Welcome everyone to UMC's 2025 First Quarter Earnings Conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at the time if you would like to ask the question. For your information, this conference call is now being broadcast live over the Internet webcast. Replay will be available within an hour after the conference has finished. Please visit our website www.umc.com under the Investor Relations Investors Events section. Now I would like to introduce Mr. David Wong, Investor Relations Manager of UMC. Mr. Wong, please begin. Welcome to UMC's conference call for the first quarter of 2025. I'm joined by Mr. Chitung Liu, CFO of UMC; and Mr. Michael Lin, Senior Director of Finance because President Wang is absent due to urgent personal matter. In a moment, our CFO will present first quarter financial results followed by our key message to address UMC's focus in second quarter 2025 guidance. After our CFO's remarks, there will be a Q&A session. UMC's quarterly financial reports are available at our website www.umc.com under the Investors Financial section. During this conference, we may make forward looking statements based on management's current expectations and beliefs. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, including the risks that may be beyond the company control. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and the ROC securities authorities. During this conference, you may view our financial presentation material which is being broadcasted live through the Internet. I would now like to introduce UMC's CFO, Mr. Chitung Liu to discuss UMC's first quarter 2025 financial results. Thank you, David. I'd like to go through the first quarter 2025 investor conference presentation material which can be downloaded or viewed in real time from our website. Starting on page four. The first quarter of 2025 consolidated revenue was TWD 57.86 billion with gross margin at around 26.7%. Net income attributable to the stockholder of the parent was TWD 7.78 billion and earning per ordinary share was TWD 0.62. Wafer shipment was flat sequentially compared to the previous quarter. However, it was up 12% year- over- year for the same period of 2024. On page five on the sequential comparison with a revenue declined 4.2% sequentially to TWD 57.85 billion mainly due to this one time price adjustment in the beginning of calendar year. Gross margin was impacted by the lower ASP as well as the earthquake during the Chinese New Year's holidays. It went down to 26.7% or TWD 15.4 billion and we expect to see margin recovery in the coming quarter. Operating expenses is under control, represent about 10.6% of the total revenue of TWD 6.1 billion. That gives us the overall operating income around TWD 9.7 billion or 16.9 percentage points. In terms of non operating income, due to the weakness in the stock market, we have some losses coming from mark to market investment valuation which is around TWD 439 million loss. Total net income attributable to the shareholders of the parent in Q1 2025 was TWD 7.777 million or EPS of TWD 0.62. In Q1 2025. For the year- over- year comparison, revenue increased by 5.9%. This is mainly due to the wafer shipment increase as I mentioned earlier, around 12% year- over- year wafer shipment increase, but it's offset by the ASP decline and for the net income comparison we see 25% year- over- year decline and therefore EPS also was lower in the same magnitude. On next page, cash position still remain over NTD 100 billion. It's about NTD 106 billion at the end of March 31st. Our total equity now reaches NTD 390 billion at the end of Q1 2025 on page six. This routine beginning of the year one-off price adjustment actually contribute to most of the revenue decline in Q1 2025. Roughly, the ASP declined by about 4%-5% in Q1. For revenue breakdown, we see good growth coming out of our Asian-based customers. It now reaches around 56% of our total revenue. North America customers on the other hand represent about 22% of the pie. IBM show a mild growth on page 10 to 18% of the total revenue breakdown in Q1 2025 and consumer segment is the strongest in Q1 mainly driven by Wi-Fi, DTV, setup box and DDI and communication computers didn't really change that much and we're happy to see our 14 nm and below revenue now is over 50% of our total revenue now reach 53% in Q1 when 22 nm and 28 nm revenue account for 37% of the total revenue breakdown in Q1. There was some disruption from earthquake but mainly there's also annual maintenance schedule so capacity in Q1 was lower and for quarter two we see the back to normal capacity as well. Some mild increase coming out of Singapore fab due to the ramp is starting on page 14. Our 2025 CapEx remain unchanged at $1.8 billion. This above is the summary of UMC financial results for Q1 2025. Next I would like to share our key messages. I apologize for still putting Jason's picture here because it's rather short notice and it also more importantly has very good pictures. Our result in the first quarter were in line with our previous guidance with slightest wafer shipment and one time pricing adjustment at the beginning of the year to reflect market conditions. First quarter highlight include 22 nm, 28 nm revenue hitting a record high representing 37% of the total sales. That was driven by a 46% quarter over quarter increase in 22 nm revenue from products such as OLED display driver IC, ISP, as well as digital TV, Wi-Fi and audio codec