The investor conference is about to begin. Good morning and good evening, ladies and gentlemen, no matter where you are. Welcome to WIN Semi's Result Webcast Conference for the Q1 of 2023. My name is Joe Chen, the Spokesman and the Associate Vice President of Finance in WIN Semiconductors. Joining me today on today's call is Steve Chen, General Manager of Corporate Administration. Today's call is organized into three sections. First of all, Steve will comment on the company's result and provide brief guidance for the Q2 of 2023. Secondly, I will go through the financials in details. After that, we will open to the floor for Q&A. Please freely submit your questions in the input box on the webcast window throughout the conference. Before we begin, I would like to draw your attention to the safe harbor notice on page one of the presentation slide. Please note that this presentation contains forward-looking statements. These statements are based on our current expectations. Actual results may differ materially from our expectations, the company undertakes no obligations to update these forward-looking statements going forward. Let me hand over the call to Mr. Steve Chen, General Manager of WIN Semiconductors. Thank you, Joe. Welcome everyone. In the Q1 of 2023, even the traditional off-season effect and the continued inventory adjustment of the smartphone industry, WIN Semi's consolidated revenue was TWD 2.9 billion and down 19% quarter-on-quarter and down 49% year-on-year. Although the Q1 revenue was better than our previous expectation, our gross margin and operating margin declined to 11% and -21%. Respectively, as our capacity utilization rates further declined to 20%. Net loss for the Q1 was TWD 479 million and EPS was TWD -0.95. Looking at the product mix in the Q1, revenue for all product segment each declined by 20%-30% quarter-on-quarter, mainly due to the off-season effect and weak consumer demand. While the progress of the smartphone inventory destocking remain unclear, we have received rush orders from multiple Android customers since the end of last year. We have also seen gradually order recover from customers entering the Q2. As a result, we believe that customers' inventories are moving towards a healthier level. Year to date, the war between Russia and Ukraine is still ongoing and the pressure of the global recession is still impacting the world. Amid many near-term uncertainties, we maintain our strategy of cautiously expanding capacity but actively investing in R&D, as our view on the long-term growth momentum of the industry remain unchanged. Several international customers have not only adopt our latest generation HBT technology for 5G mobile communication, but also actively work with us on the qualification of the next generation HBT process. Meanwhile, in order to meet customers' needs of the integrated components, we provide filters for low, mid, and high frequency applications. We have developed GaN-on-silicon carbide technology and GaN-on-silicon 90nm process to fulfill the demand of millimeter waves for the 5G infrastructure. In addition, many customers are collaborating with us to developing optical application related to short wave infrared and the long wavelength lasers. Those technology could also be applied to the automotive lidar. These are our current R&D focus. Looking ahead to the Q2 of 2023, our revenue is expected to grow by low 30% quarter-on-quarter, and the growth margin will be around the level of mid-teens%. I will turn the call back to Joe. Thank you. It's our pleasure to present our financial results for the Q1 of 2023. Please refer the presentation slide. Remember this to take a look for the page two, the safe harbor notice. We're starting from page four, the revenue and the margin trend. Our Q1 2023 revenue was TWD 2.9 billion. QOQ was down 19%, YOY was down 49%. The gross margin for Q1 was become 11.4%, which is declined by 10.8 percentage point. Operating margin has become -20.8%, which is decline about 21.4 percentage point. The decline was mainly caused by. decline in capacity utilization rate, and in this quarter is down further down to, in Q1 it's down to 20% of the utilization rate from 30% of last quarter. The earnings, please flip to page five. The Q1 '23 net loss was TWD 479 million, which is the loss was increased about 198% QOQ. The EPS become TWD - 0.95. Compared to last quarter, I mean, Q4 of '22 was TWD -0.18. Please flip to the next page in page six. Page six, we take a look for the product mix. In this quarter, Q1 of 2023, the most of the product in product mix has a different level of slowdown. For example, like infrastructure, due to the macro economy, and making the weaker in demand. The infrastructure, what's going, also going down, it used to be more stable. The rest of the product in the product mix, most of them are related to the smartphone market, which is suffering by the traditional low season, in Q1. Next page will be, in page seven, we're gonna talk about the Q2 guidance. I think Steve has mentioned it, and I'm gonna repeat again. We expect Q2 2023, the revenue to increase about low 30s, QOQ. We also expect Q2 of 2023, the growth margin will be around the level of mid-teens. Now, we can quickly talk about the income statement for the comprehensive income statement for this quarter, Q1 of 2023. Before we begin, I still have to remind everybody this is under the unaudited basis and then the actual results should base on the CPA's report. In Q1 2023, the net revenue was TWD 2,860 million. The QOQ was down 19%, and the YOY was down 49%. The gross profit