Welcome to eMemory's fourth quarter 2020 webcast investor conference. Today, with us we have Chairman, Dr. Charles Hsu; President, Dr. Rick Shen; Vice President of Business Development and Spokesman, Mr. Michael Ho; Director of Investor Relations, Ms. Li-Jeng Chen; and Director of Finance Department, Ms. Teresa Ku. The format for today's event will be as follows. The first, eMemory's Chairman, Dr. Charles Hsu, will give an opening remark. Afterward, eMemory's President, Dr. Rick Shen, will summarize our operations in the fourth quarter and full year of 2020, followed by our outlook of our business. Next, Dr. Charles Hsu will introduce the topic entitled, Applications of Trust-based Security Solutions in Data Processing Unit. We will go into the Q&A session, where our management team will be ready to answer your questions. Please feel free to submit your questions in the input box on the webcast window throughout the conference. As a reminder, this conference is being recorded, and a webcast replay will be available within two hours after the conference is finished. Please visit the company's website at www.ememory.com.tw under the investor relations section. As usual, before we begin, we would like to remind everyone that today's presentation may contain forward-looking statements that are subject to risk factors associated with the semiconductor and IT business. Please refer to the cautionary statement as shown on page three of today's presentation. Now, I would like to give the floor over to eMemory's Chairman, Dr. Charles Hsu. Okay. Good afternoon, everyone. Thank you for attending our conference call today. To begin, I would like to recap our technology development and provide an overall view of what will drive our growth for the next five years. Our technology takes an average of 5 - 10 years from development to take off. Our first technology, NeoBit, which we invented in the year 2000, now has a penetration rate of 20% in 8-inch wafers, and is still accounting for 60% of our current royalty. As most of our technology platform has been established, and the newest tablet uses our fully developed IP, the RD resource required is limited. We foresee that there will be a second growth phase as our NeoBit has been employed into various automotive platforms, therefore, making room for its penetration rate to grow. Our second technology, NeoFuse, which is basically used for the 12-inch, which we have invented in the year 2010. It's the main driver in our current rapid royalty growth. We'll increase our penetration rate in 12-inch from the current 2% to at least 10% in the future. From our most recent royalty report, royalties from 16 nanometer below have started to kick in. For our MTP, multiple time programmable device technology, we began it at 2013, and then the goal of our MTP technology is to become an embedded memory platform. Particularly for different kinds of MCU and automotive, and also power management applications. We have started seeing that in the BCD-based technology platform, there are many requests on the MTP technology, particularly for the smart power applications. In addition to our MTP technology, we have also developed embedded MRAM, embedded ReRAM with partners, and also AI memory, which uses our MTP as a memory cell to simulate neuron-like memory cell architecture. There will be a breakthrough on the revenue this year as license revenue and the activities significantly grow. Our NeoPUF, which we invented in year 2015, will drive our growth beyond three -five years. We are expected that our PUF IP will play a key role as the core component in the security root of trust for the data center, AI, automotive, autonomous driving, edge computing, and IoT. All of this plays a role for our future, and we are very confident that the growth has just begun. Next, I would like to invite Rick to report our fourth quarter and the full year operating results and the outlook of our business. Okay, Rick. Please. Thank you, Charles. Good afternoon, everyone. I will first begin with our fourth quarter results. Fourth quarter revenue was TWD 497 million, a sequential increase of 12.6% and 37.2% year-over-year, or up 15% sequentially or 45.3% year-over-year in U.S. dollars. The operating expenses were TWD 261 million, up 7.1% sequentially and 29.1% year-over-year, mainly attributable to expenditure increases such as human resource expenses, rewards, bonus, and the compensation of employees and directors. This bring us to the operating income of TWD 235 million, with an increase of 19.3% sequentially and a 47.5% year-over-year. The operating margin increased by 2.7 percentage points sequentially and 3.3 percentage points year-over-year to 47.4%. Overall, our fourth quarter EPS was TWD 2.62, and the ROE was 41.8%. For the full year of 2020, the revenue was TWD 1,777 million, up 26% year-over-year, or grew 31.6% in U.S. dollars. The operating expenses increased 21%, and the operating margin was 46.3%, with an increase of 2.2 percentage points, EPS up 30.4% to TWD 9.52, and the ROE gained 6.7 percentage points to 38.3%. Let's move on to revenue contribution by licensing and royalty. Licensing in the fourth quarter accounted for 31.1% of the revenue, up 39% sequentially and 33.2% year-over-year, or up 42.1% sequentially and 40.9% year-over-year in U.S. dollars. Royalties in the fourth quarter contributed 68.9% of the total revenue, increased 3.7% sequentially and 39.1% year-over-year, or up 5.9% sequentially or 47.4% year-over-year in