every IoT has a 5G wireless systems, and if every camera has a 3D capabilities embedded to it. Every camera. How much market would that be? We'll go enable that. There are new class of devices, AR, VR, healthcare, and the like, that we will be able to enable with the technology that we are creating. That market is extremely exciting because I don't see anywhere in the world where people are wiring lines anymore. If you see, let me know. We all go wireless. We expect that wireless to work high speed, low latency. What happen when our Wi-Fi goes off at home? Right. Life changes. We'll build robust systems, high throughput systems, high reliability systems, power efficient systems into the smart connected devices. Just to give you a flavor where our products fit into those device, that's just an example. You can apply that to pretty much any smart connected devices. We provide power amplifier solutions, charging solutions for power efficiency through GaN, we'll talk about it. We talk about sensing not only to do facial detections, but also forward-facing cameras to unlock a whole new set of applications and usage models. Then the display, that would be the revolution, not only in term of brightness and colors and so on, but in term of efficiencies. Let's hear from some of our customers on our existing partnership and further market growth. IQE has been an excellent partner for us, and we have the utmost confidence that our collaboration will only keep on growing. IQE and Lumentum share a similar cultural mindset of putting the customer first. We're highly focused on quality and are pleased that IQE is as well. The best example that I can mention is that together we have shipped over 1 billion pixels with zero field failures, believe it or not. What I look forward to in the future? Let's add another zero to that and make the future happen. My name is Feng Wang, and I am the Chief Technology Officer of Vanchip Technologies. Founded in 2010, Vanchip is a fabless design company focusing on RF front-end and high-performance analog chips. Our products are mainly used in mobile phones, data cards, and Wi-Fi solutions. At Vanchip, we are committed to delivering high-quality products and creating the most cost-effective RF IC solutions for our customers. While it may not seem obvious for a fabless company such as Vanchip to partner with a materials company such as IQE, we feel there's a great synergy here. Vanchip understands the circuits and the system challenges of the new RF front-end architecture. We strive to our best, yet in some cases, the most effective solutions to these design problems actually may exist at the material level. IQE is uniquely positioned to collaborate with our engineering teams to help improve power, efficiency, robustness, roughness, frequency, response, and other key device performance attributes. We feel this collaboration and our engagement with IQE more generally can provide competitive advantage for Vanchip products. Two very good examples, 1 billion devices with 0 field failure. That is called a performance. That by itself is a tagline. I don't know many in the industry who can say they have done that, but I like what Tia said, "Let's add 1 more zero to it." Right? As Vanchip says, that is true value creation where we work with fabless companies to understand their challenges and help create the best possible solution at the end of the day with power efficiency, better frequency, and the like. That is what IQE is best at. All those smart connected devices create tremendous amount of data through 5G network. That data has to be transported to the core network that is also evolving as we see it today. The amount of data, you may look at the statistics, it's exploding. The cloud is growing at the rate of 30%-40%, I don't know anymore, but it is a tremendous amount of opportunity for compound electronics product. Not only 5G network infrastructure the way we know it, but home networks are improving Wi-Fi 6 and up, as well as other type of networks communications such as satellite. They all require compound electronics and what we do. The core network that process the data would also be evolving towards optical network at the core to be able to cope with the data growth. That is tremendous opportunity for our products, and we are partnering with key industry leaders in that space as well. When we look at where our products fit into that space, we have the connectivity for 5G through GaN RF. We have the power to enable to reduce power consumption. Those infrastructure consume tremendous amount of power and generate heat. That's a very, very good market for compound electronics to go in and help solve the inefficiencies that we were able to enjoy up to now. Let's listen from one of our partner in that space. IQE has been a critical part of our supply chain in the past 25 years. As the only pure play compound semiconductor foundry in the U.S., GCS relies on IQE to provide the best-in-class production epi for wafer fabrication to our customers worldwide in RF and optoelectronics for communication infrastructures, automotive, data centers, and consumer electronics. In the pursuit of the next generation compound semiconductor technologies, IQE, again, is our critical partner in developing newer and better processes and materials. I'm honored to be working with IQE in the past, and believe we will grow together by bringing this partnership to the next level for many years to come. Thank you, Brian. Now, moving into the third market, automotive and industrials. You all know the transformation going on in that space, being EVs, being intelligent transportation, being autonomous driving. It's all rely on compound and semiconductor. The content in the car. Even though the number of cars may remain the same, the content is being multiplied by a certain amount, maybe 10 or 20 moving forward. We're gonna be participating into that space. We have made some announcement early in the year. You're gonna hear in a moment. This is an incredible market that has tremendous value for what we do, and we intend to play really big in the automotive market. Industrials is a very important market, as I said earlier, from the power perspective and from the sensing perspective. When you look at where our products play, we connect cars, we power cars more efficiently, we provide them intelligence, and then all display revolution would happen in the car. You know, we'll be able to build flexible display, we'll be able to build transparent display technologies. I was not joking earlier when I said the windows would be displays. There are partners working on that. So this is a very, very important market for us. Let's hear from one of our partner on what is going on there. We are very grateful for the support of IQE as a strategic partner. So many applications to mention, but if I were to single one out, I would mention automotive. We are ramping production of multi-junction VCSEL arrays together, long-range lidar products, and products for in-cabin driver monitoring systems. I'm excited about where the future is gonna lead with this collaboration. Good partnership with Lumentum, not only in 3D sensing, but also in automotive. This is really a good testament of what IQE can deliver in terms of values. Now, we have a market. We have a strategy of diversification to get into the market. We need to enhance our partnership with customers, and this is very important. In this new world where supply chain is being disrupted, supply security becomes essential. Companies are making critical decisions. Government are making critical decisions. We are evolving our partnership strategy. We are working very closely with our customers on four different vectors. One, we establish a deep and critical customer relationship that start from very early R&D phase, where we co-invest, develop technologies, and bring them to market together. Second, we align our roadmap to our lead customers' roadmap. As we said, we are market-led. Therefore, there are a lot of conversations happening with key customers in terms of roadmap alignment to do really a few things. One, to make sure that we put our knowledge base and experience together to accelerate innovations and time to market. Second, it allows us to invest on what our customers want as opposed to guessing what the market wants. Third, it allows us to fund R&D in a very collaborative way with our customers, and this is key. The third vector that is important is supply security. It's no good to have the best technology if you can't manufacture in a safe place. Scale matters, supply chain security matters. We focus a lot with our customers on how do we make sure that we provide them a secure and resilient supply chain infrastructure. The last point that's important, more so since the chip shortage, is they look at scale. Do you have the capabilities to scale when the demand comes? That's a real question, because you don't build a fab overnight. We'll show you later how long it takes to build and deploy a semiconductor manufacturing fab. Those four vectors are extremely important for us when we talk about partnership with our customers. Since the supply chain disruption happens, really those conversations are happening at CEO level. Right. Our commercial engines is working really hard to put those things in place and to make sure that we have strategic level conversations. How do we capture value? IQE has really three things, three strategic advantages that I think I would tend to say no other competition has. We have the best technology roadmap in the industry. Our customers are saying it. We have the global footprint that enable resilient and secure supply chain, and we have the capabilities to scale. No other company has the three. Therefore, we're gonna build our value creation and value capture around those strategic advantages that we have. We'll share with you a bit about our partners. I think it's the first time we show a list of partners. Some of our partners is very, very critical. It's not the full list, believe me. It's a, it's a good list. We have the whole ecosystem from the tool vendor to substrate to customers, et cetera. It's very, very important because, as I said earlier, in the new normal, we engage conversation at CEO level with our partners. By the way, I wanna thank all of them for working with us, for trusting us, for collaborating with us. We will make them successful. Therefore, we are very committed. We engage with our partners in very different ways because some companies today are making critical decisions. Make versus buy. Do I build the fab or do I work with you? Do I create a technology or do I let you create it? Do I innovate myself or do I innovate with you? There is still some who are vertically integrated, and I understand that. At IQE, we are creating a space where we can do virtual integration from R&D space. We have been doing that, as well as our virtual integration from manufacturing and scaling perspective, where at the end of the day, my goal is really very simple, to make sure that no other companies need to build an epitaxy manufacturing service infrastructure. Come work with us. We'll do it well. We'll do it better as opposed to each of us doing it separately, and we'll make sure we establish a win-win partnership. Take a listen. IQE has been a great partner to Lumentum over the past several years. We utilize their excellent quality epi wafers to address our 3D sensing market. Most of the market so far that we've been addressing is the consumer electronics market, but the exciting future is about automotive lidar as well as industrial production applications. We're so excited to have already shipped 1 billion devices using the quality and performance of the IQE epi wafers, and we're so excited about the future to continue to partner with IQE as we address these new and emerging markets that we're just at the beginning of. It's a great partnership, and I look forward to growing it in the future. SK Siltron is one of the top five global wafer companies based in Korea. We develop and manufacture high-quality silicon and silicon carbide wafers for the semiconductor industry. IQE is the world leader in epitaxy, and their expertise in advanced materials complements SK Siltron's own expertise very well. Our industry is evolving very fast. Compound semiconductor electronics will become mainstream and the need for advanced materials is increasing. This brings huge market opportunity to our joint partnership, which we recently announced. Diversification into the compound semiconductor market is very important for SK Siltron for future growth. I believe the strategic partnership between IQE and SK Siltron will bring compelling solutions to the market and enable our customers to fuel the next wave of innovation. Two key partners working with us to develop the industry to the whole different level. One last thing before I let my colleague present. One of the reason why we all have electronics in our homes, in our phones, in our pockets, it's because the silicon space has been able to manufacture at very large wafer size. Moore's law for some of you who don't know. It allows the industry to produce more and more device at lower and lower and lower cost. We at IQE plan to take the compound into that space. Compound epi wafers have been operating at lower geometry for wafer size. 6 inch or 150 mm. We believe to really fully unlock the potential of this industry, we need to go where the silicon is. 200 mm and at the end, 300 mm compound materials. That would allow two fundamental changes. One, it would bring compound into every product at a reasonable price point and right economy of scale, unlocking all its potential. The second, it would drive a whole set of new innovation where we can combine silicon materials and compound materials into new class of devices. We can't do it unless we go to where the silicon is, really to full potential. We are working really hard at IQE to bring our material platforms to that level of geometry, and we are working with many partners in the ecosystem to be able to do that because it isn't easy. Rodney would explain to you it's not just adding 50 mm to a number. If you look back how much has gone into silicon, I came from silicon space myself. Every fab that are being announced or built are 300 mm fabs. There's no more 200 mm fab being built, may expand capacity for demand, but investment goes into 300 mm silicon fabs. We wanna be the pioneer of taking compound electronics from its niche to mainstream. Take a listen from one of our partner. Good afternoon. My name is Michael Harz. I'm the CEO of Freiberger Compound Materials. With over forty years of experience in research, development, and manufacturing of III-V semiconductor materials, we are the world's leading manufacturer of gallium arsenide wafers. 