chips. We expect customers to take out additional 22 nm product in the coming quarters as customers increasingly migrate to our 22 nm logic and specialty platforms for next-generation applications. Earlier this month we also officially inaugurated our new Singapore phase III fab, which provides additional 22 nm capacity to support future growth. Pilot runs are underway and are on schedule to ramp up to volume production in early 2026. The expansion in Singapore also further broadens our geographic diversification, enabling customers to strengthen their supply chain resilience. Meanwhile, in February our Board of Directors proposed a cash dividend of TWD 2.85 per share, which is subject to approval from shareholders in the upcoming AGM on May 28th. Looking ahead to the second quarter, we are expecting a moderate rebound in demand across all segments according to near-term alignment with our customers. Beyond that, of course, we have to be cautious about wafer demand projections as policies and markets are still adjusting to the recent tariff announcement. To navigate this challenging environment, we are working closely with customers to monitor trends in end market demand. We also strengthen our competitive advantage by focusing on execution of key technology products such as the 12 nm collaboration with U.S. partners and ensuring our customers have access to geographically diverse manufacturing options. In addition, we are implementing cost reduction plans and accelerating AI and intelligent manufacturing systems to enhance operational efficiency. Through these key focuses, we are confident that UMC can maintain our financial and business resilience. Now let's move on to the second quarter of 2025 guidance. Wafer shipment will increase by 5%-7% sequentially. ASP in U.S. dollar terms will remain flat. Gross margin will be back to approximately 30% and capacity utilization rate will also recover to around mid-70% range. As I mentioned earlier, the CapEx, cash-based CapEx, will remain unchanged at about $1.8 billion. That concludes our remarks. Thank you all for your attention and now we are ready for questions. Thank you, Chitung, and ladies and gentlemen, we will now begin the question and answer session. If you have a question for any of today's speakers, please press star one on your telephone keypad and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press star two to cancel the question. Now, please press star key number one on your keypad if you would like to ask the question. Thank you. Our first question will be coming from Sunny Lin, UBS. Go ahead, please. Thank you very much for taking my questions. My first question, I want to start from the tariff impact. For the short term, how are tariffs affecting the customer order behaviors for Q2 and second half? How is that impacting your business planning? It does seem like you are having a good recovery for Q2 sales. How much of that is driven by the pulling orders due to tariff? Okay, so UMC collaborate closely with customers for technology and product qualification across multiple fabs, reducing exposures to site specific risks and ensuring supply chain resilience. We adopt a forward looking approach to mitigate business risk including a geographically diversified manufacturing footprint. By 2027 we will have manufacturing base for our most advanced available technology in the U.S. UMC also has a healthy financial structure to navigate through macro uncertainties. Although the escalating trade tensions and global tariff policies have increased uncertainty in the semi- industry and we have nothing market demand change in a very near term, that is quarter two 2025 yet. Of course visibility in the second half is becoming very limited and longer term customers may decouple their internal manufacturing options and explore external wafer sourcing options, UMC's strategic positioning, focusing on technology differentiation, global manufacturing diversification, product mix optimization and manufacturing excellence. I think in short there's very little change we observe for the second quarter. However, if you include our Q1 result plus our quarter two guidance, we think we are slightly ahead our expectation at the beginning of the year and that will give us some buffer for the uncertainty, the increasing uncertainty in the second half. Got it. Thank you very much. You are saying the growth in Q2 is not so much driven by pooling just a little bit, and in that case, should we be less concerned about meaningful drop off going to second half because there is not much being pooled in? There's not that much pooling. You are correct for quarter two. Some customers were sidelined and they want to take some precautionary action. There are some customers doing the opposite. The net impact for quarter two is very limited. Again, we cannot really see through the second half. What we are seeing right now does not really suggest there will be a shortfall in the coming quarters. Got it. Thank you. My follow up question on tariff is in terms of the potential disruptions about the supply chain on the pricing side. If tariff are pushed through either for finished goods or direct semi- chips or both, based on your current discussions with clients, would you expect some impact on UMC's pricing and margin as well as maybe potentially everyone in the supply chain will need to share the cost to some extent? I think we don't have a generalized