Good afternoon, and welcome to eMemory's second quarter 2024 webcast investor conference. Joining us today is our Chairman, Dr. Charles Hsu; President, Mr. Michael Ho; Head of IR, Ms. Lijing Chen; and the Director of the Finance Department, Ms. Teresa Kuo. The format of today's event will be as follows: First, eMemory's Chairman, Dr. Charles Hsu, will give an opening remark. Afterwards, President, Mr. Michael Ho, will summarize our operations, followed by our business outlook. Next, Dr. Charles Hsu will give a talk titled, A Must in Security: A Hundred Times Faster, PUF-Based True Random Number Generator. Then, we will conclude today's conference with a Q&A session, where our management team will 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 after the conference is finished. For more information, please visit the company's website 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 subject to the risk factors associated with the semiconductor and IP business. Please refer to the cautionary statement on page 3 of today's presentation. Now, I would like to give the floor over to eMemory's chairman, Dr. Charles Hsu. Good afternoon, everyone, and thank you for attending our conference call today. As mentioned in the previous quarters, our company has entered a multi-year growth cycle. Last quarter, we shared that we have licensed our technology to almost every foundries worldwide, with more than 600 process platforms. This number of process platforms continues to grow every year. Within these process platforms, our technologies develop from OTP to more sophisticated security IP and MTP, extending to various kind of emerging memories. The royalties received per wafer for this technology will increase as the process nodes, the memory functions, and the functions of the chip security IPs all become more advanced. Later, I will introduce one of our security IP, PUF TRNG, which is a PUF-based true random number generator, which is 100 times faster than the widely used, the conventional one. It leverages our PUF as the perfect source of randomness. This shows that we can continue to use our existing technology and IPs to develop new IPs with additional functions. Not only does this show the importance and the competitiveness of our intrinsic technology, but it also forms the most important foundation for our long-term growth, allowing us to continue innovation based on our core competencies. Therefore, we are very confident about our future. Next, I will invite our President, Michael Ho, to share our second quarter performance and the future outlook. Good afternoon, everyone. Now, let's begin with our 2024 second quarter financial result. The second quarter revenue was TWD 893 million, up 11.2% sequentially and up 28.2% year-over-year. Operating expenses were TWD 398 million, up 4.1% sequentially and 21.3% year-over-year. Operating income was TWD 495 million, with an increase of 17.7% sequentially and an increase of 34.3% year-over-year. Operating margin increased by 3.1 percentage points sequentially and increased by 2.6 percentage points year-over-year to 55.5%. Our net income, amounting to TWD 475 million, experienced an increase of 10.3% sequentially and 35.1% year-over-year. EPS for the quarter was TWD 6.36, and ROE was 67.3%. Next, let's move on to the revenue contributions by licensing and royalty. Licensing, in the second quarter, accounted for 33.6% of the total revenue, up 31.3% sequentially and up 20% year-over-year. Royalties, in the second quarter, contributed 66.4% of the total revenue, increasing 3.3% sequentially and increasing 32.8% year-over-year. Total revenue for the second quarter increased by 11.2% compared to the previous quarter and increased by 28.2% compared to the previous year.... For the first half of 2024, the licensing and the royalty revenues are as follows: licensing. In the first half, accounted for 31.1% of the total revenue, up 34.4% year-over-year. Royalties, in the first half, contributed 68.9% of the total revenue, increasing 20.2% year-over-year. Total revenue for the first half increased by 24.3% compared to the previous year. With that, I will comment on our revenue contribution by specific IPs. For NeoBit, accounted for 24.6% of total licensing revenue in the second quarter, increasing 54% sequentially and increasing 30.2% year-over-year. Its royalties accounted for 26.7% of total royalty, up 11.3% sequentially and up 15.9% year-over-year. NeoFuse accounted for 33.3% of the total licensing revenue in the second quarter, down 16.7% sequentially and down 11.9% year-over-year. In terms of total royalty revenue, NeoFuse royalties increased by 0.2% sequentially and increased by 39% year-over-year, accounting for 70.6% of total royalties. For PUF-based security IPs, contributed 12.5% of licensing revenue, increasing 105.2% sequentially and increasing 36% year-over-year, while its royalty accounted for less than 1% of total royalties. For MTP technology, accounted for 29.6% of total licensing revenue, up 110% sequentially and up 69.9% year-over-year. Royalty from MTP increased 11.6% sequentially and increased 86.8% year-over-year, accounting for 2.7% of total royalties. For the first half of 2024, the revenue by technologies are as follows: NeoBit licensing revenue increased 