Welcome to AUO 2024 first quarter financial results conference. Before the meeting starts, all lines are being placed on mute. After the presentations by the management team, there will be a Q&A session. Now I would like to hand over to Ms. Julia Chao, AUO's IR officer. Thank you, ladies and gentlemen. Good afternoon. I'm Julia Chao from AUO's IR department. On behalf of the company, I would like to welcome you to participate in our 2024 first quarter financial results conference. I'm joined by four executives: Paul Peng, Chairman and Group Strategy Officer; Frank Ko, CEO and President; Chien-Pin Chen, Senior VP of the Display Strategy Business Group; and Ben Tseng, our CFO. The agenda of today is as follows. First of all, Ben will go over our 2024 first quarter financial results and provide you with guidance for Q2 later on. Paul and Frank will provide you with opening remarks later on. We will move into Q&A session. We have collected questions from analysts before the meeting. We will address those questions in the first part of the Q&A session. Afterwards, if there are still more questions, we'll open the line to take more questions. So that was our agenda. Before I turn over to Ben, I would like to remind you that all forward-looking statements contain risks and uncertainties. Please spend some time to read the safe harbor notice on slide 2. Now I'm turning over to Ben, our CFO. Good afternoon. I would like to quickly go over our 2024 first quarter financial results. In Q1, net sales came in at NT$59.5 billion, down by 6% QoQ. In the display business, the TV segment enjoyed increased demand and increased shipments. At the same time, notebook panels experienced slower demand and slower shipment, causing revenue in Q1 to drop Micro LED. Meanwhile, energy business posted lower revenue due to the timing of revenue recognition of our engineering projects. As for our profits, amid the lower revenue, our gross profit went down QoQ to TWD 1.96 billion. OP loss was flattish at TWD 4.9 billion. Net loss attributable to owner of the company was TWD 3.5 billion. EBITDA margin was 5.8%. Moving on to balance sheet. In Q1, our cash and cash equivalents were TWD 87.7 billion. Long-term and short-term debt combined was TWD 118 billion. At the end of Q1, our gearing ratio was 19.4%, up slightly QoQ. Inventory amount was TWD 29.4 billion, flattish QoQ. Inventory turnover was 46 days, which was a healthy level. Moving on to cash flow. In Q1, we generated from operating activities TWD 1.6 billion. CapEx was TWD 8.3 billion. Net change in debt was NT$ 6.1 billion. Revenue breakdown. TV gained two percentage points to 23% thanks to stronger end demand and the TV panel area shipment increase. Mobile PC and device experienced bigger changes during the quarter, losing five percentage points. In Q1, notebook panel shipments decreased by 20%. Automotive display gained two percentage points. As mentioned, this segment is a steadily growing business. Moving on to next slide. Shipments in ASP by area. Notebook area shipment decreased during the quarter, causing the ASP to drop by 5.7%. Meanwhile, the increase in TV panel shipment helped drive up area shipment, growing by about 4% QoQ. For our Q2 guidance, based on our current business outlook, factoring into the impact from the earthquake on April 3rd, we expect the display business area shipment to be up by low to mid-single digit percentage points QoQ. Shipment of ASP denominated in dollars is projected to be up by low single-digit percentage points QoQ. Meanwhile, loading rates will be dynamically adjusted based on market conditions. Moreover, in terms of our vertical business, thanks to BHTC's consolidation into the company since Q2, we expect to see strong double-digit percentage points QoQ. And the vertical business contribution to our revenue will exceed 20%. So that was a quick update on our Q1 results and outlook for Q2. Before we proceed to questions and answers, we will have Paul to provide you with an opening remark. Ladies and gentlemen, good afternoon. Thank you for participating in our Q1 conference. In Q1, we saw steadily improving revenue month after month. We benefited from growth in the automotive and vertical business segments. For this year, we maintain our projection. We believe that the first quarter was the bottom of the year. After the first quarter, we will likely see our revenue and performance improving quarter after quarter. We will soon return to seasonal changes of the industry of panels. Q1 revenue, as Ben shared with you, was negatively impacted by slower demand for notebook panels, for which we were seeing lower revenue contribution. Also in Q4, we had more recognition of engineering projects revenue, but we had less such recognition in Q1, which had a bigger impact on our revenue as well. However, we have been committed to biaxial transformation. In Q1, we have been flexibly adjusting our product mix to improve our business performance. Our operating profit improved slightly, and loss also narrowed. Our financial structure remained quite steady. Inventory turnover was 46 days. Gearing ratio was 19.4%. Looking ahead at Q2. Actually, on April 2nd, after several months of efforts, we have completed the acquisition of BHTC, making BHTC