answer. Let me start with our UMC pricing policy or strategy. We don't compete purely on pricing. Our strategy is built around technology differentiation and manufacturing excellence via regionally diversified manufacturing basis. All that attribute works to insulate UMC and our customer away from low entry barrier models. Beside the pricing pressures, UMC remain committed to deliver differentiated technology and ensuring our customers to gain market share through the long term strategic partnership. Our value proposition is ready to walk with our customers in a transparent method. Any disruption or the cost increase through tariffs, we believe we will co work with our customers to come up with a solution. Got it. I have a question on 28 nm. Roughly, what is the utilization rate in Q1 and Q2, and how should we think about the mix of 22 nm within the whole 28 nm and 22 nm cells, let's say going to the second half of 2025? First of all, our guidance for second quarter is mid-70% for the company as a whole. Of course, 12 in is higher than corporate average and 8 in is below corporate average. Among 12 nm, I would say 22 nm, 28 nm is the better sector. It's not the best sector. Right now, 22 nm and 28 nm represent 37% of our total revenue. 22 nm alone, I would say, is more than meeting and continues to increase. That will be a key growth driver for UMC's 2025 growth. I hope that answers your question. That's very helpful. Meeting percentage, that's in terms of total sales, correct? That's correct. Thank you very much. Maybe my last question. On this partnership with Intel on 12 nm, what's the latest update that you could provide us and will it be possible that we see an earlier production in 2026? I guess lately, given the maybe rising reshoring interest in the U.S., are you seeing much stronger demand for these collaborations? Maybe Michael can answer the question. Sure. The joint development is on track. We are progressing well according to the project milestones. At this moment we are verifying the silicon performance for the pilot line and we expect the early PDK will be ready for the first wave of customers by 2026 as printed. In fact, we have been aligning with key customers on the device spec to speed up the ramp up as quickly as possible. Right now we are porting the process technology to the Arizona fab and so far the progress is on track. Got it. Basically, sales contribution, are you guys still from 2027? Yes. Got it. Thank you very much. Thank you. Thank you. Next one. Laura Chen, Citi. Go ahead please. Hi, thank you very much for taking my questions. I also want to know more about U.S. cooperation. If only Intel, other than Intel, would you have any opportunities to work with other IDMs in the United States? We have plenty of U.S.-based IDM customers consistently among our top customers. I think I do not need to mention their names, but you definitely know who they are. From time to time we have JDP, we have capacity support, and that will continue to be our strategic collaboration going forward. We do have other IDM customers in the U.S. working closely with UMC. Of course, at the current stage, the most important project is this 12 nm U.S. footprint collaboration with these U.S. partners. Understood. Because previously I also have the news. I understand that management already kind of denied but I'm just wondering like other than our current clients in the U.S. IDMs, is there any chance we can also work with GlobalFoundries on some sort of like a joint venture or cooperation? Any type of cooperation. I don't want to comment on market rumors. I think for issue like this is so sensitive and important, it has to come from the official announcement from any company involved. I think again from UMC's perspective, we consistently are looking for strategic options to enhance shareholders value. Anything can help to increase our competitiveness as well as the shareholder value. We will certainly look into that. Currently, there is no ongoing so-called merger activity right now. We have to say that there is no merger ongoing right now. It does not have to be a merger. There are many other collaborations we can still pursue to enhance shareholders value and returns. That is our mandate and we are continuing to explore all different kind of options. Yes, certainly my second question is about the margin into Q2. Even though there's a lot of macro uncertainty, we see that the utilization rate improvement and also the gross margin back to 30%. Can we kind of assume that Q1 is 12% for the gross margin since we have the one-time pricing adjustment back in Q1 as the overall demand seems to back to normal? I just wondering what's our view on the overall gross margin trend going forward? Unfortunately we mentioned the second half, the visibility becomes very limited with a lot of increasing uncertainty. It makes us very difficult to predict the numbers for the second half. We can only give the guidance a quarter at a time but our possibilities largely depend on what I mean. Pricing, utilization rate and forex movement and COGS. We have taken several initiatives to enhance our possibilities that include business engagement, technology differentiation, driving the efficiency in operations and improving our CapEx efficiency to manage the depreciation impact. Current gross margin level reflect Q1 2025 one-time pricing adjustment as well as the depreciation increase mainly coming from P6 