6-inch wafers are our core product. Today, we are also the world's first volume manufacturer of 8-inch diameter wafers. We are proud that IQE, that leading global supplier of advanced and innovative products and solutions in our industry, has chosen to rely on our wafers for many years. This cooperation with IQE is extremely important for our companies as we witness the compound semiconductor industry emerging from its niche and becoming a crucial technology solution in almost all innovative semiconductor products. 5G communications, broadband data networks, semiconductor lasers, autonomous driving, augmented and virtual reality, microLED displays. The vast majority of people are unaware that these new mega trends would be inconceivable without compound semiconductors. Together with IQE, we are taking on this challenge for growth and innovation in Europe. The increasing importance of compound semiconductors in industrial and consumer products is now requiring the industry to move to larger and larger wafer diameters. Today, the move from 6-inch to 8-inch is driving our investments in capacity and technology. IQE management is working and thinking along the same lines, what makes both companies ideal partners. Larger wafer diameters not only enable accelerated volume growth, it reduces the cost per die, what makes compound semiconductors more attractive for its many applications, and at the end, it will enable the next wave of disruptive growth. We look forward to continuing to support IQE on this exciting journey. Now back to London. Freiberger wishes you an exciting and successful Capital Markets Day. Great partnership. Thank you. This is London. All right. One of my last slide, then we're gonna move on. Let me bring this all together. As I said in my introduction, we are pivoting from technology to market leadership. We will capture value at different level of partnership for what we do, and we will grow and scale the business through the two vectors I talked about, but also unlocking the full potential at a larger geometry. We will be the one to architect the new digital world of tomorrow. Thank you, everybody. Thank you, Americo. Global mega trends fueling performance requirements in connect, sense, power display that only compound semiconductors can meet. Let that sit. Then you think about, okay, well, how does IQE ensure that we have precisely the right portfolio to take advantage of these dynamics? I'll leave that to the good Dr. Pelzel to describe. Let me welcome to the stage our Chief Technology Officer, Dr. Rodney Pelzel. Thank you very much, Christine. Ladies and gentlemen, it's an absolute pleasure to be here today to talk to you about our market-led innovation. I'm gonna show you our technology in a way that you've never seen before. I'm gonna take you through the innovation engine that allows us to architect the world of tomorrow. Now, please don't worry. I promise this will not be a science lecture. There's a few chemical symbols throughout, but bear with me, stay with me, we'll get through it together. I want you to be on the lookout for three things. First, I'm gonna tell you why epitaxy is at the core of innovation. Next, I'm gonna take you through technology, our technology portfolio, which is market-led, and how we are partnering with the market makers to architect our mutual success. I'm gonna build on what Americo said about 200 mm epi wafers and how they unlock the potential in compound semiconductors. Let's get started. As Americo's alluded to, we're in the digital world. Our world relies on semiconductors. I'm sure that's not news. They're ubiquitous. That's what this graphic's trying to tell you. They touch every single part of our lives. Compound semiconductors, we're much more reliant on them than we've ever been in the past. But what I don't think that people realize, and you actually heard it from the Freiberger speaker at the end there, I don't think people realize that we're only at the beginning of this very interesting ride. I mean, most people know that compound semiconductors gave us the smartphone. That's what took us from the brick phones of yesteryear and brought in the smartphone that we know. Interestingly, it's probably compound semiconductors that's gonna obsolete that as it condenses the functionality into my glasses or into a contact lens. I like the video where the person was moving their hands in the video at the very beginning. Tapping your screen will become a thing of the past. Glances and gestures and motions in an AR/VR world will replace them. My watch here will tell me what my heart rate is. Might be a bit elevated right now. It'll probably start telling me that I need. I'm going for a run, or I don't know if it does that 'cause it wants me to or it's congratulating me. Smart devices are absolutely amazing, but again, we're only at the beginning. The future will absolutely do phenomenal things. They will monitor your blood, looking for biomarkers. You'll get up in the morning, it'll give you a readout. It will tell you if you need to go see the doctor. Maybe a couple abnormal cells were observed. Imagine what that'll do for early detection. Imagine what that does for increasing life expectancy. Truly amazing. You heard what they said about net zero. There is no net zero without compound semiconductors. And that's true. That's not an overstatement. One of the primary reasons for that is that compound semiconductors have enabled electric vehicles to give us a range so that we're now threatening the internal combustion engine. Again, that's only the beginning. The next generation of cars will drive themselves. They'll be sensing their environment. My commute time will become productive time, and I'll be safer too because I'll have taken the human element out of driving. You can probably see I could go on all day long, very passionate about this, but what it says is that we are at the very beginning of this. What we know is that compound semiconductors are here, and they're gonna deliver a world of more. They're gonna deliver things that we haven't even probably imagined yet. You might ask why. Why is that? It's a fair question. Before I answer it, I'm gonna tell you what a compound semiconductor is at a basic level, make sure we're all on the same page. For most people, if I say semiconductor, you think of silicon because you think of your computer. Silicon is not a compound semiconductor. It's an elemental semiconductor made of silicon. A compound semiconductor is made of two or more elements, hence the name compound. I will often use CS in place of it, so compound semiconductors or CS. That's what I mean when I say that. Those CS materials have three key attributes, three pillars of what I call innovation. The first thing that they're really good at is they're very good at transmitting and detecting at high frequency, and that's what gave us the mobile phone as we know it. That's what allowed that massive brick of the 1980s to become the sleek handset of 2G, go to 3G, to 4G, 5G and beyond. Those high frequency characteristics are gonna allow us or do allow us to connect and will continue to allow us to connect. The second way that they perform very well, where they excel, is they're optically active. That's a really fancy way of just saying they do really well at emitting and detecting light. There's a myriad of applications that use that. If your phone unlocks itself with your face, compound semiconductors, the optical characteristics at work brought to you by IQE. That watch I was talking about, those wearables, again, that's doing spectroscopy on your blood. Optical properties of CS materials at work. That driverless automobile, well, it's gonna have to image its environment in ultra-high resolution, at least better, or it's not gonna perform like I just said. That's gonna use light-based radar, lidar. Again, optical characteristics of CS materials. That metaverse that we're talking about, that'll be based on high resolution, very small displays, you know, based on micro LEDs, optical properties at work. The optical properties allow us to sense and display the world in ultra-high resolution. They allow us to have an immersive experience. The final way that CS materials excel is they're efficient, and that's what allows us to power the world in an eco-friendly manner. Arguably, that's the most important characteristic based on what we face as a human species. I'm gonna spend a little bit of time there and hopefully bring that to life for you. Easiest way to talk about the efficiency is to talk about LED bulbs like the ones in the ceiling here. Those have been coming into vogue for a long time, but you still get the old filament bulb. If you were to look at the filament bulb and you were actually calibrated to it, we say, want a 100-watt light bulb, and we said, "Look, what is that in LED terms?" Go to B&Q or Home Depot in the US, pick it out, and it would say a 100-watt filament bulb is equivalent to a 13-watt LED bulb. Now I'm an engineer. We always have to add things, add up. They have to make sense. One hundred does not equal thirteen. Where did the 87 watts go? Almost 90%. Came off as heat. That's why if you take a filament bulb and you try to change it before it's been or you didn't turn it off recently, or you turned it off too recently, you'll burn your hand. That heat is tangible indicator of inefficiency. It's not just light bulbs. Power supplies for your computer. I was coming into town from South Wales on the train, had plugged in my computer on the train. I was getting off at Paddington, reached down, picked up that massive brick, hot to the touch, almost burned my hand. If you use electronic devices, I'm sure you've probably experienced, in fact, experienced that. In fact, it's probably so common you don't even notice it anymore. Compound semiconductors already have a solution to that problem. Don't believe me? Go on to Amazon and type in gallium nitride or GaN, G-A-N. It's a compound semiconductor. We'll get there. Type in GaN power supply, and what pops up is nice, sleek, small form factor power supplies that are much more efficient. They charge your devices much more quickly, about 20% more efficient. Now let's think about that. The number of... I'm a scientist, I actually do this for a living, and I'm using one of those old power supplies. How many computers around the world are using those? Imagine if we could snap our fingers and make them all GaN-based power supplies. 