Welcome everyone to Parade Technologies 2026 Q4 Webcast Investors Conference. Investor Relations of Parade Technologies, Mr. Yo-Ming Chang, will present 2026 Q1 financial result first, and during the presentation, all lines have been placed on mute to prevent background noise. After the presentation, there will be a Q&A session in English by CEO, Dr. Jack Zhao, and Vice President of Finance, Mr. Kuowei Wu. We also will reserve the last 15 minutes for attendees who would like to ask questions in Chinese. Please follow the instructions given at that time if you would like to ask questions. [Non-English content]. And now, I would like to introduce Mr. Yo-Ming Chang, Investor Relations of Parade Technologies. [Non-English content]. Thanks, Wang Qi. Welcome everyone to Parade Technologies 2026 Q1 Webcast Investor Conference. Parade Technologies' Q1 2026 consolidated revenue was $126.14 million, and the net income was $16.73 million. Its both basic and the fully diluted after-tax earnings per share were $0.21 and $0.21, respectively. These results compared to consolidated revenue $126.23 million, and a net income of $20.19 million, or $0.25 and $0.25 per basic and fully diluted share in the year ago quarter. In U.S. dollar, the Q1 revenue increased 0.74% sequentially and was down 0.07% year-over-year. The gross profit in the Q1 of 2026 was $50.83 million, a decrease of 3.41% from the previous quarter, and a decrease of 5.38% compared to the same quarter of last year. On February 10th, 2026, Parade announced the production availability of the TC3408 and the TC3410 devices, the industry's first single-chip touch with T-Con embedded driver solution for the WUXGA resolution mainstream notebook market. This device delivers extremely narrow panel borders and a T-Con PCB form factors to enable ever-thinner notebook designs at cost-effective price points. TC3408 and the TC3410 incorporate the latest power-saving features of EDP 1.5 for unmatched large power performance at up to 120 Hz display refresh rate. The device combines Parade's portfolio of patented touch screen technology and market-proven EDP T-Con, in-cell, and high-speed signal technology to provide excellent picture quality and responsive touch performance. On February 12th, 2026, Parade announced the sampling availability of the TC3410-AS device, the industry's first single-chip touch with T-Con embedded driver solution, with integrated active stylus support for WUXGA resolution. This new device drastically reduces the silicon hardware sensor cost and the logistical complexity associated with adding active stylus capability to existing touchscreen panels. The TC3410-AS device combines Parade's broad portfolio of patented touchscreen technology and market-proven eDP T-Con, in-cell, and high-speed signal technology to provide excellent picture quality at a 120 Hz display with responsive 240 Hz active stylus performance. On March 4th, 2026, Parade introduced the availability of two new quad-channel linear redrivers to support both 224 Gbps and 112 Gbps Ethernet applications for server, storage, and high-performance AI scale-up data center cable use. With industry-leading linearity and the best possible group delay, particularly when there is the line rate adjustment. The PS9524/PS9514 Ethernet linear redriver provides programmable EQ boost up to 25 dB/22 dB while operating from a single 3.3 V supply. Key parameters for the HPC AI data center include low power and low latency, making retimer cable more problematic, with its small form factor and low power consumption. The PS9524/PS9514 are optimized to fit existing metal shields of various form factors without the need for additional heat sinks. The advanced linearity allows the data centers to trade off extended cable distance versus thinner cables to reduce routing and system thermal complexity. On April 2nd, 2026, Parade announced the availability of PS8651V DP2.1a HBR3 1 to 2 MST hub controller for automotive accessories and video displays designed that or eDP port expansion. It adds to Parade's DP MST hub solutions, which include the PS8650 DP2.1a UHBR20 1 to 4 MST hub controller already on the market. The PS8651V is compliant with VESA DisplayPort 2.1a and eDP 1.5 specifications, up to HBR3 or 8.1 Gbps per lane link rate, up to 4 lanes. It is AEC-Q100 Grade 2 available minus 40 to 105 degrees Celsius ambient temperature qualified for automotive applications. Based on the current business outlook, Parade is providing the following guidance for the Q2 of 2026. Revenue is between $127 million-$141 million. Gross margin is between 40%-44%. Operating expense is between $33 million to $36 million US dollar. [Non-English content]. It is my presentation for the 2026 Q1 financial results. Now I transfer to CEO Jack Zhao to answer your questions. Wang Qi, you may begin. Yes, thank you, Yo-Ming Chang. Ladies and gentlemen, we will begin our Q&A session in English. If you wish to ask questions, please press star key and 1 on your telephone keypad and you will enter the queue. After you are announced, please ask your question. Should you wish to cancel your questions, you may just press star key and number 2. Now please press star key and 1 if you would like to ask questions. Thank you. The first one to ask question, Mike Young, Bank of America Merrill Lynch. Can you hear me? Thank you for taking my question. Yes, I can hear you. Yeah, hi, Jack, and also Kuowei and Yo-Ming. My first question