43.4% year-over-year, and the royalty increased 1.4%, accounting for 24.9% of the total revenue. For NeoFuse, licensing revenue increased 19.3%, and the royalty increased 27.3% year-over-year, contributing to 62.3% of the total revenue. For PUF-based security IP, licensing revenue increased 26.3% year-over-year, while the royalty contribution was less than 1%, accounting for 3.3% of total revenue. For MTP technology, licensing revenue increased 64.3% year-over-year, and the royalty revenue increased 75.7%, accounting for 9.5% of total revenue. Now, let's look at the royalties for 8-inch and 12-inch wafers. For 8-inch wafers, accounted for 42.5% of royalties, up 2.6% sequentially and up 26.7% year-over-year. For 12-inch wafers, contributed 57.5% of royalties, increasing 3.8% sequentially and up 37.6% year-over-year. In total, 171 product tape-outs were completed in the second quarter. We will provide more information in the management report. In the next section, I will address our future outlook. For licensing revenues, licensing revenue will continue its growth momentum due to the strong demands from both foundries and the chip companies. For royalty revenues, we will expect the royalty sequentially growth in the second half due to the new product ramping up. Now, moving on to the IP, new IP technology and business development. For new IP technologies: One, NeoFuse is developing in the FinFET High-V process to meet customers' next-generation OLED DDI plans. 2, RRAM is expanding into more process with the increased customer demands. Three, NeoFlash continues progressing in specialty process, replacing embedded Flash and external NOR Flash. Four, developing 2-nm technologies with the leading foundries. For the business development platform: 1, new CPU architecture for security IP will start to contribute to revenue. Two, successfully integrate NeoFuse for SRAM repair with the EDA company. This concludes my comments. Next, I will pass the time to Charles. Thank you. Okay, I will take time to introduce our very fast TRNG, which we developed in this couple of years, which is a must in securities. And, it is 100 times faster TRNG than the conventional TRNG. The role of true random number generator, we call it TRNG, is crucial in fortified secure system against increasingly sophisticated attacks. Today, I will discuss why having just an TRNG is not enough. You need a high speed and a high quality TRNG. Before understanding the role of the randomness in protecting a system, a secure system, it is essential to know the methods used to attack these systems. This slide will explain why a true random number generator is necessary for hardware security. There are two ways to break in a secure system. The first is by cryptographic analysis, we call it a cryptanalysis, a technique existing for centuries, where attackers uncover weaknesses in cryptographic algorithms. And over time, such attack have driven the evolution of cryptographic standards, with older algorithm like the Data Encryption Standard, we call it the DES, replaced by newer ones, such as Advanced Encryption Standard, we call it AES. The second method is implementation attacks, which target specific weaknesses within a system's implementation. Exploiting the weaknesses is to discover secret within the secure system. Now, assuming that we have well-designed a secure system that is resistant to cryptanalysis and the implementation attacks, how will an attacker be able to break in the system? In this case, they will attempt to guess the secret key, as obtaining it would allow them to access a lot of confidential information from the system. To prevent an attacker from correctly guessing the secret key, we must minimize its probability. The first factor is key length, which is predefined by the crypto algorithms. For example, if the key length is 128 bit, it means that there are two to the power of 128 numbers of possible key combination that can be generated. The second factor is ensuring random generation of the key, so that each combination is equally probable. If you refer to this diagram, you can see that after the user encrypt their secret with a randomly generated key, the probability of an attacker guessing the correct combination is reduced to one over two to 128. Therefore, to achieve this result and reduce the likelihood of an attacker guessing the correct secret key, we must use the TRNG. In the next slide, I will explain why it is important to have a high-speed TRNG. By high speed, we are referring to a high throughput capability of generating large number of random numbers in a short time. The speed and the throughput of a TRNG matters because large system often have numerous applications and hardware components that require and consume random numbers. Many of these components cannot generate their own random numbers, and they rely on a hardware-based TRNG. Given the extensive number of components, and the throughput of the TRNG is vital to ensure numbers are generated quickly and efficiently. Besides generating large volume of random numbers, a high throughput and a high-quality TRNG can help prevent side-channel attack. Side-channel attack are one of the most popular form of attacks, where attacker explore leaky information from source, such as power consumption