Dear investors, portfolio managers, analysts, welcome to our fourth quarter 2021 institutional investor conference meeting. Today's meeting will be hosted by me, Daniel, the CFO of Alchip, and our CEO, Johnny Shen. We will quickly go over our fourth quarter operation and the financial results. Of course, the 2022 full year outlook. Then we will go into the Q&A session for this meeting. Now, as usual, this is the safe harbor disclaimer. This meeting will be in English. If you need Chinese presentation slides, please go to MOPS to download the Chinese version. For the Q&A session, we also welcome the Mandarin questions. Johnny and I are all good with Mandarin. Please, participants, write down your question to host through Zoom's message function if you don't want to speak out your questions. Please leave your company's name. For the Q&A session, please use the raise hand function, and we will unmute you, and you can ask questions. This video and the audio content will upload to MOPS, maybe after two hours after the end of this meeting. Let's start. Johnny? Good afternoon, ladies and gentlemen. This is Johnny Shen, President and CEO of Alchip Technologies. Once again, thanks for attending investor conference meeting. We appreciate the opportunity to share our 2021 result and also provide the guidance for future business. In case you are not too familiar with Alchip, allow me to make a company update and identification. Our company is founded in 2003 and IPO in Taiwan Stock Exchange in 2014. The current employees, a little bit over 480 people. Three-quarter of our employee are engineers. Since we found the company, we have been successfully tape out more than 480 designs in leading-edge technology. Revenue, last year, we achieved $ 372 million. Yeah, in terms of capacity, last year, we concurrently support more than 30 design activities. More than 80% of our revenue coming from HPC and AI area in leading-edge technology. Yeah, we are one of the VCA member, Value Chain Aggregator for TSMC. Please mute your speaker. Mm-hmm. Sorry. Next page, please. On 2021 recap and summary. We can say we had outstanding year with record-breaking number in all categories. Revenue, $ 372 million. Operating income, $ 65.3 million. Net income, $ 53.2 million. EPS for NTD around NTD 21. Our market cap is approximately $3 billion. Overall, 2021 yearly result outperformed the planned number we made at beginning of last year, despite the incident happened to two of our customer. All detailed number analysis and comparison will be provided by Daniel in a later section. 2021 achievement, not only just in number, we also established many new business in different applications, including cell phone images sensor, smart speakers, automotive, and cryptocurrency. We had multiple tape-out and design win, mainly in 6nm, 7 nm, or 5 nm. Yeah, of course, HPC and AI, including CPU, GPU, GPGPU, CoWoS-related business demand remain very strong from existing customer and also from many newcomers. As for the mass production forecast, we receive incredible volume forecast from key customers. MP revenue will start to surge from late Q2 all the way lasting for at least eight quarters. The capacity limitation is our major challenge. Since business demand is too high, it causes our resource shortage. Wafer, CoWoS and substrate shortage limits the MP volume. Fortunately, with the current allocation from major suppliers, we can deliver a reasonable amount of MP number this year. Of course, we are still working aggressively on the upside for this year, also demand for the next year. Lastly, a quick update for U.S.-China trade war, tension. Yeah, as you know, there are hundreds China customers on the so-called Entity List, including two of our customers. After working with the U.S., China and Taiwan lawyers, suppliers and customers representatives, we figure out a rule and procedure to handle the situation. We have an internal SOP to minimize and anticipate potential impact in case there is any customer or partner on the list. Yeah, once again, thanks for your trust and patience. We have confidence to continuously grow our company and deliver good results. Thank you. Okay, let's get into the financial part. For fourth quarter last year, the revenue, actually we already announced the revenue and the bottom line numbers, so this is just a recap. For the revenue last quarter, our total revenue is $ 89.3 million, which is 2.8% quarter-on-quarter decline, but 34.4% year-on-year growth. For the net income in fourth quarter last year is $ 12.7 million. It's a 1.7% quarter-on-quarter decline, but 55.2% year-on-year growth. For the EPS, translating into NT dollars, for fourth quarter 2021 is NTD 5. For the yearly comparison for 2021, as Johnny mentioned, the numbers in every category is all record high. For the revenue, total revenue last year is $ 372.3 million, up 55.4% year-on-year, and the operating income is $ 65.3 million, up 95.4% year-on-year. The net income is $ 53.2 million, up 88.2% year-on-year. For the EPS, last year is NTD 21.3. For the revenue breakdown by application, you may see that, the HPC remains the majority part of our total revenue. For the fourth quarter last year, HPC accounts for 78% of our total revenue. The niche market accounted for 7%, and the network accounted for 9%, consumer sector accounted for 6% of our total revenue for the fourth quarter last year. For 2021 as a whole, the HPC revenue attributed about 81% of our total revenue, and the niche market accounted for 10%. There was a little bit of networking and 7% of the revenue came from the consumer sector. For the process node, as the company's goal that we are aiming to become the leader of the leading-edge technological design. For our revenue mix in terms of the process node. For fourth quarter last year, revenue coming from 7nm project or even 6nm or 5nm project accounted for 61% of our total revenue. 