was TWD 326 million. Therefore, the growth margin was 11.4%. The operating expense was TWD 921 million. Due to we have more capacity and then more resources to support the R&D activity. A lot of customer use it, and also internally more projects on the R&D activity. Operating expense was taken go up to TWD 921. The operating expense ratio becomes 32% and because utilization rate going down since last year quarter- by- quarter. We used to be provide the OP ratio guidance about maybe 13%-15%, that kind of level, if the utilization rate is over like 60% or 70%, but it no longer applicable because of this kind of low utilization rate. We expect that, based on the past experience, of course, the operating expense keep going up with the company scale and the size. The operating expense pretty much in the range between TWD 8 billion and TWD 9 billion in this kind of range should be reasonable. The operating loss was TWD 595 million. The operating margin was - 20.8%. There is a non-op item was gain on TWD 39 million. The detail in the page 10 for your own reference. The income or loss before the income tax was a loss around TWD 556 million. There is an income tax benefit for TWD 77 million. Therefore, the net loss become TWD 479 million. The net margin become -16.7%. The EPS in this quarter was TWD -0.95. The return on equity in Q1 was a -5% due to the net loss. The approximate utilization rate in this quarter was 20%, which is down from 30% of last quarter. Depreciation expense in this quarter was TWD 1,077 million. The car tax in Q1 was TWD 536 million. That's for Q1, the income statement. The page 10, the non-op item, I leave it for your own reference. The page 11, the consolidated balance sheet. Okay. I'm gonna highlight a couple major items. First of all, the total asset was TWD69,115 million. The total liability was TWD35,026 million. The total equity was TWD34,089 million. In between, compared last quarter, I mean, compared, they at December 31st and March 31st, there's something like the bond payable, which is our ECB, which is we. The outstanding ECB because the ECB investor in Q1 of 2024, they have a put option. In Q1 2023, CPA has reclassified this item into the current liability to reflect the put option for the investor in Q1 2024. The current ratio was significant, go down to 96%. That's what happened. The debt ratio about remain around 50% up and down, which is in Q1, it's around 51%. Last quarter was 49%. It's pretty much close. Finally, the common stock remained the same, 4,239 million. The book value per share was TWD 76.16. That's pretty much what I have for financials in Q1. Now we can begin the Q&A session. Please submit your question in the input box on the webcast window now. Okay, well, there is a question which is in our Mandarin section has several investor asking. We have explained about the revenue contribution there is at 7% coming from our 100% owned investment which is holding the offshore listed company. The due to the evaluation gain, so it contribute the revenue around 7%. That's why, the QOQ went down to 19%, but originally, when we announced a monthly revenue, it went down around 25%, 24%, something like that, or 25%, something like that. There is a different around 7%. Remember, the investment company holding the majority with the share of one of our China customers share, which is IPO last year. The evaluation gain will become the investment company's revenue. That's the reason why. Because of that, the gross margin, if we exclude this kind of item, the gross margin will become 5% from the existing 11.4%. That's something in last session of Mandarin session of earnings call of several investor have asking, and I would like to highlight it in the very beginning. Okay. There is a question about the ASP difference in this quarter and 1 years ago. How's very big difference here? I think, if maybe, we can see our presentation for the product mix. We can see compare this quarter and a year ago, actually, the cellular PA portion is dropped from 50%-55%, dropped to 25%-30%. It's almost dropped 50%. At the same time, the infrastructure percentage is increasing 10%. I think that's the reason why, if you compare ASP between two quarters, just very simply divided by our utilization rate and our capacity, you will got a very higher ASP compared these two quarters. Yeah. I think we can say basically the increase about the ASP is because of the product mix. Thank you. Okay, there is a investor question asking about the increase in OpEx. I think in Q1, the OpEx, no matter the promotion, no matter the administration or R&D, they all increased in Q1 compared to last quarter. We see that the majority coming from R&D, the R&D expenses is more than 50% of the total OpEx. We also see more activity in R&D in the recent quarter due to the lower utilization in our fab and We can provide more resources to the customer and also the R&D business units. There is a this is what happened. Thank you. Okay. Okay. I think the investor, we see some question is about how's each application situation in Q2. I think as I just mentioned earlier, the total revenue from Q2 were increasing more than 30% in this quarter. I think it's mainly coming from the cellular and Wi-Fi. because like we say, we already see some demand come back from the smartphone-related product. For the Q2, I think the cellular PA and Wi-Fi PA will have better performance than other. Optical and infrastructure may be a little weaker than these two segments. Thank you. Okay. I think there's a question investor wants to know a little better picture about H2 