Good afternoon, everyone, and welcome to AXT's Third Quarter 2023 Financial Conference Call. Leading the call today is Dr. Morris Young, Chief Executive Officer, and Gary Fischer, Chief Financial Officer. My name is Christina, and I'll be your coordinator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, please press star one. Thank you. I would now like to turn the call over to Leslie Green, Investor Relations for AXT. Thank you, Christina, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the company, market conditions and trends, including expected growth in the markets we serve, emerging applications using chips or devices fabricated on our substrates, our product mix, our ability to increase orders in succeeding quarters, to control costs and expenses, to move manufacturing yields and efficiency, and to utilize our manufacturing capacity, the growing environmental, health and safety, and chemical industry regulations in China, as well as global, economic, and political conditions, including trade tariffs and restrictions. We wish to caution you that such statements deal with future events, are based on management's current expectations, and are subject to risks and uncertainties that could cause actual events or results to differ materially. These uncertainties and risks include, but are not limited to, overall conditions in the markets in which the company competes, global financial conditions and uncertainties, COVID-19 and other outbreaks of contagious disease, potential tariffs and trade restrictions, increased environmental regulations in China, the financial performance of our partially owned supply chain company, and the impact of delays by our customers on the timing of sales and their products. In addition to the factors that may be discussed on this call, we refer you to the company's periodic reports filed with the Securities and Exchange Commission. These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com through November 2nd, 2024. Also, before we begin, I want to note that shortly following the close of the market today, we issued a press release reporting financial results for the third quarter of 2023. This information is available on the investor relations portion of our website at axt.com. I would now like to turn the call over to Gary Fischer for a review of our third quarter results. Gary? Thank you, Leslie. Good afternoon to everyone. Revenue for the third quarter of 2023 was $17.4 million, down from $18.6 million in the second quarter of 2023, and down from $35.2 million in the third quarter of 2022. To break down our Q3 2023 revenue for you by product line, indium phosphide came in at $4.9 million, reflecting a stabilizing market with modest improvement in data center applications. gallium arsenide was $4.2 million. We were pleased to obtain our first permits to ship gallium arsenide substrates during the quarter and continue to work through that process on behalf of a growing number of our gallium arsenide customers. Germanium substrates were $1.2 million, up from the prior quarter, also reflecting our progress in obtaining permits on behalf of our customers. Finally, revenue from our two consolidated raw material joint venture companies in Q3 was $7.0 million. In the third quarter of 2023, revenue from Asia Pacific was 82%, Europe was 14%, and North America was 4%. The top five customers generated approximately 31% of total revenue, and no customer is over the 10% level. Non-GAAP gross margin in the third quarter was 11.3%, compared with 9.8% in Q2 and 42.2% in Q3 of 2022. For those who prefer to track results on a GAAP basis, gross margin in the third quarter was 10.7%, compared with 9.2% in Q2 and 42.0% in Q3 of 2022. The primary drivers affecting our corporate gross margin in Q3 were volume, product mix, and an improvement in our raw material business gross margin. Beyond the near term, we remain confident that we can get back to the mid-30% range as the environment strengthens through higher overall volume, more favorable product mix, and the benefits of our recycling programs, along with continued efficiency improvements throughout our business. Moving to our operating expenses, with the reduction in overall revenue, we have maintained spending discipline in our operating expenses to align with the current environment. Total non-GAAP operating expense in Q3 was $7.8 million, consistent with our results in Q2 2023, and down from $9.2 million in Q3 of 2022. On a GAAP basis, total operating expenses in Q3 was $8.6 million, consistent with our results in Q2 of 2023 and down from $10.2 million in Q3 of 2022. Our non-GAAP operating income for the third quarter of 2023 was a loss of $5.8 million, compared with the non-GAAP operating loss in Q2 of 2023 of $5.9 million, and the non-GAAP operating profit of $5.6 million in Q3 of 2022.... For reference, our GAAP operating loss for the third quarter of 2023 was a loss of $6.7 million, compared with an operating loss of $6.8 million in Q2, and an operating profit of $4.6 million in Q3 of 2022. Non-operating other income and expense and other items below the operating line for the third quarter of 2023 was a net gain of $0.9 million. The details can be seen in the P&L included in our press release today. For Q3 2023, we had a non-GAAP net loss of $4.9 million or $0.12 per share, compared with a non-GAAP net loss of $4.2 million or $0.10 per share in the second quarter of 2023. Non-GAAP net income in Q3 2022 was $6.8 million or $0.16 per share. On a GAAP basis, net loss in Q3 was $5.8 million or $0.14 per share. By comparison, net loss was $5.1 million or $0.12 per share in the second quarter of 2023. GAAP net income in Q3 2022 was $5.8 million or $0.13 per share. The weighted average basic shares outstanding in Q3 was 42.6 million. Cash, cash equivalents, and investments were $43.6 million as of September 30th. By comparison, at June 30, it was $49.6 million. The reduction in cash was primarily due to net cash generated by operating activities. Although last quarter, that was positive in Q3, it was negative this quarter. Depreciation and amortization in the third quarter was $2.2 million, and CapEx was about $4 million. Total stock comp was $0.9 million. As I mentioned, net inventory came down by $700,000 to $86.4 million at September 30th. 41% of the inventory is raw materials, and WIP is 55%. Finished goods makes up only approximately 4%. Okay, this concludes the report on our quarterly financial results. Turning to our plan