27% comes from 16nm and 12nm. 28% and the 29 nm contribute about 6% of our total revenue in fourth quarter last year. You may see over 94% of our revenue are in 28nm or advanced technology node. For the yearly breakdown, for the 7 nm, 6 nm, 5 nm accounted for 60% of our total revenue, and the 16nm and the 12 nm accounted for 28% of our total revenue. We can proudly say that in terms of the process node in our industry, Alchip is no doubt the leader. For the revenue breakdown by region, for fourth quarter last year, the revenue from China accounts for 58% of our total revenue. But you may notice that the others accounted for 24% of our total revenue last quarter. The majority of the others came from the North America region. In this year, we believe this number will go up quite a bit, quarter- by- quarter. For the yearly numbers, the 71% of our total revenue came from China. 70% come from other region, which also referred to mainly North American region. For the business review, I guess many of you may knew that, the fatal incident, the Entity List thing. In our view, despite there was geopolitical obstacle, we still [inaudible] a very promising result last year. For both... The reason behind, I think from the big picture perspective, both China and the U.S. market showed very strong physical design demand for the HPC applications, which include CPU, GPU, AI, DPU, many sub- applications within the HPC area. We won several high volume production projects, and the delivery will start to happen sequentially in 2022 and 2023. For the profit front. Now, last year, our profit margin hiked a little bit on multiple reasons. First of all, the 2021 gross margin was 34.2%, versus our 32.6% in 2020. The reason behind this a little bit hiked gross margin is, first of all, the design revenue. The design business was very strong. As I mentioned many, many times to investors, that for the whole industry, actually the demand is much higher than the current supply, especially within the leading-edge technology node and the complicated design. That's the major reason for the margin last year. In the same time, the technology are still moving towards the more advanced technology nodes. We think for this year, 2022, this trend will continue. For last year, another reason for our growth margin is because the higher revenue exposure to the high margin production projects. Some of you may know that, for the first half last year, our production revenue shipped to certain customer with relatively high growth margins, compared to the other production revenue to the other customers. That's also one of the reason for our profit margin performance for the business outlook. Revenue for this year, 2022, we believe the revenue to the U.S. customers is the main growth driver for the whole year. The production shipment for AI chip to our U.S. service customers is expected to surge in the middle of second quarter this year. The demand is very strong, and because of the supply shortage, we are unable to fulfill all the demand from this customer. Secondly, on the demand from the AI application of U.S. customers keep on increasing. I would say the visibility for now already extended to 2023, next year. The orders from this customer is greater than the orders this year. Again, for the industry wide and the physical design/ turnkey demand for HPC, it gets stronger and stronger. I knew that some of the investors are thinking if the HPC trend already into the peak phase. In our view, we still see the overall demand for the HPC is still climbing. Actually, I will say it's keep on accelerating in 2022 or even in 2023. The project pipeline of Alchip is stronger than ever right now. Most of the projects are within the HPC application, and of course, the majority of them are 7 nm or even 6nm or 5 nm projects. For this year, because of the significantly rising production revenue, production shipment to the U.S. customers, the 7 nm will remain the mainstream of our revenue source. In the meantime, we have multiple 5 nm projects to enter the design phase in 2022, and we will have our first full mask 5 nm project tape-out in late second quarter or the early third quarter. Again, as Johnny mentioned, the supply chain management is the major factor for our 2023 top line for our 2022 top line performance. Currently, we are positive and optimistic for the supply chain management. The CoWoS and the substrate capacity are currently very critical factors for our growth. For these two parts, we are seeking every way to ease or to increase the supply for our customers. So far, we have some progress and we are still optimistic to the second half this year or the whole year of 2023. Hopefully we can get a very good support from our suppliers. The current capacity allocations are far short from our customers' orders. Even in this case, we are still confident we can deliver a very promising growth in 2022. I guess that's the presentation for our investor conference meeting