Everyone to Chroma ATE 2025 third quarter earnings conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a Q&A session. Please follow the instructions given at that time if you would like to ask questions, and for your information, a webcam replay will be available within an hour after the conference is finished. Please visit www.chroma.com.tw/investor/index under the investor relations section. Now, I would like to introduce CFO Paul Ying. Please begin. Thank you. Hello, everyone. This is Paul Ying. I'm the CFO of Chroma ATE, and today, I will be holding this meeting with Jennifer Chien, which is the Director of IR, and welcome to the 2025 third quarter earnings conference call. Well, let's start with the 2025 third quarter income statement. If you look at this page on the website, you can see that the net sales for the third quarter of this year is TWD 6.4 billion compared to the last quarter. It's about a flat 1% drop, but compared to last year on a year-over-year basis, it's a 14% growth. And with this content, you also can see the consolidated sales of testing equipment for the main and the core business. It occupies like 96% of the total sales revenue, which is TWD 6.155 billion. Compared to last quarter, it's a 2% drop. But compared to last year, it's a 19% growth. And our gross margin approaches TWD 3.8 billion and over 60%. And compared to last year, it's a 9% drop. But compared to last year, it's a 16% growth. And here, if you look at the percentage of the gross margin, I think mainly it's due to the product mix. So there's nothing that material to present. And as to the operating expenses, well, compared to the last quarter, it's a 4% drop on the general G&A expense. And R&D is a 3% growth. Compared to last year, it's a 4% and 28% growth consecutive, well, separately. For the operating income, it's TWD 1.8 billion. Compared to the last quarter, it's a 16% drop. But compared to last year, it's a 23% growth. So if we go down to see the non-operating items, you can see that net non-operating items contribute TWD 3.6 billion. Compared to the last quarter or to last year, I think it's a tremendous growth. Mainly it's due to we enjoy the gain from the disposal of residential apartments held for sale. It's all to the employees. The net value contributed to the bottom line approaches TWD 3.2 billion. For the net income for this quarter, it's TWD 5.1 billion. Compared to the last quarter, it's 155% growth. Compared to last year, it's a 253% growth. Again, although it's mainly contributed from the sales of the residential apartments, for that part, I think for the single quarter, it contributed something like TWD 7.6 to the EPS. Outside of that, we still enjoy TWD 4.4 EPS for the third quarter only. Let's go to the next page for the first three quarters consolidated income statement. Here, you can see that the first three quarters of 2025, the net sales approached to TWD 19.7 billion. Compared to last year, it's a 27% growth, and it's mainly coming from the sales of testing equipment business, which is TWD 18.9 billion compared to last year. It's a 29% growth. As to the gross margin for the first three quarters of this year, it's TWD 12.2 billion compared to last year. It's a 34% growth, and here, you also can see the operating income approached TWD 6.2 billion compared to last year. It's a 58% growth, and here, you also can see that for these three quarters of this year, the operating income approaches to over 30%-31% now, and again, for the non-operating items, net of that is TWD 4.3 billion. Compared to last year, it's a four times growth, which is tremendous. Mainly, it's contributed from the sales of the residential apartment to employees. Here, you also can see the first three quarters net income approached to the TWD 9.2 billion compared to last year. It's almost 1.5 times of last year's contribution. Again, for the EPS, for this three quarters this year, approached to TWD 21.67, which is, I think this is a good result. We've been contributing to our shareholders and investors. Again, let's see the balance sheet highlights and financial ratios. Here, you can see that the assets mainly is increasing due to the sales of the residential apartments, as well as the growth of the pipeline. You can see the cash on hand, which is 42% growth compared to last year's year-end. Inventory, we have a 20% growth. For those items like long-term debt, short-term debt is decreasing due to the cash on hand, flow of cash on hand. But for the long-term debt, it's due to the capital expenditure for the second phase of our expansion plan. The building is still ongoing. For those return on equities, I think approaches to 30%, which is a 29% for the third quarter end. Compared to last year, it's a 22%. For the return on assets, it's over 20%. Compared to last year, 15%, which is a big growth. We still net cash on hand. Also, the free cash flow is somewhere like TWD 5 billion. Compared to last year, it's a 166% of growth. This is the financial highlights. Again, let's see Jennifer take it over to give you some highlights of the product mix and the sales breakdown. Thank you. Good afternoon, everyone. This is Jennifer. Please refer to slide 9 for the product mix breakdown. For the third quarter only, test instrument and ATS have made another quarterly record high, reached TWD 3 billion. So last quarter was a historical high. And the third