our fully-owned subsidiary. We welcome BHTC to join the big family of AUO. Going forward, we will work on consolidation with BHTC and creating synergy between the two entities. BHTC will start to make contribution to our revenues in Q2. In terms of our automotive business, commercial, industrial, and solar engineering project business, as well as other vertical business, we believe growth momentum will pick up in Q2. The vertical business will likely account for more than 20% of the company's revenue in Q2, which will be in line with our expected target previously. Although demand was slower for consumer applications and the visibility was also weaker than usual. However, the good news is inventory levels at channels have been quite healthy, and brands have been restocking in advance of the upcoming higher seasonality for the second half of this year, in addition to the upcoming sports events such as Olympic Games, Euro Cup. The IT segment will likely get a boost from the expected replacement cycle driven by the advent of AI PC and commercial applications. Currently, from brands to the panel market, companies are expecting AI PC to provide a boost to the growth of PC market. However, on April 3rd, Taiwan had a very severe earthquake. Fortunately, our people at AUO have been safe and sound. However, the earthquake caused some damages to our fabs in the northern part of Taiwan, which would inevitably cause some impact on our operations in Q2. We are doing our best to allocate our utilization rate and capacity to fulfill our customer orders. We are repairing the damages at our fabs, and our fabs are resuming operations gradually. We hope that the operations will become normal in the next month or so. I would also like to take some time to share with you the updates we've made in Micro LED, which is a key part of our Go Premium strategy. At the Touch Taiwan show, which concluded last week, we demonstrated Micro LED applications and solutions, and we have received avid interest from visitors at the show floor. We demonstrated our automotive and many other applications, such as naked-eye 3D Micro LED display and the world's largest transparent display in a vehicle from transparent car window to display on demand, which is rollable display. Our showcases have won recognition at the exhibition. In terms of micro LED, we have been shipping starting from the end of last year in the wearable segment, and we will continue to expand our production. In terms of automotive segment, we are opening up new projects with several customers. But of course, in the automotive segment, it usually takes two to three years' time to ramp up production. But at AUO, we are seeing our mass production progress picking up, and we are actually making the biggest pace in the entire panel industry. And we are making our preparations for the production line for Micro LED applications. Of course, there have been some doubts about Micro LED outlook due to a certain company's decision with regard to Micro LED technology. But giving up on the company's R&D plan doesn't mean that it is giving up on Micro LED technology all alone. Because in terms of Micro LED, we have been investing in the technology R&D for more than 10 years, and we are seeing our exhibition and our applications winning recognition from international clients at CES this year. And we have many more customers coming to us talking about the possibility of developing new applications. So we think while Micro LED is still being developed, we have been able to achieve meaningful collaboration with our ecosystem partners and our supply chain partners. And we are building production lines that can really churn out mass production results. So we think the technology is already mature, and we have released plans to lower cost. With that, we believe that the quality and the cost profile of our products will be able to improve, and we will be able to lower the costs of the Micro LED products very quickly so as to deliver mass production results. Because of this, I think in terms of Micro LED, Chinese companies will enjoy more integration in the production and development of Micro LED products and applications. Moreover, on May 30th, we will hold our shareholders' meeting. Due to the economic downturn last year, we posted loss for last year. However, our board of directors resolved to pay NTD 0.9 in cash dividend using our capital reserve. This is because we are committed to rewarding our shareholders. So we are upholding the same principle and hope that we will be able to turn profitable very quickly and deliver a better return to our shareholders. Moreover, in terms of macro conditions, the world has been developing at a different pace. Today, the American economy has been recovering quite well, but not so well in Europe. Moreover, in China, the automotive market and housing market have been going through a downturn, and the consumer activity has been rather muted there. But other emerging countries are delivering strong growth. Moreover, with the shadows of inflation, wars, and conflicts such as the Red Sea crisis, uncertainties remain. However, at AUO, we continue to be committed to maintain steady financial structure. And with the acquisition of BHTC, we will be able to