Good afternoon and welcome to eMemory 's Second Quarter 2025 Webcast Investor Conference. Joining us today is our Chairman, Dr. Charles Hsu, President Mr. Michael Ho, Head of Investor Relations, Ms. Li -Jing Chen, and Director of the Finance Department, Mr. Joseph Hsia. The format of today's events will be as follows. First, eMemory Technology Inc.'s Chairman, Dr. Charles Hsu, will give an opening remark. Afterwards, our Financial Officer, Mr. Joseph Hsia, will present the review of our operations. Following that, President Mr. Michael Ho will share our business outlook. Next, Dr. Charles Hsu will give a talk titled "Chiplet Supply Chain Secured by NeoPath." We will conclude today's conference with the Q&A section 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 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 Technology Inc.'s Chairman, Dr. Charles Hsu. Okay, thank you. Good afternoon, everyone. Thank you for joining our earning call today. One of the key questions we hear from the investor is about our position in AI. Why is it more visible today, and will we have a place in the future? Let's take the smartphone market as an example. IP is often introduced starting from the second or even much later generation of chips development. Over time, as more customers adopt our technology for similar chips, the scope of application expands. Even today, as the smartphone process nodes continue to advance, we are still introducing our solution into new application chips. In the HPC and the AI domains, we will replicate this proven model. So far, we have been designed into chips covering CPUs, AI accelerators, DPUs, smart network IC, SSD controller, BMIC, and MODCAM. As of Q2 this year, we have achieved over 110 TB related to security IP. In the second quarter, we began to see royalty contributions from mass production by a major Taiwanese networking company, and we expect more significant moving forward. At the same time, to prepare the AI-driven transformation of our industry, we are implementing the largest operational reform since our founding, laying the foundation for the next 10 years and beyond. Our operation efficiency and improved sustainability, and we believe the results will be worth the wait. We are grateful to the colleagues who have built the strong foundation of the company since its inception, and we are also committed to ensuring a smooth transition and succession to meet the opportunities and the challenges of AI-driven industry change. This is the core spirit of this year's reform. Next, I would like to introduce our new CFO, Joseph Hsia, who will walk you through the Q2 financials. Joseph Hsia is an MBA from Yale and is both a CFA and CPA charter holder. He previously worked at BCG, where he led the operational improvement project for several leading technology companies. Joseph, please. Good afternoon, everyone. Now, let's begin our 2025 Second Quarter Financial Results. The second quarter revenue was TWD 937 million, up 2.7% sequentially, and up 4.9% year-over-year. Revenue in terms of U.S. dollar was $30 million, representing a 7.1% increase from the previous quarter and a 7.3% increase year-over-year. Our operating expenses on the other side were TWD 391 million, up only 0.3% sequentially, and down 1.8% year-over-year. In results, operating income was TWD 546 million, with an increase of 4.5% sequentially and an increase of 10.2% year-over-year. Our operating margin increased by 1 percentage point sequentially and increased by 2.8 percentage points year-over-year to 58.3%. However, impacted by a foreign exchange loss of around TWD 90 million this quarter, our net income totaled TWD 400 million, experiencing a decrease of 13.4% sequentially and a decrease of 15.8% year-over-year. In results, EPS for this quarter was TWD 5.36. Next, let's move on to the revenue contributions by licensing and royalty. First of all, licensing in the second quarter accounted for around 34% of the total revenue, increased 32.4% sequentially, and up 6.1% year-over-year. In terms of the U.S. dollar, this represents a sequential increase of 39.8% and a year-over-year increase of around 10%. Royalties on the other side in the second quarter contributed around 66% of the total revenue, decreasing 7.9% sequentially, but increasing 4.3% year-over-year. In terms of U.S. dollar, this represents a sequential decrease of 4.6%, but a year-over-year increase of 5.9%. In results, our total revenue for the second quarter increased by 2.7% compared to the previous quarter and increased by 4.9% compared to the previous year. In terms of U.S. dollar, total revenue grew by 7.1% sequentially and 7.3% year-over-year. For the first half of 2025, the licensing and royalty revenue are as follows. First of all, licensing in the first half accounted for 30.2% of the total revenue, up 5.7% year-over-year. In terms of U.S. dollar, the licensing revenue increased 5.9% year-over-year. Royalties on the other side in the first half contributed 69.8% of the total revenue, increasing 10.5% year-over-year. In terms of U.S. dollar, royalty revenue increased by 8.4% year-over-year. Total revenue in results for the first half increased by 9% compared to the previous year. In terms of U.S. dollar, the total revenue grew by 7.6% year-over-year. I will comment further on the revenue contribution by specific IPs. First of all, NeoBit accounted for 18.8% of the total licensing revenue in the second quarter, increasing 5.6% sequentially, but decreasing 18.6% year-over-year. In terms of U.S. dollar, the licensing revenue for NeoBit increased 10.6% sequentially, but decreased 