in Tainan as well as the upcoming P3 in Singapore. We are actively looking to improve our product mix such as more specialty content and higher 22 nm, 28 nm wafer shipments and drive the efficiencies in operations when our EBITDA margin can still remain intact. Okay, that's very fair. Thank you very much. Thank you. Next one. Brad Lin, Bank of America Securities. Go ahead please. Thank you for taking my question. Congrats on the well solid 1Q result and also the bright second quarter guidance. I have two questions. The first question will be in terms of the customer type, has UMC seen potential upside from maybe North America or IDM due to the current issue? Thank you. I think we do see increasing customer appreciation to use these regionally diverse manufacturing base. For various reasons customer may need to have certain type of product manufacturing in some specific manufacturing sites and UMC with operations in Singapore, Taiwan, Japan and China and upcoming U.S. capacities I think our customer appreciate even more recently with the option we can offer. I think that's the feeling and also the sense we get from the recent conversation with many of our major customers. Thank you very much, that's very clear. A follow up question on that is that what time do we expect to see so called meaningful contribution from. This kind of impact? It is very difficult to quantify, but for our Singapore fab, probably is the best example that the P3 is going to volume production in early 2026, and I think it is becoming a very pursuit after location for its less impacted geopolitical tension. Certainly, if there is any demand exceeding the capacity we can offer, we will certainly see a better performance out of our Singapore site, and the same argument can apply to any other site we have. I cannot give you a quantifier for now. Just the customer appreciation certainly will endorse our customer relationship and the so-called stickiness for the longer term. Got it. Thank you very much. Hopefully that we can also gain more so-called LTA with that as well. If any, please do let us know. My second question would be end market demand. Could you also provide insights into the demand trend across the key end markets, especially for automotive and also industrial as well as consumer electronics? Have there been any notable shift in the customer behavior or the patterns recently compared to our last earnings call? Thank you. For Q1, consumer segment grew as our CFO alluded to, driven by Wi-Fi, DTV, setup box, and driver IC. All the other segments such as communication remain relatively flat and we saw computing kind of decline due to a softer demand in IO. Automotive for Q1 also declined due to softness in microcontrollers, DDI, as well as power management. As you know, for Q2, all major segments for computing, communications, consumer will grow. For computing segments, we expect that growth will be driven by flash controller IC. For communication, it will be increased from ISP, networking, flash controller, as well as Wi-Fi. For consumer, it will grow due to continuous growth from DTV and setup box. Last, for automotive, we expect that segment to be flattish. Looking for Q2. Should we expect any meaningful recovery from this auto industrial which seems to be, well, relatively softer for a while? The automotive right now, the inventory seems kind of relatively high, obviously compared to other key segments of our business. For now, we remain a more conservative tone for the auto market. Got it. Thank you very much. Thank you. Next one, Charlie Chan, Morgan Stanley. Go ahead, please. Thanks. For taking my question. My first question will be also on gross margin. It seems like 1Q you are doing a little bit better. The guidance of mid- 20% and 2Q kind of hit 30%. Meet some pricing pressure. Can you share with us some more color about which parts are doing better no matter pricing or cost or just a kind of FX impact so you can deliver better gross margin? Thank you For saying that better. Personally I don't think it's better. We never feel enough to pursue a better gross margin. I think it's a very important index internally for all the management team. We continue to proactively deploy cost reduction efforts including multi source, streamline our operations, manage supply chain pricing and drive automation transformation. These measures kind of help us to offset or at least partially about those cost headwinds, including green energy, including yearly annually salary adjustment. There are a couple of headwinds we need to offset through our cost reduction efforts. In the beginning of the call we mentioned that Q1, Q2 is slightly ahead of our expectations compared to the guidance we gave for the beginning of the year. That kind of only gives us the buffer. Hopefully it's enough for the increasing uncertainty for the second half. Pursuing a better gross margin is the endless mandate for management team. We hope we can do better. Sure, yeah, thanks for the comment and I hope you can keep it up. Second question is about your kind of partnership with Intel in the U.S. Just out of curiosity, do you receive some request that some of your customers want you to accelerate that U.S. operation with Intel? Because it seems like your foundry peer, right, seems to receive a similar request and even some customers are willing to pay higher wafer price for their chips to be produced in the U.S. I know you have planned