or electromagnetic emissions, to discover keys. To counter these attacks, the new random numbers must be generated continuously to mask the side channel information. The middle figure show a simplified example of a crypto operation protected by masking. In a masked operation, the random bit transform the input data into two independent sets and are sent to two separated mask operations. Compared to a single operation, the separating them ensure there is no leakage. Since the operation continuously consume random numbers, the throughput of TRNG is also important in this use case. Beyond security, there are other applications that are highly reliant on random numbers. One example is banking, where many keys or PIN number require high-quality random numbers to ensure the security of accounts. Because the number of accounts and the transaction are enormous, a highly throughput TRNG is essential as well, as shown on the third figure at the bottom. Having described the importance of a high throughput and the high-quality TRNG, it is clear that our solution, PUF TRNG, meet this criterion. A unique feature of our TRNG is that it has two entropy sources, unlike conventional TRNG that relies on a single source. Our PUF TRNG combines dynamic entropy from ring oscillator, static entropy from our new PUF chip fingerprint. Normally, dynamic entropy operates slowly because due to the time-consuming process of collecting natural fluctuation, leading to low throughput in conventional TRNG, as is illustrated using the dashed line. The throughput in this case is usually less than 1 Mbps. To overcome this limitation, PUF TRNG uses high-quality random bit generated by PUF to refine the output of the dynamic entropies. Typically, it takes the dynamic entropy source a long time to gather natural fluctuations. However, by using PUF for refinement, we can achieve a high throughput by reducing the collection time of the dynamic entropy, yet still achieving high-quality output. As shown in the figure, PUF TRNG delivers throughput approximately 100 times greater than conventional TRNG, while maintaining similar power consumption. We also create innovations to better show the difference between PUF TRNG and the conventional TRNGs. In Figure 1 to 4, we invented a simple topology optimization inside the circle to determine the randomness of the random number generated. The uniformity of the lines inside the circle indicates the randomness of the number. If the number are truly random, the circle becomes to fill uniformly as more random number are generated. On the other hand, if the randomness of the generated number is poor, the line inside the circle will not be uniformly distributed. So for the dynamic entropy generated by ring oscillator, as shown in Figure 1, within the blue circles, a single blue line represents a 10-bit random number. The dynamic entropy constantly generated a random data. However, its output quality is not enough for secure keys, because the line tends to appear at the same positions, indicate that the randomness of the random number is poor. For the figure 2, it is a conventional TRNG using PUF post-processing. Here, the random numbers are generated by gradually accumulating more random bits from the dynamic entropy. Over time, and after going through post-processing, the output will slowly become uniform and complete, as is shown in these animations. By looking at the figure 3, which is a static entropy generated by PUF. Static entropy is instantly ready and it does not change over time. The line are very uniform, indicating the result of a very high quality from the start. By looking at the figure 4, which is a PUF TRNG using PUF refinement. In the PUF TRNG, the generating the numbers from the uniform line indicating high quality output. Additionally, the speed of the generation is much faster than the conventional TRNG. This is evident from the fact that the output generated by the line of a PUF TRNG appears much faster than in conventional TRNG, heightening the difference in the generation speed. So another way to understand this, imagine a conventional TRNG as classic cars. They are functional, but they're not efficient. They are either slow or consume a lot of gas when running fast. In comparison, PUF TRNG is like a new engine car. It runs fast while consuming low power. Lastly, another advantage of a PUF TRNG is that both the dynamic entropy and the static entropy are implemented in hard macro and pre-qualified across various technology realm. This ensure superior quality compared to RTL-based TRNG provided by other IP vendor or customers. So in conclusion, the integration of high speed, high throughput, TRNG, RNG is vital for maintaining system security and the functionality. Our PUF TRNG solution stand out with its ability to generate high-quality random numbers efficiently. This is not only protect against the sophisticated attacks, but also support large volume random number generation. With PUF TRNG, we are setting a standard for the high-quality TRNGs. And this conclude my remarks. Thank you very much for your time, and next, we will enter the Q&A sections. Thank you, Charles. This concludes our prepared statement. We will now begin the Q&A session. Please submit your questions in the input box on the