today. Thank you for your participation, and we are going to enter the Q&A session. Thank you. Okay. If you have questions, please use the raise hand. Please use the raise hand button. You can unmute your speaker by yourself. Haas, please. Okay. Hi, Johnny, Daniel. Congratulations on the good results, and thanks for taking my questions. My first question is regarding your business outlook. Could you provide your sales growth expectations for this year? Maybe you could also try to provide more detail on the major projects for your design and also turnkey business respectively? Thank you. Haas, again, because the authority, the TWSE give us a very clear instruction that we cannot disclose the numerous guidance for you. I will say this way. I noticed that the current consensus of our total revenue in 2022 has been moved from $460 million-$480 million to about $480 million-$ 500 million. For the consensus, that's a higher end of $500 million. We have confidence that this number is not very difficult to achieve. That's the guidance for this year. Of course, I have to emphasize that how many capacity of CoWoS and ABF substrate we can get dictates the upside of our total revenue. Of course, the major growth driver is the infrastructure shipment to our U.S. customers. The demand is very, very strong. I told some investor that the scale of the order from our customer is far beyond the supply we can find. Even in this case, the shipment volume in terms of the dollar value to this customer for this year is very significant. Let me give you another hint that for last year, the revenue to North America accounts for about 14% of our total revenue. This year, we do believe the revenue from the North American region will account for more than 40% of our total revenue. The revenue to the service customer will account for the majority of this 40%. Okay, thank you. My second question is about your current progress on the node migration. As one of your U.S. peers overnight on its earnings conference call mentioned that ASIC demand will stay strong in the next couple of years, and they are migrating to 3 nm. Could you discuss your expectation for the mid to long-term growth outlook for the ASIC market? As you mentioned, 7 nm will be the major growth driver for this year. Looking beyond this year, when do you think 5 nm will start contributing more than 7 nm for your business? When do you think 3 nm contribution will start? Thank you. Okay. Let me give you the answer. I guess for this part, Johnny can give you more color. This year, of course, because of the production revenue to the U.S. customer, 7nm will still be our mainstream technology node for our company's revenue. For the 5nm, the revenue contribution from 5nm or even more advanced technology now will increase significantly. For last year, we have two 5nm projects. One is the test chip to U.S. customers, and another one is the full mask project to the Middle East customers. For this year, there are multiple 5nm projects from U.S. customers and China customers. Of course, there will be 6nm projects, and most likely we will have our first 3nm project kicking off this year. Johnny, do you want to add something? Sure. Hi, Haas. Let me add, try to add more. Just like Daniel mentioned, the major revenue driver will be 7 nm. I think that's mainly because of production. But in terms of NRE, 5 nm for sure will be the major driver for NRE. Yeah, right now, most of our new customers are pursuing 5nm. The existing customers, the 7 nm already tape out. The next project definitely will be 5nm or 4 nm. So the 5 nm NRE contribution for sure will be the highest among all design nodes. Yeah, also 3 nm, we're going to have a test chip tape out by June timeframe. But in fact, some customers approaching us for 3 nm full turnkey project. Most likely we will engage a few, but tape out will not be this year or even next year. I think based on our estimation, the 3nm tape out will be early 2024. The test chip will come out, will come back sometime next year. Full mask production won't start until 2024. Okay, thank you. You're welcome. A quick follow-up. Uh-huh. Could you try to quantify how the wafer price hike and substrate supply constraint is impacting your sales and margins outlook? Do you have the capability to fully pass on the growing cost to your customers? Thank you. For the price hike from the materials like the wafer, like substrate or the offsets, we can easily pass through these cost increase to our customer without a problem. As I mentioned to investors that some of our revenues, the pricing scheme is cost plus margin. There's no problem to pass through the increasing cost. For the substrate shortage, I said that we are trying to do something to increase our substrate supply. All these things are in progress. Currently, we are very positive on it. For 2023, I think 2022 is almost done. It is very difficult to find a large portion of extra support. We do have some room for improvement. For 2023, since the orders from customer are still very strong, and for this time, we have time. We already engage with the suppliers for the 2023 supply. I personally believe that the supply situation for both CoWoS and the substrate will be better in 2023 than in 2022, this year. Okay, let me try to add more. Yeah, the substrate shortage, I think this is everybody's the problem. Yeah, I think. To us, I'm thinking about there's the upside for Alchip. Yeah, as you