U.S. dollars. For the full year of 2020, the licensing revenue is TWD 490 million, while the royalty is TWD 1,287 million. Licensing and royalty grew 13.9% and 31.3% respectively, or 19.1% and 37% respectively in U.S. dollars. In terms of revenue contribution by technologies, the results are as follows. NeoBit accounted for 17.1% of the total licensing revenue in the fourth quarter, increased 6.2% sequentially, but it decreased 17.1% year-over-year. The royalty accounted for 57.2% of the total royalty, down 7.6% sequentially, but up 17.8% year-over-year. Mainly due to content increase of the applications such as PMIC, TDDI, fingerprint and the sensors. NeoFuse accounted for 71.3% of the total licensing revenue in the fourth quarter, up 50.6% sequentially and 67.5% year-over-year. Its royalty increased by 26.7% sequentially and then 94.1% year-over-year. Due to the continuous production of existing applications such as TDDI, OLED, PMIC, DTV, Bluetooth, and ISP. This brings the royalty of the NeoFuse to contribute 39.6% of total royalty. Our PUF-based security IP contributed to 1.7% of licensing revenue in the fourth quarter. Although this technology has not yet to contribute to any royalty, engagement with industrial leaders is still actively ongoing. As for MTP technology, licensing revenue decreased 33.6% sequentially and then 9.3% year-over-year to account for 9.9% of licensing revenue in the fourth quarter. Royalty from MTP decreased 3.9% sequentially, but increased 8.9% year-over-year due to To contribute 3.2% of the total royalty. Currently, our MTP team is working with partners on developing eMRAM, RRAM, AI memories. Both RRAM and AI memory have been verified with proven results and definitely had a breakthrough this year. In the full year of 2020, for NeoBit, the licensing revenue decreased by 17.4% year-over-year, but the royalty increased by 9.2%, accounting for 50.8% of total revenue. For NeoFuse, the licensing and the royalty revenue grew 38% and 119.8% year-over-year, contributing to 43.6% of total revenue. For PUF-based security IP, licensing revenue increased 148.2% year-over-year, contributing to about 0.7% of the total revenue. MTP technology, the licensing revenue declined 30.9%, royalty increased 1.9% year-over-year, accounting for 4.9% of the total revenue. Looking at royalty from 8-inch and 12-inch wafers. 8-inch wafers, which accounted for 61% of royalties, increased 5% sequentially and 21.2% year-over-year. 12-inch wafers contributed to 39% of royalties, increased 1.7% sequentially and 80.9% year-over-year. For the full year of 2020, 8-inch wafers accounted for 62.3% of royalties, with an increase of 18% year-over-year. 12-inch wafers accounted for 37.7% of the royalties, with an increase of 61.4% compared with the previous years. There were 137 product tapeouts completed in Q4, a record high quarterly number. In 2020, there were a total of 494 product tapeouts completed, which is also a record high yearly number, reflecting increasing demand of our IPs. We will provide more information in the management report that will be released later today. In the next section, I will address our future outlook. We expect the growth of the revenue to continue in the first quarter of 2021 and beyond. For licensing revenue, besides continuing strong demand from our NeoFuse and NeoPUF IPs, we also expect the MTP licensing revenue to increase significantly. We expect the licensing revenue to grow this year. For royalty revenues, we expect both eight-inch and 12-inch royalties to continue their growth momentum. 8-inch royalties will grow due to PMIC content increase in 5G smartphones and the demand pickup for TDDI, automotive, and IoT applications. 12-inch royalties will have strong growth as customers are increasing production for ISP, OLED, DRAM, SSD controller, multimedia related, networking related such as Bluetooth, Wi-Fi 6, TWS, and others. Besides, royalty from 16 nanometer and below will have started to kick in based on our most recent royalty report. For new business development, our new application are centered on the business development of hardware security. NeoFuse in advanced process is being adopted for secure key storage and is seeking to replace the conventional eFuse. We expect this will be a trend for hardware security. Business activities of PUF-based security solutions are in progress in the application of IoT, industrial IoT, AI, blockchain, FPGA, data processor unit, DPU, mobile storage, UFS, and automotive. Our PUF RD has also recently been adopted by some American customers and our cooperation is in progress. Partnership with the processor IP vendors are in progress. That is the cooperation with our Arm and RISC-V related. This continue to extend our PUF-based security solution platform and bring in more customer adoption. For the new IP technology development, we have demonstrated 6 nanometer, 6 silicon results successfully. Our 5-nanometer plus IP has been tapped out in Q4, and we expect the completion of the silicon verification in 2021. In Q3, we have announced crypto processor, PUFiot, which integrates with our root of trust, PUFrt, with crypto engines. PUFiot is aiming to provide IoT and AI chip with a comprehensive, easy-to-use security solution. In Q4, we have announced a joint partnership with UMC on PUFflash development by providing an integrated security solution for encrypting and protecting the data in flash. We will continue to develop our PUF-based solution to implement HSM, that