to list our subsidiary, Tongmei in China, on the STAR Market in Shanghai. We do need to resolve one open item. Morris is in China as we speak and is working on this matter. Although it is moving slower than we expected, we are making progress, and we're confident that Tongmei remains an excellent candidate for a listing and will be approved to proceed. With that, I'll now turn the call over to Dr. Morris Young for a review of our business and markets. Morris, welcome from China. Thank you, Gary, and good morning, everybody. Well, this is China here in the morning. The demand environment in Q3 remained stable, and we were pleased to see some encouraging early signs of improvement in the data center market, resulting in modest higher indium phosphide revenues. We still believe that inventory digestion across our markets will continue to the end of the year, and in some cases, may persist into 2024. But we believe the worst of the declines are behind us, and we're looking forward to the new year with optimism. We've worked diligently throughout 2023 to advance our innovation in large diameter substrates and to support and nurture emerging opportunities across our portfolio. In indium phosphide, as the data center market prepares to move to 800 gig data rates, we are seeing increased development around next-generation silicon photonics devices and electro-absorption modulated lasers, or EML, for higher speed data center transceivers. The growing adoption of AI technology is providing a strong catalyst for the industry transition to higher speed, and we are excited to be engaging with customers for new opportunities as the market expands. Our proven performance in optical devices for the data center, coupled with our success in developing 6-inch indium phosphide substrates, is putting us in a solid position for both current and future generation of data center optical devices. We're also seeing positive development activities in both consumer and healthcare applications for indium phosphide. This further reinforces our conviction that we are in a very early stage in the adoption of this material across a multitude of emerging applications. Our early success not only validates indium phosphide as a material of strategic importance, it validates AXT as a world-class supplier to tier one companies. We believe that the next two years will see the further expansion into these and other areas. Now, in gallium arsenide, we're pleased to announce in September that Tongmei, our subsidiary in China, received its initial export license and was able to resume shipping gallium arsenide substrates and germanium substrates in the second half of September to a number of our customers. We made good progress in filling customer orders and minimizing disruptions. We're very proud of the way our team has responded quickly and effectively, and we're grateful for the partnership of our customers in working with us through this process... Like indium phosphide, the market for gallium oxide remains weak but stable, with inventory digestion likely to continue into 2024. That said, we are actively preparing for a new wave of innovation in our markets. We're pleased by the progress we're making in our eight-inch gallium oxide for customers. And this consumer high-end display and automotive applications for micro LEDs, we today, our customers' wafer application specifications for micro LEDs are exponentially more stringent than they were when our eight-inch development began. And yet, we have been able to meet these requirements, delivering outstanding piece part densities results in volume. We feel very confident in our ability to serve this emerging market. We believe that there will be a growing number of use cases in development. Our expectation is that product development from multiple customers is likely to run throughout 2024, with the first micro-LED product coming to market in 2025 and beyond. In Q3, we saw a modest increase in our germanium substrate revenue. Tongmei received the first export permits for germanium substrate customers during the quarter and was able to ship accordingly. Overall, the solar cell satellite market is navigating similar cyclical headwinds as the other markets. But we are confident that this area of our business will recover as the market strengthens. Finally, sales from our raw material business trended down slightly in the quarter, but gross margin improved from Q2. Overall, the pricing environment remains relatively stable, and we don't expect any major changes in Q4. In closing, we're looking forward to the new year with renewed optimism. While inventory rationalization may persist into the new year, we're pleased to be seeing the early signs that we can make a positive change for 2024. We believe that the trends that have been driving our revenue and customer expansion remain very much intact. Further, we have executed well in our development of large diameter substrates that will pave the way for our opportunities in the next generation devices, spanning from data center, consumer, and other markets. As we navigate the near-term environment, we continue to prioritize our cost savings and efficiency, and we are focused on accelerating our return to profitability. I will now turn the call back to Gary for our fourth quarter guidance. Gary? Thank you, Morris. In keeping with our comments today, we expect Q4 revenue to be between $16 million and $19 million. We expect our non-GAAP net loss will be in the range of $0.13-$0.15, and GAAP net loss will be in the range of $0.15-$0.17. Share count will be approximately 42.6 million shares. Okay, this concludes our prepared comments. Morris and I would be glad to answer your questions now. Christina, operator? Yes, and at this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Again, if you do have a question, please press star, then the number one on your telephone keypad, and we'll pause for just a moment to compile the Q&A roster. Okay, and your first question comes from the line of Richard Shannon from Craig-Hallum. Your line is open. Well, hi, Morris and Gary. Thanks for taking my questions, and Morris, thanks for getting up so early in China this morning. Let's ask a question on the guidance here for the quarter, just to kind of get the assumptions built in here. Obviously, the midpoint here is roughly flat with the third quarter, which makes sense, given your comments about stabilization. Are there any unusual trends within the substrate buckets as