expand our presence in smart mobility so as to expand our footprint in the market. Moreover, we will be able to extend our capabilities in advanced display technology into more applications. In addition, in other segments of the vertical business, we maintain our goal, which is to bring AUO to move forward, to make AUO to be much more than just a panel maker, but also a solution provider utilizing our core competency in the panel manufacturing business. So that was my quick update. Now, I would like to turn over to Frank, our CEO, who will provide you with more information with regard to our integration with BHTC and the plans in the automotive business. Thank you. Thank you, Paul. Ladies and gentlemen, dear analysts, I'm Frank. I would like to share with you some of the latest developments in our key businesses. Last time in the last quarter's financial results conference, I talked to you about the fact that we will provide you with more updates when we complete the acquisition of BHTC. Today, I'm happy to report to you that in the beginning of April, we have completed the acquisition of BHTC, and this company has become a fully-owned subsidiary of AUO. Today, as we speak, we are driving consolidation between the two entities. Going forward, the original CEO of BHTC, Michael Jaeger, will continue on as the CEO of the company, and he will be leading BHTC's consolidation with AUO. The two companies will become one team to serve our customers. Of course, one very important aspect is to expand AUO's footprint in the smart mobility ecosystem, and we will also seek to utilize the resources of both companies to achieve optimal allocation of resources. In particular, we hope to create synergy in three aspects. First of all, our product and service reach. BHTC is a very important provider in the segment of human-machine interface in the automotive segment. It is able to provide mechanical control knobs and such knobs alongside displays as well as climate control systems. It has built up a comprehensive product line. In recent years, the company has been using increasingly advanced digital technology. Before the acquisition, BHTC was an increasingly important customer of AUO. In the area of the cockpit, especially in the front driver's cabin, display is being combined with mechanical control interface to provide prominent human-machine interface. In terms of display for the automotive segment, sensors, mechanical components are being integrated into the mix. With the acquisition of BHTC, AUO is able to build more intelligent cockpits for vehicles and to provide more added value to automotive displays. In our development of smart cockpit, the completion of the acquisition of BHTC is a major step. We have built up a good foundation. In terms of R&D going forward, we will utilize the R&D resources and vitality of both sides to build up on our product expertise to deliver new display technologies into more products and possibilities so as to accelerate the pace of development and expand possibilities. The second aspect is key customer relationship management. BHTC has been working mainly in Europe, servicing European customers. As for AUO, we have built a solid customer base in East Asia and America. In terms of our customer profiles, we too can complement each other nicely. For the past few years, AUO has been using our technical expertise to expand into automotive display technology platforms. We have transitioned from a pure panel provider to a tier one automotive display solution provider. Of course, the completion of BHTC will help strengthen our collaboration with more car makers in the future. We hope that we will be able to reinforce our positioning in the tier one segment so as to expand our collaboration with global car makers. As we transition into more diverse field applications, we hope to become a more prominent automotive display solution provider, and of which smart mobility will be a key aspect of our business. The third aspect is manufacturing presence. As you can see on the slide on the lower bottom, on the left bottom, in terms of the manufacturing locations around the world, in the automotive business, you need to have a wide coverage to serve global car makers around the world and also to meet the demand for local production and local services. BHTC has manufacturing facilities in China, India, Bulgaria, and Mexico. And these factories have been certified by international car makers. So the completion of acquisition of BHTC will help accelerate our footprint in the global manufacturing business so as to achieve our objective in serving car makers around the world. At the same time, the collaboration of the two companies will help us to reduce upfront investment for both parties and also help us to expand our economy of scale and bring more benefits in the area of operating efficiency and purchasing power. So these three aspects are the areas where we hope to see more synergies created through the acquisition and the consolidation of BHTC into the AUO. More importantly, we will prioritize the demand and requirements of the car makers around the world. Besides producing products locally, we hope to deliver more comprehensive, high-quality smart cockpit solutions and more innovations. With