a schedule for the 12 nm in the U.S. but I'm just curious whether you are receiving similar requests that hope you can speed up. The answer is yes. I think most of the customers like to see the 12 nm solution as early as possible and they also have a very aggressive product launch time and they hope our 12 nm solution can catch up with their product roadmap. Yes, the pressure is there. We understand and we received inquiries from our so-called early adopt customers. That's why we are under the pressure to try to expedite the whole process. It is already a very aggressive process, I mean timeline. It is also the first time we cooperate, collaborate with our partners and there are also many tasks that need to be solved before we can even try to catch up with our aggressive timeline. There is a pressure and wish to do so, but in reality so far we are on track with our planned schedule. Gotcha. Yeah, thanks for that answer. Besides the hope for you to accelerate the plan, do you also see some desire for you to even kind of reach out to more advanced nodes? I know you need to plan ahead like maybe two to for years if you want to further migrate to below 12 nm. I ask these questions because your industry already officially denied their future partnership with the U.S. fab, which is Intel. I am not sure if that gives you more room or your concerns. You wish you to migrate to the more advanced nodes that would adopt EUV. If you are using the market story as a background for this question, I have to be extremely careful. Right? In that case the answer is no. We are only focusing on the current node which is 12 nm and both companies decided and there is a contract between two companies to execute this 12 nm collaboration and for UMC alone. Of course I can speak for UMC. We appreciate this collaboration with our U.S. partners and we offer our foundry know-how and the bulk of the technology structure. U.S. partner offers the on-site capacity with very limited depreciation. We see it is a very innovative mutual benefit collaboration and certainly we do not want to be limited to the current node only. However, only cover 12 nm for now. Okay, that's great as well. The last one, I think, very kind of tactical short term question. I'm sorry, but did you maintain your full year guidance? Is that the case? Was the implied half and half seasonality? How much conservative are you begging for second half? Our view for the whole 2025 hasn't really changed our view on 2025. Foundry market is expected to grow in the mid to high- teens percentage. Like we mentioned earlier the previous quarter, UMC's addressable market should grow around, I mean low single digits for our addressable market which we intend and we have declared we're going to outgrow that. Of course I just said that. I mentioned that the first quarter plus the guidance for quarter two put us a little bit ahead of our expectations. Uncertainties in second half may offset that which we don't know clearly yet. That's the current view for the whole 2025. We probably use like single digit, maybe mid single digit at the full year guide and try to calculate the implies of second half. Is that the right way to think about your narrative on second half? Yeah, let's stick to the qualitative statement that we trying very hard to outperform our addressable market. Okay. Okay, thank you. Yeah, I'll be back to the queue. Thank you. Thank you. Next one. Gokul Hariharan, JPMorgan, go ahead please. Yeah. Hi. Hi. Chitung, David and Michael, my first question is on margin. I think you've kind of got back to 30% in Q2. How should we think about the cadence for margins. Because it looks like your implied expectation in second half is going to be largely flattish. Looks like. If that's the case, how should we think about margins? Could you also refresh what is your expected depreciation growth? I think last time you said high 20% for this year. Is that still the case? Given Q1, I think the increase was not that big sequentially. Depreciation increase still high 20% for 2025. Each quarter is sequentially going up, so we are facing higher depreciation expenses for every quarter. That is the pressure. For margin guidance, I think I have to highlight that about 2 percentage points in Q1 was impact from the earthquake. That is why. If you add back that 2%, the increase is more mild for the second half. Again, we are very sensitive to loading for the second half in terms of where we are for the margin. We know the factors such as pricing, the depreciation, but we do not know the factor for forex and loading. Of course, we continue to try to enrich our product mix by having more 22 nm. All these factors blended together create the formula for our gross margin, especially in the second half. Understood. Is 22 nm, 28 nm combined now higher margin compared to the corporate average already or is it still not there yet? If you exclude the new depreciation out of Tainan P6 and Singapore P3, of course it is. If you include that, I'm not so sure. Maybe may not be the case. The depreciation is there anyway with or without the extra 22 nm, 28 nm contribution. Of course the more the merrier. That's fair. Thank you Chitung. Just on the Singapore P3, are you having any thought about accelerating the capacity plan? Given you mentioned you're getting a lot more demand coming through for or interest coming through for Singapore fab. I think previously you kind of slowed it down