Welcome everyone to Parade Technologies Limited's 2023 fourth quarter webcast investor conference. Investor Relations of Parade Technologies, Mr. Yo-Ming Chang, will present 2023 Q4 and fiscal year 2023 financial results first. During the presentation, all lines will be placed on mute to prevent background noise. After the presentation, there will be a question and answer session in English by CEO, Dr. Jack Zhao, and Vice President of Finance, Mr. Kuowei Wu. We also will remain last 15 minutes for the attendees who would like to ask questions in Chinese. Please follow the instructions given at the time if you would like to ask the question Welcome to Parade Technologies Limited's 2023 Q4 webcast investor conference. Today's meeting will first be presented by Investor Relations, Mr. Yo-Ming Chang, who will report Parade Technologies' financial results for the Q4 of 2023 and the entire 2023 fiscal year. During this presentation, 2023 fiscal year. During this presentation, your phone will be in mute mode. After the presentation, we will arrange for President Jack Zhao, Ph.D., and Vice President of Finance, Mr. Kuowei Wu, to take your questions in English. in English. Additionally, we will reserve 15 minutes at the end to take your questions in Chinese. And now, I would like to introduce Mr. Yo-Ming Chang, Investor Relations of Parade Technologies. Mr. Chang, please begin. Thanks, Jason. Welcome everyone to Parade Technologies' 2023 Q4 webcast investor conference. Parade Technologies' fourth quarter 2023 consolidated revenue was $121.3 million, and the net income was $20.06 million. Its both basic and the fully diluted after-tax earnings per share were $0.25 and $0.25, respectively. These results compare to consolidated revenue $101.45 million, and a net income of $14.48 million, or $0.18 and $0.18 per basic and fully diluted share in the year-ago quarter. In US dollars, the fourth quarter revenue increased 2.71% sequentially, and it was up 18.41% year-over-year. The gross profit in the Q4 of 2023 was $31.91 million, an increase over 1.44% from the previous quarter, and an increase over 16.19% compared to the same quarter of last year. For the fiscal year 2023, the consolidated revenue was $441.25 million, representing a decrease of 35.1% from $679.92 million in the prior year. Gross profit was $192.93 million, and the operating income was $62.87 million. Net income was $64.97 million, or $0.82 per basic share, and $0.82 per fully diluted share. These results compare with net income of $167.25 million, or $2.09 per basic share, and $2.06 per fully diluted share in the prior year. Based on the current business outlook, Parade is providing the following guidance for the Q1 of 2024. Revenue is between $114-$126 million. Gross margin is between 43%-47%. Operating expense is between $32.5-$35.5 million. On November 29, 2023, Parade announced the two new eDP T-Con device, DP821 and the DP823, that comply to the newly released eDP 1.5 standard. Systems utilizing eDP 1.5 start production in 2024, and Parade's new devices target the mainstream high-volume display market. 120 hertz is the trending as the major frame rate for both consumer and the commercial premium notebook models. The DP821 supports display solutions up to WQXGA 120 hertz, and the DP823 supports up to WUXGA 120 hertz. The DP821 and the DP823 provide full eDP 1.5 functionality, including early transport, Panel Replay, which is the preferred function to use for panel self-refresh, and other advanced features, including GPU branch-specific variants. Both DP821 and the DP823 support 30-bit input and the global dimming for Display HDR 400 performance… The new DP821 and the DP823 devices offer backward compatibility with eDP 1.4b and earlier device, as well as compatibility with source device compliant to the new specification. On December sixth, 2023, Parade announced the availability of the PS8481, PS8483, DisplayPort 2.1 2-to-1 retiming MUX retimer family, and the PS8431 HDMI 2.1 2-to-1 retiming MUX for commercial and consumer PCs, host systems and peripherals. PS8481 and the PS8483 support DisplayPort 2.1 up to UHBR20, 20 Gbps per lane, delivering up to 80 Gbps total bandwidth. The devices are fully compliant with the VESA DisplayPort 2.1 standard. PS8431 is compliant with the HDMI 2.1 specification, features FRL support up to 12 Gbps, and the backward compatibility with TMDS up to 6 Gbps. The devices support low power consumption for standby and the low power states, greatly extending the battery life of the mobile devices and enabling system Energy Star compliance. [Foreign language] 126 million, consolidated gross margin is 43%-47%, and consolidated operating expenses are $32.5 million-$35.5 million. Based on November 29, 2023, Parade Technologies announced two chips supporting the latest eDP 1.5 specification timing controller, DP821 and DP823. Computer systems adopting the eDP 1.5 standard are expected to enter mass production in 2024. Parade's new products mainly target high-volume mainstream display products, whether consumer or commercial notebooks. 