is, hardware security module, which can be embedded in the chip to provide security function for network applications. Now I will pass the time to Charles. Okay. Please turn to page 15. I will start to explain why DPU is booming up and also why DPU require more security solutions. As everybody knows that NVIDIA is a big company on GPU. Why GPU becomes important is because a lot of new applications, particularly AI applications, require a lot of pattern recognition or graphic recognitions. The DPU become the very good accelerator to compute the graphic data. In general, CPU can take care of because CPU is very general for the computation and also can be used for the computation, also the data storage, also other network functions. It's very general functionality. However, as the application increases, such as the AI application, and now there are lots of IoT applications. Since the year before last year, NVIDIA start to promote their DPU. Also from the last year, we start to promote our PUFsecurity solution in North America market. We also get inquiry from quite a few of DPU companies. I would like to take this chance to give everybody a very short brief about what DPU can do to assist the CPU. As you can see from the page 15, we have the simple diagram to compare the conventional data center and also the DPU-powered data center. DPU, process unit, is a process which can offload the CPU burden by assuming the responsibility of managing the data processing in network server and the data center, such as storage and data classification, and also the security. This extended data processing capability will improve the system performance in a similar way as what the graphic processing unit, CPU, does to improve the graphic processing performance. As IoT is booming, a lot of data will be collected from the edge device. The data-centric driven processor are becoming very important to manage big data. Therefore, in addition to CPU and the GPU, DPU is required for improving network server and the data center performance. That is why in page 15, you can see that for the new architecture, CPU will be taking care of the application management, while DPU will assist CPU for the network management, storage management, and also security management, because those are very related to the data processing. As I said, the conventional CPU, after the DPU offload the CPU can perform the application management very well. In the past, the CPU need to also take care of the security, because the security function can occupy a lot of CPU computation time. If the DPU can take care of the security, then the CPU can take care of the application management very efficiently. So the inclusion of a DPU, it can offload the networking processing and also particularly for the networking processing, because in the 5G, actually, they are so-called Software Defined Network, which need to slice the network server for the three different applications. One is for the mass connectivity, one is for the high bandwidth, another is for the very ultra low latency applications. If the network server has a DPU can take care of that. Because of the network now is so-called virtual network, the security will become very important because for the storage and also network processing, they are all shared the same memory and also same path. That's why the security become very important to take care of each branch of the service. By doing this, CPU can focus on its processing for the edge application instead. The overall performance of the server, including the network server and the data center, can have a lot of improvements. In such case, the DPU need to have more security function into the DPU. The embedded security function not only enhance the overall level of defense, but also can prevent CPU operation from being interfered with by the hacker, and preventing massive security breakdown. Such as, for example, now there are a lot of botnet attack and also the attack from, we call it phishing mail or other different kind of attack, which will influence the CPU's operation. If DPU take care of that, then the CPU can still continue to do the application processing without being interfered by the attacks. In terms on both the amount of sensitivity of data surges when the IoT application become booming, the DPU need to be equipped with more solid security functions so that the data will be well-protected during the transmission or the processing. That is why security solutions are essential to DPU. Most of our potential customer in North America when they inquire us about our PUF-based hardware security solution, I think that are very interested, and they think that this could be embedded into their DPU to provide very strong security functions. The reason why the PUF-based hardware security solution can enhance DPU securities is because, in order to attain the fast and very reliable security operations, each system needs its own unique identifier at the hardware level. This unique identifier is basically similar to the fingerprint to the human being. That is the fingerprint of the chips. The security can use that, we call it one of a kind PUF values, to generate, because this unique identifier is created by PUF, and the DPU can use this unique identifier to generate keys and also to encrypt data and to ensure integrity and also authenticate between sensors and the receivers. We found that embedded PUF into, and also PUF-based solution into DPU chips, can enable very high security and very