Welcome everyone to UMC's 2025 second 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 a question. For your information, this conference call is now being broadcast live over the Internet. Webcast replay will be available within two hours after the conference is finished. Please visit our website, www.umc.com, under the Investor Relations, Investors, Events section. Now, I would like to introduce Mr. Michael Lin, Head of Investor Relations at UMC. Mr. Lin, please begin. Thank you and welcome to UMC's conference call for the second quarter of 2025. I'm joined by Mr. Jason Wang, President of UMC, and Mr. Chi-Tung Liu, the CFO of UMC. In a moment, we will hear our CFO present the second quarter financial result, followed by our President's key message to address UMC's focus on third quarter 2025 guidance. Once our President and CFO complete their remarks, there will be a Q&A section. 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's control. For a more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC and the Overseas Securities Authorities. During this conference, you may view our financial presentation material, which is being broadcast live through the Internet. Now, I would like to introduce UMC's CFO, Mr. Chi-Tung Liu, to discuss UMC's second quarter 2025 financial result. Thank you, Michael. I'd like to go through the 2Q 2025 Investor Conference presentation material, which can be downloaded or viewed in real time from our website. Starting on page four, second quarter of 2025, consolidated revenue was NTD 58.8 billion, with a gross margin at around 28 nm.7%. The net income attributable to the stockholder of the parent was NTD 8.9 billion, and earnings per ordinary shares were NTD 0.71. Wafer shipment in quarter two increased to 957,000, up about 6.3% quarter-over-quarter. However, the effective NT dollar exchange rate also appreciated, similar magnitude from 32.89 in Q1 to 30.81 in Q2. Utilization rate increased from 59% in Q1 to 76% in quarter two. Revenue, as a result, increased about 1.6% sequentially to NTD 58.75 billion. Gross margin, as we mentioned earlier, reached 28 nm.7% or NTD 16.8 billion. This is already factoring in around 3 percentage points of the forex impact in quarter two. Net income reached NTD 8.8 billion or 15.1% net income percentage rate. EPS is NTD 0.71 in second quarter, compared to NTD 0.62 in the previous quarter. On page six for first half comparison, revenue increased by 4.7% to NTD 115 billion. Gross margin reached 27.7% compared to 33.1% in the same period of 2024. Net income attributable to the shareholder of the parent for first half of 2025 was NTD 16.67 billion or NTD 1.34 in EPS terms. Cash remained over NTD 100 billion, reached about NTD 101 billion at the end of first half of 2025. Total equity for the company is now around NTD 337.04 billion. ASP up a little bit in the second quarter, mainly due to the better product mix. On page nine for revenue breakdown, there's literally no change on a sequential comparison basis. Europe increased to 8%. Asia reached about 67%. IBM edged up slightly to 19% compared to 18% in the previous quarter. In terms of application breakdown, the change is also very minor. Consumer went down to 33% by 1%, and communication increased by 1%- 41%. Advanced technology revenue continued to increase, and with now revenue below 40-nm representing more than half of the total revenue, reached 55% in quarter two when 28 nm represented 40% of the company's total revenue. On page 13, the capacity breakdown, we will continue to see some minor capacity increase. For the third quarter, the capacity increase will come from mainly the 12x in shopping. After the first six months, our CAPEX budget for year 2025 remained unchanged at an estimate of $1.8 billion. The above is the summary of UMC results for second quarter 2025. More details are available in the report, which has been posted on our website. I will now turn the call over to President of UMC, Mr. Jason Wang. Thank you, Chi-Tung. Good evening, everyone. Here, I would like to share UMC's second quarter results. In the second quarter, the utilization rate increased to 76%, but the wafer shipment grew 6.2% quarter-over-quarter, primarily driven by communications in image signal processors, NAND controllers, Wi-Fi, and LCD controllers. While we experienced an increase in the overall utilization and the growth of our 28 nm portfolio, the unfavorable foreign exchange movement of the NT dollar kept our gross margin to 28 nm.7% by nearly 3 percentage points. Revenue from our 28 nm portfolio continued to grow sequentially, now accounting for 40% of the total sales, a record high in both percentage and absolute dollar terms. Our industry-leading 28 nm solutions continue to win adoption by customers, and we expect to see further market share