120 Hz is gradually becoming the mainstream display frequency for high-end notebooks. In response to this trend, Parade DP821 can support WQXGA resolution up to 120 Hz, while DP823 can support WUXGA 120 Hz. DP821 and DP823 fully support new eDP 1.5 features, including Early Transport, the new mechanism Panel Replay preferred for panel self-refresh, as well as specific functions defined by various GPU vendors. DP821 and DP823 both support 3Speed color input, full-area dimming, and Display HDR 400 color performance. The new DP821 and DP823 are compatible with the latest standard systems, and backward compatible with existing eDP 1.4b. On December 6, 2023, Parade Technologies announced its PS8481, PS8483, DP 2.1 two-to-one retiming multiplexer, retimer series products provided for commercial and consumer personal computer host systems and peripheral devices, as well as PS8431, HDMI 2.1 two-to-one retiming multiplexer. PS8481 and PS8483 support DisplayPort 2.1, each channel can support up to UHBR20, 20 Gbps transmission rate, overall bandwidth up to 80 Gbps. The series products fully comply with VESA DP 2.1 specification. PS8431 then complies with HDMI 2.1 specification, and supports FRL up to 12 Gbps transmission rate, at the same time backward compatible with TMDS up to 6 Gbps transmission rate. The series products as well as low energy consumption support standby mode and low power mode, greatly extend the battery life of mobile devices, and make the system compatible with Energy Star requirements. It is my presentation for 2023 Q4 and year 2023 financial results. Now I transfer to CEO, Dr. Zhao, to answer your questions. Zhao, you may begin. Thank you, Yo-Ming. And ladies and gentlemen, we will now begin our English question and answer session. If you wish to ask the question, please press star one on your telephone keypad and you will enter the queue. After you are announced, please ask your question, and every time you could ask two questions at the most. Should you wish to cancel your question, you may press star two. Thank you. Now, please press star one on your telephone keypad if you would like to ask the question. Thank you. And our first question will be coming from Fion Chu of Daiwa. Go ahead, please. Hi, Jack. Hi, Yo-Ming. This is Fion from Daiwa, and Happy Chinese New Year ahead. I'm just wondering, since recently, AI PC has become a hot topic, and could you please share with us, what's your view on AI PC demand this year? And do you think it will really help accelerate the PC replacement cycle for this year? And what's your business opportunity for retimer or any design win we have seen so far? Thank you. Okay, thanks, and happy the lunar year. Yeah, the first question regarding the AI, yeah, we were in the CSU and went to several private booths to see the AI demo and the performance. I think so far, we saw the AI notebook or PC perform edge AI calculation or AI performance. The productivity improvement are impressive and some of feature and previously hard to believe the notebook could perform. And I think that 2024 will be the first year the notebook PC equipped AI acceleration, the competition for those the performance improvement, productivity improvement. Of course, among those features or functions, the Microsoft Copilot play a significant important role to enable those features. In terms of AI notebook or PC, one of the key performance improvement is a large computing calculation, and the current CPU are hardly catch up. So you will need to have the AI acceleration, the calculation, either through the external graphics card or use through the integrated into the CPU chip, or there are third things. You put a acceleration chip into the notebook to achieve certain performance. And we had our device, in fact, demonstrated together with our customer and through the OCuLink interface on the external graphics card. On that graphics card, in fact, has our PCIe Gen 4 retimer, and through the cable, OCuLink cable, has our PCIe Gen 4 Redriver there. So we're proud and we are associated with those, the first generation and the performance on the edge type of AR machine. Actually, it performed pretty well because you have external, the graphics card there. On the integrated solution, we engage with the OEM to designing our USB4 retimer into the Qualcomm platform, and soon enough, those notebooks will be on the market, supplied by multiple OEMs. Yeah, we foresee the more, VR, AR-enabled notebook into the market, and we will have more opportunity, largely associated with those high speed, the PS device will be introduced to the market. So we are pretty positive. We would like to see more functionality, productive, productivity improvement into those AR machine. Got it. That's very clear. The other question from me is that, could you please update us the product mix for Q4, and also their guidance into Q1 and, the demand outlook of our standard plus customer? Thank you. Okay, thanks. In the past Q4, our DP product line is above 30%. Our high-speed PS product line is above 40%. Our TC product line is lower than 20%. Our TT product is close to the 5%. And into the Q1, the Q1 is a typical lower seasonality for PC and notebook, largely because we will have about 10 to 2 weeks of holiday season, and that's about 10% of your working days. So typical, the Q1 for PC or notebook is a lower season. However, in our