high performance for the chip solution and also the entire systems. I think that is what I want to share about why DPU become the new architecture and also new elements in the new systems, such as the virtual network processor and also the data centers. Okay, thank you. Thank you, Charles. This concludes our prepared statement. We now begin the Q&A session. Please submit your questions in the input box on the webcast window, and you will enter a queue. Should you wish to ask your question in Chinese, we will translate it to English before our management answers your question. We are now going to collect questions, and we will reply to you in a minute. Please stay with us. Thank you, everyone. We already have many questions, so I will invite Rick to answer one by one. The first question is regarding our January revenue, which is record high of TWD 420 million. The guest once asked if the IP license and the services revenue, which is also record high, is one-time recognition, and is the contribution from NeoPUF or NeoFuse? In the last three months, eMemory IP license and service revenue are more than TWD 50 million. Will this be the norm in the future? Rick, please. Okay. Thank you for your attention on eMemory's revenue achievement. Here I would like to answer that. The upfront fee, like the NRE and the license fee, is recognized by milestone. That is not just one time, and without seasonality. We can expect good growth from the licensing this year, as I mentioned, a strong demand from NeoFuse, NeoPUF, and also M31 Technology. Another question. According to the annual report, eMemory royalty revenue accounted for 70% of the total revenue, which is higher than the world largest IP company, Arm. This percentage is also significantly better than the domestic M31 Technology, 20%, and the [M31] Technology, 9%. Why is the proportion of eMemory royalty revenue so high? Okay. This is a very interesting question, and frankly speaking, some investors also asked the same question before. Our business model, eMemory's business model, is end-to-end royalty money, and we charge much less upfront license fee. Our current royalty reflects our accumulated effort from the past. The reason we can have the highest percentage of revenue from royalty, because for the first, our persistence and the stickiness with our business model. Second, the technology we invented is the most fundamental part of the semiconductor structure. Whenever customer move into production, eMemory will be rewarded by the production royalty. This is a win-win-win situation for all parties, including foundry partners, end users, and eMemory. With that, eMemory is able to enjoy the growing royalty contribution when customers succeed. Another question from Mr. Chen, SinoPac. Last week, PUFsecurity news. PUFsecurity's crypto co-processor, PUFiot, meets CAVP certification. I would like to ask, by passing this certification, certifies security algorithm, including AES, KA, CMAC, DRBG, key packaging. Does this mean that NeoPUF has made a great progress and will be adopted into IoT-related security application? Okay. Well, first thing, I would like to thank you, Mr. Chen, for his attention on our progress, especially in the technical portion. Yes, the demand of our PUF-related IP is very strong. We already tape out, as you know, and we mentioned several impacts on conference call that we already have several tape outs for the IoT chips and the other applications which embedded with the PUF IPs. The question from Ms. Lee. Based on Q4 licensing revenue analysis, PUF-based has declined since Q3, even lower than Q2. Although the amount decline is not large, but there seems to be a contradiction in the trend. Please explain. Well, the revenue recognition is based on how we sign, when we sign the contract, and of which cannot be judged only by one quarter. Customers' request for PUF, as I mentioned, are very strong, and that we expect more licensing to come this year. It is mentioned in the previous earnings call, royalty from NeoPUF will be seen as early as the second half of the year. Does the schedule still remain? Oh, yes. We expect the customers will move into production stage in the second half of this year, so everything runs smoothly. Yeah. Apple does not use our NeoPUF. Samsung use its own SRAM PUF. What are the other areas that NeoPUF could provide opportunity to help the company create high revenue growth? Currently, the hardware security is using standalone Secure Element chip, we call that SE chips. Our security solution by leveraging our NeoPUF major randomness function can be the Secure Element as a full IP block directly embedded into chips itself. The NeoPUF now is just at the very beginning stage. We expect this will be the future trend for the hardware security. What NeoPUF cases we have received or are negotiating? Well, the demand for our OTP related solution is very strong, as I mentioned. There are many projects ongoing, including data center processor. That is introduced by Charles just minutes ago, and also FPGA and ADAS for automotive and AI, industrial automation and IoT. All those requirements are from the customers in U.S., Europe, Taiwan, and also China. In the current situation of capacity tightness of foundry, does it impact the progress of our new product development and verification? If so, how does the company cope with it? Okay. I think a lot of our investors and shareholders are concerned about this current situation, but our answer is we don't see this