gains in wireless communications over the coming quarters. We have always believed that with the right 28 nm is a strong and long-lasting node with a robust product pipeline. In addition, the new Phase III facility at our Singapore FAST 12i is set to start production in 2026, while it enables UMC to better serve customers seeking diversified manufacturing for enhanced supply chain resilience. Looking ahead to the third quarter, we expect a mild increase in wafer shipment. However, adverse foreign exchange movement will lead to a decline in NT dollar revenue. We are closely monitoring the near-term uncertainties and risks as the market anticipates US tariff policies. To mitigate macro and geopolitical happenings, including foreign exchange risks, UMC will continue to actively manage our foreign exchange exposure and maintain financial flexibility to enhance our financial structure and business resilience. Now, let's move on to the third quarter 2025 guidance. Our wafer shipment will increase by low single-digit percentage. However, NT dollar denominated revenue is fully exposed to fluctuation in the foreign exchange rate. For instance, a 5% appreciation in the NT dollar will result in a corresponding 5% reduction in reported NT dollar revenue. ASP in the US dollar will remain firm. Q3 gross margin will be approximately Q2 gross margin, subject to the foreign exchange effect. Therefore, our Q3 gross margin will be approximately equal to that of Q2 under the assumption the foreign exchange rate is at a current level. Capacity utilization rate will be in the mid-70% range. Our 2025 cash-based CAPEX budget will remain unchanged at $1.8 billion. That concludes my comments. Thank you all for your attention. Now, we are ready for questions. Yes, thank you, President Wang. 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 the star key and number 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 the star key and number two to cancel the question. Thank you. Now, please press star one on your keypad if you would like to ask a question. Thank you. First, we will have Brad Lin, Bank of America, for questions. Go ahead, please. Hi. Thank you for taking my question. I have two questions. The first one will be on the ASP trend. What is the initial outlook and view on the ASP trend into 2026, given the higher expense and cost? Obviously, we are happy to learn the state of the ASP in the near term, but yeah, any initial view for 2026? Thank you. I mean, typically, we do not guide anything beyond that, beyond 2025. As you said, we can talk about the near-term of the ASP outlook, but you will be interested in looking into a longer-term ASP projection. Let us share about the ASP strategies. Our goal is to continue to differentiate our technology offering and product mix and to maintain and improve our ASP resilience. We want to further widen the gap in technology offerings while increasing the revenue contribution by those respective nodes. Following our rollout of the 28 nm technologies, we will continue to provide specialty technology in 40-nm and 35-nm nodes, where the percentage of our revenue contribution competing with the pricing boundaries will continue to decline. For the near term, our CFO actually mentioned our Q2 ASP saw a low single-digit increase driven by the higher 28 nm product mix. In Q3, we expect the product mix remains unchanged. Therefore, the ASP will remain firm for this year. Yeah. Got it. Thank you very much. My second question would be, we have seen in the presentation 14-nm and below mix listed in the slides as zero for a while, but still listed in there. Should we expect the number to increase, and will that be from 12-nm or potentially also 6-nm? Okay. 12-nm still fits for us. For that particular program, the cooperation with Intel is progressing well and remains on track according to the project milestone. At present, our hosting are working on verifying silicon performance for the pilot line. We expect that the earliest PDK will be ready for this first wave customer in June 2026. We expect customer product tape-out to begin in 2027, so we'll probably see some revenue in that time frame. I think that's the twelve. We continue marching in that direction. If we go beyond that, we don't have any concrete plan for anything beyond the twelve nanometer today. Our development effort will continue to focus on that and also to broaden our specialty technology portfolio on both ends. That is definitely on our roadmap. Once we have more concrete updates, they will be shared with you. Currently, the most important task is to deliver the highly competitive solution for mass production at twelve nanometer through our close cooperation with our partners. For anything beyond that, we will explore the future opportunity through the partnership arrangement, which