Good morning. How are you all? We're here at 9:00 AM, I think we'll go ahead and get started. I'm Mary Jane Raymond, the Chief Financial Officer at Coherent Corp. We also have with us today Dr. Giovanni Barbarossa, our Chief Strategy Officer and the President of the Materials segment, and more importantly, Dr. Chuck Mattera, our Chair and Chief Executive Officer. Welcome to our briefing today, both to all of you in the room and all of you on the phone on the webcast. If you wouldn't mind, it would be helpful if you could mute your phones. Today's event will run for about 90 minutes. It's about 45 minutes of presentations, we'll use the rest of the time for questions. Coherent's Broad Technology Portfolio enables many of today's exciting megatrends. We will showcase today two of those areas, one in display and the other in life sciences, to highlight a couple of the opportunities that are developing pursuant to these growing market trends. Our first speaker will be Dr. Kai Schmidt, Senior Vice President and General Manager of the Excimer Laser Business Unit. Kai will discuss our unique position in display equipment, and you will hear how our differentiating platform technologies continue to enable this evolving market. Our second speaker is Dr. Christopher Dorman. He is the Senior Vice President and General Manager of the Solid-State Laser business in Europe. Chris will explain how our laser technology is enabling megatrends in medicine through genetic sequencing, flow cytometry, optogenetics, and multiphoton microscopy. Kai and Chris will share their insights into the markets and how they see them evolving. They will highlight important trends and upcoming catalysts that we believe have the potential to drive inflection points in these markets, which is making for an even more exciting future for us. As a reminder, any forward-looking statements we may make today are given in the context of today only. They may contain risk factors that are subject to change, possibly materially. We do not undertake any obligation to update these statements to reflect events subsequent to today, except as required by law. A list of our risk factors can be found in our Form 10-K filed for the year ended June 30, 2022. The presentation materials today are available on the investor relations tab of our website, coherent.com. With that, let me turn it over to Dr. Kai Schmidt. Kai? Thank you, Mary Jane. Good morning from my side. Displays are our window into the connected world. Nearly every consumer device today has a display. A smartphone without a display is impossible to imagine. Displays are getting larger and more interactive in our homes and in our cars. State-of-the-art displays are slim, bendable, high resolution, and have a wide color gamut. Future displays will range in size from tiny ones for AR, VR applications to more than 100 inch in diagonal for very large wall TVs. Today, I will walk you through how the market opportunity for Coherent will grow over time from now to what's next and beyond. We will begin by describing our strong position now in the current market for manufacturing equipment designed to produce OLED displays for smartphones. We will then move to what's next by reviewing the catalysts driving an expansion of the OLED manufacturing equipment market, thanks to new capabilities in manufacturing larger OLED displays, which are better suited for tablets and laptops. Finally, we will look at what's beyond, with yet another large incremental market opportunity, this time for Micro LED display manufacturing, driven both by very large displays such as for 4K wall TVs and on the other end of the spectrum, by very tiny ones for extended reality. Let's begin with now, the market for OLED display manufacturing equipment for smartphones. OLED displays are nearly perfect displays. They have a high dynamic range. They can be operated at high frame rates to ensure a blur-free video experience. OLED displays can be made rigid or flexible. There are numerous examples and very nice rollable prototypes shown by several display manufacturers. There are well above 150 different process steps required to manufacture OLED displays. Coherent provides the lasers and optical systems for at least four essential process steps. The first is laser annealing of the thin film transistors so they can meet their performance requirements. Without the laser annealed backplane, there would not have been any state-of-the-art OLED display and phone. The second is laser lift-off, which is the process of detaching a flexible or foldable display from its rigid production carrier. The third and the fourth are laser cutting of fully processed individual displays and laser drilling of holes for cameras and sensors that are user-facing. The first of the four, laser annealing, contributes by itself to about 20%-25% of the Laser Segment revenue, and we expect that to continue. For every $10 spent on new annealing systems, there is $1-$2 for laser lift-off equipment if the OLED display is flexible or rollable. Similarly, about $1-$2 revenue for laser cutting and drilling equipment. OLED displays will