quarter compared to last year further increased by another 12% and 74% compared to last year. This has been demonstrated strong demand of AI server power. Sum up for the first three quarters, the total sales have increased by 64% compared to last year's first three quarters and higher sales than total annual sales revenue in 2024. Since the new AI power infrastructure will start to build out new capacity next year, we expect the power business, test instrument, and ATS will continue to grow in 2026. For semiconductor sector, in third quarter, it has declined 5% quarter over quarter, but still increased by 15% year over year. The slight decline was due to some adjustments for the shipping. We expect semiconductor remains strong compared to last year. Last year, our semiconductor sector had an outstanding growth of 135%. This year, year to date, first three quarters of semiconductor factors have reached to TWD 6.9 billion, which is continuing to increase by another 41% and equivalent to the annual sales in 2024. Based on our recent receipts from our customers, orders, and plans for next year, we believe the semiconductor sectors will continue to grow another year. The tech solution due to slow sentiments of EV industries and reschedule or deliver the automation for AI applications year to date has declined around 40%. We don't expect this sector will have a large pickup in the fourth quarter. Overall, parent company sales reached TWD 5.5 billion in third quarter, similar to second quarter, but increased by 38% compared to last year. For first three quarters, the total sales revenue for parent company reached up to TWD 16 billion, presented a growth of 40%. And for consolidated sales in the third quarter, it's about TWD 6.1 billion, kind of flat compared to last quarter, and increased by 19% compared to last year. First three quarters was about TWD 18.9 billion, presented a growth of 29% compared to last year. The consolidated entity math, we think, should be similar to last year. So the total consolidated sales for first three quarters reached up to TWD 19.7 billion, presented a growth of 27%. And we think we will have another year of good growth. We can move on to Q&A. Yes, ladies and gentlemen, we will begin our Q&A session. If you would like to ask questions, please press star key and 1 on your telephone keypad, and you will enter a queue. After your name is announced, please ask your questions. If you would like to cancel your questions, please press star key and 2. Thank you. Now, please press star key and 1 if you would like to ask questions. Thank you. The first one to ask questions, Alex Wong from Bernstein. Go ahead, please. Hi, Paul and Jennifer. Thank you for taking my question. This is Alex from Bernstein. I have a couple of questions. The first one is about AI power tester. What's the lead time now for your product? I remember last time you mentioned it's about six months. Any update on that? We're willing to speed out for special customers. So now it's really short. We do everything we could. Otherwise, we couldn't digest. We couldn't really be ready for the next capacity, next product capacity building next year. Because so far, I think this year is mostly still build out the capacity for existing solutions. If you talk about new solutions like 800V or other HVDC, I think they schedule next year. I see. Okay. Yeah. So about the 800V HVDC or 400V HVDC, so you do see more business opportunities for this new architecture. So you will have more product solutions for these power racks. Is that right? I think product is ready. We just need the customer schedules next year start to build our capacity. I see. The product you have, is it the same like your product for PSU, BBU, supercapacitor, the stuff you already sent? Yeah, because this is a new AI, you could say new AI power infrastructures. Okay. Okay. I see. And then the question about the SLT. How should we think about the testing time for Rubin SLT versus Blackwell? Do you have more color about that? Okay. First, we already received the PO and the forecast for next year. And we think according to the number we received, it should be similar cycle time. But due to Rubin, it's quite complicated, higher level compared to GB. So the number of units is actually increased. I see. So although Rubin is more complex and thermal design power is much higher than Blackwell, but you see the testing hours is similar to Blackwell. Is that right? Based on how we preliminarily forecast the units, I mean, the total unit need for capacity. But as I said, this capacity starts to build for next year. So this is just not the entire run. I mean. Oh, I see. It's not entire run, but start to build up capacity for next year. But as I said, the total unit, according to customer's recent forecast to us, is more than it should be. I see, and then the final question is about metrology. Last time you mentioned this year, the guidance is over TWD 1 billion revenue. Any update to that? What kind of update are you looking for? I mean, for the metrology revenue guidance this year, is it still the multi-billion? And then for next year, how would that compare to this year? I don't comment on the numbers, but we just pretty much support the customer's schedules. I think how much people think about the capacity next year, that will be how much growth rate for the equipment. That's very clear. Thank you. Thank