guidance, and we already provide our guidance, and we are guided pretty similar to what we had on the Q4. So we think, relatively to Parade, Q1 is compared with traditional Q1 quarter. We think we're pretty happy to see the strong demand. And we do see more shortened demand, pulling demand in this Q1, just in the first months of Q1. So that's what we see so far. Got it. Could you please also update us, the outlook of each product line, like which we're, we're seeing growth or decline into, the Q1 this year? I would think the PS product remain a good momentum on the demand side, largely because of more machine, more notebook will have USB4 connectivity there. So our retimer chip will have more opportunity and with a good volume. And our DP product might have a good recovery because previous 2023, they had quite inventory in the channel. Now, those one, the channel inventory are pretty diminished, so they will have more shipment in the Q1 for our DP product. Rest of them are pretty much similar. And then noticeable, that our high-speed parts may have a good opportunity, really associated with the USB4 retimer. Got it. Thank you, and Happy Chinese New Year. You too. Thank you. Next one, Daniel Yin, Morgan Stanley. Go ahead, please. Hello. Hi, good afternoon, Jack, Judy, and Yo-ming. Thanks for taking my question. My first question would be regarding more near term, on your gross margin. So, when I look at your margin trend in 4Q, it's edged down slightly. But your guidance for 1Q, midpoint remains at around 45%. And you mentioned that, in 1Q, your high-speed product, which is the PS product line, will show, pretty, promising growth. At the same time, your DP also recovery. So, I'm kind of wonder what's the, what's really driving the, the margin fluctuation here, because, looks like the product mix is similar in 1Q, versus 4Q. And how should we think about, going forward, your, your gross margin trend into 2024? Okay. Yeah. Thank you for the question for the gross margin moving forward. I think a gross margin is a complicated factors, and there are few things factor. One is your cost of your product. The second one is your selling price. The third one is really the we have a certain amount of inventory write-off as the aging product by our loss. So those three factors play together, and we try to manage our gross margin to the range of our guidance. And we don't think the gross margin will have a dramatic change or big change, but remain within our guidance. But if your granularity to manage the gross margin could be difficult. So there will be some slightly change and up and down, but we try to work harder to manage this. Those are the three factors. As I said, your product cost, the manufacturing cost, and I think the manufacturing cost at this moment is slightly benefited to us because the whether foundry, whether the assembly line try to reduce the price to attract more the customer and the volume customer. And secondly is your market, the product price. And on that side, I have to acknowledge that all the parts or mature parts, you start to see customer push you to reduce the price. The third factor really is the inventory and when it's aging, and we have to write off as per our inventory rule there. Yeah. Thank you. Thank you, Jack. If I can follow up, you mentioned about the last point, which is the inventory write-off. Could I ask, did you write off any inventory in Q4, and what's the amount? Any chance this inventory could buy back into 2024? Okay. So we have been written off our aging inventory since the H2 of 2022, by our aging rule there, every quarters and quarter- by- quarter. However, those product, we also sell those products once there's a demand there. So the, on the book, you're written off, but you really did not scrap those, the parts, and we happen to be laid out and a lot of them are sell to the market when the demands come out. So yeah, that's like a push-and-pull thing. And yeah, to the specific Q4, we did have the certain, I think a kind of small amount of return off on the inventory, and we continue do that by our the inventory management, the aging rule there. Sure. Thanks, Jack. My second question is regarding your PS line. You mentioned about the USB4, the adoption continue to go up. Could you update to us what your expectation for your for the USB4 adoption this year? And, also, I think we mentioned a couple of times that PCIe Gen 5 retimer is going to ramp up into 2024. Could you also give us some updates on the schedule, so both USB4 adoption and the USB4, sorry, PCIe Gen 5 retimer ramp-up timeframe? Thank you. Okay. Yeah. For the USB4 retimer, and we are actually pretty positive, and we -- in the 2023, we're shipping good amount, retimer. We talk about millions, millions. And in the 2024, we see significant ramp up, and we're talking about multiple times of demand from the 2024 versus 2023. So that's the, that's pretty positive. Well, mainly our device is on the AMD platform and Qualcomm platform, so those are the, those are the positive thing. And we also developed during the Q4 quarter, we also successfully developed USB4 v2, or previous people call it USB5 or Thunderbolt 5 retimer chip, which had 80 Gbps on the FinFET technology. And