continue to gain market share in all display applications, but remain dominant in the smartphone area. In the smartphone market, the total number of unit panels, including all display technologies sold globally, is expected to grow at a CAGR of 3% over the next five years. OLED displays, more specific, flexible OLED smartphone displays, are expected to increase at an 8% CAGR. The fact that flexible and foldable OLED displays will progressively gain share over rigid displays is a favorable trend for Coherent as it implies growing market for laser lift-off. The portion of rigid OLED displays in smartphones will nearly stay constant, but these will find more and more adoption in IT displays and automotive displays. Altogether, we expect the market to increase by 30% calculated from the area of the display. Coherent is by far the market leader in lasers and optical systems used for annealing in display fabs around the world, but mainly in Korea and China. The lasers are called excimer lasers. Their emission consists of high energy pulses of ultraviolet light. This light is shaped to form a line of light in an optical system called line beam. Annealing OLED panels with such an optical system is very robust. It features a large process window and is very well suited for 24/7 production environment. Each laser requires regular maintenance and replacement of consumables, such as this gas discharge tube and other parts. This generates a constant revenue flow for each system installed and used. We have more than 200 annealing system installations, which represents more than 300 excimer lasers in use annually. As we mentioned earlier, the display annealing business is between 20%-25% of the laser segment revenue, and we expect that to continue at least through the end of the decade. Service, including consumables, is in the range of 50%-70% of overall display annealing revenue, depending on fab build-out and consumer demand. An important point to remember is that the annealing process developed by Coherent over decades is the de facto standard and process of record for annealing OLED displays worldwide. This makes the barrier to entry into the annealing market very high. That barrier to entry will only be getting higher, as I will soon explain. So far, I've been discussing our position in the OLED display manufacturing market as it relates to smartphones. This is the now. I will then move to what's next. Larger OLED displays for tablets and laptops. Over the last decades, the display industry has developed standards for the production of displays based on the size of raw glass material called mother glass. Today's mainstream is generation six or Gen 6 mother glass, which is approximately one meter 50 by one meter 80. This is used for smartphone OLED display production, whether rigid, flexible, or foldable. The next generation of mother glass size will be Gen 8, which is two meter 20 by two meter 50, doubling the area compared to Gen 6. The number of displays per mother glass increases by the same magnitude, enabling significant economies of scale. The cost of operation of the equipment is basically equivalent for Gen 6 and Gen 8 fabs. As a result, the cost per display decreases as the number of displays per mother glass increases. In addition, the larger glass size gives more flexibility in processing different display sizes. Gen 8 mother glass size is the future. It enables the expansion of the OLED display manufacturing equipment market for tablets, laptops, and computer monitors, which is quite significant. The larger OLED displays for these IT devices are forecasted to grow quickly at about 50% CAGR over the next five years. We already know of plans for five Gen 8 OLED fabs. They will be located in the leading display manufacturing countries, Korea and China, with the first of those to come online in late calendar year 2024. While the market is evolving to Gen 8 fabs, we are also innovating and advancing our laser annealing technology. In doing so, we are increasing the barrier to entry even further. Our new laser annealing system, sorry, is based on a solid-state laser instead of an excimer laser. This new solid-state laser, called PYTHON, is designed and optimized for Gen 8 OLED sheets. PYTHON enables an improved annealing quality at higher throughput and lower cost of operation. These are the three main significant benefits for our end customers, the display manufacturers. That development is the result of 10 years of our technology leadership in display manufacturing technology. The combination of Gen 8 glass size with our new annealing system will lower the cost per display of the annealing step by nearly 50%. That's an impressive figure. We were able to achieve this huge leap in innovation because we have been so close to that business for so long time. We are, in fact, very excited because in March, next month, we will be shipping the first demonstration unit, including the PYTHON laser, to a major integrator in Korea. I've told you about the now, OLED displays for smartphones. What's next, OLED displays for IT devices. We also have an eye on what's