20% savings instantaneously. That's why compound semiconductors are so interesting. They enable all of those things that I just described. I've told you about compound semiconductors, and I'm gonna assume that you buy in like I do, and I'm gonna move on to why IQE? Why does IQE win? In order to answer that, I'm gonna go back to a graphic that we saw from Americo, which is about the value chain. If you remember, he said that the value is created at the epitaxy level. We also heard that from Jean-Christophe, from Joel. I'm gonna try to again, bring that to life a little bit, and I'm gonna say it in a little different way. I'm gonna say epitaxy is the lithography of compound semiconductors. I heard you went. He went. Got into lithography now. There he goes. He's off and running. No, I'll explain it. Lithography, what is it? Lithography is what allowed silicon to scale to ever smaller dimensions. It's the reason that the room full of computers that put the man on the moon, the computing power of that room full, is now condensed onto my watch. Lithography did that. Lithography unlocked the full potential of silicon. Epitaxy does that for compound semiconductors, and the reason that it does it is because they're compounds. They have a lot of very unique ways, a lot of power, a lot of ways in which I can tune them in a very powerful manner. In order to fully unlock that, I've got to control them very, very finely at an atomic level. If we wanna demystify epitaxy just a little bit more, probably best done with an example. The example I'll use is, let's say we're baking a layered cake. When you bake a layered cake, you have to make sure that every single layer in that cake perfectly complements the other layers. You need to put them in the right proportion. You need to put them in the right location, so that you get a cake that tastes as you desire in the end. In that analogy, IQE is the baker. The cake is, or the baking process is epitaxy. The layers in the cake are our materials that we use, that we put together in a very specific way, in the right ratio, in the right purities. In the end, we put them together so that they perfectly complement each other, so that we have the best product, the best end product in the end. Unlike the cake that you make in your kitchen, ours are much more complicated. Our layer stacks are up to 400 layers thick, and they're controlled on an atomic level, so they're actually much thinner, a lot more layers in the cake. If you went and looked at the process that we use to create our epi, you would see that they sound almost like baking a cake, temperature, materials. The ingredients in the recipe, the time, how long did you bake it for? Now we control them much more finely, but yeah, they're very similar. Just like if you have an oven at home, or at least if you're me and you have an oven, just because I've got an oven doesn't mean that I'm gonna go win the Great British Bake Off. Therefore, not every person that does epitaxy or has an epi machine is a champion. We've been doing it longer than anybody, 30+ years, and we've been on the forefront. We believe that we are the best at doing epi. Now, I've known this. IQE has known this. I'm expecting that you now have a new appreciation for it. Our customers absolutely know it, and their customers know it. For that reason, we don't interact with the supply chain in that linear fashion that you saw before. We interact where we're at the center of innovation. We interface with every single part of the supply chain. Why is that? Well, it's because what we do underpins success or failure. If we don't get it right, the device won't work. Conversely, if we're able to put in some of our magic, we can get things to work that you never thought might work. We define success or failure at the very beginning. Because of that, we are starting to think about those partnerships that we were just talking about. Now we've always partnered, but we now, we're starting to partner in a much different way. You heard Americo say we're not selling wafers anymore. We're selling what I would say is success. We're selling milestones to our customers. We're engaging so that we can extract value much sooner. Part of that is we've now rebadged our original headquarters, the IQE Europe site in Cardiff, Wales. Yeah, it was named before Brexit, apparently. The IQE Europe site in Wales has now become the R&D center, and it is now the flagship for innovation in the group. It is gonna be the place that creates the processes that were ported into the sites that Keith will tell you about later, our volume manufacturing sites. It is also the place where we will engage with these partners in a market-led manner, where we will engage at a very fundamental level, shifting that business model to selling success as opposed to selling wafers. When you do that, and when you use the absolute powerful position, the unique position we have in the supply chain to understand what customers need from every perspective, when you innovate, you're able to create something that's absolutely pulled by the market. The market will reach out and grab it and pull it all the way through. Market pull is what we mean by market-led. You're directly addressing a challenge that the market has. Now, IQE has done that for many years, but it's also had some market push as well. Market push would be creating an innovative solution, pushing it to the market, looking for a problem to solve. With this new model where we are reaching out and we're reaching out with our customers to pull solutions through the supply chain, in so doing, we're shifting all the way over to the right here, which would be full market pull. That allows us to better capture value because it's linked to an immediate need, and therefore things get a lot more predictable. In the past, we had a little bit of market push, which is less likely or less predictable. You're anticipating a market need. You don't have as much visibility, and therefore you limit your value capture. This is the way in which we are operating as IQE. I'm gonna take you through one of our newest areas that Americo's already talked about, which is MicroLEDs. You would have heard this year that we're entering the MicroLED market. We announced partnerships with Porotech. We announced partnerships with MICLEDI. Let's hear what one of those partners, MICLEDI, has to say about the interaction with IQE. Hi, my name is Lars Bach. I'm the COO of MICLEDI, and today I would like to talk to you about our cooperation with IQE to develop red MicroLED material based on seamless compatible AlInGaP material on 200-mm wafers. In our view, IQE is the technology leader in epi wafers for photonics and for III-V materials. In our feeling, IQE is an excellent fit for MICLEDI among various other potential partners for red AlInGaP. Another important topic why we have chosen IQE is the scalability of the technology from 150 mm up to 200 and 300 mm. Why is 300 mm so important for MicroLED manufacturing? First, our unique reconstitution methodology gives us the advantage of advanced litho at 300 mm to make the most consistent, high-performing MicroLEDs. The 300 mm fab has as well unique advantages in their characteristics, which is required in our wafer to wafer hybrid bonding to relieve the bow stress, the wafer bow, the surface flatness improvement, and the edge to edge tolerance. Scaling to 300 mm offers as well certain improvements in terms of high volume, low cost, consistent high yield, and maximum depth dice per wafer. Lars certainly says it even better than I can. Enough said. We are very excited about going into the micro-LED market, and we are, like you said, we're partnering in ways that we've never done before. We're partnering in ways that will allow us to really reach out and capture that value. You now understand what I mean by market-led. You understand what our philosophy is about going in and creating and engaging in innovation. Let's look under the hood a little bit in terms of how we create that innovation. In order to create the innovation, you need to have a materials or technology portfolio or a toolkit of technologies. IQE has the broadest and deepest technology portfolio in the industry, hands down. It consists of five material platforms that are shown up on the screen here. Don't worry about what they're called. There are five distinct material types that have key different characteristics that enable us to innovate. We also have in our portfolio all of the relevant epitaxy techniques scaled. Again, don't worry about epitaxy techniques or what they're called. Think of them as different types of ovens that bake your cake. We take all of these five material platforms with those technology or epitaxy platforms, and we create solutions that directly intersect with those application areas of connect, sense, power, and display. We've been doing this for 30+ years, so that has given us a very powerful view. It's also given us an unprecedented amount of IP, or intellectual property. That would consist of trade secrets, that would consist of know-how, and would consist of patents. Let's look at the patent part of that. What you can see is that it's a very respectable patent portfolio. In the lower left-hand corner, you see what the composition of it is. It covers all of the parts of our business. Going forward, we will start to favor the emerging parts, the display and power, as you might expect. If you look at it in comparison to our competitors, as I've shown in the upper right-hand corner, we certainly have quite a few more, at least double the patents that they do, or at least the first competitor. It's not just numbers. We also have the best quality, and we use citations to tell us that. You see we have lots of citations. People wanna know what we're doing, and we certainly have 4x that of the nearest competitor. The best materials platforms supported or protected by the leading patent portfolio. Let's bring that full circle. Let's take those five material platforms that I showed you, and let's see where they intersect the market verticals of smart connected devices, communications infrastructure, and automotive and industrial. That's the view that we get, and now you can really begin to see the power. Just look at one of them, gallium nitride, and let's zoom in on that. What you can see is the same material can cross over verticals. The same material inherently diversifies your business, and you're able to leverage what you learn from one to apply to the other. Very, very powerful position. Let's go into a little bit more detail on GaN because it'll give you an idea of how we do this, the paradigm that we use. Same for all materials. I'm gonna use GaN as an example. Why am I telling you about GaN? Well, it's 'cause it's extremely versatile, very, very exciting material. GaN underpins our business today and will create waves of innovation going forward. If I look at those conduction properties, those high-frequency properties we talked about, what I can see is that immediately today intersects the communications and infrastructure vertical. It's used in base stations. IQE has a very strong position in that. We do believe, and you'll hear from one of our partners that GaN will make it into handsets, and then it will intersect the smart connected devices vertical. If we look at that market, it's there today. It's about $724 million U.S. total device market according to Yole. Today, growing at a reasonable clip so that by 2027 it's predicted to be $1.4 billion. It's a market that's in there. We have a portion of that market, and it's growing into the future. If I move over to the power characteristics, so that's part of the efficiency, but GaN also has a very high breakdown voltage, and it also performs very well at elevated temperatures. It's a great power material. We already know that it intersects with power supplies 'cause I told you that story earlier. It intersects the smart connected devices already, and it's starting to make it into automotive. That's the first time we've seen that vertical on the screen. Smaller market today, about $182 million, growing at a faster rate, about 50%, so that it is predicted by Yole to be equivalent to connect by 2027. We're not done. Let's go back to those optical properties. GaN will emit red, blue, and green light. You can tune it to do that. That's the trifecta. The moment you get all three of those, you can make any color, including those bright lights in the back that are white and blinding me right now. This will allow LEDs to go into smart connected devices. It's the ideal solution for that. Very high-resolution screen, say on a watch or some type of wearable that is extremely efficient. Also will go into automotive and industrial. Again, logical reason. You're trying to conserve as much battery as possible. You don't want the display chewing things up. Now, that's a nascent market today, very small, 7.3 million today, but growing at a much more rapid clip. Roughly 158% CAGR up to about 834 predicted by 2027. Now you begin to understand the power and the excitement. You have a material that underpins your business today, very strong business, very strategic position, that's growing, but then tomorrow you've got the power market, and the day after that you've got the display market. Very powerful. Now, you've probably guessed I fibbed a little bit. It's not quite that easy because all the GaN that's in there isn't created quite equally. Using my analogy from before, let's say GaN is chocolate. Well, it's a different type of chocolate, different recipe for each. You've got milk chocolate, you've got Belgian chocolate, and let's say you've got dark chocolate. So they're not the same, and we believe that IQE is the only one that can address all three of those markets. For that reason, when you're thinking about GaN, you're thinking about IQE. Don't just take my word for it. Let's listen to some of what our partners in GaN have to say about it. GaN for me, for a volume play, I'm very interested in its ability to be integrated on the handsets and what kind of properties does it have to unseat its incumbents? You know, what I believe is GaN does very well in power, you know, figure of merit for switches, for example, power amplifiers. Those areas are very interesting to us to understand, can it unseat the existing compound semiconductors in gallium arsenide or in the RF SOI area for RF switches. That to me is the draw and what I like to understand. I am delighted to be working with the IQE team on the development of next-generation wafers for radio frequency and the power applications. Gallium nitride, or GaN, is a very