know, the substrate supplier in usual case, they won't talk to each individual customer unless they are very big. Even our number one customer in U.S., it's very difficult to get their allocation. They would like to talk to us and discuss it with us because we are representing more than 30 customer. The support we get from the ABF substrate house, we can say is very good. They even talk to us for the further cooperation. In terms of price, I don't think that's an issue. All our customers are willing to pay the substrate price as long as we can get the volume. So far so good. Yeah, as I mentioned, substrate shortage becomes one of our weapons to secure our customers. Okay, thank you so much. I'll be back in the queue. Thank you. All right. Thanks, Haas. Okay. Next one is Sze ho. Sze ho, you can unmute your speaker. Hello, Sze ho. Okay. Hello. Hello, Johnny and Daniel. I have two questions from my side. The first one also again on the back end CoWoS and also substrate. Seems like you are sounding a little bit more positive, right, in terms of securing the capacity. Can you share with us maybe for this year and next year, what would be the fulfillment ratio relative to the forecast you gave to those back end suppliers? Okay, for the substrate supply, I will say for this year, the major customers in U.S., the orders fulfillment rate for now is about 42%-43%. The confidence level for us to achieve about 50% is getting higher and higher since we are getting some commitment from the suppliers. It is impossible for us to fulfill 100% of customers' needs for this year. That's the current situation. Seems to be a little bit compared, let's say, three months ago. Excuse me, your voice is a little bit low. [inaudible] is still getting better compared with, let's say, three months ago? The substrate. I can tell you, everybody in this industry is looking for substrate support. True. True. Okay. Sounds good. Second question. Definitely, going forward, we will target on project with a high volume, production volume, right? Mm-hmm. I just want to check with you guys. Let's say going into the 5nm project, what would be the revenue split between, let's say, NRE and also the production for any specific, let's say, 5nm project? Optimally, I would say. Yeah. It is very difficult to tell because we have so many projects in so different applications. Different application derives different ratio. Mm. It is very hard to answer you. Again, the logic is when you invest more upfront in the NRE, reasonably, we will expect higher production revenue from this project because the customer can always make money back on production. They cannot make the money back from the NRE. That's the logic behind. For the ratio, I'm sorry, I don't have an answer for you. Oh. Is there a ballpark, let's say, the production revenue would be, let's say, 5x or 10 x bigger than the NRE revenue? Our expectation is, in terms of ratio, it will be discussed internally over and over again. In the past year, our production NRE ratio is close to 1: 1. Yeah. Ideally, I think starting from 5nm, 7 nm, the ratio hopefully will be 1: 3. Mm-hmm. 1:3 ratio. For this particular U.S. customer, the ratio will be much better than 1:3. It depends on the situation. Our goal and expectation is 1:3. Okay. Yes. Sounds good. Yeah. Going forward, let's say, into 3 nm, that ratio would go even higher, right? I believe. I believe because the investment getting higher and higher, they need a bigger revenue to get back the money they invest. Okay. Yeah. Mm-hmm. Sounds good. Okay. Congratulations. Okay. Thank you, Szeho. Thank you. Yeah. Next one is Britney Lam. Great. Thank you so much, Johnny and Daniel. I wanna ask a little bit about China. Since you mentioned the U.S. is growing very fast, I'm curious to know what the expected contribution would be from China this year, the application pipeline and, in particular, Phytium? For China, this year, I think the growth mainly comes from NRE. There are so many design opportunities out there. Since we have very good position in the China market, we can grab the best projects on the market for sure. For the production, as mentioned, we have the Entity List last year. Although everything is in progress, at this moment to talk about the substrate supply with the substrate suppliers is really difficult. Hopefully we can get a good result from the substrate supply. I think the production revenue from China market, we expect the strong growth would occur in 2023. It is hard to tell because, let's say, the reason why we don't have a very firm answer for you is because some of the projects we have done, we have taped out are for the startup companies in China. For startup companies, it is very difficult to predict the future shipment. It could be big. Again, it could be small. For certain projects in China, we do have high expectations. For example, we did the smart speaker project with major service providers in China. We believe this project can generate a certain amount of production volume this year. Honestly, we don't have a very good idea of how high it will go. Mm-hmm. Okay, let me try to add to that. In terms of NRE, I don't worry at all because in China, to be honest, we have a very good reputation. Any new customer who want to do the leading-edge technology, they all come to Alchip. We can say for the past year, every month, even every week, we have a new customer come to us. Unfortunately, our resources