webcast window. All of our questions will follow the format of answering the Chinese version first, followed by the English version. We will now collect the questions and begin our Q&A session. [Foreign language] The first question was: Price-cutting competition among Chinese foundries is very serious. Have you been affected? Michael. In recent years, China has actively expanding its production capacity by building the new foundries and the new fab areas for mature process, many of which are using our larger NVM technologies. In terms of the royalties from China, the capacity expansion and the increasing penetration rate will drive overall growth, even if foundry wafer price decline. Thank you. [Foreign language] The second question was: Recently, Trump said that TSMC should pay the United States for protection. Will this have an impact on eMemory? Michael? ... Our IP is licensed to foundries around the world, including the U.S., such as Intel and GlobalFoundries. With our platform established globally, we have a widespread range of technologies and in various process, making us less susceptible to political influence. Thank you. [Foreign language] The question was, are you seeing a trend of customers incorporating AI capabilities into their designs? How does this affect your company? Michael. As far as we know, we already have customers who has incorporate AI functions into their designs and are moving to tape-out in more advanced process for functions such as recognition and image processing. As mentioned in the last earnings, AI application systems involve data input, data model storage, and the computing accelerators. Currently, our IPs are adopted for applications related to the data input through various sensors. For data storage in NAND and DRAM, customers are using our IPs for SSD controller and CXL memory interface. In terms of computing, which is mainly in the advanced process, we have customers adopting our Root of Trust IPs and SRAM repairs IPs. These developments are expected to drive our future licensing and royalty growth. Thank you. [Foreign language] [Foreign language] The question was about the lecture just now. Chairman Hsu just mentioned that eMemory's true random number generator is the fastest in the world. If this is the case, why haven't major high performance computing vendors used it? Charles. Our true random number generator is based on our OTP and the PUF technologies. This is a hard IP and must be qualified in each process. The number of our qualified process continue to grow and progressing toward the most advanced nodes. As most more customers adopt our technology and accumulate production records, and as hackers use faster computing to launch attack, the market will demand faster random number generator. We are working with our CPU partners to promote this technology, and are very confident that its future development. [Foreign language] The question was, what is the reason why PUF's royalties have not increased significantly? Can Charles please answer this question? Okay, licensing for our PUF technology has been increasing. The first customer to adopt our PUF was China's largest chip company. However, due to U.S. government sanctions, we were unable to continue receiving royalties from their productions. Despite this, we have more than 60 tape-outs gradually entering the mass production stage, and will soon contribute to our royalties. Thank you. [Foreign language] The question was, what is the progress in 2 nanometers and 3 nanometers? Is it possible that after eMemory's IP is ready for 3 nanometers, customers will already start to migrate to 2 nanometers? Can Michael please answer this question? Our development of 3 nanometer and 2 nanometer has always aligned with the requirements of the most advanced foundry process and the customers. Currently, some customers have already started the design in for 3 nanometer, while 2 nanometer is still in the early development stage, progressing much faster than the previous years. Even if we are... our technology is not adopted by the first generation, there will still be future opportunities due to the process migrations. For example, even in the mature nodes, we still have hundreds of new product using our technologies every year. Thank you. [Foreign language] So this next question is about MTP. MTP's licensing fees and royalties have experienced the most significant growth. In which application is it mainly used? How do we expect MTP to contribute to the company's future? Can Michael please answer this question? Our MTP technologies include a comprehensive product lines that meet different specifications, ranging from the like a high endurance Neo EE and medium density Neo MTP, which require no additional mask to high density embedded flash such as Neo Flash and RAM. The recent growth in MTP is driven by the adoption of a Neo EE in the PMIC and SPD ICs on DDR5, as well as the Neo MTP in the new four color e-paper and electronic shelf label, ESL, driver ICs. Currently, technology licensing to foundries and the adoption across different applications are accelerating. The royalty rate of MTP is higher than the OTP, so its contribution to our revenue will become increasing significant. Thank you. [Foreign language] The question is about DRAM, so