we believe will be mutually beneficial. Sure. Sounds great. Thank you very much. Thank you. Next one, Charlie Chan, Morgan Stanley. Go ahead, please. Hi, Jason, Chi-Tung. Good afternoon. My first question is about the tariff impact. Your customers' behavior, do you see kind of pulling in, and what does it impact your second-half sustainability or outlook? Thank you. Sure. Good afternoon, too. We do observe the stronger demand upside in Q2, and as well as Q3, is partly driven by the inventory build-up in anticipation of a potential U.S. tariff. For UMC's first half 2025 results, which is in line with our guidance of the Q2 wafer shipment increase of 6.2%-3%, quote-unquote, while the Q3 demand increased on a higher base, we expect the shipment will still grow mildly sequentially. There are some observations about that. Given the 2025 market dynamics, such as adjustment to the U.S. policies and ongoing geopolitical and macro uncertainty, the usual seasonal pattern may be different. We, along with our customers, will closely monitor those market signals. Yeah. I see. Thank you. Yeah. I think lots of discussion about the future advanced packaging technology, right? Jason, can you share with us about your business development here? I think you have some interposer capacity, right? How are we going to utilize those capacities going forward? Maybe some color about the potential applications. Sure. I mean, we're not missing. We don't want to miss out the advanced packaging opportunities. We are preparing our advanced packaging solution for what we see is for the growing energy consumption of the cloud AI, as well as the potential growth in the edge AI market. First, to address the power efficiency requirement for the high-computing processor, UMC is developing the 2.5D interposer with a DTC and discrete DTC, which is going to be the roadmap coming up. Right now, the current interposer is moving on to the next generation, and we're waiting to introduce this and expect to ramp after that. Second, UMC is leveraging the scalable 3D wafer-to-wafer stacking and TSV to enhance the competitiveness of our specialty technology. We are currently in mass production for the extremely small form factor for the 5G and 6G RFIC. Based on the success of the 5G and the 6G RFIC with the wafer-to-wafer stacking, we are also developing memory-to-memory stacking and memory-to-larger stacking service for the high bandwidth computation requirements. Okay. Thank you. My last question, again, is always. Want to consult you or pick up your points about the semiconductor cycle. I believe this is the third consecutive year we do not see so-called second-half recoveries. What do you think is happening on this semiconductor industry? Why do we not see sustainability or so-called specificality, right? I remember in the past, you have upcycle and shortage, overcapacity, and then correction. We seem to do not see that anymore. I mean, certainly, the visibility is actually lower nowadays. You're absolutely right. When we started here in 2025, we actually expect the 2025 gross outlook will be slightly better than our addressable market. We've seen our addressable market is going to grow slightly, at a low-single-digjt. At this moment, we still expect our 2025 gross outlook will remain unchanged. That stays. Beyond 2025 or 2026, we have to closely work with our customer, sharing their visibility as well as monitoring the DOI situation. As of today, I think the DOI is getting to the healthy level. We've seen that DOI is approaching the healthy level about a quarter or two quarters ago. Right now, the computer consumer communication segment is still healthy, remains healthy, while the automotive and industrial still remain high. I think while monitoring the macroeconomics as well as the DOI, we can only hope that sooner or later we will see the upcycle. Right now, the visibility is pretty low. Yeah. Okay. Okay. Yeah. So yeah, maybe try it again about Brad's question about wafer pricing. So, yeah, because obviously, FX impacts all the Taiwan sounds a lot in terms of gross margin. Would that be a factor you can put on the table to negotiate with your customers for next year's pricing? I mean, we continue working with our customers in terms of pricing conversation, closely. Those are more of a tactical conversation. I think fundamentally, like I reported earlier, I think our key focus is trying to differentiate our technology offering so that we can continue to enhance our product mix to improve the ASP resilience. I think that's where we're marching. We have a fairly clear roadmap today on many fronts of our technology development. Our goal is to further widen the gap in technology offering and increase the revenue contribution from those respective nodes and technology offering, which we think that