is kind of housekeeping. Could you also break down the Q1 revenue by business? Okay, thank you. In the past Q1, our DisplayPort or DP was slightly above 30%, our PS or high speed category was above 50%, the TC or source driver was below 10%, and the TT include our TTED was close to 10%. Okay, that is very clear. Thank you, Jack. The second one is about the PC market outlook. Do we have an update regarding to maybe this year's trend or year-on-year growth or decline? Thank you. Yeah, I think since the coming new year, and it has been reported or it's a fact, memory price increased dramatically. That does cause the trouble to PC and notebook, the area. As the increase of memory cost, the system price increase. Many research report also had updates. We also check with our OEM customers, and it's getting a lot more of the lower forecast than what it was. We see the lower forecast in the 2026 compare what we had last Q4 when we do our planning work. Yeah, the 2026, we will see PC and notebook, the unit shipment decrease due to the primary memory increase and also due to the war in the Middle East, of course, depress the demand side. Got it. Thank you, Jack. My follow-up question is on the gross margin side. It looks like when compared with last quarter, Q4, the product mix improves, but it's not so much on the gross margin side in Q1. I'm just wondering, is there any impact coming from the wafer price already, or can we attribute this more to the competition? It's mainly related to increase of cost rather than the competition. I think that in the Q1, the margin, as we forecast in the Q4, the cost increase really came from the offset side and the packaging and the final test. If you are in the industry, the current situation from the Taiwan OSAT, and increase a lot of price, and not once, not twice, and some of them many times. Yeah, we're facing the challenge, the environment to manage the manufacturing cost. Yeah, we graduate also in the Q1 to see the fab site, especially the foundry from the China side. We cannot use that many of China side, so the fab increase is, to us, might not that significant at this moment. The back end OSAT did increase quite a lot. That's why would we have the forecast, the margin increase. Yeah, that's the current operating environment. Yeah. Thank you, Jack. Maybe my last question is about the forward outlook on the gross margin. Since there could also be some foundries joining the price hike, going forward from Q2 or second half. How should we think about your pricing adjustment on the other products? Also, how should we think about the gross margin impact in the upcoming quarters? Yep. As our manufacturing costs increase, and we being forced to adjust our product price. We did do a select product since some of our product has embedded the flash there. In the late of Q1, we did increase some of select product price. Moving forward, as our competitor already adjust their price or increase their price, we also consider to have a selective product which forced by our manufacturing cost increase to do adjustment. We provide a guidance. We will treat this gross margin guidance very seriously. Hopefully, as the product mix getting better with our new price, the Q3, Q4 can slightly improve. That's what we expect. The whole dynamic really is going to see the manufacturing side increase and how much we're also doing to diversify the back end to the OSAT side, to the other region, which may provide a more stable price environment. That's what we are currently thinking and what our current operations towards those directions. We also implement a few of our own measures to improve our gross margin. Those are gradually taking effect. Okay. That is very clear. Thank you, Jack, and I will go back to the queue. Thank you. Next one to ask questions, Jamie Ye from KGI. Go ahead, please. Hi, can you hear me? Yes, perfectly. Hi, Jack. I would like to know about, I think the first one is ASIC-like projects. How is your confidence level now? I think I remember second half last year, you say that six months later, we will know better. How do you think about that, and do you still think that visibility for those projects into next year are still improving? Yeah. We have implemented multiple ASIC-like projects. In fact, we are very busy on those big projects, and most of our engineering resources are designated to those areas. Some big projects will take almost 100 engineers to do. Yeah, we're very busy to do those projects, and we hope, and so far so good. Actually, the project is moving smoothly in terms of milestones, in terms of the design milestones achieved. Yeah, it looks good, and we hope that we are on time to tape it out and deliver to customer afterwards, and that will be a major contribution to our 2027 revenue. Thank you. If I remember right, I think you mentioned that maybe next year, revenue with this Ethernet, like multiple projects can maybe be back to pre-COVID level. Those will be after tape-out because those are deep submicron parts after tape-out sometimes. Hopefully, later the second half, it will be contributed to our top line and the bottom line. Second half next year? Okay. Yeah, let's look at it, and by that time, I will report to you. Okay. Thank you. The second thing is Spectra7. I think you also mentioned that you are developing some driver that customers will not necessarily use a DSP that will consume more power. Can you share with us how is the