they're asking what is our progress in DRAM? Can Michael please answer this question? Our OTP is mainly used for repair function in the DRAM. It has already been implemented on the multiple process platforms of several customers and is continuously being developed for more advanced process. Recently, with the mass production of a new process of DRAM customers, the royalties have increased significantly. Thank you. [Foreign language] [Foreign language] So this next question is, Michael just mentioned, that you guys have three nanometer customers, and what is the application of your first three nanometer customer? And when will we start to see contribution? Can Michael please answer this question? Our first three nanometer customers are primary in the data center server applications. They require not only OTP, but also the PUF based security to protect the data. They will contribute to our revenue in the second half of this year. Thank you. [Foreign language] The chairman mentioned in previous quarters that SRAM repair density is increasing, providing more opportunities for our IPs. What is our progress in this area and when can we expect to see more contributions? Michael. As the demand for AI and high-performance computing increased, the density of embedded SRAM is also growing. Therefore, the demand for using OTP for SRAM repair continued to rise. We have seen an increase in the adoption of our solutions by more customers and the products, resulting in more royalty, which we foresee will be a trend and the contribution will increase significantly in the future. Thank you. [Foreign language] ...This next question is for Michael. When will OLED DDI 28 nanometer mass production begin? As early as 4 years ago, our all OTP was adopted in the 28-nanometer OLED DDI products by many customers. These products have gradually entered the production and continue to contribute to royalties. The penetration rate of OLED DDI in mobile, tablet, and notebooks keep on rising and moving toward more advanced process, driving the royalty growth. Currently, some customers are moving to 22-nanometer OLED DDI, accumulating good production records, and are developing products for the next generation of FinFET High-V process. We are optimistic about our continued growth in this market. Thank you. [Foreign language] [Foreign language] The next question is: Although the recent blue screen crash event at CrowdStrike seems unrelated to security, CrowdStrike's endpoint security is also touted as Zero Trust. How can eMemory compete with software companies using a hardware approach? Can Charles please answer this question? With the Zero Trust framework, eMemory's hardware security provides a hardware Root of Trust and security computation capabilities. For cybersecurity software companies, hardware security can enhance the security of their application. eMemory's security IP aim to boost the competitiveness of this software companies, not to compete with them. [Foreign language] [Foreign language] The next question is: What role does eMemory play in Google's OpenTitan framework? Charles? The OpenTitan platform sets the standard for securing data transmission between IoT device and the cloud through hardware security. Our security IP, being a hardware security solution, can be directly applied to Google's OpenTitan platform for encryption and decryption. [Foreign language] [Foreign language] So given the talk that the chairman gave about TRNG, there's still someone online who's curious about true random number generators. So the question is: It looks like that TRNG can provide random source for generating secret keys and obfuscating to help resist against attacks? Does it imply that having high-speed TRNG and security design is more important than having a PUF? Can Charles answer this question? Yeah, I think in the security, very high security systems, the high-speed TRNG is very important, as well as PUF. Because in our invention, the high-speed TRNG need to rely on the PUF as a input to run the number of generators. In addition to that, PUF also play the very important role as a unique ID. And this unique ID, you have to find the number which is very unique and come from the natural randomness. And by using this natural randomness in the unique ID can be also create-- can also create the mother key, mother security key for the system. So in the very high secure systems, the PUF and the high-speed TRNG are all, both are very important. Thank you. As we have answered most of the questions, and in the interest of time, we will now begin the closing comment. Charles, can you please conclude the presentation? Okay, thank you once again for your patience and the support for eMemory. We will continue to work hard on the technology and IP innovation, and also the PUF-based hardware security solutions for our customers, and bringing higher return for our shareholders. For more information about our PUF-based security IP and the technology, we encourage you to visit our PUFs ecurity website, www.pufsecurity.com, and check out what our articles and other materials. Thank you. Thank you, ladies and gentlemen. Please be advised that the conference recording will be accessible within the next three hours. 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!