we can make sure that our ASP can remain resilient. Yeah. Great. Thanks, Jason. Very helpful. Thank you. Next one, Gokul Hariharan, JPMorgan. Go ahead, please. Hi, Jason and Chi-Tung. Thanks for taking my question. First of all, for the Singapore fab 20-nm and 22 nm expansion, could you talk a little bit about what is the current pace of the ramp-up, and the kind of customers that you're ramping up there? Obviously, some of the pricing negotiations that you had back in 2022 and 2023 obviously had some price escalators. Could you talk a little bit about whether those price escalators still exist, given the environment has definitely changed somewhat? That is on the 20-nm part. Yeah. Sure. For the 12i in the Singapore facility, given the current market dynamics and customers' alignment, we project the 12i Phase III production ramp will start in January 2026. It will ramp up with a higher volume starting in the second half of 2026. That is the current ramp plan. Many of this ramp schedule and alignment is based on the customers' closed communications. Right now, given the application ramp-up is going to be mainly in the communication with our 22 nm high-voltage devices. We still believe our 28 nm high-speed solutions are differentiated from the market. The ASP still remains fairly healthy at this point. Yeah. Got it. Secondly, on gross margins. We are roughly in the mid-70% utilization, and we are kind of in the mid to high 20% gross margin. I think depreciation definitely started to grow again and looks like it is going to grow into the next couple of years as you bring in 12i. Could you talk a little bit about what is kind of the realistic pathway for us to get back to that mid-30% gross margins or low to mid-30% gross margins that we have talked about? Currency is not something that we control, but maybe talk about some of the other factors. Is that kind of a realistic goal that you are pursuing? I think back to some of the previous questions, can pricing be a realistic tool to kind of get there, or is it more challenging to use price as a tool to get there? Absolutely. I mean, it's definitely our mission to continue to improve the gross margin back to the reasonable level. Given the current loading, it is frustrating, fluctuating around the 70%. Definitely putting some pressure in terms of the gross margin while the depreciations increase. The focus is very clear. I kind of answered Charlie earlier that we are focused on technology development, technology offering, even the newer technology offering. The partnership engagement and with the product mix improved, we think that we have a path going back to the reasonable level. For the past, we have been maintaining our foundry shares in our addressable market segment. Based on our current design pipelines, we anticipate more shares again in 2026 as well as going into 2027, particularly in the 28 nm market today. Now, while we rolled out the other technology offering, we think this will continue to improve, and we will definitely march into the direction to go back to the right level, the gross margin level. Yeah. Yeah. If I may add on to that, our annual depreciation growth is going to peak out. If you recall, in year 2023, our depreciation expense increased by more than 20% year-over-year, and similar magnitude for 2024. Sorry, similar magnitude for this year, for 2025. For 2026 and 2027, the increased magnitude will be a lot less. Could drop down to a single digit. Hopefully, we will have a better cost structure moving into year 2026 and 2027. Thanks, Chi-Tung. Maybe one more question on the high-voltage side for 28 nm 22 nm. jason, do we have a pathway below 22 nm for high voltage, given there's been some discussion about some of the driver IC-related products moving below that, be it to some kind of a finFET node, but enabling high voltage? It's definitely on our roadmap today. They are. While we still believe 22 nm high V will be the most compelling and competitive solution today as well as the next couple of years, yes, the finFET solution of the high voltage is on our roadmap today. Yes. Any timeline in terms of when you think customers will start demanding this? We're still aligning with our customers. It's contemplating between the value proposition 22 nm versus the next node. We are closely working on that. I don't have a specific timeframe, but I kind of don't want to give a guess right now. Given all the data on hand, we still think the 22 nm high voltage will have a link. There will probably be another year to close to two years. Understood. Maybe one last question. Several of the consumer fabless companies are guiding down Q3 quite meaningfully. Your own wafer orders are slightly moving up in Q3. Should we expect that there could be a hiccup in Q4? Every year seems to be a different seasonality, but