important material for macro technology trends. It offers significantly improved performance across wide range of applications while reducing energy consumption compared to conventional silicon solutions. In order to build out super fast, high capacity, low latency, 5G telecommunication networks, the world needs GaN. In order to deliver highly efficient power electronics to meet net zero commitments, the world needs GaN. Bringing together the world-class expertise of SK Siltron in advanced materials with IQE's epitaxy capabilities will ensure we are able to create a compelling roadmap offering to our customers and play a key role in the proliferation of advanced materials. That's some great messages from some great partners at GlobalFoundries, Giulio and Peter at SK Siltron. If you notice, he said the world needs GaN. He said it twice. Based on what I just said, the world needs IQE, because when you're thinking of GaN, you're thinking of IQE. We've got the best technology, got a really sound strategy, how we're gonna go extract value, but it's not enough. You heard Americo talk about it, not enough. The way I would phrase it is you need to put the wafers, put your product in a way, in a form factor that the markets can use. That happens to be 200 mm because that's the language of the specialty foundries that enables you to unlock that significant capacity from those foundries. Earlier this year, we released press release on our first commercially available 200 mm VCSEL wafer. Very excited about that. As Americo said, you might just think of it as, "Well, that's 50 mm more. How much is that really? A couple inches." The only equation, there's only one in the talk, is to remind you that the area of a circle goes like the radius squared. When you compute that, you nearly double the number of devices on that wafer. It is very significant. Also, keep in mind that scaling isn't something that we're just brand new to. We've been doing this for our entire history. In fact, when I started at IQE in the USA at our Pennsylvania site as a production engineer in the year 2001, one of the first things that I did was scale 100 mm to 150 mm for PMAs. Fast-forward 15, 16 years later, I had the privilege of leading the team that scaled 100 mm VCSELs to 150 mm VCSELs. That's what allowed the consumer launch of facial recognition for mobile handsets. If we hadn't have done that wouldn't have made any commercial sense. It wouldn't have happened. I was actually thinking about that when writing this presentation. The number of people that told us we were crazy, that we were wasting our money, that it wasn't gonna work. Now it's taken for granted. We've gone to the next node, 200 mm. We've leveraged that pedigree, that 30-year pedigree in scaling to do that. Now, Americo said it is complicated. It is very complicated. In fact, going to 200 mm is extremely complicated. We are in a position to understand that complication like no other. We looked at that problem as a problem statement, just as a thought experiment, and we immediately knew that's not gonna work. That wafer is gonna have a lot of problems. Let's just re-engineer it down at the foundation. We'll put it on a different substrate, and that's what we did. We identified that solution probably faster than most people have even seen it as a problem. We have a roadmap for scaling for all of our materials, ultimately to 200 and 300 mm. You're gonna ask me, "Well, when's that all gonna happen?" If I told you, I would be lying to you because the market doesn't know. When the market tells me, and it will, we'll probably know more sooner than most, we'll go there. We'll go there in force, and we'll grab hold of it and pull it through the market. I think it's about time for a break. We've been sitting here for a while, so let me summarize what I told you. First of all, told you about compound semiconductors and epitaxy, and told you that that's absolutely necessary for technology innovation going forward. I've taken you through our market-led deployment of our best-in-class technology that ensures rapid value capture. Finally, I've talked to you about scaling it to larger wafer diameters, which brings that into the mainstream. It allows us to mate our technology with the best silicon-based technology to create some phenomenal innovation. In closing, I just wanna remind everybody, we are on just the beginning of a really, really exciting journey of innovation. I think all that we can do at this point is buckle up and enjoy that ride. Thank you very much. Thank you, Rodney, and you nailed it. A PhD was not required to understand that presentation, which actually is incredible when you think about the dozens, hundreds of PhDs that the work that you described represents. Everyone knows that, like, one of the hardest things to do is to tell a complicated technical story in a simple way, and you nailed it. Thank you very much. You also made us hungry. We're gonna take a break now and get a coffee or what have you. 15 minutes, and then we'll return and Keith Anderson will take the stage, our COO, and followed by Tim Pullen, our CFO, and followed by an opportunity for Q&A. We'll take 15 minutes here and online, and we'll see you soon. Welcome back, everyone. We're heading into part two of this event, and I'm really excited to introduce next our Chief Operating Officer, Keith Anderson. He's gonna be taking us through, you know, sort of where the magic happens, you know, our factories, and particularly our high volume manufacturing facilities. It's a really exciting transformation story, and I'll hand it over to Keith to tell you the rest, so Keith Anderson. Thanks. Welcome back, everybody. What a phenomenal story that Americo and Rodney shared. It really is very compelling, and I hope you're sitting there listening to it. I knew what was coming. It was still exciting, and it still raised the hairs in the back of my neck, and I hope I did the same for you. My name is Keith Anderson, and I have responsibility for our global sites to deliver scale and, along with Rodney, to deliver the world-class epitaxy you've heard about. I'm sure you've noticed the Irish accent. It's a northern Irish accent, to be really specific in the room. It's one of four that you've heard about or heard today and hearing. Tim will round it off with his English accent, his lovely English accent. I joined IQE four years ago. I was compelled, and it really is one person's fault, and that's Rodney. You know, back then, he used an awful lot more chemical symbols. He used an awful lot more jargon, but on my word, he represented the sort of the apex of our unbelievable talent that we have with regards to epitaxy engineering in our company. Previously, in my earlier part of my career, I was part of the aerospace industry, and in that area, we had complex engineered products, scaling for growth, and very demanding customers that expect the very best. I delivered then, along with Rodney and my team. We will deliver again. We are transforming at pace to standardize, centralize, and scale. We are the only global pure play epitaxy provider, which gives us that supply chain resilience that Americo spoke so powerfully about. We are ready with the facilities and expertise right here and right now. Our very strong IQE heritage that Americo spoke about positions us phenomenally well. On the chart, we have four of our key volume sites, and I'll go into more detail on them. Before I speak to them, Rodney talked about our new R&D center, and we have a few other sites that I would want to mention. We have our substrate facilities in Milton Keynes, and then we have Protech and Galaxy, who provide deeply complex solutions to the industry. We have our silicon facility co-located in Cardiff that is working on the advanced silicon epi that Rodney spoke about. Our unique global facilities positioned across the three continents deliver us that opportunity right here and right now to scale. Newport, Massachusetts, North Carolina, and Taiwan all are combined to have the two platforms of MOCVD and MBE. We're positioned right now to scale. Without putting a spade in the ground and within our four strategic sites, we can deliver three times the capacity growth in the next several years. Everything that you've heard about with the opportunity, we have unique first-mover position on. To give you some direction on that capacity and to kind of point to exactly how that looks, we've created this chart and this illustration of how it looks. Taiwan, you've heard about quite a bit of investment in the last few years, positioning for the wireless growth that we talked about. North Carolina, our champion MBE site, is positioned. Massachusetts, the partner to wireless, in Taiwan, is positioned. It's also our center of GaN expertise as it currently stands, and we can double our capacity there. Newport, our mega foundry, which you've heard from a number of our suppliers about, is really quite an outstanding achievement of IQE. Thirty years of IQE engineering and deep expertise has gone into the manufacture of the world's most advanced epitaxy facility. Not only have we delivered, Rodney and I, those VCSELs that Thea talked about, but we have the ability to scale in a very controlled, deliberate, and reliable fashion in this outstanding facility. We've been working very hard in the last several months as Americo was onboarded to be ready to mobilize, to ready as that customer pull comes through. As Rodney and our sales team develop those strong partnerships, we're ready to go. If we started and we wanted to put a spade in the ground, it would be 24 months before we're ready to install and to fit the clean room. Another 6-12 months before we're ready for reactor and customer qualification. That's a significant timeline which we don't need to think about just yet. IQE, for the growth that you're hearing about today, is positioned in that 12-24 month timeframe to be able to scale. We are ready, and we're mobilized. Our engineering teams, our site teams, we're positioned, and we're waiting and ready to go. Let's hear from Giulio, who Rodney, Christine, and I met a few weeks ago in Newport. The one thing I took from the facility, it looks very scalable, the way you have your modular construction, the way you approach the multiplication of tools, the multiplicity of tools. Very, very interesting to see that. I can tell the ability to grow and still provide the same volumes and yields and control is very important to our, not just to GF, but to our customers and our customers' customers. They would not be able to sign up to a new technology if they felt the facilities did not meet up to their standards. It could be the technology of Galaxy, but if you cannot scale it and if you cannot provide a viable model for high volume manufacturing, then it would just not be used, unfortunately. Thank you, Giulio. I know a number of you have been to Newport, and we've helped you understand the facility. We really do have that cut-and-paste approach. The engineering that we've got there, the way that we've done it, the way it positions us, is to know exactly what we need to do next, what time it would take, how long it takes to implement. We really are in a very good position. In terms of thinking about transforming our operating model, there's things that we've done, there's things that we're doing, and there's things that we're going to do. We talked about the sites that we have, and what we've been doing in the last several years is thinking about how do we optimize our strategic footprint. With milestones, how do we take down the cost base and leverage that strategic site to give us that volume? We announced the movement of the business from Pennsylvania to North Carolina and the combination of two fantastic sites and teams into one site. We announced the movement of the business from Singapore to Taiwan last November, and we completed that journey in June, and we were delivering first qualification wafers this month. We've done that. With Pennsylvania, we expect next year, towards the end of the year, we're bang on track to deliver the fusion of those two great sites into one world-class MBE facility. In terms of our site-focused execution, that's where we've been, and we've been outstanding at it. In 3-5 years' time, as we really scale, we have to have a centralized, standardized model in order to absolutely guarantee the execution that you've heard about today. As we go to 3x, that challenge of being perfect becomes tougher, and the only way to deliver that is to be standardized and centralized. To support that, we've been working on the delivery of a single integrated manufacturing system. This time last year, we announced a partnership with Critical Manufacturing, one of the world's best and leading MES providers. We are on track and ready to deliver that system to our first 2 sites in Q1 of next year. When that comes together across the world, it really is going to be a very powerful solution. I visited Taiwan for the first time in two and a half years, about 8 weeks ago. It was great to be part of the team. It was great to see them. It was great to be there on the ground. While I was there, I visited two automation companies from the silicon industry, and I saw the future. It was really, really cool. Excuse the sort of boyish expression, but