the consolidation, we will gain a stronger footprint and niche in the industry. We will utilize this advantage to become a more important and prominent smart solution provider to car makers. So this is a very important aspect of our strategy in the development of display HMI and the automotive segment. Last week, at the Touch Taiwan in Taiwan, we demonstrated our capabilities in this aspect. I think many visitors have been able to see the results that we are able to deliver. We demonstrated at the show floor our award-winning products and solutions at CES. At the same time, we invited BHTC to join us in the Touch Taiwan exhibition as well. Some of you may have already seen BHTC's products in your vehicles because this company has been a key player in providing some of the cockpit solutions to international car makers. The products that it provides include automotive HMI, climate control systems. I think through the exhibition, we are bringing to the market firsthand experience in how the one team between BHTC and AUO will play out and it is hopeful that our collaboration will help bring stronger synergies going forward. Our goal is to become a leading provider in the smart mobility e-service solution space. We also hope that the existing automotive business of AUO plus BHTC will maintain revenue growth in the double-digit range. Going forward, we hope that our automotive business as a whole will account for more than 25% of our company's revenue. Why do we want to achieve such a target? Because automotive business, compared with other consumer applications, provides extended order visibility and, of course, better margin profile. So it is able to help us offset the fluctuations in profitability amid the panel industry's cyclicity. So I think this is a very important aspect of our revenue growth. Now, about Touch Taiwan, let's have a review. Besides demonstrating new technologies and applications and besides showcases of smart cockpits, a big highlight of our Touch Taiwan exhibition is that we are demonstrating our vertical business solutions and products. In terms of vertical market, we have smart retail, healthcare, education, and enterprise solutions. A worth-noting highlight at Touch Taiwan this year was our smart retail solution for which we leverage a wide array of LCD display technologies and applications for the use of retail settings. More importantly, we are incorporating other offerings such as electronic shelf labels for retailers. So at the show floor, we were demonstrating not just display technology but also a full set of solutions catering to retailers, providing them with offerings for advertising, in-store promotions, and discount notifications. So this is a full set of smart display management and operational systems helping to bring bigger benefits to retailers in their management and their sales operations. Of course, by doing so, we hope to expand AUO's ecosystem in the market. Before Touch Taiwan this year, we signed an MOU of collaboration with E Ink on large-size colored e-paper display. E Ink and AUO have been partners with each other in the supply of TFT backplates. And this time around, we are not only providing TFT backplates to E Ink, but we are also making large-size colored E Ink displays for the company as we join forces with each other. The E Ink display will be able to accommodate demands in indoor retail settings to be a replacement for paper posters. Under the global trend of ESG and labor shortage, the capability to utilize digital solutions and energy-efficient solutions such as these will provide viable solutions to the challenges that the world is facing. It also provides important business opportunities for us. So we are very happy that we are able to engage with such an ecosystem partner. By joining hands with E Ink, we hope to develop further in the smart retail application space. To sum up, I think at Touch Taiwan this year, visitors have been able to feel and see firsthand that AUO has been more than just a panel provider. We are now a solution provider in new technology and in automotive solutions. In terms of solutions and new technology, we have been treating them as very important growth segments for us going forward. Again, we are transitioning from a panel provider to a company that is able to utilize core competency in panel manufacturing technology in various field applications. So this is our goal. Thank you very much. Thank you, Frank. Now, we would like to proceed to questions and answers. For the first part of questions, we will address the questions that we have collected previously. The first question is related to our acquisition of BHTC. Will the acquisition of BHTC affect our relationship with conventional Tier 1 customers? And how will this impact the competitive landscape between AUO and other industry panel makers? Frank, would you please? As a Tier 2 automotive solution provider, AUO has been building longstanding partnerships with Tier 1 suppliers. Due to the partnership, we understand that displays are getting increasingly used in the cockpit. Cockpits are getting more displays and larger screens of displays, and they have actually become a new selling point for vehicles. In recent years, due to the recognition and