beyond. Display technology itself is evolving. We gain insight into these trends very early because customers will tend to their trusted suppliers to share their roadmaps. The success of laser annealing with excimer lasers was critical for our customers a few years ago to enable them to create the market for smartphones. Such success drives very close customer intimacy, which in turn continues to increase the barrier to entry into the market. The new display technology is based on MicroLEDs. TVs based on MicroLEDs offer performance comparable to the best OLED TVs on the market, but they have a substantially higher level of brightness, and that's the key differentiator. Because of their brightness, we believe that MicroLEDs will be adopted in mass production for high-end TVs and ultra-large wall displays in the next 3-5 years. These high-end TVs will be greater than 60 inch in size and will support 4K resolution or more. Displays based on MicroLEDs also consume much lower power than displays based on OLEDs. They are therefore favored for display that are battery-operated, especially in products where the battery size is very limited. This is, for example, the case for wearable devices such as watches, smart glasses, and other extended reality headsets. The trade-off is that MicroLEDs are expected to be higher in cost for many years, possibly forever, so the only markets that will adopt the technology are where brightness and low power consumption can command a price premium. It is likely that smartphones and IT devices will continue with OLED technology, therefore, the market for MicroLED display manufacturing equipment is incremental to the market for OLED display manufacturing equipment. Let's talk about how Coherent enables MicroLED display manufacturing. MicroLED and OLED displays share similar performance characteristics that are enabled by Coherent's laser annealing process. MicroLED displays require another process which is completely new and specific to that technology. Here's the reason why. MicroLEDs are tiny LEDs with sizes today in the range of 10 to 50 micrometer with a clear roadmap to five micrometer, which will reduce the cost of displays. Handling and manipulating such small objects with high precision can only be done with lasers. In fact, lasers with a wavelength so small that they need to operate in the deep ultraviolet wavelength range. In addition to the laser annealing, we invented a new process called laser transfer, which operates in the deep ultraviolet. With our capabilities to design very high precision optical systems, Coherent enabled what's called the Laser-Induced Forward Transfer process, which was invented specifically for these tiny MicroLEDs. This new process enables the transfer of MicroLEDs from the wafer to the final display with incredible precision and speed. In fact, our laser transfer process is two orders of magnitude faster than any other existing technology. This is absolutely critical for the viability of MicroLED displays if you consider for a moment the target application of very large displays with 4K resolution and higher. The majority of the MicroLED display manufacturing revenue opportunity will therefore be from a combination of incremental laser annealing equipment and laser transfer. We believe that this amounts to more than $1 billion of incremental revenue over the next 10 years, taking a reasonably conservative view that our addressable market would be only 10% of the total addressable market for MicroLED TVs larger than 60 inch, which equates to around 4 million TVs annually. In summary, I have given you an overview of our activities in the market for display manufacturing. As you can see, lasers are critical to realizing some of the most sophisticated consumer products, including every smartphone in this room. Just like in industrial applications, laser are increasingly the solution to enable the next generation of technology. We expect to see this with next IT devices. In the future, our lasers will be just as critical for really large high-resolution and high-brightness displays based on MicroLEDs, as well as for tiny screens on wearable devices. As consumer electronics prices fall, consumers choose larger displays and the market for display manufacturing equipment grows. Assuming that we will continue to maintain our high market share for Gen 8 investments in Korea and China, leveraging our new optimized annealing system, the main growth will be driven by the increasing number of installed systems and service revenue growth for the years to come. Thank you very much. I would like now to turn over to Dr. Chris Dorman. Thank you, Kai. The World Health Organization estimates that the number of people over age 60 will increase from one billion in the year 2019 to more than two billion in the year 2050. Degenerative diseases, cancer, and Alzheimer's require challenging solutions. In the last five years, we've hit an inflection point in our ability to analyze, manipulate, and understand the genetic building blocks of the human body. Photonics technologies are driving this inflection point in modern