you. Next one to ask question, Kevin from Citi. Hi, Kevin. Oh, hey, Jennifer. Hi. Thanks for taking that question. First of all, I would like to get a quick sense from the power sector right now. I think in addition, we have seen the strong strengths at the customers. I guess in addition to the unit-wide kind of growth, are we also seeing how should we think about the content growth? For example, we're testing more and more components inside of those products. How should we think about the content growth in terms of power tester as well? Are we seeing that value increase as well? I think if you talk about those design and the content change, I think you probably need to ask Delta. Yeah. But I think current situation is they are going to change to another new format of AI power infrastructures. So that triggered the new capacity build. It's hard to do this kind of comparisons. All right. Okay. So okay. However, based on the preliminary, the customer's forecast for next year, we're supposed to have another double-digit growth. Yeah. Okay. Would this be like a high double-digit similar to this year, or? I'm not going to comment on that. All right. But however, recently market mostly talk about like 800V, something HVDC. It's not yet built. So you need to think this is new capacity built. Okay. So that would be the new capacity build. Got it. The driver. Yeah. All right. My next question is more on the SLT side. So I think you just mentioned that about the I think that the unit-wise might still need to have some upside compared to this year, right? So first one, how should I think about the ASP for the Rubin generation of SLT? Is it going to increase similar to the past generation, let's say from the Hopper to Blackwell as well? Okay. Overall, according to our okay, Rubin is kind of fine. It's final, so we already received the PO, and based, of course, the price is increased, and same as the number of units is also increased, so there's no doubt for Q3. I think will be more than this year. I think overall system-level test, we think will be more than this year due to two factors. First one, of course, comes from NVIDIA, as I said, no matter the unit price or number of units for new capacity, both are increased. Another factor is I guess everybody pretty much already aware that we are gaining the market share for AMD, so AMD specs already released, and we will be acting as a sole vendor for AMD, so this is kind of gaining extra customer space, and this thesis is not accounting for the drivers for ASIC. We do see like one or two ASIC actually turning to more aggressive next year. Right. All right. Lastly, I think just following on about the AMD part. So I think in the past few years that due to the strength of the key customer, so the contribution from SLT from these parts is rather limited. So are we seeing a significant increase in terms of contribution from SLT for next year from the new customer? And how should we think about the automotive demand going forward as well? Honestly, I don't really care about your question. I don't quite understand your question. But basically, we already guided since the middle of this year. We already revised our system-level tester sales contribution for this year. So this is already more than last year by double digits. And according to current order intake, I think we do have a confidence level that next year probably will be more than this year by gaining market share. As you know, before, we were not a system-level tester provider for AMD because they mostly cover CPU. So starting from the MI400s, now we became a supplier. All right. Lastly, on the automotive demand for SLT? Sorry, I don't understand your question. Sorry. Oh, I think so far this year, much of the demand actually comes from auto chip testing. Much of the SLT demand comes from auto testing, right? So are we going to see similar strengths for next year as well? Same product continues to build up capacity, doesn't apply for equipment company. So this year's driver, remember we mentioned that some amount, small amount carry forward from last year GB plus ASIC. So initially, our guidance regarding the system-level tester is flat decline. But later, we revised out because the customers want to build on non-GB products. Non-GB product customers are actually positioned those chips are for autonomous driving plus edge AI. But if you want to know the really detailed split, I think it depends on NVIDIA. Okay. Got it. Got it. Thank you. Thank you. Now, next one to ask question, Michael Xu from Yuanta. Go ahead, please. Hi, Michael. Hi, Jennifer. And hi, management team. And thanks for the presentation. And first one, I want to know about how can we imagine the AMD, their SLT, about the amount and its units is similar to which generation about NVIDIA's solution like Hopper or Blackwell? Just how to imagine it. You could try Hopper. Yeah. Okay. Thanks. And the second one is I want to update about the Photonics solution. And heard from maybe from some person or locals, and they mentioned about them will have some programs in November. Is there any update about it? Are you asking all CEO or CPO? Oh, sorry, CPO. Yeah. Thanks. Are they being sorry, are they being qualified yet? I'm still on that program, but I'm not sure the comment. Just heard about the rumor, so I just want to just check about is there any update or not. I think they need