recommendation of car makers, we have many Tier 1 customers that are working with us. We are building some hybrid partnerships with Tier 1 suppliers. Customers would come to talk to AUO. They would have co-designing with us. And at the same time, they would rely on Tier 1 suppliers to provide assembly services and local services. And we continue to maintain very strong strategic partnerships with Tier 1 suppliers. Thank you, Frank. The second group of questions are financial-related questions. First up, about utilization rates. Our Q1 loading rate was slightly higher than 80%. In Q2, we will continue to dynamically adjust our loading rates based on market conditions and our product mix. Depreciation and amortization amount was NT$ 8.4 billion in Q1. Our 2024 D&A amount with the inclusion of BHTC since Q2 is expected to be NT$ 34 billion. CapEx in Q1 was NT$ 8.25 billion. Our CapEx for the entire year of 2024, again, with the inclusion of BHTC since Q2, will be no more than NT$ 33 billion. Those were financial-related questions. Next, about display market updates and outlook. The first question that we have is, how would sports events drive TV sales? James, would you please? Ladies and gentlemen, good afternoon. In the TV segment, I think everybody is now preparing for this upcoming sports event since June this year. There will be the Euro Cup, Copa America, and the Olympic Games. Moreover, in response to the Red Sea crisis, which prolonged freight transportation time in Q1, many brands and channel operators started to restock, which helped to boost TV demand in Q1. We are expecting that the upcoming sports events will help drive the sales through of TV set sales that are large-size and high refresh rate. In the IT segment, after COVID, the market has been going through adjustments for two years. Today, the inventory levels have been digested nicely. The PC market has regained YOY growth in Q1, and customers have been replenishing their inventory levels. Today, with higher demand for gaming applications and the upcoming replacement cycle and the demand for AI PC models as well as the end of life of Windows 10 next year, we are expecting the IT market to regain momentum gradually. Today, the consumer market will likely see stronger demand ahead of the commercial segment as enterprise capital spending remains quite conservative. The commercial segment will likely recover after the second half. The next question is about the inventory levels for TV and IT products at channels. James, would you please? In the TV segment, companies are preparing for the upcoming sports events. Currently, inventory levels at channels are slightly higher by one week or two weeks, but they remain at healthy levels. In the IT segment, which has been going through inventory corrections for two years, the inventory levels have been very stable at the moment. In Q1, customers started to replenish their stocks. Today, TV and IT segments are seeing channels having healthy levels of inventory. James, you talked about AI PC. Could you share more with us whether you think AI PC will drive the demand for notebook products and will panel makers provide more added values in that aspect? I think PC makers have high expectations for AI PC applications. Brands are releasing new AI PC models, and more models will be released starting from the middle of this year all the way to the beginning of next year. AI PC will require high-performance NPUs, which will consume more power. At the same time, notebook products would need to maintain long battery power up to more than 10 hours of battery endurance and slim form factor. This means that all the components would need to be slimmer and more power efficient. Of all the components, display is probably the biggest consumer of battery power in a notebook computer. We're also aggressively working with our customers to provide high-power efficiency LTPS panel. This kind of panel, compared with conventional panels, is able to save up to half of the power consumption and save up to 30% of power versus OLED panels. This is why LTPS will be a priority of ours as we drive AI PC application growth. We have many projects that we are conducting designing with our customers. Ladies and gentlemen, we will now open the line for you to pose questions. To ensure equal opportunity for each participant, please remember to limit the number of questions to three per call, and please state them all in one go. Thank you. The first question comes from Diana Zhang from UBS. Please go ahead. Management team, good afternoon. I'm Diana from UBS. I have two questions. First of all, it's about BHTC acquisition. Could you provide us some data points including its 2023 revenue? I think it has already released its revenue results. Could you also talk about the profitability level and the one-time impact on AUO in terms of goodwill or OPEX? Secondly, regarding the automotive segment at Touch Taiwan, you demonstrated many new products. You also mentioned localization, localized manufacturing. Could you also talk about your future capacity utilization planning and the CapEx plans as well as other financial-related plans such as your objectives for automotive and vertical business? Any objectives? Thank you. Hi, Diana. I'm