a little bit compared to previous plan. Given the demand outlook, is that something that we could anticipate some change? That's definitely dynamic. The future capacity ramp for Singapore will depend on the alignment with our customer needs. Of course, we have begun to see a pickup in PayPal. That may or may not translate into a pickup in customer demand. PayPal definitely already sees the pickup, so it could happen. The current plan is still the production ramp, the mass production will be in early 2026. Understood. Lastly, on the Intel collaboration, I think once you start the 12 nm revenue contribution, could you talk a little bit about what kind of customers you're seeing adopting this. Secondly, once you start the revenue contribution, what does the impact to your margins or EBITDA given the unique kind of arrangement that you have with Intel. Okay, Michael, can you answer the first question? I can answer the second question. As for now our chief focus on Wi-Fi connectivity and high speed interface SoC products. In addition to this 12 nm large process, we also exploring potential fintech specialty technology solutions to further complement our portfolio with diverse product applications. As for the margin, certainly we hope it's an enhancement to our corporate average. It largely depends on the capacity utilization rate and by structure. There's limited depreciation cost item in the cognitive. The overall U.S. manufacturing probably will boast higher manufacturing costs than the manufacturing in Taiwan. These two factors will need to see how to offset each other. There are still many variables. We have to wait until closer to 2027. Got it. The capacity allocated into this arrangement, is that largely a static capacity that Intel has already allocated? Because obviously they have a lot of capacity on 14 nm given that was a full node for Intel. Right. They probably have quite a bit of capacity even after some of the conversion. Is that a static allocation or is it something that is dynamic? Depending upon how demand goes, I will. Say it's more dynamic. However, it definitely needs a certain economy of scale to start with. Depends on how customer adoption for this technology and this collaboration. Certainly, we would believe there could be upside if the market adoption is modeling expectation. Got it. Thank you very much. Thank you. Next one. Felix Pan, KGI, go ahead please. Hi, good afternoon. There are two questions from me. First of all, still on the semiconductor tariff, potentially I just want to double confirm. I think a couple months ago I think TSMC made a statement that customers should take care of the tariff things. I just wonder, is like UMC also holding this kind of a view? If that's the tariff on semiconductor place? That's my first question, So I cannot. Comment on our competitor. I also mentioned earlier, UMC will adopt a very transparent cooperation alignment with our customers to cope with these potential tariff issues. That is our stance. How to deal with this possible potential tariff together with our customers is our key approach. Okay, so can I. So that means you don't rule out the possibility that foundry also have to bear the cost at some degree. Is that in place? Is that right? It's not what I said. No. What I said was we will cooperate with our customers in a very transparent environment and collaboratively to deal with this parity issue. Okay, understood. Okay, the second question, I understood that the visibility for the second half is still unclear and I think besides the demand profile, can you just share a little bit if the cycle, if the, you know, potentially the down cycle is coming. Assuming that, how do you see the inventory level across the different applications from your perspective. Okay, as far as the inventory goes, the current days of inventory remain similar to first quarter 2025 in terms of applications. The DOI as well as the inventory for consumer electronics remain at a healthy level. However, days of inventory for automotive and industrial segments remains relatively high and we expect that it will take more time to digest. Obviously we will continue to carefully monitor the ongoing impact of the tariff policies and it has obviously created a very challenging environment in the semiconductor supply chain. Okay, can I just have a quick follow up on that? I understood different from other cycle currently besides the auto, every auto application at a healthy label. Because of the 90 days, the 90- day pause for the tariff things, do you see the inventory, like how likely to, you know, elevate in second quarters? Do you think this the play like that and how serious for the inventory pop up? First we mentioned that there's not much so called net net impact from the tariff rush order yet in the second quarter. It should translate to a normal symmetry for the coming quarter. However, again the second half visibility is very, very limited. Anything using the current data to assume may change overnight. It is very difficult for us to give a comment on that. Okay, thank you. Thank you. Next one. Jason Zhang, CLSA. Go ahead please. Thank you for taking my questions. My first question is in terms of the advanced packaging. I think preferably you mentioned that UMC probably is moving, will move into the advanced packaging market. Can you provide us more details or long term plan in terms of this new area? I also saw the news or rumors