I was really excited. We're building those concepts now. We're actively working on what a light site non-wafer handling solution looks like for IQE. Standardizing roadmap, you know, I think sort of taking the complex and representing the work that we're doing. You know, I was kinda thinking about, we've got some of our management team on the left here, and these three simple things represent the work of hundreds of people. It's really quite humbling to try and get that across, to the scale of the hard work that we're all involved in, these guys are involved in order to deliver this. Systems and processes. We're working to build one solution to power Rodney Pelzel's R&D. We call that Lane one and Lane two, and one solution to power the Lane five, the really high volume solutions. Manufacturing intelligence. Rodney Pelzel didn't go into it, and it's a topic for another day because both of us could talk about it for a very long time, the amount of data. Phil would call it big data. We're connecting that information not only from the customer fab, but also into our own characterization, back into the monitoring of our production, back into the FDC that we're working with Veeco now. The connectivity of that, well, we've got some of the best data analysts in the industry, and we see that as a real value add to what we're gonna be able to offer to our customer. One of the ways that we delivered perfect VCSELs for TAI's output was because we connected with them at a level that we haven't done previously with other customers. Rodney Pelzel's the trust that we have with that partner and the integration of that data with our data streams meant that we will deliver perfectly. Finally, automation, and what I talk about in terms of that vision of how we siliconize our niche of the industry. We've got that roadmap laid out. We've done some of it, we're doing others, and we're going to get to other pieces of it. It's our collective vision that this really supports our play in the current captive market. Being able to say that we are virtually vertically integrated, and that as a company, we can potentially plug in to your manufacturing system, is a very powerful play. As we've executed the delivery to the supply chain, being robust, high quality, and as I've indicated, we've also been changing. Pennsylvania, a site full of phenomenal people and phenomenal talent, we're fusing with North Carolina. Singapore, a site with an incredible legacy and a great customer base, we've moved that business to Taiwan. We've moved from autonomous acquired sites, and we're in the process of moving to the strategic manufacturing sites and the volume sites that you see on the wall. Beyond that, we're now starting the journey of matrixing our organization, centralizing our functions such that we do one thing and one thing only, and that is one standard for IQE. All of HR, all of finance, centrally reporting, ensuring that as we scale, we're robust and we're able to execute. It's my vision that those things in combination give us the execution engine that we will require to execute at scale. That repetitive and robust product control that ensures we retain that reputation that we have gained, and that we deliver the revenue that Americo and Tim have talked about. That high quality, that high volume, and that high margin output of a manufacturing system powered by great technology. One of our partners in this, key partners in this, is AIXTRON, and Felix is gonna talk to us now. Ladies and gentlemen, my name is Felix Grawert. I'm the CEO of AIXTRON. AIXTRON and IQE are partners in the area of compound semiconductors. AIXTRON is providing epi wafer manufacturing equipment, and IQE is providing epi wafers with our equipment. Together, we have the vision of growing the market size of compound semiconductors by driving productivity, increasing the level of automation, and adopting larger wafer sizes. The opportunity ahead of us in the compound semiconductor industry is gigantic. Compound semiconductors are today where the silicon part of our industry was about 30-40 years ago. New applications are popping up every year, and the creativity of engineers opens up new business opportunities and segments. AIXTRON is the market and technology leader for manufacturing equipment in this area, while the engineers at IQE are the masters of driving leading-edge epi wafer innovation. As an epi wafer foundry, IQE provides access and a scaling path to high volume compound semiconductor manufacturing. We work closely together to push the limits of what is physically possible, and we work towards much larger wafer sizes. As long-term partners, we provide the basis for our customers and partners to rely more and more on compound semiconductors to fully realize the potential of the mega trends driving our industry. Thanks, Felix. You know, I've got to know Felix really well over the last year, and that's because we're working intensely on three deliberate vectors. Rodney spoke about it, Americo spoke about it, and that is the scaling of the wafer. That wafer scaling is critical for our penetration into the broader market, as Americo's announced, as Americo's talked about. Secondly is improved productivity and improved yields. We must, and we are, continuing to challenge ourselves every year on improving year on year. The third is ensuring that our partners are ready for scale as well. That as we come calling for those reactors, that they're ready to position and power us to growth. Felix is a great partner, and we're very thankful for it. We've got, and I think Christine said it, I think I recognize a powerful vision when it's simply said. Americo is some very simple but powerful words. Rodney as well. We've talked about centralized standardizing scale within operations, but this is a team sport. Along with the outstanding heritage that IQE has, the effort of Rodney and his team with products, we started to add new people, new competence, like Christine. With safety, we have a new group, Safety Director. We have a new interim Chief People Officer, Quality, new Director, and Sustainability is a new strategy that we announced in June of this year. Each of those areas has a very specific strategy laid out for the next three to five years, which complements the scaling strategy that is designed to support and accelerate it and ensure that our robust execution isn't threatened. I could talk about these. We've talked about them for days and days and days, and there's a huge amount of work here, which I'm very proud of. I'm very proud for some of these guys in the room to hear this story. It's exciting, and we have these base enablers of scale ready to go. Dave Bishop, our Group Director of Supply Chain, is in the room. He's been here a few years more than me, but he's laid the foundation for our supply chain in terms of having the resilience, security, and the responsibility all in place. It takes a lot of work with the global tensions and the situations that we've got, COVID, the inflation, the geopolitical. It takes a lot of work every day underneath that three-year strategy to ensure that we remain perfectly executing. Thanks, Dave. Let's hear from Sumitomo on one of those strategic partnerships. Thank you, Morishita-san. Another one of our great partners who's taken the time to articulate the partnerships that we're building and have built within IQE. You know, being the perfect northern Irish guy, I'm kind of looking forward to about 30 or 40 minutes from now when we've answered all your really tough questions, and we get to the drinks reception, and you can ask me some really tough ones whenever I'm not being flanked by Tim protecting me and giving you the deeply insightful answer. Sorry, Tim. A summary then. We're the only global pure-play epitaxy provider. We're ready with the expertise and the facilities to execute. We're also transforming at pace to standardize, centralize, and scale to underpin the success that we're going to have in the next 5 years. Thank you. Amazing. Thank you, Keith. As Keith mentioned, we had the pleasure of hosting Thomas Caulfield from GlobalFoundries at our Newport facility, Rodney, Keith and I, early in October. I've been in the semiconductor industry a long time. I've visited. I was trying to count, I don't know how many factories, but dozens of factories over the course of those 26 years. 200-mm fabs, 300-mm fabs, OSAT facilities, photomask manufacturing facilities, and now epitaxy, you know, factories. The feeling that I had walking into Newport last month, I've only had one other time in my life. That was the first time I visited a 300-mm fab, it happened to be the IBM East Fishkill facility, you know, 20 years ago-ish. That was this feeling of, like, wow, this is different. This is amazing. Something big is gonna happen here. This is gonna be a factory that's changing the industry. I know several of you have been to the factory already. We invite you all to come visit. I'm sure you'll have the same sense of awe. Rounding us out here and with the punch line, so to speak, is what this all means for our numbers. Let me introduce our Chief Financial Officer, Tim Pullen. Thank you, Christie. Good afternoon, everyone. Now for the business end of the presentation, I guess. We've heard today already from Americo about that fantastic market opportunity ahead of us. We've heard from Rodney Pelzel, who's told us about how we're bringing market-led innovation to capitalize on that opportunity. We've heard from Keith Anderson as to how we've got the world-class facilities to deliver those wafers to the market. I'm gonna talk to you about our financial vision, what that means for our business. We're gonna talk about growth, how we're gonna deliver 3x in revenue by 2027. Gonna talk to you about margin expansion, how we're going to deliver industry levels of profitability by working with a new commercial operating model, and how we're gonna work with our customers to make IQE the champion of the epi wafer industry. Before I do that, I want to return to some of the complex challenges that Americo talked about, but put the CFO lens on it. You can see the issues on the screen here that we're all faced with in the world today. After a couple of years of pandemic, there's nothing as certain at the moment as uncertainty. There's risk everywhere we look around this chart. That's something that we've grown used to dealing with. We're navigating this environment in the way that we manage our business. In fact, the compound semiconductor supply chain has proved incredibly resilient in dealing with these issues. Strong communication up and down the chain, pragmatic decision-making to keep the supply chain sustainable, and business continuity going. Actually, it's in the DNA of the semiconductor industry to be able to adapt to this industry. Keith talked about driving that productivity in the industry. That's critical. That's happened in the silicon space over decades, and it's something that will happen in the compound semiconductor space as we mature the industry. That means that even in an inflationary environment, we're able to drive value. Yes, we'll increase prices if we need to, and there are examples of where that's happened this year, where cost inputs have gone up. In the main, we'll be driving the productivity that will offset the effects of inflation. More than that, semiconductors will provide the growth that will actually offset some of these challenges. Because the macro trends of the semiconductor and technology industry are the answer, as we've heard today, to some of the problems that we see in the world. Certainly, when we think about compound semiconductors, they're probably the answer to the most biggest problem that we have, which is that net zero target. A tough world, but one in which we think the macro trends will actually be reinforced and accelerate, and we'll manage with the financial discipline to make sure that IQE is well-placed to execute and deliver on our revenue growth. Let's talk about how we're going to do this. Much has been said before about the inflection in the compound semiconductor world, you know, the demand for compound semiconductors. Now, we're not gonna wait for that inflection. We're shifting from market takers to market makers. We're gonna grab hold of that inflection point and pull it towards us. With our new transformed commercial model, we'll explain how we're gonna capture the value that we bring to the most important supply chains in the world, whether they're smart phone handsets, telecommunications infrastructure, or things like aerospace and security applications. I'll also explain how we're gonna tackle outsourcing, how we're going to tap into the captive supply of some of the world's biggest semiconductor companies, and how we'll solve some of the problems of expansion that they face. All of this will result in what I call strategic capacity expansion. Now this is really important because if you think about those macro trends, this huge opportunity that we're talking about, the massive increase in compound semiconductor demand, where's it all gonna be made? Is there the capacity of epitaxy production today to meet that? No. How is it gonna be put in place? Now, this isn't about how you purchase wafers. It's not a purchasing level issue. It's not a technology