to get qualified by customers before we talk about capacity build. Okay. Got it. And sorry, and the final one is about: can we update about the BB ratio about power testing? And yeah, just power testing. Thanks. Too many to account for BB ratio. Okay. And that's all. Thanks. Thank you. Next one to ask question, Hasley from Bank of America. Go ahead and ask your questions. Yes. Hi. Management team and Jennifer. Thanks for taking my question. So a couple of questions, probably just from the shareholder first. How much contribution from data center related to power equipment now? Last time it was 40%. Would you provide some updates? And how much of it is coming from China? I think we still forecast 40%. I think just if I think the proportional-wise, maybe next year will be more than 40%. Maybe. Maybe. Because according to recent, our order received, still mostly the capacity build is from the AI power. Because as I said, because the AI power infrastructure is migrating to another format. That's the key driver. I come to the split for China because Delta also do China business. How could I do a split for Delta? Okay. Yeah. That's right. So 40% for fully implemented this year and could be higher for next year. Okay. That's pretty helpful. And then just on the gross margins, down mildly versus the same quarter in the third quarter. But I think from a year-on-year comparison perspective, it is still improving. And still, compared with the historical rates, it is still on the high end. So should we think about this as a new norm going forward? At least going to be like 50% level, or is it going to be dropping back to high 50% level? I think we see where we are. Anything above 55%, we're very happy. That's it. Yeah. Okay. So you're not changing your structural profitability guidance yet? No. If you ask me the gross margin, which is mostly reluctant to comment, I think we will maintain we are happy with over 55%. Okay. Okay. Yeah. That's helpful. And then just on the forward outlook, could you share a little bit on the book to bill? I understand there's someone asked this question, but I mean, just from the qualitatively speaking perspective, would you say that the current book to bill for both power and also the semi-equipment business is actually at the high end or even probably the historical high at this stage? Okay. This year is only two months left. So if you're using three months rolling, I can't do the BB ratio because the customers most of place order for next year. Yeah. But customers sometimes they give you the orders, which you need to break down by three different periods. How could I really provide you the BB ratio with three months rolling? Okay. Yeah. Can we pass this, skip this question? Thank you. I won't follow up on this one. But I mean, just on the semi business versus the power business, previously you guided semi is going to outgrow, but with stronger than expected power demand year to date. Are you still holding the guidance, or it seems that power is going to outperform semi for this year at least? Maybe semi will catch up next quarter. That sounds pretty promising. Okay. And then just initial view into 2026, this is going to be my last question, and I'll be back in a few. Do you have a view which segment is stronger? Is it semi or power? Because you mentioned that power is going to grow double digits. And I assume that based on your comment on SLT and also electrolytes just now, semi should also be at least growing double digits as well. So just wondering if you could comment on, based on the current customer backlog, which segment is probably going to outperform the other? Okay. Next year, 2026, our second batch will start renting. And we're glad to receive those orders and to meet the customer's needs. So this already answered your questions. Okay. Yeah. That's pretty clear. Thanks, Jennifer. Thank you. We are now in a Q&A session. If you would like to ask questions, please press star key and one on your telephone keypad. Thank you. Next one, we have Jerry Cheng from J.P. Morgan. Go ahead, please. Hi, Jerry. Yeah. Thank you. Hi, Jennifer. Yes. Two questions for me. I think first of all, yeah, for the power business, we understand Delta, Light One, likely they're going to be your key customers. But just wondering if the international US power ODM such as Vertiv, Flex do they also use your equipment, testing equipment extensively? That's my first question. I think Vertiv, they mostly is very, very high power, like a power station type. We don't cover the high end and if you want to say the essential power, someone like AEI, but the fact is, if you talk about those AI components, especially for server data centers, I think Delta has already accounted for quite a big chunk. Yes. Yes. Yeah. Well, my question is basically, you probably still see some newcomer or people want to grab a piece of the very strong data center power inside the data center, right? So just wondering, if anyone new comes to this market, would they mostly buy in the Chroma equipment? Yeah. But the new solution, the new structures need to be approved by the customers. This is not something all you want to make and then you can sell. So that maybe you can give us some indication about the competition landscape. What do you mean by competition? You mean our competition or Delta's competition? Yes. Yes. Or your competition? Yeah. Or you don't see