well as raw materials to get to that point? Or are they all, you know, roughly similar to flat sequentially? I don't think there's much, you know, ripples or nuances. It's kind of business as usual, frankly. So, you know, yeah, I don't have a lot of other color to add, so. Yeah. Okay. I, I, I- Maybe- The only thing I may add is, gallium arsenide is still, we're still working through how many permits can we get. So, I mean, the more the permits we can get, and perhaps we can increase that slightly, but it is not a very significant increase. Okay. And then I guess basically I want to ask on indium phosphide, given the importance of that, that revenue stream here. You're talking about the strength in data center, but hadn't mentioned anything about, consumer telecom or some of the other markets there. So maybe you can kind of delineate, you know, by the submarkets there that are driving that into the fourth quarter. You're still expecting, data center to grow, and I guess specifically, I want to touch on the fact that I think your large customer in that area has, transferred that transceiver business to another buyer, and so I want to get a sense of the degree to which that business will sustain. Gary, you want to take that, or, so let, maybe- Sure, I can start, and you can join if you want. So, data center is a strong sector for indium phosphide. Our business development guy, Tim Battles, is kind of upbeat about it, frankly, so, that's a positive. The Jabil transaction, we talked about this with Tim today, and he actually feels it's a good decision. So basically, it will allow Intel, in his view, okay, to focus on their core strengths. And it shouldn't detract at all from our revenue stream to Intel, and if they grow and improve, it will increase. So Jabil becomes basically a systems integrator or a, you know, that's what they do, is assemble stuff. So, Tim thinks it's a good shift in the business model, but of course, it's our opinion from AXT and, you know, clearly, it's Intel's decision, so. But we don't see it as a negative at all. We see it as a positive, so. Okay, fair enough. Maybe just the last topic on indium phosphide here. Just want to get a sense of continued traction with consumer electronics applications, whether it's your big historical customer or any new ones coming in here. Just some thoughts on how they, how you expect that to go over the next few quarters? Yeah, we continue to work with our customers, although this still, it is still early, but we have sent samples to at least two customers who potentially is going to decide how much to ramp and what's the timing for ramping. But, we are in the early stage of qualification, but that application, I understand, is for consumer applications, and it's scheduled to launch, if it is successful, in Q3 of 2024. So I think, you know, that activity is still, I believe, is still. still. I mean, given the market is so dire, I think it's active, and people are planning for next generation application for indium phosphide. Okay, fair enough. Two more questions for me, I'll jump out of line. First of all, I'm just following up on the comments on micro-LED. I may have missed something in there with the spotty line here, but I guess my general question here is, how is the environment here and the importance of this to your, you know, certain customers out there relative to last quarter? Are things holding in there in terms of timeframe and size, or is there more uncertainty here in the as the macros certainly seem to get worse over the last 90 days? Well, I think the intention for customers to proceed, it's firming up. I do believe they're coming. I think the only question I have is, what's the volume is gonna be, and how fast it's going to ramp up to the next phase, et cetera. I mean, we're given the initial ramp-up volume production, I think it's somewhere around mid-2025. And of course, it's gonna ramp gradually from, you know, next year onwards, and into the first stage of production is 2025, I think. But I think that timing, although it slipped from early predictions, but nevertheless, I think the customer is committed to go ahead with it. Okay, and last question for Gary is on cash flow. I think you, last quarter you were talking about, you know, trying to generate some positive working capital here, and I see, I think inventories are down slightly, but perhaps you're expecting or hoping for a little bit more. What's your general thought here as you look on operating capital and working capital benefits this quarter and into the near future? Well, first of all, in terms of inventory, you know, I've gone back with my coworkers, sort of looked at some historic inventory levels when maybe we were doing $25 million a quarter, $30 million a quarter. So it illustrates to me that we should be able to take inventory down. So I'm still targeting to do that. I think at a minimum, we should shrink it by at least $10 million. It's reciprocally, it's easy to do that if our run rates are high, and it's harder to do that when our run rates are so frankly modest right now. So I feel confident that we can do it and that we will do it. So it's in terms of... If and if you look at our overall, like I, I was looking at the cash generated from operating activities in our internal cash flow thing. It's negative $280,000 for the first nine months of this year. So because, you know, you're adding back depreciation, you're adding back stock comp, and there are some low-hanging fruit items on the balance sheet. Inventory is one, accounts receivable is one. Especially in China, we have pretty long day sales outstanding, so I'd like to bring that in. So yeah, I think it's okay. And, you know, I will, of course, be delighted to bank the IPO money, but in the meantime, I think we're safe. Okay, fair enough. That is all from you guys. I will jump out of line. Thanks, Richard. Christina, any more questions? Yes, so there are no further questions at this time, so I will turn the floor back over to Dr. Morris Young. Thank you for your participation in our conference call. We will be presenting at the Needham Growth Conference in January, and looking forward to seeing many of you there. As always, feel free to contact me, Gary Fischer, or Leslie Green directly, if you would like to set up a call with us. We look forward to speaking with you in the near future. Thanks, Morris. Thank you, all. Thank you. Thank you, and this does conclude today's conference call. You may now disconnect.