just wanted to understand how you think about that inventory cycle. For many of the Asian consumer fabless companies, which are your key customers as well. Sure. I mean, the inventory situation actually is quite healthy with fewer major segments already. Outdoor and industrial, I think, they're still kind of high, but the rest of it is actually quite healthy. At this point, given the visibility, we do not guide a Q4 at this time. Our view for the full year 2025 will remain unchanged. Again, I kind of touched on that earlier, that we expect our addressable market will grow by the low-single-digjt, and we will still outgrow the addressable market in 2025. The biggest challenge nowadays is really the visibility. Given the macro uncertainties and the geopolitical concerns, I think the customers are still cautious. It does not mean they do not have a demand. The question is, they kind of want to play this thing in a different manner. We are working closely with them. Meanwhile, Q2 is growing, Q3 is sliding sequentially, and Q4, we just have to play and see. We will definitely report that next quarter. Meanwhile, we think the overall 2025 projection is still unchanged. Yeah. Okay. Yeah. Thank you, Jason. Thank you. Thank you. Next question, Sunny Lin, UBS. Go ahead, please. Thank you very much for taking my questions. My first question is on 20 nm. If we look at Q2, Jason, what's driving the revenue upside? Is it driven by the 22 nm migration or through a product mix upgrade? Looking ahead, could you share a bit more on your share again in wireless communications and maybe some of the other products going to 2026? Okay. 22 nm and 28 nm revenue contribution increase is mainly coming out from the communications. In Q2, computing and communications segments, but mainly on communications in Q2. Going forward, we are highly confident in 22 nm and 28 nm business in 2025 and beyond, going into 2026. The strong demand outlook is supported by the computer tape ball momentum on many different applications, thanks to the customers, of course. Again, it is really supported by UMC's differentiated technology and the regional manufacturing footprint as well. This includes our 12i fab in Singapore, which the P3 fab expansion is on track, and we are on track to ramp in 2026. It will begin to contribute in the revenue in the second half of 2026, and this 22 nm and 28 nm capacity and support for the growing demand. The combination of that technology proposition, manufacturing quality, and the well-positioned 22 nm and 28 nm will remain the core growth engine for the next year, 2026. Yeah. Thank you very much. On 12i, would you be able to price the wafers a bit higher, given a higher cost structure? When you talk about high-volume production starting from the second half of 2026, is there any type of capacity that we should expect? I mean, we kind of do not want to quote exactly capacity size, but we are quickly ramping our P3. We look at 22 nm and 28 nm capacity on a total basis between our own facilities. I think the older utilization rate across the different facilities 22 nm and 28 nm were above our corporate averages. Even today, they are above our corporate average. The question about the—I kind of missed your earlier question, the first question. Pricing for Singapore, would you be able to price a bit higher given cost is higher as well? Oh, no matter, I missed it. It's a sensitive subject. Right now, again, our pricing position is based on our technology offering, our value proposition. I think that's the baseline of the ASP. In terms of the diversified location, we have to work with our customers to understand the needs, right? We want them to stay competitive, and we want them to acknowledge the differentiated offering of our technology, as well as the geolocation benefit. It's a subject that we will talk about with our customers, but mainly on the technology differentiation as well as their competitiveness. Got it. Thank you. That's helpful. I have a question on the Intel partnership. Seems like Intel is becoming less proactive in pursuing the foundry ambitions with the new management. I wonder, how does that affect the business development with UMC? Let's say if Intel wants to scale down and they look to maybe sell the capacities, in that case, would UMC be interested in acquiring the capacity assuming the price is reasonable? I think it's hard to comment on any speculation, but I don't kind of want to comment about the partners' priority within the company. I can only comment about our program, and our current program with them, like I said earlier, the cooperation with Intel is progressing very well, and the milestones remain on track. Most importantly, both parties are very committed to this 12-nm collaboration. I see no change at this point, and we still have