16.5% year-over-year. Royalty from NeoBit accounted for 26.4% of the total royalty, down 4.3% sequentially, but increasing 3.3% year-over-year. In U.S. dollar terms, NeoBit's royalties were down 1.9% sequentially, but up 3.9% year-over-year. Secondly, for NeoFuse, it accounted for around 39.4% of the total licensing revenue in the second quarter, up 6.3% sequentially, and up 25.5% year-over-year. In terms of U.S. dollar, it increased 12.1% sequentially and 29.8% year-over-year. In terms of total royalty revenue, NeoFuse royalties decreased by 10.3% sequentially, but increased by 4.1% year-over-year, accounting for 70.5% of our total royalties. In terms of U.S. dollar, royalties decreased 6.8% sequentially, but increased 6.2% year-over-year for NeoFuse. Third is our Path-based security IPs. It contributed 14.7% of our total licensing revenue, increasing 176.3% sequentially, and increasing 24.7% year-over-year. In terms of U.S. dollar, this represents an increase of almost 200% sequentially, and a 32.4% year-over-year growth. Path-based security IPs' royalties accounted for less than 1% of the total royalties, down 5% from the previous quarter, but increased 238% from the previous year. In terms of U.S. dollar, the royalties were flat sequentially, but surged 216.7% year-over-year. Lastly is our MTP technology. It accounted for 27.1% of our total licensing revenue, increasing 77% sequentially, but decreasing 3.1% year-over-year. In U.S. dollar terms, licensing revenue grew by 86.2% quarter -over -quarter and edged up 0.1% year-over-year. Royalty from MTP accounted for 3% of our total royalties, up 30.4% sequentially, and increased by 15% year-over-year. In U.S. dollar terms, that would be 34.4% sequential growth and 16.2% year-over-year growth. For the first half of 2025, the revenue by technology are as follows. First, NeoBit's licensing revenue decreased by 3.9%, but royalty increased by 11.3% year-over-year, accounting for around 24.4% of our total revenue. In terms of U.S. dollar, licensing revenue decreased by 4.6%, but royalty increased by 8.6% year-over-year. Second is the NeoFuse licensing revenue. It increased by 10.7%, and royalty increased by 10.2% year-over-year, contributing to around 63% of our total revenue. In terms of U.S. dollar, the licensing revenue increased by 10.1%, and the royalty increased by 8.3% year-over-year. Next is our Path-based security IPs for the first half. The licensing revenue increased by 14.2%, and royalty increased by 346.5% year-over-year, accounting for around 3.5% of our total revenue. In terms of U.S. dollar, licensing revenue increased by 17.7%, and the royalty increased by 322.2% year-over-year. Lastly, for MTP technology, the licensing revenue increased by 2.7% year-over-year, and the royalty revenue increased by 7.2%, accounting for around 9.1% of our total revenue. In terms of U.S. dollar, the licensing revenue for MTP increased by 3.3%, and the royalty increased by 5.4% year-over-year. Now, let's take a look at the royalties for 8 in and 12 in wafers. First of all, the 8 in wafers accounted for around 40% of our royalties, down 13.4% sequentially, and down 2% year-over-year. For 12 in wafers on the other side, it contributed around 60% of our royalties, down 3.8% sequentially, but increased 8.8% year-over-year. In total, we had 160 product tapeouts completed in the second quarter, and we will provide more information in our management report, which will be uploaded to the website shortly after this earnings call. Next, I would like to invite our President Michael Ho to share a little bit more about our future outlook. Michael, please. Okay. Thank you, Joseph. Good afternoon, everyone. In the following section, I will address our future outlook. Regarding the licensing revenue, we anticipate the licensing revenue will continue its growing momentum due to a very strong demand from both foundries and fabless customers for our IPs. As for royalty revenue, we expect the royalty revenue to continue its growth trend as the accumulated TB in the pipeline that are moving into production. Particularly, we have started receiving the PUF-related royalties, which will accelerate our royalty growth momentum in the future. For new IP technologies, one, our new post-quantum cryptography has been fully developed and certified under the NIST CIVP program, covering the published FIPS 203 MLK and FIPS 204 MLDSA standards. This marks the official launch of our full-stack PUF PQC architecture. Two, on TSMC N3P process, our NeoFuse OTP, NeoPath, and PUF-based Root of Trust have been qualified, enabling secure PUF-based solutions for advanced AI, HPC chips, and chiplet designs. We are also advancing development on N3C and N3A process to secure the value-tier products and automotive applications. Three, in partnership with leading foundries, we are advancing the development of 2 nm technologies. This concludes my comments. Next, I will pass the time to Charles. Thank you. From AI supercomputers to advanced driver assistance systems, chiplets are redefining high-performance design. Modular, flexible, unstoppable. With components built across multiple sites and countries, the supply chain is more fragmented and vulnerable than ever. A single compromised chiplet can jeopardize an entire system. In defense, aerospace, or automotive, the cost can be catastrophic. PUF technology creates a unique, unclonable identity for every chiplet, derived from the silicon itself. Keys are generated on demand, never stored, never cloned. From manufacturing to quantum readiness, PUF security delivers the right protection at every stage of the chiplet