Ben. BHTC's 2023 revenue was EUR 634 million. GP was EUR 164 million. OP was EUR 15 million or so. But we place more importance to OP plus D&A, which are driven by cash flows. In 2023, the company's amount was EUR 77 million-EUR 78 million, and the sales margin was about 12%. Generally speaking, the company is a quickly growing company, so this means that it will spend a higher OPEX in business development and R&D. At the same time, it is delivering stronger sales growth momentum. So this is an aspect that we place more importance to in terms of OP plus D&A performance as well as its sales growth prospects. You asked about the impact on AUO. In terms of our balance sheet, based on our 2023 figures, the inclusion of BHTC will add 5 percentage points to our total assets and 6 percentage points to our total liability at the same time. So that was a perspective in terms of our balance sheet. Hi, I'm Frank. To your second question regarding the automotive business, with the inclusion of BHTC, we hope to drive more synergies. I talked about three aspects. In terms of the new product development, in addition to applying our automotive displays' expertise into more settings and applications, we are seeing displays getting a bigger screen and are using bigger numbers in an automotive cockpit. So today, displays have extended from the conventional space, which is the CID in the center of the cockpit in the driver's cabin, all the way to AC and dashboard on the left-hand side, and all the way to the right side of the cabin, which is the PID, passenger information display. These aspects mean that displays are taking a bigger position and importance in the space of the cockpit by integrating displays with the conventional strength of BHTC. And we are also utilizing digital means to provide comprehensive product plans. By integrating digital with mechanical means, which is the display plus mechanical control, we will be able to extend our technologies and also to bring Micro LED into more cockpit scenarios and also to drive mass production at a faster speed. Going forward, we will work with car makers and discuss with car makers to expand more Micro LED applications in the cockpit. This is also the applications that we demonstrated at CES and Touch Taiwan and the reason why we want the awards at CES, because for car makers, they also need a strategic partner that is able to engage in co-design with them. Compared with other conventional Tier 1 or panel makers, AUO claims a very unique position. That is, we have the expertise to co-design smart cockpit solutions with car makers. In terms of our international footprint, for the past few years, AUO has been developing in North America to expand our manufacturing base. With the acquisition of BHTC, we will be able to land our presence in North America and also through the company's fab in Mexico while at the same time developing in the North American market. The next question comes from Lisa from Yuanta Securities. Please go ahead. Management team, good afternoon. I'm Lisa from Yuanta. I would like to follow up on a previous question. Would you please share with us whether there will be any goodwill amortization from the acquisition of BHTC, and how much will the amortization be? In addition, I think BHTC has a big R&D staff. Will that have a big impact on your expenses and your costs going forward? The second question that I have is about the recent earthquakes. Recently, we have frequent earthquakes happening in Taiwan. During earthquakes, would your manufacturing machines have preventive shutdowns, or are they continuing to operate due to the fact that they have to run production around the clock? Will that also cause damages? Could you provide more cover around this? Moreover, you talked about utilizing the resources from other fabs to accommodate the requirements and needs of your customers. Could you also share with us the one-time impact on your operations? The other question that I have is relating to electricity rate hikes. While you are not using as much electricity as foundry companies, are you deploying any solutions to cut down on your electricity consumption? And what do you expect the future electricity rate hikes going to be on your business? Hi, Lisa. I'm Ben. I would like to answer your first two questions relating to BHTC. First of all, when there's an acquisition, there will be some premium involved, which will call for PPA. And for the amount of PPA, we will have to wait for the assessment of our accountants to know the exact numbers. The purchase price is EUR 404 million, and the book value is EUR 140 million. The gap will call for PPA. How much of it will be amortized? However, it's still subject to assessments by accountants. And our accountants are going through the operations in various fabs, and we expect to see some results by the end of this year. Now, about the R&D expenses. Yes, as I mentioned, because this company is a rapidly growing company, it is securing Tier 1 business. And in the beginning of the development cycle, it will have to invest more in R&D and sales business opportunities development. At the same time, because of these efforts, this company has been able to create strong growth momentum. Frank has talked about the