suggest that UMC is cooperating with U.S. clients such as Qualcomm. I wonder if you can provide more details in terms of this new applications. Thank you. All right, thanks Jason. Obviously we can't really comment on specific customers but as far as packaging wise goes, we're very, very excited about our customer engagements in 3D wafer- to- wafer segments. That encompasses RF front- end modules. Also for sensor memory as well as logic. We've gotten the requirements and they're actually picking up in terms of engagements. As far as 2.5D interposer, we have seen that the projects for HPC- related projects for interposers as well as a deep trench capacitor, these requirements are also continuing to grow. We expect that obviously will be a trend to come and we will definitely prepare ourselves to accommodate these emerging trends. Got it. Thank you. How the contribution do you expect in the future if those kind of project can start meaningful shipments or volumes in this year or in the future? Thank you. This is still in a very early stage so we don't expect to see significant revenue contribution in 2025. Got it, got it. My second question is in terms of the demand side, I think your competitor in China all suggests that there is a very solid growth maintenance on the demand side and their utilization rate has meaningful improvements since the second half last year. You also gave a very solid growth in Q2. Can we assume that there are structural improvements or recovery or growth in mature node and or do we see a lower competition from Chinese players because of this kind of recovery or improvement? Looking into the future, if this kind of demand can further increase, I mean can our selling price or gross margin be driven by this kind of meaningful growth? Yes. Wondering if you can give us more color on it. Thank you. Yeah, I wish I could jump into a conclusion, I mean that would be great but unfortunately that's not what we see right now. What we are seeing is really for the first quarter and the second quarter guidance, we are a little bit ahead of beginning of the year guidance, so better but not too much. The increasing geopolitical tensions and the potential tariffs certainly shadow the second half. Feasibility has become very unclear for the second half. We cannot jump to the conclusion you mentioned. Although UMC continues to focus on the differentiated technology in order to cope with the upcoming new competitors. Our 22 nm, 28 nm platform is crucial for UMC strategy to move away from the commercial type of market. We have probably the most competitive solution in 22 nm, 28 nm eHV, which has enabled UMC to become the leader in OLED display architecture. In addition, our 22 ultra- low power and 22 ultra- low leakage technology, this offering delivers 30%-50% power savings compared to standard 28 nm nodes and it's ideal for IoT device wearable and AI applications. All this plus our diversified manufacturing locations, we believe we are in a unique position to send out those potential commodity capacity no matter if where you located. We are confident about our strategic position. Hopefully that answers your question. Understood, thank you. I have no more question. Back to Sue. Thank you. Thank you. Ladies and gentlemen, we're going to take the last question and the last one. Frank Lee, HSBC, go ahead please. Hi, thank you for taking my question. My question is, with the ongoing tension between U.S. and China, do you foresee any potential impact to your China fab, like for example, like foreign. Are you expecting like foreign customer to reallocate their orders from your China facility to maybe outside of China such as Singapore or Japan or even Taiwan? Do you foresee your customer, localized customer, to maybe reallocate also allocate their orders to a domestic China foundry too. First of all, in order to mitigate the geopolitical tension, what we can do is first to 100% following the law. No matter if export control or any of the local compliance requirements, UMC devotes all the resources to meet the compliance and the export control requirements. We are following every rule out there. There is no gray area for that. Secondly, we are happy with our geographically diversified production base because you never know at what point of the time there will be requirement for customers to move around their production. In fact, our China fab today is actually enjoying higher than corporate average loading. We certainly also see customers need to see more capacity available in our Singapore, Taiwan or Japan. All we can do is really try to be as diversified as possible and make sure all these fabs can support each other in many of our major technologies and offerings. That's what we can do. Okay, thank you. That's all I have. Thank you. Ladies and gentlemen, we thank you for your questions. That concludes today's Q&A session. I'll turn things over to UMC IR Manager for closing remarks. David, please. Thank you everyone for joining us today. We appreciate your questions as always. If you have any additional follow up questions, please feel free to contact umc@irmc.com. Have a good day. Thank you. Ladies and gentlemen, that concludes our conference for first quarter 2025. We thank you for your participation in UMC's conference. There will be a webcast replay within one hour. Please visit www.umc.com under the Investors Events section. You may now disconnect. Thank you and goodbye.