lifecycle. In a world built on chiplets, trust isn't optional. It's essential. PUF security. Every chiplet authentic, protected, and future ready. Okay, after watching the video, I'd like to walk you through how PUF technology can secure the chiplet supply chain from end to end. As we know, the shift toward chiplet-based architecture has brought many benefits, greater flexibility, modularity, and performance optimization. It has also introduced new security challenges because chiplets may be designed, fabricated, and integrated across different vendors and geographies. This creates multiple attacks surfaced throughout the supply chains. By embedding Physical Unclonable Function or PUF technology directly into each chiplet, we can establish a hardware-based root of trust that protects against threats from design to deployment. Let's first look at the types of security challenges chiplets face. This falls broadly into two categories. The first category is supply chain security. This includes IP privacy, where proprietary chip design can be stolen and illegally replicated. There are also the threats of malicious parts, sometimes referred to as Trojan chiplets, which may be inserted during the manufacturing and could compromise the entire system. Finally, counterfeit chips, where unauthorized chiplets are introduced into the supply chain, potentially undermining reliability and security. The second category is authentication between chiplets. In a multi-vendor environment, primary components such as the cores or accelerators enable a component like I/O modules, and the supportive components such as memories must all be verified to ensure they are genuine and trustworthy. Without strong authentication, malicious or incompatible chiplets could be integrated into the system, compromising performance or security. NeoPath addresses these supply chain challenges across all three stages of the chiplet lifecycle. In the design phase, the main risk is IP privacy. Traditionally, hardware unique keys require manual handling, which is vulnerable to leakage. NeoPath eliminates this risk with its inborn hardware unique keys, removing the need for external key injections. In the fabrication and the packaging stage, one concern is malicious parts being inserted, where NeoPath ensures each chiplet carries its own unique ID, enabling traceability for device management throughout the manufacturing. In the deployment stage, counterfeit parts may attempt to infiltrate the network. NeoPath can be used to generate cryptography keys and certificates to authenticate components and maintain supply chain integrity. This end-to-end approach allows us to track and verify every chiplet throughout the lifecycle. When we talk about chiplet security, it's not just about the supply chain. Each chiplet also needs its own safeguards to protect the way it communicates with the rest of the system. The level of security depends on what that chiplet actually does. For supportive components like memory drives, basic security is enough. They don't perform computation, but they still need to be verified by the CPU or accelerator. Basic security is achieved by a hardware root of trust with anti-tampering and security storage, plus a simple one-way symmetric authentication. Enabling components such as I/O drives play a bigger role. They are essential for system operation and interact with other chiplets all the time. To increase to moderate security, a unique ID and a true random number generator are added, while still using one-way symmetric authentication. Finally, primary components such as CPU and accelerators, such as the brain and the engine of the system, demand the highest level of security, the full set of hardware root of trust functions, and the two-way asymmetrical authentication to ensure both sides verify each other. Overall, by matching each chiplet's role with the right level of protection, we can keep the system secure without adding extra complexity where it is unnecessary. This slide shows how NeoPath-based solutions come together to secure die-to-die communication in a chiplet system. At the top right, we have the memory die and the control die. Both store their keys and certificates securely in secure OTP and use a hash-based message authentication code for one-way symmetrical authentication. The core die, which is high value and central to the system, integrates PUFCC for two-way asymmetrical authentication and cryptography operation, establishing a strong hardware root of trust. The accelerator die and the I/O die use the PUF RT to provide unique ID and keys, along with the HMAC for session-based authentication. This ensures they can be validated quickly and securely before exchanging the data with the core. By combining HMAC for lightweight authentication, secure OTP for storage, PUF RT for hardware root of trust, and PUFCC for advanced cryptography, NeoPath delivers a comprehensive layered defense, securing each chiplet individually and the entire package collectively. To summarize, the adoption of the chiplet changes the security landscape by introducing new risks at each stage of the lifecycle and at every interface between the components. NeoPath offers a silicon-native, uncloneable identity for each chiplet, enabling us to secure the supply chain and authenticate die-to-die communication by tailoring the security solution to each chiplet. We can maintain both security and performance, ensuring that the chiplet-based system remains trustworthy from design to deployment. This is what I would like to share with you today. Thank you. Next, we will enter the Q&A section. Thank you, Charles. This concludes our prepared statement. We will now begin the Q&A section. 