aspect that we hope to create synergies. One aspect is utilizing the R&D resources of both entities to create more potential and to make the best out of the combined R&D resources, which will be a very important aspect for us going forward. Hi, Lisa. I'm Paul. About your question on earthquakes. What happens when an earthquake strikes, such as the earthquake on April 3rd, which was a very high-magnitude earthquake? What happens is that when an earthquake hits a certain magnitude, all the supplies of chemicals and gases would be cut off, and all the staff inside the fabs will be evacuated, and they would not return to the fab only after checks have been conducted to make sure that nothing is broken down. It has happened where an earthquake hits a certain level that the operations would have to be suspended temporarily. On the day of the earthquake on April 3rd, we ran through the entire SOP. Most of our fabs evacuated the staff, and we would have to recover our operations for the places where we suffered damages. Although they were aftershocks, we haven't seen scenarios where we had to evacuate the staff further. There were perhaps one or two facilities where we have to evacuate our people there, but they were able to recover the capacity very quickly. So we don't see major production impact on our business because of that. The next caller is Brad Lin from Bank of America. Please go ahead. Thank you, management team, for taking my questions. I have two questions. The first one is also relating to BHTC. I think BHTC has been steadily delivering a gross margin of more than 40%. However, for the past 10 years, its OPEX has been nearly 40% or so. How much did R&D account for? With the consolidation, would you expect to combine the R&D forces and effectively lower the expense ratio? Also, in terms of other aspects of SG&A, would you expect to further lower the OPEX? After all, the company's net margin hasn't been really solid. So I would like to know your thoughts on this. Would you expect to see some improvements through cost reductions or increasing the scale? I will ask my second question later. Hi, I'm Ben. On your question, I would provide some numbers. Yes, indeed. In terms of gross margin, the company has seen some variations, mainly due to the changes in the company's product mix. In the past, it has been focused on climate control. In recent years, it has been shifting its focus to HMI, with the percentage of HMI becoming larger than climate control. So this is quite similar to what we have gone through. In the beginning of our entry into a new technology area, we will invest more, and at the same time, that would affect our gross margin. So the investment in the initial stage would be higher in the growth stage in order to boost sales growth going forward. In terms of OPEX, as mentioned, of course, in the beginning, you will need to invest in more resources, and outreach R&D is a very important aspect. So is product development and sales operations. Other SG&A expenses would also mean that after the consolidation of the two entities, we would have a bigger synergy and a bigger combined business volume. So hopefully, we'll be able to lower the amount. It will depend on how we execute our plan to achieve better results. Hi, I'm Paul. So Ben just talked about financial numbers. I think the two teams have been working on consolidation relentlessly. In terms of our business and our product lines, I think the two companies are highly complementary with each other. We should be able to develop new projects very quickly. However, in the automotive segment, while we think the business outlook would be quite strong and the designing cycle would last about two to three years, that's the nature of the automotive business. But at the same time, BHTC has strong growth momentum to begin with. And in terms of our cost, we have been very strong in controlling raw material purchasing prices. So with our strength in cost control, we do believe that visible results will happen out of the consolidation. Thank you, Paul and Ben, for your answers. We also hope that we will be able to see cost improvements very quickly and revenue increases in the next two to three years. Now, about my second question, it is related to display business. We're seeing many Chinese panel makers producing on demand. Is AUO going to follow this trend? Or as other companies produce their products based on demand, you will make your own judgment when prices become higher? Moreover, in recent years, TV shipments have been quite steady. In the first half, many brands are replenishing their stocks in advance of the upcoming sports events. I wonder would that mean that we will prepare for a stronger second half? Thank you. Hi, I'm Paul. At AUO, we have been committed to the principle of producing our products based on the orders that we have. We seek to minimize our inventory levels. We would achieve optimal product mix based on our order streams. So this would probably make us quite unique because we do not accumulate inventory, and we seek to achieve optimal product mix optimization based on the orders that we have in hand. As for the second half outlook, yes, indeed, currently, the visibility is not that good. However, we think that for