level issue. It's a CEO and board level issue. How am I gonna get that strategic supply? Americo has already talked about how we've understood the cost of not having that supply. We've seen that now. Our CEOs of the industry, the boards, they understand what the problems are. The time is right to have that conversation about putting in place the strategic capacity the industry needs, and that's how we're gonna grab hold of that inflection point and pull it towards us. Let's go into detail a bit more. Our commercial model, we're shifting, transforming our commercial model as we are other aspects of the business, towards strategic long-term agreements. IQE has a deep heritage, as we've heard today. Huge expertise that is unique in the world. We've always added value up and down supply chains. What we need to do now is make sure that we're capturing that value and capturing it in a way that's mutually beneficial for both ourselves and our customers. We can do that through strategic long-term partnership. That means long-term commitments from IQE to put capacity in, to bring leading-edge technologies to market to our customers. Reciprocal commitment as well, long-term, from our customers for volume or share. Together then, we can invest, we can co-invest for that strategic capacity expansion that we talked about. Through the collaborative market-led R&D that Rodney spoke about, we'll be able to accelerate those products through to market to fill that capacity that we're talking about here. What are the benefits of that? It may be obvious, right? To really unlock the benefits, we combine it with our commercial engine. Americo's talked about this before. We're really supercharging here. People like Christine coming in from the industry. More industry knowledge, more customer centricity, more customer collaboration, and importantly, 3x customer engagement. Now, people ask me, "How do you measure that, Tim?" Right? This isn't a number I can report in the financial statements. But what I can say is, compared to a year ago, I can definitely see at least 3x customer engagement in quantity, but also in quality at the C-level of our industry, which is really important when we're thinking about how the big decisions on that capacity are gonna be made. That commercial engine that we're building, together with the transformed commercial model, will result in more consistent growth, improved visibility, stronger returns on investment, and higher profitability for the group, which is something I'll return to in a moment as well. Why would the big semiconductor players outsource epitaxy to IQE? It's a good question. In any big business decision like that, there's gonna be push factors, there's gonna be pull factors as well. If you look at the semiconductor world at the moment, IQE is the only global pure-play epitaxy provider, as we've explained. We have spot competitors in parts of the market. They tend to be in one geography, probably a single site, with a limited technology breadth compared to what we do. We also have epitaxy performed by some of the vertically integrated players in the world. The boards and the CEOs of those companies are facing some of these push factors. If the specialist field of epitaxy is not your core competency, if you're performing that activity in a space-constrained area within a corner of your foundry, if you haven't got access to the leading-edge technology that we've got in our team, if you don't have a roadmap to scale to 200 and 300 mm, then as the CEO or the board of that company, what you face is that make or buy decision. Are you going to invest in that epitaxy capability, potentially build a greenfield site, hire the people, develop the expertise when you've only got yourself as a customer to serve that? Or are you going to outsource to the world leader, to IQE? That's the push. Here's the pull. This is our business model for outsourcing. We've talked about long-term agreements, that reciprocity and commitment from both sides that allows us to co-invest and put the capacity in that gives you that supply chain security. Economies of scale. In any outsourcing decision, this is gonna be critical. Now let's talk about the economics of the compound semiconductor industry. It's not about the cost of the wafer that IQE produce. It's about the cost of the chip that our customers produce. At IQE, we have the world's leading quality of epi wafers, thanks to my colleague sat over here. That means that we can produce wafers that have superior yield, superior area and specification. For our customers, that means that for any given number of chips they want to produce, they're using less wafers. They're putting fewer wafers down their line, and that means that they have lower OpEx and a lower capital intensity. It's all about the cost of the chip, not about the cost of the wafer. We will be able to drive that economies of scale for them, and we'll be able to multiply that effect through the standardization journey that Keith outlined for us. In the silicon world, you can see that. You can see how the scaling and the standardization over time, as well as access to leading technology, has led to a huge outsourcing in manufacturing. The same will happen in compound semiconductors, with IQE shaping how that looks. If you're not already convinced that's gonna drive economies of scale, then just layer on top the move to 200- and 300-mm wafers, which as we've described, are a huge step change in the economies that are possible. A very compelling financial argument. There's also three continent operations, and we can't underestimate that in today's world. We can deliver wafers, manufacture wafers, develop IP, protect IP in any region of three major continents of technology that our customers choose. We're operating with close proximity to those customers, so we can enable the close collaboration. That will give us the broadest market access, but it offers an advantage to our customers. All of this provides a business case, but there are still objections to outsourcing. How, Tim, about margin stacking or the inefficiencies of interfaces? Well, this is where our business model provides a counter to those objections. The virtual, vertical research and development and operational integration that Keith and Rodney have articulated so well allows us to plug into those customers and counter that efficiency argument. Transformed commercial model together with that outsourcing operating model. What does it all mean in terms of numbers? Well, let's just return to the market briefly so we can remind ourselves of the size of the pie. We're playing in a GBP 0.8 billion outsourced epi wafer market at the moment. By moving into that captive space, that outsourcing space, we can overnight double our addressable market to GBP 1.7 billion today. Then that market is gonna grow over 20% CAGR to GBP 4.6 billion by 2027, as we've heard. A big market for us to go and play in. Because of that, we're signing up to a target, as you've heard today, of 3x in five years. That's a compound annual growth rate of 25%, faster than the market growth. It gives us a business the size of $650 million or so by 2027. We've got the technical expertise to do it. We've got the facilities in which we can do it to scaling 3x within the four walls that we have. We have a diversification strategy that will give us the broadest access to that market. Our current business connects wireless sensing or photonics together with the diversification strategy into power and microLED display that will give us product, market, and customer diversification and enhance the resilience of the business. Let's dig into a bit more detail. Let's explore each of those four areas a bit more. Americo asked the question earlier, what happens when your Wi-Fi goes down? I can tell you what happens in my house. I'll find out about it in about 60 seconds flat from my kids, probably quicker than I would if the central heating went down. That's because we all expect to be connected all of the time. Certainly, my kids do. There is an insatiable demand for this. It's not just about your smartphones, it's about all manner of devices. Everything is going to be connected in the future. That means this market continues to grow through 5G, through 6G, and future networks. We see continued growth both on the handset side and the infrastructure side, and we believe we can grow a 15% CAGR and enjoy circa 20% market share in 2027. Sensing. IQE has a deep heritage here. The best technology solutions that have enabled us to carve out and then maintain the leading position in advanced sensing solutions at the top end of the market, the high value end of the market. These will continue to evolve. As we look at the future market, we see really exciting things as we've talked about today, like healthcare sensing and lidar, which, to be honest, are quite frankly game changing for the human race, let alone for IQE. We see we can grow at 15% CAGR here as well and enjoy circa 20% market share in 2027. We talked about entering the power market. This is probably the most attractive market in compound semiconductors over the next five years. The market is probably about half of that existing market today in terms of epi wafer production, and it's forecast to grow at around 30% CAGR over the next five years. We think we can enter this market, not through small projects. This is a big industry, power. It's dominated by economies of scale. Here our strategy is to enter through strategic partnerships. We've announced one of those already, SK Siltron. You've heard from them today about how we'll work together in this market, and there's a pipeline of further opportunities for us here as well. We think we can take 10% market share by 2027. We've got, last but not least, MicroLED displays. This is a really exciting technology, right? Not only does it offer the potential for the brightest, most clear display technologies that will proliferate from our small screens on our wrists to the big screens behind us, but it offers power efficiency, which feeds into that net zero ambition. Here we've got proof point of our new commercial model already in action. Rodney talked about how we capture value in a way that's mutually beneficial for ourselves and our customers, how we look at the milestones associated with scaling, developing our technologies, not just the wafers that we're supplying. That's why even though this is a new technology where the standards haven't been set, we have revenues today. That's because we aren't gonna bet big on which technology will win. We will work with several players out there to help them develop and scale their technologies and bring them through to market. Beyond that, we see then a mass production opportunity, and that's why we see that we can take over 20% market share of a market that could be a quarter of a billion GBP or even bigger, depending on adoption rates of micro-LEDs over the next few years. Four really exciting areas. When we bring it all back together, you see this. A larger, more resilient, more profitable business with a broader portfolio. Laying the foundations for growth. You're all asking me, "So Tim, when's it gonna happen?" Right? Can we enjoy this next week? Well, these strategies take a bit of time. Americo talked to us in March, a couple of months into the job, and articulated how he was going to lay the platforms for growth. Today, you've heard some of that from Rodney, from Keith, from myself, how we're changing, transforming, evolving our business into this new way of doing things. That's well underway. That gives us the ability to go to market in the way that I described. To go for those strategic long-term agreements in development for mass production that will yield a big growth phase for the company. Now, there is a gestation period for those. We need to negotiate the deals. We need to go and buy the tools. We need to put them in and qualify them and so on. For the impatient among you, of which I'm one, that may seem frustrating, but actually that's a really great factor of our business model because that provides also really great customer stickiness. It takes time to put in place. As Keith has described, we can do it faster than anyone else. The growth phase will be there. Over time, that will help us create the epi wafer champion of the industry together with our customers. Okay. Tim, this is a capital markets day, so you need to explain how we're gonna make some money, right? How is the margin going to expand? As we said, over 30% EBITDA margin by 2027. This is the industry level of profitability that the shareholders in the room and online will expect. Just imagine what the company could be worth if we value ourselves based on that EBITDA versus where we are today. Three ways. Revenue growth, we talked a lot about today. Increasing that volume, that top line, in order to grow the margins of the business. The global site optimization that Keith has talked about, reducing the number of sites to those strategic footprints so that we can optimize our cost base. Operating leverage to increase the margins of the business. What do I mean by that? Well, look at us today versus five years' time. Lower wafer volume spread across circa six sites until we close Singapore in June. A relatively high fixed cost as a percentage