progress for this project after you acquire Spectra7's equipment? Also, how can we see the contribution for those optical projects? You see, we've gone through our announcement. We have two products, PS9514, PS9524. Mm-hmm. One is a silicon-germanium high-speed redriver and achieved speed at 112 Gbps. Mm-hmm. Another device has achieved 224 Gbps. Mm-hmm. Those both came in with Spectra7, but as we brought it into the production stage. Doing the qualification, so on and so forth. Both products are engaged with data center cable design guide, which, typically, you can imagine for 1.6T. Mm-hmm. Those use a 224 Gbps chip and the 112 Gbps for 800 Gbps. Those redriver cables, based on the cable guide told us, as well as the data center guide told us, it's useful for 2 meters, 3 meters applications. Mm-hmm versus the 5 meters. Yeah, we have multiple designs going on with those cables. I see. I think your customers are transceiver module maker customers, and they buy this driver product from you, and then they will purchase maybe later on their own, and then put together. Those are for copper application. Copper. Oh, okay. Those are the- Copper. Copper application for the copper cables. Yeah. Copper cable. Okay. Yeah. Okay. If it's copper, then I think shortage issue will be less, and then probably we can expect some contribution, maybe sometime second half this year. We hope so. Yeah. We are doing the qualification with the customers, and hope those will be the. Yeah. Let's see the project continue going. Yeah. I see. Is it CPO or it's just outside the- No, those are just cable. Just cable. Okay, I see. Okay. Also my last question is CPU. I think we experienced some CPU shortage, mainly on the server side, maybe impact some consumer application. Do you also see that? If that is the case, then maybe customers will need to buy more from Qualcomm and then maybe buy more USB retimer from you. We heard both Intel and they have certain, the SKU has a CPU shortage, right? Mm-hmm. Maybe they allocate the silicon resource to the AI, the CPUs or GPUs. Understood. Yes. Yeah. It's not large scale, I would think, but we do see some of the shift to the Qualcomm. Yes, it does. Mm-hmm. Not large scale, I would think. Hopefully, this situation might improve. That was the Q1 we heard of something, but I'm not that sure how big is the scale because the end market demand, due to the DRAM- Yes. Due to the Flash increase, is the major thing to depress the demand from the PC and notebook. Those one probably less pronounced. We do see. Yeah, we heard some of the model converted to the Qualcomm's. Yes. Okay. Thank you. It's all clear. Thank you for my questions. Now back to queue. Thank you, Jack. Thank you. Next one to ask question, Jerry Su from UBS. Hi, thanks for taking my question. Maybe circling back to the Q2 outlook. I think Yo-Ming already provided a revenue guidance range. Can we have some more comments about the outlook for each product line, compared with Q1? Compared with Q1, the DRAM, as Yo-Ming in the announcement. Our two TTED chips and those will be significant increase in the Q2. Q1 already ship quite many into production. Q2 will ship a lot more. The other area might be the PS parts will continue to kind of uptrend, even though the overall notebook demand will not be as good as we had thought. Still, PS parts continue doing well. We also will ship, Q2, some parts outside the PC notebook side. For example, the automotive, we ship more. Yeah, those are the few themes. Okay. Thank you. Probably, also want to understand the outlook into the second half, because I think, Jack, you previously mentioned that the notebook demand or PC demand seems to be softer than what you have previously expected. How much visibility do you have into the second half of the year? How should we think the revenue outlook, for second half comparing with first half? I would think that in terms of our pure revenue for the second half, it's healthy and meet our expectation in terms of seasonality. Even though the 2026 and the larger picture of PC demand may not be as good as we had wished, but we do think the second half still will be better than the first half. For our own business, and we continue pulling some segment outside the PC area will start to contribute in the 2026. Also the late of 2026, we even have some of the driver parts designed into the data center, the storage side, we will start shipping. Those will help in the late of 2026. Okay. I see. Speaking of the data center related product, previously, one of the investors asked about the business from Spectra7. I think if I hear correctly that currently you are shipping for cables. But can you give us some idea about what's the current opportunity, once the transceiving method move from copper into optical? For example, in the CPO, these product lines, what's the current opportunity and potential or revenue can be coming from? Thank you. Those two optical things to Parade is a longer-term thing for us. We are currently more focused on the, in terms of revenue, the opportunity is more on the copper cable. There are two areas driving the cable. One, as we reported and discussed on the Ethernet cable, and that is relatively easy to understand. There are another category under data center, and now is getting heated up. Those are the PCIe Gen 6 active cables, and they really address the issue that the PCB board with the high grade, high speed PCB is getting a lot