shortage limited us to take many projects. In terms of production, people doing the GPU, CPU, I also have a high expectation, but I also have has a certain uncertainty. Because of a little bit sensitivity for that area, we're thinking about penetrating other application. Just like Daniel mentioned, the smart speaker from the tier I, the service provider, we already won. Also the cell phone image sensor, using for the multiple, tier one, cell phone maker in China. That project we also won. Go back to the Phytium. We still have the good expectation on this account. Based on their forecast, I think it's still very, very sexy. Britney. I see. Thank you. Just one more follow-up question that you mentioned earlier about the shortage on not just substrate, but the CoWoS. Given the technology and also the high cost of it, what's your strategy to get supply and can you quantify how much you actually need? Okay. Go ahead, Daniel. Mm-hmm. Okay. If you are asking for volume, I cannot give you the number because we have agreement with the suppliers. It is not a good thing to disclose the numbers because, you know, almost every customer is asking for capacity allocation from substrate vendors. But you may think this way, that for substrate vendors, they want to do business with Alchip. Because by doing business with Alchip, as Johnny mentioned, they, you can say they connect indirectly to multiple good customers with very good upside potential in the future. Even though for these two years or three years, it is the golden period for our substrate suppliers, they also want to diversify their customer portfolio. Through us, it is a very good way for them to do so. Because of that, the substrate supplier, no matter you name it, Kinsus, Nan Ya, UMTC, Kyocera, they all gave us very, very good support for our customer. Okay. Thank you so much. No problem. Thank you, Britney. Charlie, please. Hi. Hello, Charlie. Mm-hmm. Hello. Hey, Johnny, Daniel. Good afternoon. Mm-hmm. Yeah. Now since you have getting a very heavy exposure to a U.S. regional customer, my question is about how sticky is the business going to be in the long term and also some potential competition from the U.S. localization. For example, now for the U.S., AWS, right? They also have several other projects like Graviton, their own CPU designed by themselves. In what circumstance do you think this kind of key account will decide to design chips on their own since they have this kind of capability? And how are you going to address this long-term risk? Mm-hmm. Okay. Let me answer you first. First of all, I cannot speak for our customers, but, in our field, I think, as you mentioned, for example, AWS, actually the reason why they do the ASIC is to gain more control and, to differentiate their services from their competitors. For them, essentially, they are still service providers. They have many applications, and they have many design needs. For now, they still put the majority of their engineering resource to the front end, to the applications. For the back end, first of all, for the leading edge technology node, they don't have too much choice. I think, in the future, there will be a hybrid structure. They may choose one or two chips to do the whole design portion by their own. In the meantime, there are still many design opportunities there for the outsiders. As you mentioned, we did the inference chip and they did the Graviton. If you are asking about the stickiness or the sustainability of their project, I would say we already won another project from this customer. We almost won a third project from them, I guess, in this quarter. We don't doubt this relationship with customers will last not shortly. I think it's a long-term partnership, kind of, relationship with this customer for the chip design. Okay. Thank you. Okay. Yeah. Let me try to add to that. I agree with Daniel. I think working with this particular customer we consider is a win-win. Yeah, to be honest, they are not so price sensitive, and we are not charging them too much. I think the relationship during the design and also during the production is getting better and better. That's why, in addition to this product line, they've referred another product line to us and fully endorsed us for winning another project which we already did. In the future, I think we will respect the customer's decision, and we will try our best because in terms of design, we have much more experience than them. They can. They're only doing, like, 2-3 tape-outs a year at most. We have 30 tape-outs. We accumulate enough experience before next generation. Yeah. Working with us, I think is, we always consider it as that's the best way. I told them, "Please consider our team as a part of your company." I think so far they agree with this concept. Yeah. Great. I think so far so good, the relationship. Yeah, thanks. Mm-hmm. From the U.S. localization perspective, right now you have a super high exposure to HPC. Mm-hmm. High exposure to the U.S. region. The Intel Foundry Services, you know, their fab is really to localize an HPC project in the U.S., right? IFS, they're funding, like, $1 billion. Mm-hmm. To enable ecosystem. Do you think there's a kind of long-term competition for you in the U.S.? Yeah, let me try to take that. I think, for the U.S., if they want to establish this back-end related resources, they will take a long time. As you know, for the past 20 years, not too many engineer