medicine, underpinning the techniques needed for these solutions. From lab-based science through diagnostic tools and on to genetic engineering, delivering personalized therapies, Coherent's products and technologies are at the heart of this advancement. There are three key fundamental elements to this revolution and t shree stages in the development of this technology. The three key elements to this revolution in medicine are a biological sample, a fluorophore, and photons. The addition of a fluorophore to a biological material, a cell, a gene sequence, or brain tissue enables it to interact with light. Measuring, imaging, counting, and sorting of biological material is enabled. Light is the perfect tool for biological measurement. The three key stages of a technology are fundamental research, development of instrumentation, that is the tools for measurement and processing, and finally, the development of therapeutics. Together, this is called translational science, and it is underpinned by the interaction of the fluorophore and the photon. I'd like to explore today a few examples of these advances that are enabled by Coherent's technology in the lab, instrumentation, and in delivery. I'll elucidate how this enables personalized medicine and also provides the tools to keep an aging population healthy. I'll cover current events, the near future, and the long-term mega trends. In other words, now, next, and beyond. Today, nothing is more illustrative of the power of photonics and fluorophores than the COVID pandemic, where a rapidly evolving photonic toolkit has been deployed. The last three years of headlines have been dominated by the number of COVID cases detected by PCR tests, reports on the evolution and spread of mutations, and articles on the efficacy of vaccines and other therapeutics. Each one of these technologies and techniques is underpinned by Coherent technology. In 2019, the term PCR would mean nothing to the public. Today, this three-letter acronym can be in a newspaper headline without the need of explanation. If you were tested during the pandemic, there is a good chance it was by a real-time reverse transcription polymerase chain reaction, an RT-PCR, a PCR test. First, you are swabbed, then probes, which selectively bind to the RNA sequences of the virus, are tagged with fluorescent dye molecules. The sample is thermally cycled, and the fluorescent signal is measured with time. If the target RNA sequences are present, the signal doubles with each cycle. Coherent provides key components for PCR testers, and we responded to the challenge of massively expanded demand by doubling manufacturing capacity of thin-film filters for PCR testers and ramped production of thermoelectric assemblies used to generate the highly controlled temperature cycles. Another critically important technique used in the fight against COVID is flow cytometry. COVID-19 has a dramatic effect on the human immune system. Flow cytometry is at the forefront of quantifying that impact, designing therapeutics and testing vaccines. Coherent's OBIS and Sapphire lasers and the integrated systems with multiple lasers, Coherent's CellX, are the photonic engine of these devices. These same lasers are also at the heart of many high throughput gene sequencing instruments. Very high-resolution cameras map the sequences of hundreds of millions of target DNA molecules simultaneously. Using this method, the complete genome of SARS-CoV-2 virus was sequenced in just a few hours. Sequencing of the virus genome has identified suitable targets for synthetic vaccines. This knowledge of the virus's genetic makeup also allows researchers to understand how SARS-CoV-2 is mutating, to track new variants, and to ensure that PCR tests and treatments remain effective. PCR testing, flow cytometry, and gene sequencing were rapidly deployed and effectively used in the pandemic as they are already part of the arsenal of doctors and medical researchers. COVID has allowed a glimpse into that toolkit of scientists. It has also accelerated the development of techniques to tackle cancer, Alzheimer's, and degenerative diseases. This, in turn, is rapidly accelerating progress in personalized medicine, opening up a huge market opportunity for our products. With the world's over 60 population expected to double from one billion in 2019 to two billion in 2050, medicine requires rapid technological advancement. The healthcare industry must shift from reactive treatment of symptoms to preventive care that looks at early intervention and prediction. New technologies will increase access, improve outcomes, and lower costs, while also enabling providers to better understand, monitor, and treat the underlying mechanisms and causes of chronic diseases. Personalized medicine requires biological and genetic analysis of the individual. The tools for this analysis are the same as those used in the fight against COVID. An attack strategy to tackle cancer starts with these systems. Gene sequencing tumors, looking for the mutations which cause rapid cell division, or probing for a virus which provokes an immune reaction and a misguided repair