of revenue, certainly compared to single site operators that we would sometimes be compared to. By 2027, four strategic scaled sites. Three times the number of reactors considering those sites, as Keith has explained, higher volumes. That process of standardization to get the productivity and the efficiency from our execution engine delivering those economies of scale for our customers. That's how we'll optimize our fixed cost as a percentage of revenue, and how as that wafer volume increases, we'll be spreading those fixed costs across a much larger number of wafers and making much bigger margins, over 30% EBITDA. The final thing that we'll talk about is how we're gonna invest. Obviously, if we're going to be putting in that capacity, we need to pay for it. I need to be clear, this is not a build it and they will come strategy. That's not to say that investing ahead of the curve doesn't have its advantages. The foresight that Drew had to build Newport is an incredible advantage in today's world. When we think about the industry and how it now realizes the cost of not having capacity, and Keith's articulation of how that gives us a 24-month advantage to anyone else to put that capacity in, it's an amazing asset to have. Going forward, as you can see, we don't need to put a spade in the ground. We don't need to build new facilities. That means for our investors, the CapEx that's going in is much more linear to the revenue opportunity that we see. More revenue, more reactors. Let's talk about two ways we're gonna invest. There's R&D and there's capital equipment. Research and development. Building on what Rodney talked about, we see that we're moving to being more market-led. Collaborative strategic partnerships to capture the value in our knowledge base while bringing more value to our customers. We're really accelerating the time to market here. Importantly, we're sharing the technology risk with our customers. We're managing that technology risk to make it more likely to be successful. Now, that doesn't mean you'll always be successful, and one of the core competencies of IQE is operating at the leading edge. Sometimes at the leading edge, things will fail. That's normal. It's good to fail if you learn from it. That's a good thing. My mantra has always been, "Don't get in too deep, too early." This is about investment governance. It's fine to fail as long as you haven't invested too much on the way there. It's through that disciplined approach, sharing the risk with our customers, collaborating with them, we get the best of both worlds. That maintenance of leading-edge technology advantage with the return on investment that comes from it. Capital equipment. There's two ways we'll invest here. On a tactical basis, we may invest in a tool here or a tool there, probably material-specific, probably for a specific development project with a specific customer. Here we have the balance sheet strength to be able to go and invest in that ourselves. That will be paid for with the collaborative arrangement that we've talked about in our business model for research and development. If we need to put more tools in than that, which we will on this journey to 3x, those of you who've worked out how many tools that might be in your models, banks of five, 10, or even more reactors, that will be funded through those customer agreements. There's two ways that we can do this. Either we'll get a prepayment upfront from the customer and then a discount on the wafer volume over time in order to put the capital in. Or we'll have firm commitment in a contract, three, five, seven years, that would enable us to come to the market, to yourselves, to raise the money, but with a clear return on investment story as to why that capacity is going into our facilities. To summarize, we're gonna grow this business. 3x, we're gonna expand our margins to industry levels, and we're gonna become the champion of the epi wafer industry. Thank you. Thank you, Tim. There's something very powerful as the head of global sales, I see my performance target right there on the big screen for everyone to see, 3x revenue growth in the by 2027. Listen, it's the right markets, the right technology, the right facilities, the right team. Sign me up. I'm going on record right here. It's definitely in our sights. Okay. That is the end of our prepared remarks, so to speak, and we'll be pivoting now into a Q&A. Before we do that, let me just give a very simple summary of what you've heard from us today. At IQE, we are market-led. We're going to capture the value for what we do, and we will scale and grow the business. That's it. Give us a few minutes here to kind of rearrange the stage, and I'll ask Americo, Rodney, Keith, and Tim to come up for Q&A. Those online, please continue to submit your questions. We'll pull up those as well. Okay. That was fast. We're ready. Okay, maybe we'll start. I have my phone here 'cause that's where I'm seeing the questions from online. Why don't we start with a question here in the room if we have one. We have a roving mic, so just give us a moment to get that to you. Hi, it's Harvey Robinson from Panmure Gordon. I've got a few questions. I'll start with a couple now and then come back later. Two strategic questions, I think, for Americo. It sounds to me from what you're saying in terms of a slight shift from wafer sales to, if you like, solutions, that you may be thinking about charging for design services. Is that something you're thinking of? Almost like NRE. Is that the right take on that? Then my second question is maybe even more strategic. You're talking about partnerships and value for the company in the ecosystem. I mean, it sort of reminded me of some thoughts that when ASML took money from three leading semiconductor companies in 2012 to pay for EUV. Is that something you're thinking about over time, or are you just? Tim's explanation of how you fund the CapEx is a slightly easier way of doing that? Thanks for the question. It is a bit of all what you mentioned. When we look at what we do and how we do it, we go from early stage R&D investment with customers all the way to high volume scaling. That's one. Second, we work with pretty much everybody in the ecosystem, and the way we create value is different for each of those ecosystem partners. You heard from Vanchip, how we partner with them to create high value added products, right, differentiated products. It could go from NRE type of funding in early stage R&D to co-investment into the scale. I mean, as I got the mic, I've got a couple of questions for Tim, which I always ask him. Yeah, I think he knows what they are. Could you just come back. I mean, obviously, the 3x revenue growth, I mean, quite a lot of that can be achieved from your existing capacity. Could you just give us a reminder where we are in terms of current CapEx? And obviously, your gross margin kinda hides the true number 'cause you've got all that manufacturing cost in the COGS. I know you've given us the EBITDA margin, and I know you're sensitive about the gross margin, but could you give us a feel for where gross margin may get to in 2027? Okay. In terms of facility utilization, it does change by different material systems. Rodney laid out the, you know, different material systems that we produce. We also talked briefly around the different tool platforms that we have as well. We have less utilization on our MBE facility. MBE, for those of you who don't know, is just one of the types of oven that we use. We have higher levels of utilization elsewhere. For example, in Newport, we have 10 tools at the moment where we produce our 3D sensing VCSELs. There's actually very high utilization at the moment, strong performance in the second half of this year. Depending on what material system it is that's growing, we may need to upgrade a tool or buy a new tool. The return on capital employed will be different. Always, we would have a strong return on investment because of the commercial model that we're deploying. Very good. The gross margin, what I'll say to you is that, the EBITDA level we set out today gives us, you know, a good industry level of EBITDA margin. Whilst I'm not gonna disclose a gross profit number because it will change depending on the mix, it would be industry level gross profit to go with it. Let me just let me take a maybe a couple from here to make sure I pull in some folks on the end here. There's a question around do you see any risks, Keith, in skill shortages in terms of the expansion plans that you and specific questions about, you know, locally, and is there any geographies where you see that as a particular issue? We're partnering very strongly with local universities. You know, if I think about Cardiff and Cardiff University, Rodney and the Cardiff University team are incredibly closely collaborating on new technologies. That talent pipeline that I alluded to in the people section, that's one of the reasons for that close collaboration. We've got line of sight to that, and we're very encouraged by that collaboration. Good. Come back to the room here. Just give us a moment. Thank you. Thank you. I'm John Karidis from Numis. I have two questions, please. Firstly, if you're in sort of conversation with companies that you'd like for them to outsource to you, how do you answer the question, what happens if somebody takes IQE over? How big of an issue is that? And then secondly, I'd like to understand where you are in developing your sales and marketing muscle. Maybe it's unfair because you've just taken the reins. But I'm trying to figure out, and I know that this is never this is a job that never ends, but what are sort of the basic things that you are still missing, and how soon will those pieces be in place? Do you want to take that first, that last one? Okay. Thank you, John. Well, when we talk about the industry, as I try to outline, the conversation is not limited to M&As. We really look at the industry challenges that we all face. The fact of the matter is there's a consensus out there that there is a big market, a growing market, a exciting market that has values. The question is how to go capture that market. Most of the conversation focused at the strategic level on how can we make sure that we factor into our decisions the global challenges like geopolitics, supply chain risk, investment profiles, technology innovations, competitive landscape, and the like. We really don't focus on what happen if one company goes change controls here and there. That's something we always know can happen, and it should not change our fundamental business processes. Yeah. I'll comment on the sort of the sales question. Yes, it's. I'm still developing, you know, the plan and identifying exactly what we need. There are some actions that we've taken, you know, recently that I think are really important. One geography that we didn't have a strong presence in terms of our commercial engine was in Asia writ large. I have Kevin Wong here who just joined our team as Vice President of APAC Sales. Kevin and I have worked together over the years and built businesses at IBM and at GlobalFoundries, and we plan to do it again here. That's one very important add for us, and there'll be others. Thank you. Yeah. Salah. Hi there. Salah here from the International Semiconductor Executive Summit and Mubadala. Out of interest with regards to IQE, will IQE take opportunity of possibly getting a bit of the CHIPS Act from the U.S. or also, I mean, I'm not sure about the E.U. because we're out, I mean, Britain's out of the E.U. Where is IQE's position in that area? The other question that I have as well is, with the investments happening in India, and there will be specific investments happening in the Middle East, will IQE potentially consider opening a fab in that area if it makes sense? Good questions. Complex one. The CHIPS Act one is easy. Yes, we want the money. As much of it as we can get. We have plans in place. As you know, we operate in the United States, not only from the fab perspective, from the business perspective. It's our largest market, not only in consumer but in military defense as well. IQE is really a very strategic partner of the U.S. ecosystem as a whole. Given my background, I've been in the CHIPS Act process before, as you may guess. We are putting actions in place to be part of that complex but yet very, very important process. You're talking about E.U. There are also E.U. funding that we would go after. Wherever we have operations, wherever we have opportunities to build a public-private partnership, including in the U.K., which I wish would have been moved way faster. I have not seen any line of sight yet. Maybe someone can help in the room to get the U.K. to come to the table. I believe it's still the only large country in my memory that has not set any semiconductor strategy. If they are listening, let's get going. As far as other geos, we have not really contemplate. I think the challenge we work with is how to maintain the optimum footprint while we scale the business. Thank you. Maybe I'll just go to one question here to bring Rodney into the conversation. Believe it or not, there was a question on the chat about quantum dots. Really a general question about what we're doing there. Let's just note those are. Yeah. I'm just kidding. Kidding. Yes, we