year. I think, yeah, although we see some recovery from the Q2 right now, but as we always mention, actually, the lead time for our product in most of the case is only around like four to six weeks. It's really hard to say how the H2 situation right now because of most of the situation our customers, it's just based on the lead time to place the order. I think at this moment, it's really hard for us to gather enough exact order from the customer for H2 year. I think for the H2 year, we will as usually, we will quarter by quarter to report to all investment at the conference call. Thank you. Okay, there's a question, is asking about how the difference between our guidance for Q1 and the real margin is cost of the our investment adjustment. I think. I think basically, first, I think the problem is a little different quarter by quarter. In Q1, actually, the infrastructure percentage is dropped around like 5%. It definitely will impact our margin a lot because the, as everybody know, I think infrastructure is the highest margin of our product. At the same time, we got a very low utilization, 20%. Actually, every different in the high margin business will enlarge the impact of the margin. Thank you. Okay, there is a question, has some question about how WIN Semi will control our cost at this low utilization rate period. I think, from the OpEx point of view, maybe it's not that easy to explain that because, as a foundry, a lot of our cost is coming from the fab operation, not for OpEx. The last mainly, if we can control better about our manufacturing cost, I think that will have a better benefit with our margin, so very big factor. I think, definitely, we will more focusing how to control our manufacturing costs at this low utilization period. Also, at the same time, definitely we also have, try to control our OpEx. As you know, in OpEx that, maybe 50% or more than that is coming from our R&D. As we just have our major comment at the previous time, that, we don't want to low down our R&D activity, even though in this low demand period, because of the, for the future, demand growth. If we don't invest the R&D right now, we definitely will lose the opportunity in the future. Yeah. Beside the R&D, I think no matter our sales expense or other administrative expense, I think we will, put our eye on that and make and, control that. Thank you. Okay. There's a question asking about do we any update for our CapEx this year? I think in last earnings call, we have released the CapEx guidance for the whole year 2023, which is, we expect that the CapEx will be around TWD 4 billion plus and minus for the whole year, which is a significant went down from the past 2 years-3 years. I think the major task will be our existing fab, no matter the machine and equipment maintenance and also the facilities maintenance. The second one will be our new fab in Southern Taiwan Science Park in Kaohsiung, Luzhu area. Because we're still working on the first main building construction, and we need to finish the construction for the main building, first main building. Otherwise, it gonna... Well, if we stop it, stop the construction at this moment, then when the any kind of recovery, the restarted the construction will be not easy and wasting a lot of resources and money. inish the main building's construction first and then stop there and then wait and see until the recovery of the business. That is about the CapEx. At the same time, our depreciation expense for the whole year of 2023 also remain the same, our view. It will be less than 10% of increase. Most of that is coming from the new equipment install in the past one years. So, will be single digit increase for this year's of this depreciation expense. That is the CapEx and the depreciation. Thank you. Okay There's some investment. Investor want to discuss about competition, especially from China. I think right now because of the trade war, definitely China government right now is try to build their own semiconductor supply chain domestically. I think definitely our compound semiconductor also will be have some impact about that in the future. As we discussed with a lot of investor in before. Our WIN Semiconductors is also more focusing on the advanced technology with future to our customers. I think most of our revenue and our profits coming from our advanced technology, not our legacy technology to our process. Yeah, I think in the future, China foundry maker, they definitely will have some product in the market and, but as we just mentioned in the major comments, the 5G is the back communication space also upgraded year by year. WIN Semiconductors, we're more focusing on collaboration with all the tier one customers to making the new advanced PA launch in the future to gain the better profit in there. For the PA market, I think the most of the profit or profitable portion is coming from the higher frequency and high-end PA. Yeah. For the low-end and low-end PA and even some medium PA, definitely, I think in the future that will face a lot of competition in China. Fortunately, I think WIN Semiconductors has well diversified our PA market. I think the share of the high-end PA, WIN Semiconductors is still keeping a very good shares in there. Thank you. There is no more new question. We're gonna wait for one minute, then finish the call. Thank you. Okay. As there are no further question, then thank you very much for your participation in WIN Semi's conference. There will be a webcast replay within hours. Please visit www.winfoundry.com under the Investor Relations section. You may now disconnect. Goodbye.