willing to do the hardware. Even right now, the demand is very high, but in the short time, if they want to build out their own thing, I think it is very difficult. The AI company you mentioned about, they also have a very ambitious plan. In fact, they also come to us for this design opportunity. I am a little bit worried about the localization, the geopolitical issue. Maybe later on, they may have some restriction using the China design resource. That's why, starting from last year, we've been starting to build up a big amount of resources in Japan and also in Taiwan, in order to anticipate this. So far, among all our 40 customers, only one customer has a particular request. Do not use the PRC citizens apply on their design. So far, I don't receive too much restriction on that area. Okay. Thank you. Yeah. Thank you. My next question is about the 3nm, right? Because it seems to me right now you can see that TSMC's first wave customers are all huge companies, right? I'm not sure going forward, given very expensive wafer cost and also the design fee, photomask, et cetera, do you expect your customers? Because your company's edge is really towards the smaller volume niche projects for smaller customers, right? Do you think your customers will migrate to 3nm? I know you have one project, right? Just in terms of the cadence or the scale. Mm-hmm. Do you think a 3nm is going to be big revenue stream to you in the coming years? Okay, for 3nm, basically it's a little bit too early to tell, but in fact, we worry about the similar situation for 5nm two years ago. Hmm. After all, we have so many 5 nm customers. Yeah. Looking forward, as long as the technology improvement and performance improvement, yield improvement, I think yield up to certain stage, I don't worry about the business opportunity. Yeah. Right now it's already two to three potential customers talking to us about 3nm. Right now, 3 nm for me is a little bit too early. I don't think the production will kick off starting from 2024. Starting from next year, I expect we have a few 3 nm design wins, and by the end of next year will be some tape-outs. This year, our goal is to take two. I think that's on the design phase, I think that's good enough. For this year, our focus will be 5 nm NRE plus 7 nm production. Okay. Charlie. Yeah. Let me answer you. I think that the story repeats again and again. For 16nm, many people said the NRE is too high, so the number of the customers will decrease. It turns out for 16nm, the customers are flooding into this node. Again, these things also happened for 7nm and the 5nm. To us, our view is, as Johnny mentioned, it's too early to tell. But to us, we will think within the HPC area, because the majority of our customers, or the majority of the chip makers, actually they are not selling chips, and they are building up systems to provide services to their customers. So the NRE investment will become more and more reasonable. They don't. Now, I won't say they don't have to. The concerns for the end product price is not a concern anymore. I think the situation for the HPC area comparing to the consumer products is a little bit different. I see. Yeah. Thank you. Yeah. I have one or two smaller questions, but it depends on you guys whether I can continue or you want to take other audience question. Okay. If you have questions, please use the raise hand function. Yeah. Charlie, yeah. Yeah, okay, just one more question. No problem. Yeah. From you. Okay. Yeah, I do this quickly, right? About China. It seems like lots of China companies say they still you know introduce HPC chips, right? Namely for example Pingtouge or- Mm-hmm. Baidu, whatever, or some GPU startup. For those China customers, they don't rely on design service. How serious future? I just want to get a sense, you know, what exactly you evaluate to China accounts, whether they can really, you know, survive without your support? Okay. Charlie, let me answer you first, and I believe Johnny, he's located in Shanghai. He can give you more color about it. For my observation, the energy of China's chip design business actually right now is actually in the startup area. They get very good funding, and they, because of the funding, they can attract many engineers with good incentives. The speed of doing chips, actually, for the staff, they are quicker than the existing giants. I knew that you mentioned that for the service providers like Alibaba, like Tencent, or like Baidu, they are all trying to do their own chips, and those chips are in the most leading-edge technology nodes. Based on our knowledge that those chips are to them kind of experimental kind of stuff. When they want to do the full mask production version of the chips, I will say we have very high confidence they at least will discuss with us. Since if you want to do the mass production version of chips, if you don't have experience, it will delay your schedule. There will be many obstacles or problems going to happen. We don't worry this too much. Okay. Thank you. Mm-hmm. In China, I think the other than this major service provider, so many startup company, high-profile startup company, they have a design resource from the tier I U.S. company and form a team to do the design. We have at least eight to 10 customer like this. Design experience, Front-end design experience, I don't worry about too much. They also have enough funding. They also have a very fruitful design pipeline. We