that's a prototype, and we think our technology take a lead on this particular segment. So we're pretty positive from the USB4 and the current generation and the future generation. In terms of PCIe Gen 5 retimer, as we previously talked about in the Q1, we will have one of our customers, a pretty credible customer, will start to ramp up our PCIe Gen 5 retimer. We still hold this view, and we in fact did ship some MP parts to our customer. So that's what we see, and we'll continue having the USB4 retimer devices shipping to our customer, having the new design win associated with those workstations and so on, so forth. And actually pretty interesting, those devices are fitting to the workstations or those traditional customer workstations pretty well. Thanks, Jack. Yeah, look, looks like the USB4 demand is much stronger than our previous commentary. Thanks for the update. Lastly, just also I want to ask about DP, mainly on the MLA T-Con. So, from Jack, your observation, how do you think about the MLA penetration into the no matter the notebook market or the pad market? Also, could you share with us how you think about the competitive landscape, since this is a, you know, high entry barrier, high margin business, so maybe there will be some other competitors. But how would you think about the competitive edge from Parade? Thank you. Okay. We have been shipping to AMOLED T-Con solution to tier one customer for a few years already on the notebook. And we will have a major ramping up AMOLED T-Con in 2024, or pretty close to ramping up with a large volume. And AMOLED, the solution for whether for notebook or tablet, I think a tablet probably more attractive because those are the consumer application and display, vivid display are more important. The color accuracy may not be as important as the notebook, besides the AMOLED may provide other features for tablet. For notebook side, the AMOLED is one of choice for the high-end segment. However, the AMOLED still is more expensive panel for the notebook application. For commercial application, the advantage of AMOLED notebook to those commercial notebook could be quite limited, and because you care about the power, you care about the accuracy of your color. So it's a competition there, depend on OEM, how they present those notebook to which market segment. Certainly, the people hope AMOLED panel may get cheaper along the way as technology is getting mature, but at this moment it's still kind of expensive. And it remain in the high-end segment of notebook, or it's still quite niche, I would think, at this moment, because we are shipping quite some volume there. But compared with whether LTPS or whether the oxide panel, the volume remains more. Thanks, Jack. So, just one last thing. Could you also share us about the competitive edge from Parade on the AMOLED T-Con? Yeah, also any- Yeah, I think the AMOLED T-Con at this moment largely is a ASIC chip, right? It's associated with a panel panel customer definition of the AMOLED. And the customer, the panel customer in the Samsung versus the BOE are different, or LG are different. So you have to design towards the other panel spec. So that's kind of... It's very different from today's amorphous or LTPS or oxide. So we work with those panel customer to design sort of ASIC type of chip with them. Okay? It's a different from today's business model, which you typically design a T-Con you can fit into panel A or panel B factory, you are pretty much the similar, right? So that's thing. We continue work on the mainstream, work with our OEM customer to define for those the AMOLED solutions. I see. Thank you. Thank you, Jack. Those are all my questions. I'll be back in the queue. ... Thank you, Daniel. Next one, Eric Chen, UBS. Go ahead, please. So thank you. So happy Chinese New Year to Jack and Yo-Ming. My first question is on USB4, just follow up with the question, talking about the win on AMD platform, also Qualcomm. So I'm just curious about your take. So is it possible for you to get any closer beyond AMD and Qualcomm? And what's your expectation about the penetration this year in notebook? We hope we could penetrate beyond the AMD, Qualcomm platform, right? Our customers, in fact, are encouraged, or themselves, are trying, talking to their suppliers to have the suppliers like us to into the, for example, Intel platform, right? So, a few of OEM customers are talking to Intel and on this, or they try to define the retimer differently if Intel cannot provide the solution. So, we saw the OEM customers try to kind of do this and, however, we don't know whether they will be successful or not. We certainly willing to support our OEM effort to penetrate to the other platform. However, for Parade we would think the USB4 retimer in 2024, just started from beginning, there will have more into the notebook and the eventually the USB4 on notebook will be pretty high percentage. Once by Microsoft's rule, once you have one port, one port is USB4 and your entire notebook, other ports has to be USB4 as well. So for the system which has two USB Type-C there, so they may demand two of those chips. If it's three or four, you might demand more. So the unit-wise, it could have a good size even in