more expensive. In some cases, PCB in the shortage. Customers, many data centers, demand to use a cable for high-speed signal and the rest of them just use on the PCB can use more lower grade PCB board. That's another area we're working on with multiple customers with our PCIe Gen 6, the retimer there. Yeah, that's what we are working on, two areas. One is those Ethernet, one is the PCIe Gen 6 or later on Gen 7, those kind of cables. Okay, I see. For optical, this is more like, several years out from today. It's more like 2027, 2028, we should start to see, once the copper moves to optical, you will have some exposure there as well. Yeah. That's the little bit longer term, I would think. Very long term. I see. Got it. Maybe then my last question before going back to the queue is that for ASIC business, can you give us a little bit more color, like what kind of categories or products you enter into? Is it more display related or high speed, like a hub host or retimer, or what kind of project you are working with a customer? I would think those are the high-speed system solution. It's not related display. Oh, okay. Let me correct myself. A few are related to display. Major one for us, a new category, is a system level, high-speed system level chip. It's not retimer. Okay. I got it. All right. Thank you. Next one to ask questions, Vivian Yang from Nomura. Hi, Jack and Yo-Ming. Thanks for taking my questions. Can you hear me clearly? Yes. Please, go ahead. Yeah. Thank you. My first question is a follow-up of your pricing adjustment. Could we know more details about like for which segment or what kind of application are you going to adjust your price? And also, are we only passing through the inflated cost or is there any markup for us to see gross margin improvement opportunity? And also, what customers feedback on this activity? We broadly choose the selective parts, but the Q1 adjustment is more targeted, whatever, we have a part flash embedded, so that's successfully. Customer did not have much of complaint either because people know the flash device went up a lot. The Q2 adjustment or upcoming adjustment will be targeted pretty broad-based, not everyone, but product broad-based. Our sales team work with our customer together to present and to let customer understand we're being forced to do those adjustment and because of cost increase significantly. Certainly we hope and pretty much our gross margin is lagging factor, is the manufacturing cost increase. So that we hope those adjustment price will help us to improve our gross margin and make our business financially sustainable. Thank you. My second question is regarding the shortage. Other than CPU, do we see any other components are facing shortage? I think the shortage on the manufacturing side, I would think you heard a lot of substrate shortage, TFT glass substrate shortage, right? In the manufacturing side, you will hear the lead frame has a long lead time, and you may have a test capacity shortage. In terms of components and besides memory, flash, CPU. I think those are the industry focus. It's less for the other components, but I would think the IC supply like us, most of them all suffer from the cost increase. Thank you. My third question is regarding your standards-plus customer. We all know that there are growing demands for example, some specific series of Mac for applications like Open Cloud. Do we see increasing demand for this part? I think we have a device there for the Mac mini, as what you said, the Open Cloud, the sudden uptick, and you do see the market there, the purchase lead time getting very long. Yeah, all the extra parts, but I'm not sure how long could sustain those upticks, right? Besides, they have a new product cycle, and introduced the low-priced MacBook in Europe, and we have a device on the panel side. Those are benefit from the uptick of their business. One thing I do want to emphasize, those Open Cloud, the phenomenon really indicate AI may going to the edge, to the consumer space. It happened now to be the Mac mini. Many other devices or the Unix or Linux related machine will also can act for those applications. As far as the AI goes to edge, we hope will be benefit. I do hear that more and more start to AI inference goes to the edge. Okay. Thank you, Jack and Yo-Ming. I will go back to the queue. Right now, we have Keith Ng from Morgan Stanley. Go ahead, please. Thank you, management, for taking my question. I have a question on the automotive end market. You previously indicated the auto revenue could represent a few percent of revenue this year. My question is whether there's an update to that expected contribution, and how do you see the outlook of the auto end market in 2026? Thank you. Actually, the auto were doing relatively good, and we had an announcement that even gone through the PS8651V, and which already in the MP, as we announced. We're in the shipping MP volume now. Multiple customer were using this, the DisplayPort hub, because you have a multiple panel in the automotive, and those DisplayPort hub become very convenient. We continue shipping to the multiple automaker, like whatever the EV car in the U.S., and the top EV car in China, all using our device and pretty high volume. Yeah, we are optimistic for 2026, especially second half, we probably will see more auto revenue. However, the units of auto revenue are not as the PC type of thing, but it's help for our. When the