finished the 7 nm. Now they are doing 6nm and 5nm all together. In terms of production volume, I think that's a major challenge for us and also TSMC. We're working with TSMC very closely because the support effort is very high for both of us. Production expectation, I think is very important. We are working with the related supplier, including the foundry, including the substrate house, and interviewing those customers. I think overall, we have a consensus that our customers may have a good chance to hit a certain amount of production. I'm looking forward to see some production happen, yeah, late this year or early next year. Yeah. Mm-hmm. Thanks, Johnny. This is a little bit important information to me. What you're saying is that front-end design. Mm-hmm ... is not a big issue for those staffs or even BAT. Is that the right way to think about the back-end- Mm-hmm. The place and route is now the key bottleneck for entire China's HPC. Exactly. Industry. Exactly. Yeah. Yeah. As you know, front-end design is not a process technology dependency. Yeah, they're just doing the algorithm and coding. Yeah, they don't worry about the process technology too much. Mm-hmm. They have experience because they're all coming from the tier I company like AMD, like NVIDIA or others. Yeah, but back-end is purely experience driven. Yeah, you need to have a certain experience to understand the process technology for current technology before you go to next generation. Right. You can see so many bright young engineer in front end, but you can hardly to see to find a young engineer very good for the back end. Back end is a purely experience driven. Yeah, you need to learn from the hardware algorithm. If you are good, if you are smart enough, then you can pick up the good algorithm very fast. But back end stuff is need to be built by experience. That's why the startup company, I think it's very difficult to find a good back end engineer and back end team, but they can find some guru from the product company to form a front-end team. Right. Right. Mm-hmm. Got it. Thanks for those information. Super helpful. Thanks, gentlemen. Thank you. Thank you, Charlie. Okay. Here's a question from message. How much NRE from N5 would account for 2022 NRE revenue, and how are the nodes going as well? I would say, first of all, I'm lazy. I didn't do the calculation, but for sure, the revenue from N5 this year could be much higher than we had in 2021, since we have multiple N5 projects either in design phase or we will tape out within this year. Roughly, I would say if we assume like five N5 projects, roughly $ 40 million-$50 million. Yeah, that's maybe the amount from NRE. For the production, we don't know because we are going to tape out one N5 for mask project in the middle of this year. Even there, the production contribution will be very small because of the cycle time. For other technology nodes, for last year, the 7 nm revenue already accounts for 60% of our total revenue. For this year, I believe this number will be even higher. Okay. Sze ho, please. Yes, two quick follow-up. In second half this year when we are ramping up the production business, what sort of growth margins should we be expecting? You see the overall gross margin or? Overall, yeah. Overall gross margin. Because the NRE is so strong, it's also very strong this year. Even with expanded production, revenue percent in terms of percentage of total revenue. Mm-hmm We are still very positive that our overall blended gross margin could be above 30%. Okay. All right. That would not be materially different from, let's say, from Q4 last year's level, right? No, because last year the NRE percentage is higher. For the production, as I mentioned in our slides, for the production in the first half, the growth margin for those products were high. Okay. Got you. For the R&D headcount, our hiring this year, what are we internally projecting? More than 100. We issue more than 100 offer letter already. Mm-hmm. Of course, there will be people come and people go. Mm-hmm. We are still targeting to expand our total employee headcount to 600- 600 by the end of this year. Oh, okay. From last year's year-end is 480, right? Actually close to 500. 500. Oh, okay. Basically adding 20%. Yeah. Mm-hmm. I see. In terms of the operating expense guidance this year, I'm not sure if you can share with us on the call. There will be double-digit. For last year, the operating expense is about $ 62 million. For this year, I would say the operating expense range will be at about $ 73 million-$74 million. Oh, okay. All right. Okay. Thank you. Mm-hmm. Thank you, Sze ho. Okay, now it's 3:30 P.M. We take one more questions and we can end up this meeting. Is there any questions? Please use the raise hand function. Charlie, please. Yeah. Just a quick follow-up. Do you expect any revenue contribution from Bitmain first half or second half this year? I know you cannot talk too much, right? Just in terms of, do you still see some revenue stream from Bitmain? We hope we can have revenue from Bitmain this year. In our forecast there is revenue contribution from- Mm. this customer. Is it more from NRE or turnkey? Charlie, I cannot discuss it in detail. Okay. Yeah. Fair enough. Thank you. Okay. Thank you. Okay. Okay, I guess that's it. Thank you for your participation, and thank you for your support to Alchip. Thank you. All right. Thank you very much. Thank you. Thank you. Bye. Bye-bye.