the AMD or Qualcomm platform. We're excited to see not only for this generation on the USB4, we are marching towards next generation on the USB4 v2, or previously we called USB5 or Thunderbolt 5. And we think those one will carry more value to us and provide more technology advantage to us, and will have a higher SP price as well. So we're moving forward to that direction. Oh, okay. Thank you. Maybe a quick follow-up on that, and then I'll have another question. So I think you talked about USB4.2 and the content, potential content gain, and I think in your early, early remarks, you talked about the USB4.2 moving to FinFET node. And I think if I recall, you said the USB4 retimer is priced at about $2.7. So may we have your, like, initial gauge about how much USB4.2 pricing could be? I don't know exactly, because the market has not getting over there yet, but we only can judge. You have to use the more advanced, the technology to do this, and the complexity increase, dies has increased, and that's what we view, your selling price has to go up. Hopefully, the margin also will be better because that's more advanced technology there. I'm stuck on that view, but it should be much better than the years before itself. Understand. And my second question is about your competition. I think Chinese players are right now very aggressive in the driver IC spaces, and they're, like, going beyond mobile. They're also getting into PC devices. So how would your competition in China shape up, and how would that affect your driver IC margin profile and also your on the sale strategy? Okay. Yeah, thanks. And for us, we are selling the driver, is a so-called SIPI-based driver. That's our proprietary interface. So those driver can only working with our T-Con, which equip the SIPI interface there. That's where the our bundle solution together. Yeah, we saw on the low-end segment of driver, and there's a lot more the that few of startup go very aggressive to on the price side. And I don't think we do see those one there, but those are low-end solutions, and it does not impact that much on the middle or high-end market. And besides, those driver does not work with our T-Con anyway, right? So that's the one thing, and our interface is a proprietary in certain degree, help us. In the large, in the direction-wise, we moving or we push forward our integrated solution, which is our TD, and, that's a T-Con driver integrated solution. We had a success on our 3210, and then now we're shipping a newer device, 3230, and, with the PSR there, and start shipping large volume. We also have the low end, we call it, for the amorphous solution. And those one on the low end are really to compete your, the driver T-Con separate solutions. And the cost, pitch cost, the towards the panel, towards us, are way improved. So for the larger picture, we are moving the game and go to the TD solution. And besides, we also not only T-Con source driver integrator, we also integrate our, touch into it. So recently, we actually had a win with a Tier 1 customer on our TTED device for the Chromebook, and because those touch source driver T-Con integrated solution provide a value to those customer, even in terms of price or in terms of integration level. So our solution towards the competition really moving up the supply chain, the full chain, to go to the integration. And I think that's not only benefited to us, also benefited to our panel customers. All right. That's very clear. So thank you very much. I'll back to the queue. Thank you. Thank you, Eric. Next question, Jamie Ye, KGI. Go ahead, please. Hi, Jack and Yo-Ming. Happy New Year. I have two questions. The first one is, for your first quarter guidance, things that is better than seasonal, and it translate to 25% around year-over-year of growth. Do you think that we can expand this kind of growth into the rest of 2024? And which products will grow higher than others? Okay. Thank you. And I think thank you for the positive notes for our Q1. Mm-hmm. I think the we has a better visibility for H1 year of 2024. Mm-hmm. And then we think, you know, it will remain good, the growth, the momentum there. Mm-hmm. And, uh- Mm-hmm ... compared with 2023. And, the H2, and we think it will - if the momentum remain there, we will do better in the- Mm-hmm ... Q3 and the Q4. And, I think we are pretty positive on this. And partially because 2023, we had a pretty bad year, and we had a, every semiconductor company all had the inventory overhead issue. Now, on the channel, the inventory overhead are gone, so we could ship a lot more than before. And, so we're pretty positive on the 2024. And besides, the general momentum for our product, we have a few new category segment join the force to create more revenue, which we did not have previously. For example- Mm-hmm ... the automotive, start to shipping more, and we start to shipping, more on the, server area and data center area. Mm-hmm. And those are the positive sides which we did not have in the 2023... Good point. But we are certainly will have on the 2024. Yeah. Jack, when you say, if the momentum remains, H2 will be better, do you mean, sequentially or, compared with last year? Typical, the second half for notebook or PC segment- Mm-hmm ... will be better than the H1. So- Okay. Yeah, it will explain to, is it both sequentially- Mm-hmm ... so as the year-over-year, because 2023- Okay. Yeah, yeah, year-over-year, and- Low base. I see. Yeah. ... And when you talk about the new category, like the automotive and server, do you think that these area, new areas will contribute like 5%-10% of your? I did not check it, I did not check exact percentage. You probably have to talk to Yumi afterwards. Mm-hmm. We do, especially automotive, we have a do have a new path worth up to or adding the more device to our current automotive customer. We're shipping in 2024, and it's not only one and a multiple automotive customer start to contribute to our bottom line there, or the top line and the bottom line there. Mm-hmm. I see. Thank you. And my second question is about things that the AI PC AMD's will benefits Parade's from the high-speed product, like retimer on USB4 and PCIe retimer. And I want to ask your opinions about foldable, because foldable smartphone seem it's likely to cannibalize tablet. And do you think that may somehow we need to worry about the tablet demand for this year? Or foldable trends will actually increase OLED penetration on tablet, even if now it's expensive. I think at the display side, OLED, the penetration into the portable device, like a tablet, probably should be, should happen. And Mm-hmm. As we previously discussed, because it does provide advantage for portable device. In terms of AI going to portable device. Portable, mm-hmm. AI, we say it just because the computation power requirement. Mm-hmm. Uh, we- Mm-hmm. -in the short term, I think we will more see on the notebook or PC platform. It's- Mm-hmm. really for improve the productivity. Computing power. For commercial usage, and also the, it does have a computing power with good experience for users. In the CSU, we had tried a few of the generative case for the AI PC. You might take 20, 30 seconds, you will get a get on the solution, pretty appreciable and pretty amazing. However, it does take, it took a lot of the computing power, and those PC tend to be, or notebook, tend to be big size and those kind of thing. In some case, you have to put a, as I describe, you put the external graphics card, OCuLink, the interface to plug in. But I'm sure the mobile device will have the AI functionality, will accelerate in the future. Mm-hmm. I'm not sure in the 2024 or 2025, but I think the future- Mm-hmm. Definitely, because those AI function is attractive and it did improve the people's productivity and so on, so forth. And it's amazing, I would say. Yeah. Mm-hmm. For the foldable, do you expect that we will see foldable tablet in the coming future? And because I want to ask is that, if we see the foldable tablet someday, I mean, will that benefit Parade, like maybe we will need more T-Con, OLED T-Con. I think that possible, but at this moment, I have to comment on this. But I really think the notebook PC is tangible and is happening now, and that's the thing- No, I want to add this foldable. I do think those are happening and now. Mm-hmm. And for the foldable? I, I- Foldable tablet. Oh, foldable. Foldable. I think it's a good thing, but I'm not sure... I'm not that sure, but I think it's durable and very much durable- Mm-hmm. And I'm not there. Yeah. Mm. I cannot- I see. Okay. I cannot say too much on this. Okay. I see. And, I want to ask about the tax rate assumptions for 2024. That is my last question. Thank you. Kuowei, could you comment on the tax rate? Yes. So I think for 2024, the modeling purpose, the 9% cost is still a reasonable assumption. ... Mm-hmm. 9%? Yeah, 9%. 9%-10%- Okay. I think still a reasonable assumption. Mm-hmm. Okay. Thank you very much. Happy New Year! Thank you. You too. Happy New Year. Thank you. Next one, Vivian Yang, Nomura. Go ahead, please. Hi, Jack. Hi, Yo-Ming. Happy New Year, and thanks for taking my question. I have two housekeeping questions. First is regarding your inventory level. I think your inventory level is still at a relatively high level in Q4. I would like to ask, will we digest down on inventory in the following quarters, or will you prefer to maintain at this level going forward? That's my first question. Yeah. Though I think I explained previous conference call as well, that those inventory are equipped for our standard price customer for new product introduction. And yeah, those are the pretty new parts there. And moving into the 2024, first of all, those parts are in the big shipment now. And secondly, we did amend several long-term agreement with our wafer foundry, our assembly lines, and to allow us, without any punishment or any the fee involved to significant take fewer number of wafers and take fewer of the those discount those long-term agreement to take a few of capacity. So moving forward to the Q1, Q2, you will see quite amount of inventory were reduced. What had a surprise to us was, some associate with our customer, tier one customer, did not take, the supposedly parts were shipped early, but it didn't. So but however, now it's start to empty shipment. And, in addition, we had a certain commitment with long-term agreement we signed, but we successfully modify or changed