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] [Foreign language] Our first question is, and we believe most investors want to know, that is your company's operating performance has lagged behind TSMC. Why is that? Given your 3 nm verification is complete, can we expect growth to catch up or even surpass TSMC in the future? Michael, please. Our business model naturally involved a long lead time from technology development to royalty contribution. From initial development to process verification takes about two years, followed by another two years from customer adoption to mass production and the royalty generation. It can take several more years to build a meaningful revenue base. Once adopted, a process node can generate royalties for over 20 years. We have followed closely with the leading foundry, starting from the 16 nm in 2014 through the 6 nm, 7 nm, 6 nm, 5 nm, and 4 nm to 3 nm with customer design in. Royalties from the sub-16 nodes are only now becoming more significant. Over both the past 10 or 5 years, our wafer shipment growth has exceeded the leading foundry by 10%. The gap in performance has mainly been due to the slower ASP growth, especially in recent years, as the leading foundry's strong growth was driven by much higher priced leading-edge nodes. Historically, our IP enters the market after advanced nodes stabilize and complete roughly two years of foundry verification, capturing the second or the third generation products. With customer demand for security rising sharply, adoption is accelerating. Since advanced node royalties are several times our historical average, plus incremental PUF-related royalties, our growth will be driven by both wafer volumes and higher royalties per wafer going forward. Thank you. [Foreign language] [Foreign language] With the antidollar stabilizing, the company recorded FX losses in the second quarter. Could we see a reversal in the third quarter, Joseph? Yes, exchange rate will still have an impact to us in the third quarter. For example, in July, our revenue grew by 19% year-over-year in terms of U.S. dollar, but only 7.3% in terms of New Taiwan dollar. FX will impact us mainly in three areas. First is when converting U.S. dollar denominated revenue into New Taiwan dollar upon invoicing. Second is exchange rate movements between the date of revenue recognition and the actual cash collection. Third is the mark-to-market revaluation of U.S. dollar assets, which mainly is U.S. dollar cash and accounts receivables at the end of each period. Most of our operating expenses are in New Taiwan dollar, with only some R&D tools and equipment paid in U.S. dollar. We have no U.S. dollar debt exposure. We currently hold around $14 million in terms of U.S. dollar assets, mainly our cash, U.S. dollar cash and accounts receivables. The actual FX impact will still depend on the exchange rate movements throughout the third quarter. Thank you. [Foreign language] [Foreign language] The table volume declined for the second consecutive quarter compared to the same period last year. Is there any specific reason behind this? Which applications and process nodes are affected? Michael, please. In the second quarter, we have 11 fewer NTO compared to the same period last year, mainly from the consumer products such as DDI, PMIC, MCU, and sensors. The number of tables for these product categories does not follow a consistent pattern. In some cases, a single table from a major customer can contribute more royalty revenue than dozens of tables from the smaller customers. This is also closely linked to the broader industry trends. From a process node perspective, we have seen a higher proportion of NTOs at more advanced nodes below the 28 nm. This is related to our progress in completing development and qualification at least the advanced process nodes, which support a long-term upward trend in royalty ASP. As foundry continues to develop more process nodes and expand into a wider range of application chip categories, we expect the long-term trend for table volume to remain upward. Thank you. [Foreign language] [Foreign language] When will we start seeing royalty contributions from your company's accumulated PUF-related tables? Charles, please. Okay. Over the past few years, we have accumulated more than 110 tables related to PUF technology, spanning a wide range of applications from leading-edge processor, automotive ADAS, and networking to general consumer products, covering a very diverse set of customers and process platforms. Because security IP typically requires a longer verification and integration cycle, the time from adoption to mass production royalty is generally longer than OTP. However, the stickiness of such IP is also higher. Based on our July royalty report, we have already begun to see some customer applications enter mass production, and the past design wins are now converting into more stable and long-term royalty streams. Coupled with the current strong demand for security IP, we expect both license fees and royalties to enter a period of rapid growth. Thank you. [Foreign language] [Foreign language] There have been market rumors suggesting that recent workforce adjustment and salary changes have caused concern, and questions have been raised about whether your operations are facing challenges. Additionally, some have noted that several members of your management team left in prior years and wonder if they have joined competitors. Michael, please. To clarify, three Vice Presidents voluntarily retired one or two years