are doing quantum dots. For those keeping track, that would be part of the gallium arsenide material system, because that's the lattice parameter since it's the second question. We are involved in it through government programs, but we have a very nice capability in North Carolina, the MB capability, and we've actually demonstrated quantum dots on 300 mm wafers. Very well established and a very nice technology. As the market's gonna pull towards that, we will, we'll continue to develop that. Very good. Thank you. We'll take another question from the room. How about right in the middle here? So Hi. Balaji Tirupati from Citi. A couple of questions from my side. First one is, at this stage, what would be the key challenge in meeting 2027 target on revenues? Would it be diversification in new segments or would it be trying to convince your peers or competitors with captive facility to outsource to you? We have to run both plays. Of course. Okay. The market is open to outsourcing, we believe, because as Tim tried to explain, captive players today face greater and greater challenges moving forward. We are not prioritizing one strategy versus the other, we are running both of them in parallel. Understood. On margins, I guess a lot of emphasis is on optimizing fixed cost base. However, with the current geopolitical evolution, would you think that inefficiency in capital allocation could be a key challenge for you? Let me take the first part, maybe Tim can jump in. I think as I tried to say in my introduction, the benefits of what we built over 50 years of large scale, single site is no longer the predominant factor. I think the industry has come to realize that even though there is inherent cost of running global footprint, there's value on doing this. It's up to us to continue to articulate and to capture that value from our customers, and by providing that secure and resilient supply chain. That doesn't prevent us from optimizing our own fixed cost. Right? We will continue to do that, as Tim say, and continue to run operational as efficient as possible. As you know, a factory has to run at full capacity to be able to deliver the best economics. Scaling up by 3x our revenue is one way we're gonna see our margins improve significantly. I think to add to that as well, one of the examples I gave was the scale and the standardization that you've seen in silicon leading to the outsourcing, you know, predominantly in that sector. If now the world is looking at that with one disadvantage, it's the fact that a lot of manufacturing is concentrated in single locations, potentially viewed as high-risk locations. Actually, IQE is coming from the other way around. We're not facing the challenge of how do we globalize a concentrated low-cost operation. We're coming at it from the challenge of how do we scale an already established global operation. Actually, I'd rather have it this way around. Ours is a growth challenge. We already have that global footprint, which others will probably now try and emulate. A significant share of your current footprint or the capacity to expand is based out of U.S. or in the U.K. One of the key markets, end markets, China, with the current evolution, may prefer a site which is based out of Asia. Do you see need in the near future to actually expand in Taiwan? Not immediately, because we have expansion capacity, as Keith outlined, in Taiwan. As we ride along with our commercial strategy, our approach will be to collaborate and put in place strategic capacity with customers. Really depends on the scale of some of those as to whether that will happen within the four walls, as we can do. We can meet our revenue target within the four walls. If need be, we could scale outside of those four walls as well. Very helpful. Thank you. Any other questions from the room? Hello. Hi. Helen Adams, Peel Hunt. It's a simple question. I think you talked about scaling, and you said you're gonna do it in a modular fashion. How do you factor in the sort of competitiveness for MOCVD machines, for example? I mean, because everyone's trying to get them, and you see these very long lead times. How has IQE going to manage that over the next 5 years? I think the partnership that we have with AIXTRON works both ways. With the leading edge epitaxy that Rodney and his team develop and the ability and the growth trajectory that we see, that's a mutually beneficial partnership. As well as that open communication and that kind of line of sight to where the industry's going means that we're having those conversations that say we're well prepared to meet that together. Very good. We will go to one question in the chat. Tim, they're sensing a lot of optimism about your commitment to these financial targets, and there's a question around why the optimism, you know. Why the optimism? Yeah. I think we've seen it here today, haven't we? I think if you look at the heritage of the business that Drew built, the amazing assets, people, IP that we have, together with the marketing thinking that Americo brings, that strategic thinking that Christine outlined. The technical capability that Rodney and his team bring, which is unique in the world. The facilities, the uniqueness that Keith is running every day on a daily basis and the scalability that those things have. If ever there was an ingredients list for success, then that's it. Okay. Very good. We'll take another one from the room. Hi there. It's Elliot from Numis. First question just around reporting revenue segments. Am I right in thinking that that's gonna change now into the verticals and move away from wireless and photonics? Secondly, inflationary pressures across the business, where do you see the most, the largest inflationary pressures, and how are you mitigating that? Then lastly, how would you reassure investors around pricing power? Obviously, in the world at the moment, there are some challenges. We've outlined those. You know, it's well documented that there's a lot of handset inventory in the chain, for example. I think what I would urge people to remember is that inventory cycles are a normal factor of the semiconductor industry. Actually, what we've seen this year is the IQE portfolio working pretty well. Where we've seen some weakness in the handset market, we've seen real strength in photonics, for example, in the second half. That's really the strategy as to why you diversify further, right? The more you diversify, the more you get that robust portfolio. Yes, some things will be up one year, some things will be down, but the balance is overall that you can get that consistent growth. If you look at the inflation question, obviously a hot topic, for everyone. There have been some, you know, input cost inflations that we've seen this year. As I say, some of those we've passed through in that pragmatic supply chain conversation to keep things sustainable, but other things we need to eliminate through efficiency. That's why as we scale, we're standardizing, we're scaling to make sure that we're not always having that customer conversation, because this is an industry that drives down costs, that drives down the unit cost in order to take technologies to market, and that's what we're focused on. We may see some short-term challenges, but longer term, we'll be able to overcome those with the efficiency and scale that we have. I'm sorry, your third question was? Pricing power. Pricing power. That's really the business case for outsourcing, and it's the mutual benefit that you can generate. As I say, it's not about the cost per wafer. If we're gonna maintain a high price per wafer, that's not a bad thing for our customer. What they get in return is a high-yielding, high-quality wafer that enables them to reduce their OpEx, their capital intensity, gain access to the leading-edge technology. There's larger wafer diameters, the economies of scale, and so on. This is really win-win. We can maintain strong margins with good priced wafers and enable economic benefits for our customers. Tim, if I may add, the efficiency question. If I think about VCSELs as a specific example, over the last four years, what Rodney and I didn't talk about today was the combination of his team's expertise and my team's expertise in driving effective and efficient growth of our production year on year. That growth over the last four years, the combination of expertise in our teams is very significant double-digit. Americo's expectation underneath that is that continues year on year, and that compounding the message you see today is that challenge to my team and Rodney's team to continue to deliver that efficiency. They'll go to another from the chat for you, Rodney. You were talking about the leadership position we have as the power in power GaN. Mm-hmm. You know, as that opportunity emerges. There's a question about what technologies are serving that market today. Yeah. Reading the question, they may have misunderstood when I said that we're the one that can operate across all of each of those at the same time. There are players in each of those areas. Right now, your power in GaN is virtually all exclusively on silicon. As I mentioned, it's a market that's there today, but it's gonna grow very, very quickly. A lot of your partners right now in that area are vertically integrated. As that grows, and that's gonna be one of the cases that I'm sure they will bring forward and we will be addressing as well. Very good. Tim, there's a specific question around ROI expectations as we make investments. Very strong, is what I'm saying. We don't set a single hurdle rate for ROI. What I do expect is the tool investments that we have would pay back in between three and four years. You can research the cost of a tool, and so you can see, you know, we could get a relatively strong payback on these. These tools go into operation for 20+ years. If you can get a payback in three or four, then you're gonna get a really strong ROI through the life cycle. Tarek. Yes. Hi. Thanks. Bharat from Berenberg. Just one question on when you set up these long-term agreements that you're talking about in the future, can you give us a bit more detail on how the revenue visibility is gonna be improved? What's gonna drive that visibility improvement? That visibility comes mainly from what Tim tried to outline, the mutual commitment. Because if you are a customer, you build devices, you need epi wafers. If you don't have epi wafer, you don't have your end product. That mutual commitment that says they rely on our output, and we rely on their demand, that's very, very important. The more closely we work, the more visibility we create, and that visibility creates certainties on both sides. Okay. Sorry, another question, actually, with regards to the, for example, you talked about GaN across all three, across new segments as well. Yeah. Is that gonna have, like, incremental R&D costs as well? Because you have as you said, it's a different recipe across these different segments. Is that factored into your forecasts in the near term? Yeah. All right, thanks. It's... I'd say one of the key things is certainly there'd be development in there. But if you're market-led and you're partnered, you'll be tied in lockstep, and you'll be driving for that value, and that can be achieved in a lot of different ways. Yeah, would there be development that's necessary? Absolutely. Would be some, but there will also be a partner that you're partnering with at the same time, and both extracting value as you go. Very good. Okay, well, we're at the top of the hour, so it seems maybe an appropriate point to pause the Q&A. You know how to get ahold of us if there's any other further questions or anything. Americo, any closing comments as we end our session? Well, I wanna thank you so much for giving us your time online, in the room. Great questions that show the interest. I am really excited. I try to do my best to share my excitement, my energy with you guys. This is a great business, and we do this because we need to make a great impact in fixing some of those global challenges. Of course, we run a business. It's not lost on any of us. We have a great asset. The market needs us. The market is transforming fast. My ask is, this is a new normal, okay? I know this industry has changed a lot. The playbook that anyone would have had five years ago is gone, no matter who you are in the industry, right? This global market where everything is open, where you go build where it's cheap. I see questions about China, about Taiwan. We don't have time to go through that. Every executive board, every CEO is trying to cope with the change. I have had the chance in my end, in my experience, in my career, to have worked across three different continents, across the entire industry, from R&D to business to sales. I have seen it all. Maybe I'm able to synthesize it a little bit better than most 'cause I've been there. I was running Asia-Pacific in my past company. It is a very complex industry, but it's a very exciting industry. What we are trying to say today is this is a new normal, and I would like that very much we look at IQE and IQE opportunities throughout these lenses. I know some have been with us for a very long time. There have been ups and downs. This time is different. Thank you very much. Thank you, Americo. Thank you.