those, the long-term agreement with our partners without any penalty, without any fine. So that's the... We are happy with it, and 2024 will take a significant less of wafers or the capacities. Okay, sure. My second question is regarding the OpEx guidance. I think the dollar amount is slightly higher, so I would like to ask, maybe for the whole year, how should we think of the OpEx? Yeah. Under 2023, because the business was not that good, we control our spending significantly. And, yeah, we did not do any headcount cut, so on and so forth, but we did sort of cut down our spending side. Moving to the 2024, we set up our goal. We are kind of more towards normalization of our business. So we did accrue those necessarily, the bonus perform, bonus payment, our performance related to the bonus and those kind of things be accrued. So we consider taking into consider 2024 more normalized business, not like 2023. We did cut a lot of the spending side. So that I would like to explain to here. And, kuowei, do you have a? Yeah, just like Jack mentioned, 2023, we cut down a lot of spending, especially on the employee bonus across the board. So for 2024, we start to accrue those bonus. But we're always looking for opportunity to optimize our expense rate, so based on revenue. So, I think the trend, just like Jack mentioned, bonus will increase, accrue versus 2023. Okay. Thank you. I'll back to the queue. Thank you. Next one, Evelyn Yu, Goldman Sachs. Go ahead, please. Hello. Can you hear me? Yes. Uh. Okay. Thank you. Thank you for taking my question. I just have one quick question that is related to the CXL market for your PCIe and PHY retimer. When do we expect to see a wider market adoption? And, have we started to see some revenue contribution already for your CXL retimer solution? Also, are we seeing new competitors for this market? Are there other than current retimer competitors, or how do we expect the competitive landscape will be like? Thank you. Hello? Hello. Yeah, yeah, I'm sorry. Somehow the line got dropped. Oh, it's fine. I'm back. I can hear you. Yes. Shall I repeat my question again? Oh, I had an answer for the spending side. I said 2023 was a, because business was not that good, and we did cut a lot of spending. And then 2024, we think, yeah, getting to be more normalized. So we are kind of putting the spending back. It's a lot of associated with those bonus program and the performance release program. So we are accrued those into our projection. And yeah, I would like to see whether, Kuowei, you have any comment on the spending side? Sorry, I think that was the last question. That's not my question. So my question- Oh. is related to CXL. I'm sorry if the line was unclear earlier. I can repeat my question again. Yeah, please go ahead. Can you hear me clearly now? Yeah. Okay. So, okay, my question is related to the CXL, Compute Express Link, them for your PCIe Gen 5 retimer. So I want to know that when do we expect to see a wider market adoption in this field? And, have you started to see some revenue contribution already for your, CXL retimer solution? And also I want to know- Uh- -on, uh- Yeah, CXL industry is still doing the qualification, and we have not. CXL for memory platform has not been into production. We do work with the memory and switch guy for the qualification. I think a CXL might take another year to become volume production. However, CXL is important segment for the PCIe retimer, so on so forth. I also heard you mentioned the question about OCuLink, right? Yeah, OCuLink is one of interface to allow the PCIe connected to the external graphics card or so on so forth, because OCuLink provide a pretty big interface, the bandwidth there. The OCuLink interface is quite similar to the HDMI. You just plug in both sides, and then you have, you can have a graphics card as extension for your the CPU. In the CSU, we had our, the OCuLink solution carry our PCIe Gen4 retimer. On the cable, because the pretty long cable, it has our PCIe Gen4 redriver there. Both are in the small volume shipment at this moment. We hope those one will be kind of applied to other models. Now we see have four or five models, a PC has those kind of solutions. I think most customers are still testing the market because it's pretty new. But we do expect there are certain demand on this. Yeah. Thank you. I hope I answered your question. Yes. So, other than OCuLink, CXL-related market penetration, you think that it might only happen maybe 2-3 years after? Yeah, I would think about two or three years might be will become a major thing in the data center. We are working with one of our key customer for the data center to work on this. Hopefully will become the through the four for the real applications. We hope the performance get improved, and in the data center, you can use less those memory thing and also reduce the overall the power usage for the data center. Thank you. Sorry, just one follow-up on the competitive landscape. So other than current retimer competitors, are you expecting more commerce to join the market for these related- Uh- -um, field? Which one? Retimer for PCIe or USB? Which one? For PCIe. For CXL- Uh. For memory segments. Are you seeing- Yeah. new players in