very high expectations with this program. Got it. Thank you very much. Thank you. Thank you. As a reminder, please press the star key and number 1 on your keypad if you would like to ask the question. Thank you. Next, we'll have Laura Chen from Citi. Go ahead, please. I'm sorry. Laura just dropped the line, and we'll take the next one. Jason Zhang, CLSA. Go ahead, please. Thank you for taking my questions. I just want to follow up the impact on, from the FX ratio. Can you provide your FX ratios for Q3? Thank you. First of all, every 1% move appreciation of NTD against US dollars will erode our gross margin about 0.4-0.5 percentage points. That is where the 3 percentage point erosion comes from, on back of the 6%+ NTD appreciation against US dollars. For Q3, we do not do forecast, but we are using current forex rate, which is nearly 29.8 when we give out our guidance. A reminder for quarter two, the weighted average was 30.81. Thank you. My second question is in terms of the competition. It seems like your Chinese competitors now have a better or higher usage rate currently. Do we see a better market or lower competition in the mature node? How can UMC benefit from this lower competition? Thank you. At this point, more than half of our revenue comes from specialty technology solutions, which serve our customer demand in differentiated technologies. For instance, our 22 nm 28 nm AI, kind of touched on earlier, is probably the most competitive solution in high-end smartphones or OLED display market. In addition, 22 nm ultra-low leakage and low power technology will deliver another 30%-50% better power saving compared to standard 28 nm. With our position ourselves as a specialty foundry partner, focused on low leakage, low power logic, embedded high voltage, BCD, embedded non-volatile memory, RFSOI solutions. We want to continue to provide specialty technology where the percentage of revenue contribution in this space will increase, and the percentage of the revenue contribution competing with the Chinese foundries will continue to decline. I think that's our focus. I think that we have made quite a bit of progress already, and we think there's more room for us to improve on that. Got it. Got it. Thank you. I have no more questions. Thank you very much. Thank you. Next one, Laura Chen, Citi. Go ahead, please. Yeah. Thank you very much for having me back. Just a quick follow-up. I want to understand your view on the long-term gross margin outlook. We understand that there's a lot of moving parts, rising depreciation, and also currencies, etc. But we do see that recently the utilization rate is kind of improving back to high 70%. As we're moving into Q3 with the wafer shipment also going up. What's our view on our so-called long-term gross margin target? If you can give us more colors on that. Thank you, Jason. Right now, mid 70% is not great. Obviously, loading will be one of the important focuses. To improve the loading, fundamentally, you have to provide competitive solutions to customers. Like I said, we focus on technology differentiation, focus on new technology development, and then following with the key customer partners' engagements. By doing that, we think the loading will increase. As well, the gross margin will get healthier. The other one is, of course, the cost. For the depreciation increase, and Chi-Tung also touched that earlier, this couple of years, we have a significant depreciation increase. After 2025, I think the increase percentage will start getting more mild. While we improve the loading and maintain the cost structure, the next thing is, of course, the ASP management. From the ASP management and with the more compelling solution, and you have a more diversified manufacturing site and the manufacturing qualities, we think the ASP will, at least the branded ASP will, remain resilient. Not to mention, we'll continue marching forward with our 12-nm development, and hopefully we can continue to improve the product mix as well. Giving all those is putting a roadmap for us to improve our market relevance and position as well as our financial performance. For the past, we have already improved our structure, probability in terms of our break-even point. From that front, we already see an effect and benefit. Going forward, there's still work to do. Combining all those, we think we have a roadmap to march into a better result. Yeah. Sure. Thank you very much. Chi-Tung, can you also remind us what will be the depreciation cost increase for this year or maybe next year? This year is low 20% year-over-year. Next year is still a very rough estimate, but as I mentioned. The magnitude of increase will decline significantly, maybe to below 10%. Okay. Thank you very much. My next question is also about our operation in China. As we know, we still have two