PC, the demand is not as good as we wish, the automotive come up may help us for the overall revenues. Thank you. That's very helpful. I will go back to the queue. Next one to ask question, Jerry Su, UBS. Thanks for taking my question again. Just want to follow up on Jack's previous comment about, in the Q2 or later this year, you will see more contribution from TED, TTED. Can you give us some more color about the current adoption of these products and also the competitive landscape? What makes these integrated solution from Parade that can stand out and then taking more market share or higher penetration from the industry? Thank you. First of all, the solution itself very attractive because lower the cost and make the panel, the board thinner and the panel itself thinner. Especially the TTED, which has a significant software integration and a firmware integration. For ourselves, in touch, we have a lot of unique IPs. So far on the TTED, we have not seen any competition close to us. As we visit the OEM customers, the panel customers, they love the solution a lot. We continue to expand those TTED to the more general, the so-called oxide and amorphous solution. You will see our market share will continue to grow. At this moment for 2026, based on the shipment we have, on the unit shipment we have, probably we're getting close to the 10% of those kind of level. With the TTED together, yeah, very close. I would think very close to 10%. Hopefully the next year, you will see the growth quickly above that. We have big hope, and we are introducing whole product line, Spectra7, and you will see more announcements. We deeply engage with customers. The cost, the integration with the discrete or the traditional T-Con source driver plus touch chip, that's not comparable. On that front, we work very well, especially TTED, and it's amazing. We also can support with stylus, and really, to the customer, there's not much increase at all. They can use the panel for whatever the purpose. You can do the touch, you can do without touch, you can do with the stylus support. It really helps them to manage SKU. The major customers are adopting very quickly. Okay, thank you. I just also want to follow up on the question about the margin as well as the operating expense. For the margin, Q2 gross margin, I think you provided a 40%-44% range. I just want to get a feeling that, given the cost increase and then you are negotiating with your customer, are you able to fully pass through those costs and maintaining the same margin? How should we think about the gross margin for Q2? Is it going to be similar to Q1 or there should be some upside? I think this is very dynamic, right? You understand. We hope for the manufacturing side will not probably at the stage stop, right? Although we are lagging behind the manufacturing increase. We're adjusting, talk to customer need, that probably will take a certain period of time. I would think by the Q3, Q4 probably more meaningful to see our strategy. But our guidance is our guidance. We definitely will hit our guidance. Okay. That's helpful. On the operating expense, I think Q2 you've got a similar range, but for second half or further out into 2027, as you have a lot of different new project or business continuing to grow, how should we think about the longer-term operating expense? I would think the operating expense we will be very cautious and because our major business on the PC side and it was not as we had thinking. We'll be cautious. On the second half on our other business outside the PC side especially moving forward to the 2027 hopefully those will make a contribution more towards our both top and the bottom line. Got it. Maybe last question regarding the standards-plus customer. I think you have mentioned about the better demand for some of your products this year. Are you seeing any other new opportunities in this customer into next year or so, particularly, recently they have some management change? Yeah, that management change is just very recent, and I have not seen, just like you have read the news, right? We are executing multiple projects with them. In fact, in this Q1, we won another project, pretty big project there, and we're in the execution. We hope that you earn the project. Your IP earns the project. Certainly, we're very close to them. We know each other very well. Yeah, I would think that your IP, your engineering capability makes it different. That's where you could win the projects. The relationship helps, the proven track record helps, but your IP is very important. Can you give a little bit more color on this? As you mentioned, you're on the project Q1. Is this for something that the end product is already out there, or is it something new? Or you're getting into a certain new category or providing a new chip? I don't want to get into those, but we have some more new products. When should we expect revenue contribution from this new project, this year or maybe next year? Those big projects, it always will take more than a year to execute. OK, I see. All right, got it. Thank you. That has been the Q&A session in English, and we will begin our Q&A session in Chinese. [Non-English content] Taipei Securities，Raymond Kuo, [Non-English content]. [Non-English content] [Non-English content] [Non-English content] [Non-English content] [Non-English content] [Non-English content] [Non-English content] [Non-English content] Thank you very much. Thank you.