ago. They remain retired today and have not joined competitors. Our business operations remain strong. In fact, customer demand for our IP continues to far exceed our current R&D capacity. The recent organization optimization was undertaken to improve the operational efficiency and strengthen our technical R&D capabilities. From the end of last year to the end of August, our total headcount was adjusted from 360 to 346, a net reduction of 14 employees. Within that, R&D headcount increased by 6, while non-R&D headcount decreased by 20. We continue to expand our R&D team to meet the very strong customer demands, and we are also bringing in AI algorithm talent to integrate AI into our design process and management system. These initiatives are expected to enhance productivity and result in higher average employee compensation over time. Thank you. [Foreign language] [Foreign language] Now that CLIPTRA Rule of Trust, the OCP specification is in place, has your company noticed any demand coming in? CLIPTRA is the standard for data center security, and CLIPTRA 1.0 was announced on March 1, 2023. We have seen a number of customers begin adopting our OIP as a result of the specification. Based on customers' feedback, mass production could start as early as next year, generating royalty contributions. CLIPTRA 2.0 was announced on March 1, 2024, incorporating post-quantum cryptography. Our IP has already passed NIST CAVP certification and is now being integrated into customers' chip design. [Foreign language] [Foreign language] What is the current status of the collaboration with ARM? Charles, please. Okay, since we are in the ARM chiplet consortium and in the ARM CSS platform, the security is basically supported by our PUF RT. We expect more chip adoption in the 3 nm for the second half, with the collaboration continuing down to the 2 nm process node. [Foreign language] [Foreign language] President Trump announced a 100% tariff on chips and semiconductors imported into the U.S., with sanctions for companies that have committed to or are in the process of building plants in the U.S. What is the impact on your company, Michael? Our IP is licensed to virtually all foundries worldwide, from the most mature to the most advanced process nodes. Since our licensing fees and royalties are paid directly by the chipmaker or foundries and do not involve the physical movement of goods, tariffs do not apply to us directly. Where customers choose to manufacture to avoid tariffs, or any cost or price increase from tariffs, is beyond our control. However, if tariffs lead to a change in foundry pricing, we could be indirectly affected, positively or negatively, since our royalties are calculated as a percentage of foundry price. Thank you. [Foreign language] [Foreign language] Does the company collaborate with the four major U.S. CSP? Charles, please. Yes, for their in-house design chips, these major CSPs are already our customers. Their engagement with us began with the adoption of OTP technology in early projects and has more recently expanded to include the PUF-based security IP, with the scope of application continuing to grow. [Foreign language] [Foreign language] 。 Will the push for China's domestic chip sales sufficiently lead to competition from Chinese IP vendors that could impact your company? Michael, please. China has been rapidly expanding foundry capacity and is driving domestic production, while this led to a drop in foundry price, particularly last year. Our penetration rate has continued to rise. The increase in wafer shipment using our IP more than offsets the decline in the foundry price, allowing our overall royalty to keep growing. Because the IP adoption requires a long lead time and has high switching costs, directly impacting the reliability of the end system. Even when the smaller companies in China develop the similar IP and some customers try them, the result typically leads to the customers switching back to our solution. Thank you. In the interest of time, we will begin the last question. [Foreign language] [Foreign language] Referring back to the earlier point that our R&D bandwidth is under pressure, does this impact our capacity to take on new customer projects? What measures are being considered to address this? Michael, please. The current shortage in R&D capacity primarily concerns the design and the development of OTP and the Security IP for the most leading-edge process nodes. Demand in this area is very strong. As customers using mature process nodes can often adopt the existing IP library, it can reduce the need for customized IP development. To address this capacity constraint, we have already allocated internal R&D resources, for instance, assigned the engineers from the MTP and the Mature Node OTP teams to support the efforts. In parallel, we are actively recruiting new R&D people to further expand our capacity, while also improving our design workflows, including the adoption of AI-driven methodologies. Thank you. Thank you, Michael. We will begin the closing comments. Charles, please proceed. Okay, thank you for attending our conference today. For more information about our PUF-based security IP and the technology, we encourage you to visit our PUF security website and check out our articles and other materials. Thank you again for your patience and support for eMemory. We will continue to work hard on technology and IP innovation and the PUF-based hardware security solutions for our customers and bringing higher returns for our shareholders. Thank you. Thank you, Charles, and 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.