this year, the panel industry will resume its normal seasonal patterns. And the bottom is Q1, and we remain to have expectations for the subsequent quarters. But of course, we would pay close attention to the changes in the macro conditions. Thank you. The next caller is Karen Huang from Citi. Please go ahead. Management team, good afternoon. I'm Karen from Citigroup. Thank you for taking my question. I'm having two questions. First, about your automotive segment. You've talked about that you hope to maintain double-digit growth for the automotive revenue. Could you provide us some cover around your revenue growth prospects for the automotive panels this year? Have you taken into account the revenue contribution of BHTC? As the inclusion of BHTC will likely boost the volume. Also, about the effects of earthquakes. In your Q2 guidance, you have factored into the impacts of earthquakes. Could you provide us with some more quantitative numbers? Thank you. Hi, Karen, about your question on the automotive business revenue growth. Regardless of BHTC, in terms of the automotive revenue of AUO, between 2022 to 2023, we have seen our revenue growing from NT$ 30 billion to NT$ 35 billion. And in 2023, we reached NT$ 44 billion. For the past few years, we have been delivering double-digit growth. This year, our existing automotive business is likely to post double-digit growth, and the revenue will exceed NT$ 50 billion. This is thanks to our accumulated experiences and our efforts in the automotive segment for the past few years. It's also attributable to our increasingly close collaboration with car makers in recent years. With the inclusion of BHTC, we expand our coverage to the climate control and display HMI. So we believe the revenue contribution will increase. About the second question on the impact of earthquake. Well, actually, the impact in the form of quantitative figures, it is being adjusted dynamically. We conducted a quick review of our capacity allocation, and we quickly responded to the earthquake by having discussions with our customers in how we're going to deal with the impact of the earthquake. And we continue to refine the plans and adjustments in how we can adapt to the earthquake and its aftermath. Thank you. Ladies and gentlemen, we will now take one last question. The last question comes from Derek Yang from Morgan Stanley. Please go ahead. Management team, thank you for taking my questions. I have two questions. First of all, in your guidance for Q2, you mentioned that shipment is expected to be up by low- to mid-single-digit percentage points QoQ. In terms of unit shipment, could you provide some projections for your main applications such as TV monitor and notebook panels? Maybe provide us with a ranking of their shipment volume. The second question is relating to your Micro LED strategy. You have exhibited many Micro LED products at Touch Taiwan. What is the revenue contribution of your Micro LED business? What is your goal for the next three to five years for the Micro LED business? Thank you. Derrick, Ben here, for your questions, first question on guidance. Actually, we have been using area shipment as a part of our guidance projections. You may be interested in knowing the changes in the revenue contribution. So I would like to provide you with some idea. The automotive segment is a steadily growing business for AUO. We expect to see steady contribution from automotive displays in Q2. And with the inclusion of BHTC, we expect to see bigger revenue contribution from our vertical business in Q1. Our solar PV module business and EPC engineering projects had weaker performance, and we expect the performance to strengthen in Q2. So across various applications and business groups, between Q1 and Q2, they would have different levels of performance. So this is how it goes. As for your second question on Micro LED s revenue contribution. In terms of our product portfolio plans, we are developing various plans for Micro LED applications, and we are investing resources in these applications. We hope to develop new applications and many more of them. In terms of the new technology such as Micro LED, in the beginning, we focus on driving up the values for the applications. For example, transparent display is a very worth noting bright spot. It can be applied in TV, retail such as automotive transparent windows settings. These will be priorities of us going forward, and we have received strong responses from our customers so far. Moreover, in the areas of high-brightness niche applications such as nautical applications, Micro LED delivers high brightness, which makes it perfect for nautical sailing and outdoor applications. It also makes it a very good application for wearable devices because wearable devices normally have quick iterations, and we have secured more than one customer that is working on designing with us. Therefore, automotive, vertical, wearable, TV, and so on are the priority markets for us in terms of the mass production for Micro LED. Thank you. Ladies and gentlemen, this concludes our investor conference. If you have any other questions, please feel free to contact us at the IR department at AUO. Thank you very much for your participation. We'll see you next time.