an issue. We have a record higher number in tape out for the year and for the quarter, and for the month of January this year. On the other hand, for the long-term business development and growth, foundries still allocate certain resources for the new platform development and the new product deployment. At this circumstance, eMemory's technology and technical excellence are quite essential to support foundries and the fabless companies too, for the product development. We are now still busy in development projects. Okay, thank you. Foundry supplanted the production of panel driver ICs for the production of automotive chips, causing their production output to reduce. What is the impact on the company? Okay, this is a very good question. Our IP are also developed in the automotive platform too, as we reported many times. On the other hand, the tighter capacity, the better foundry price, wafer price, which will benefit our royalty income. Is there any product tape out in automotive application? When is royalty income expected? Yes. We have many automotive technology platforms and accumulate many tape outs, and already have royalty contribution and constantly increase. With the new era approaching, such as 5G, Wi-Fi 6 and EV, gallium nitride and silicon carbide are rapidly becoming mainstream. How will this affect the company? Okay, this is a very good question and quite technical. I think that the purpose of using gallium nitride and the silicon carbide is for the discrete power. That is the ultra-high voltage or ultra-high current driving. Our IP are adapted for power management. It's quite different, right? Which integrates the power management, integrates different function blocks such as MCU, a clock generator, LDO and RF. Therefore, the market is different. The trend for power management is moving into more advanced process nodes, and we even have customer adopt 15 nanometer for digital power solution. In addition, in case more power or more high-frequency products can be deployed in the system, it means that more product application will bring in more silicon-based IP requirements. As you learn, more IP contents are included in the electric vehicle. It helps our customers to have more business opportunities and benefit eMemory accordingly. Thank you. In the face of booming era of the semiconductor industry, a large amount of capital expenditure and employees have been increased. What is the company's strategy in employee recruitment? Okay. This is the question regarding our recruitment. First thing, I would like to emphasize that eMemory is a technology innovation company. We encourage engineers to create new technology for enabling new product applications. For the most important thing for eMemory is to develop our talents for more contribution, instead to recruit more people. We recruit new talent based on what we need. For the young talent recruitment, as you may know, eMemory is offering two formal course on our non-volatile memory and our security technology at National Tsing Hua University. This will help us to recruit new talent directly from the school. Okay, thank you. The question regarding MTP. As we mentioned, we are going to have a breakthrough in licensing and activity. Can we elaborate more what kind of applications are MTP? Okay. Okay. The breakthrough regarding the MTP is, in this year, hopefully, we will deliver the RRAM and the AI memory for customer to use in foundries. It means that it will bring us to the new era of the product applications. The other is regarding our employee bonus. Is it based on revenue? The 15% profit share, is it based on revenue or based on profit? Okay. The bonus is based on the profit before tax. It means that it is 15% of the profit before tax. As a reminder, should you wish to raise a question, please submit your questions in the input box on the webcast window and you will enter a queue. We will collect your questions and will get back to you in a moment. Please hold on. What do you look for when you hire engineers? What is unique about your hiring process? I think as I mentioned, that eMemory is a technology innovation company. The engineer we are looking for is the person with the features of innovation and proactiveness. I think that will be our key factor to evaluate the potential candidates. What will be the single largest growth driver by end application in Q1 in 2021? Okay. At this moment, we foresee a lot of product application will drive the revenue growth, no matter in the first quarter or in this year. That includes the ISP, OLED, and a lot of product applications in 28 nanometer and below. As a reminder, should you wish to raise a question, please submit your questions in the input box on the webcast window and you will enter a queue. We will collect your questions and will get back to you in a moment. Please hold on. If there are no further questions, we now begin closing comments. Charles, please proceed. Okay. Thank you everyone, again, for your patience and the support for eMemory. We will continue to work hard on innovation, IP, and the technologies, and also the security solutions for our customers, and bring a higher return for our shareholders. Thank you. Thank you, ladies and gentlemen. Before we conclude today's event, please be advised that the recording of the conference will be accessible within two hours from now. Thank you everyone for joining us today. We hope you will join us again next quarter. You may now disconnect. Goodbye, and have a good day.