fabs in China. Even though there's always very fierce competition, do we see any possibility that our IDM customers, if they want to enter in the Chinese market, they can also leverage our capacity there to be kind of differentiation as well? Can you give us more update on your current strategy in China? First of all, with our diversified manufacturing sites, we definitely are able to serve different customer needs. If there is a customer need for their product to be produced in our China facility, that is something that will very much welcome us. The same thing if we have a customer moving from China to other locations, we very much welcome that. We believe the diversified manufacturing offering will give us a benefit of supporting customers with their supply chain resilience needs. Right now, for the IDM customer moving into the China facility, there are certainly some signals, but I think the signal goes bilateral, multiple different ways. We are working closely with different customers, and hopefully we can fulfill their desired needs. Yeah. Okay. Thank you very much. Thank you. Next one, Tim Schultz Molender, Redburn, go ahead, please. Yeah. Hi there. Thank you very much for taking my questions. I had two, please. The first one is on pricing behavior. Particularly, just how rivals are behaving in terms of pricing in the communications segment. Is that disciplined pricing, particularly given the steady improvements in days of inventory, or is pricing more challenging? I had a follow-up. When there's ample capacity available, pricing becomes a topic. Not until the capacity becomes tightened, I think the pricing will always be a topic. I think from a behavior standpoint, it's really subject to the capacity situation. Given that the current capacity situation, regions are different, and I think that conversation still happens quite often. Yeah. Okay. That's very helpful. The second one was in terms of the collaboration with Intel. Good to know that the PDK 2026 production 2027 is still on track. I had a two-parter there. It's just in terms of the work you're doing with your partner, do you see any impact from the headcount reductions? Does that influence that cooperation in any way? The second part, talking about gross margins and the outlook in 2027, 2028, this journey to get back into the 30s. Obviously, loadings are the most critical factor. Does this cooperation with Intel play a material part in your sort of medium-term gross margin outlook? Many thanks. On an absolute dollar term, yes, it will. Because of the business model that we have. Coming back to the question about the headcount and the commitment from our partners, it's actually quite positive. I think there's a, I think the product itself is being expanding from the R&D development, now getting into the high-volume production preparation. There's more involvement from different organizations. I would say from the involvement standpoint, from the different organizations, it's actually increased. I can't really comment about their headcount situation, but I can tell you we see a lot more activity from various different departments and organizations because we're moving from the R&D activity, gradually start moving into the so-called high-volume production preparations. You can see while we're expanding the activity scope, there's actually more involved with the program today. That's super helpful. Many thanks. Thank you. Now we are taking the last question. Alex Cheng, BNP Paribas, go ahead, please. Thank you for taking my question. I only have one follow-up question regarding your China business. Can you comment in terms of utilization? How is your China fab utilization versus the overall utilization? In terms of the price pressure, have you seen it eased in recent months? What is the outlook for the price pressure in China? Thank you. Our 12x facility today is actually running at full capacity. It is above our corporate average. Since our different sites are mainly serving as the manufacturing facilities, the business management is all centralized. At this point, there is no pricing differentiation between different locations for us. Thank you. Thank you. Ladies and gentlemen, we thank you for all your questions. That concludes today's Q&A session. I'll turn it over to UMC Head of IR for closing comments. Thank you for attending this conference today. We appreciate your questions. As always, if you have any additional follow-up questions, please feel free to contact ir@umc.com. Have a good day. Thank you. Ladies and gentlemen, that concludes our conference for second quarter 2025. Thank you for your participation in UMC's conference. There will be a webcast replay within two hours. Please visit www.umc.com under the Investors Events section. You may now disconnect. Thank you again. Goodbye.