any competition? I wouldn't use the word like we are sole vendors, but Delta, I only could say Delta, Light One, and others, AEI, they're preferred. Hello? So I have to say product is ready, but just the scheduling to build out those capacity next year. So my key point is scheduling next year, which means everyone is ready for that. Okay. Sure. Understood. Okay. Maybe move on to the next question. Next question is related to potential future acquisition. Just wondering, because I think I recall a few years ago, you bought some startup that focused on the thermal technologies. Are you looking to do that in the future? We always do. Yeah. Every year, we add it. We always looking. Five to ten acquisition opportunities under evaluation. Yeah. We always keep the radar out. Yeah. Yes. Without revealing the details, but can I say thermal management will be one of the key areas that you're looking to? Not only to that. Not only to that. Sure. Of course. Not of that. Okay. Sure. Thank you. That's very clear. Okay. Appreciate it. I'll get back to you. Thank you. Next one to ask question, Cheng Shih from KGI Securities. Go ahead, please. Hi, Jennifer. Hey. Also, follow up on AI server power-related business. Based on your customer's capacity expansion plan, it seems like next year or 2027 onwards will be even bigger years for them. And I understood you have many power testing products. May I assume on 800V HVDC, your products are ready, but not yet shipped to the customers? Yes. Okay. Okay. This is the customer's plan for next year. So all of this year's driver of sales contribution only for current existing products is not yet for the rollout of 800V and HVDC. Yes. Sure. And then but based on this, we already saw 3Q deliver quite strong growth for this business. But you have still so many projects on hand, and we can assume the 800V HVDC will be very big. So can we assume it's still a quite strong growth for power business next several quarters or several years? I would say, like, several, like, five years. So you say a couple of years, yes. Okay. Okay. Got you. That's all. Thank you. Thank you. Next one to ask question, Arthur Lai from Macquarie. Hi, Jennifer. Yes. Hey. Thank you, Paul and Jennifer. Congrats on a really good result. I would like to ask a non-power question first. In the semiconductor test solution segment, we have a 15% of EOV growth. Can you give us more color on the future booking? What do you mean by future booking? Okay. Like probably quarter four next year. Because. Yeah? Yeah. Okay. Equipment companies, sometimes maybe I should say most of the time, we need to support customer schedules, and they cannot be just like the components makers equally break down into all three or four quarters like this. They couldn't do that. To be honest, in the Semiconductor sector, I don't think this result was kind of disappointing, because I think third quarter, we just, I would say, mostly is system testers, and the Photonics stages have not been changed, as I probably mentioned before. All of this year, we've been strong due to the migration to 1.16, so if dollar-wise, I think Photonics stages in every quarter is not very much by dollars, it's not very much change, but I have to say maybe system-level tester is the biggest contribution, and metrologists really need to support the foundry share schedule. So that's why I said we still remain the whole year is strong, will be strong. But that's why I said, how do you know it will not start to better than what we had for third quarter? I mean, for the coming four quarters? Got you. Yeah. So. But this year, okay, this year is only two months left. I think for equipment company, those numbers, whatever we could have, is pretty much that kind of levels. I think we will pretty much somehow meet the market's expectation. But I think people should look forward for the 26th. Because currently, all the orders, including metrology, system-level testers, the current order, customers are all asking for 26th already. Yeah. Agreed. Agreed. Thank you. And since we already see some strong demand from the 26th, do we confirm the agreement or key component shortage from outside? Some of the critical components may be a little bit wrong in time, but currently, not seeing any shortage. Okay. I understand. Yeah. And just to follow up on next year, you just highlighted a major new factory. If you're looking to the factory footprint, how much percentage bigger than our existing factory? Growth base-wise? I think growth base-wise, we can probably at least 50% to double. Oh. Yeah, but we are based on growth base turnover. It doesn't mean all we could fully occupy at first stage. We gradually extend those base phase. But we're glad to have this second phase. As you could see, foundry definitely you always need to maintain certain level of inventory to support whatever equipment they wanted. And then as you could see, once we sell short of those Delta and the Lite-On's demand, we're willing to build out a special growth base to them. Yep. Understood. Thank you. I don't have any questions. Okay. Thank you. Currently, if there are no questions, so ladies and gentlemen, we thank you for your participation in Chroma's conference. There will be a webcast replay within an hour. Please visit www.chroma.com.tw/investor/index under the investor relations section. You may now disconnect. Thank you again and goodbye.