this field? Yeah, we thought one or two or three guys are competing on this market segment. It's very subject to the performance of your retimer, especially on the latency, and our timer has a very good latency number, and yeah, it's really start to competing each other for the solutions. And the best thing is that there are many customer, and many customer on this segment, and besides this, I would think the real CXL take off is not on the PCIe Gen 5, the area is on the PCIe Gen 6, the segment or area, and so that's the PCIe Gen 6 become more important for CXL. We are developing PCIe Gen 6, the retimer, both retimer and Redriver currently, and we think those will become more important for CXL. Thank you. Thank you. Ladies and gentlemen, we are now moving on to the Chinese section of the Q&A. [Foreign language] HSBC, L Wang, [Foreign language] Hi, Jack and Yo-Ming, Happy Chinese New Year! And [Foreign language] upside？[Foreign language] Gross margin [Foreign language] good topic, and [Foreign language] transition from [Foreign language] shortage [Foreign language]1.5 [Foreign language] oversupply，[Foreign language] 2023 [Foreign language]，[Foreign language] inventory overhang [Foreign language] continue [Foreign language] impact [Foreign language] 2024 [Foreign language] gross margin，[Foreign language] customer [Foreign language] IC，[Foreign language] supply [Foreign language] situation [Foreign language] it is true，[Foreign language] channel inventory [Foreign language] inventory [Foreign language] issue [Foreign language] resolved，[Foreign language] supply [Foreign language] demand [Foreign language] relationship. [Foreign language] how much the foundry [Foreign language] assembly line willing to reduce the cost, [Foreign language] factor. [Foreign language] gross margin remain [Foreign language] stable, [Foreign language] after gone through [Foreign language] difficult time in the [Foreign language] 2023, [Foreign language] later of 2024, [Foreign language] segment [Foreign language] bring [Foreign language] better gross margin, better mixed situation。 [Foreign language] AMOLED T-Con [Foreign language] adoption rate[Foreign language] penetration rate [Foreign language] AMOLED T-Con penetration rate [Foreign language] [Foreign language] help, 2024 [Foreign language] for sure. [Foreign language]AMOLED[Foreign language] adopt, [Foreign language] consumer customer[Foreign language] consume [Foreign language] stream video, so on so forth [Foreign language] commercial usage, [Foreign language] commercial usage [Foreign language] demand, [Foreign language] accurate[Foreign language]color, [Foreign language] high refresh rate for the gaming. [Foreign language] adopt, [Foreign language] definitely [Foreign language] ahead of time [Foreign language] adopt. [Foreign language] [Foreign language] ...Hello, Jack, Yo-Ming [Foreign language] [Foreign language] [Foreign language] Jack [Foreign language] Yo-Ming [Foreign language] gross margin [Foreign language] gross margin [Foreign language] Q22 [Foreign language] result [Foreign language] gross margin [Foreign language] complicated [Foreign language] write-down [Foreign language] write-down [Foreign language] I think this write-down will gradually become less, because this aging, your inventory, this correction is already almost gone. Then look at other segments, because you still are one, you hope maintain's gross, add your margin in check, so your business is still in a recovery mode for the revenue growth. So there is a certain time point, you will go negotiate, with your customer negotiate price to maximize your revenue side. Then this is a negotiation's process, right? You hope you have a maximize growth, but your gross margin in check. I believe this is our 2024 year's a pretty big stabilized margin, is a pretty big goal for us. [Foreign language] [Foreign language] source driver [Foreign language] bundle sale, [Foreign language] source driver, [Foreign language] low end，has to be in check with [Foreign language] competitor, even though [Foreign language] design into [Foreign language] segment, [Foreign language] price [Foreign language] getting similar. [Foreign language] challenge [Foreign language] area, source driver in the low end side. [Foreign language] solution to the source driver from low end，newcomer, [Foreign language] integrated solution TED [Foreign language] counter [Foreign language] low end [Foreign language] solutions, now moving on to more integrated solution. [Foreign language] PC shipment [Foreign language] growth [Foreign language] 5%-10% [Foreign language] high single digit, [Foreign language] Jack [Foreign language] add more comment？ [Foreign language] read research report, [Foreign language] single digits [Foreign language] market momentum could be better[Foreign language] AI [Foreign language] enabled machine may start to take more [Foreign language] important position [Foreign language] customer [Foreign language] refresh [Foreign language] notebook and to equip [Foreign language] new functionality, [Foreign language], high notebook [Foreign language] momentum [Foreign language] reasonable, I would think. OK [Foreign language] OK, [Foreign language] [Foreign language] OK, thank you everyone!