mechanisms are all analyses enabled by the multiple wavelengths of our OBIS lasers. The analyses enable doctors to create targeted treatment strategies for the individual, such as medication which blocks cell division, prevents an immune response, or attacks tumor cells at an identified attack point. Targeted therapies can minimize the side effects of the current untargeted treatment regimes. Flow cytometry analyzes thousands of cells per second and can sort them. A biological sample, such as blood or bone marrow, in a suspension of single cells is then labeled with a fluorescent marker or multiple fluorescent markers which bind to specific cellular targets and are then made into a linear stream and pass through laser light. Multiple measurements of this light are taken, the light which forward scatters, the light which scatters to the side, and the fluorescence. A vast amount of data is collected. Modern cytometries use five different OBIS lasers at different wavelengths and up to 40 cellular markers simultaneously. They use a technique called high-dimensional flow cytometry, which yields a huge amount of data on the immune system. Such high throughput screening tests are fast and automated and can quickly test a large number of cells to quantify the efficacy of therapeutics. Gene sequencing instruments use similar lasers and also have extremely high throughput. The fluorophores are designed to attach to specific base pairs of DNA rather than specific cell locations. Very high-resolution cameras map the sequences of hundreds of millions of target DNA molecules simultaneously. The cost to sequence a genome has dropped from millions of dollars to just a few hundred. Editing DNA is driving cures for diseases of aging and cancer, in many cases in just one dose. Medicines which are designed by chemistry-based science will be replaced by individual treatments created by cell or gene-based approaches, leading to more targeted drugs and forging a path to making many cancers a disease of the past. We've looked at the developments taking place now, the COVID pandemic, and what's coming next, personalized medicine. I'd like also to give you a view of what's beyond and already on the horizon for photonics-based research, the coming revolution in brain medicine. The aging population is fueling dramatically increased research into neurodegenerative diseases such as Alzheimer's, motor neuron disease, and Parkinson's disease. These progressive neurological disorders present not only a devastating human cost, but also a huge financial burden. The global cost of dementia exceeded $1 trillion in 2018. The sheer complexity of the human brain presents massive challenges for investigation. The interaction of light with biological material, again by fluorophores, has unlocked new techniques in understanding the brain. Three-dimensional high-resolution imaging of the mammalian brain in vivo or in vitro was unlocked by the introduction of a technique called multiphoton microscopy in 1990. Fluorophores are introduced into the brain, allowing its structure to be imaged. Previous imaging techniques use a single photon to excite a fluorophore in a process called confocal microscopy, which is great for imaging in two dimensions. In multiphoton microscopy, the photon is replaced by two photons, each of exactly half the energy which can be delivered precisely to a specific location in three dimensions. These photons are produced by what physicists call an ultrafast laser, which has a pulse length of about 100 femtoseconds, which is 100 millionths of one billionth of a second. This precise delivery of an extremely short pulse of light at an exact wavelength and at a tiny spot that can be shifted in three dimensions enables high-resolution imaging of live brains. The power of multiphoton microscopy is that it provides images of both the brain structure and its operation. In addition to this already amazing capability, multiphoton microscopy has recently been augmented by a revolutionary advancement called optogenetics. Optogenetics goes beyond imaging and allows activation and inhibition of neurons by light. No longer a read setup, but a read/write interaction. Cells in the brain are made sensitive to light by a genetic modification and upon a flash of light, neurons can be fired. Optogenetic tools are cracking the puzzle of how the brain works, probing the functions of learning and memory. The brain is mapped using a multiphoton microscopy, determining the location of neurons using a Coherent Chameleon or Axon laser. An ultrafast laser, a Chameleon or Monaco laser is focused on a specific chosen neuron or a group of neurons, which promotes ions to travel through the cell membrane and fire. Through this method, a neural pathway is activated to form a new neural pathway. We are at an inflection point in neuroscience, with current advancements allowing scientists to monitor the activity of hundreds of cells in three dimensions in an animal that performs natural or learned behavior. Selectively firing neurons with light during an animal's activity confirms that these specific cells are crucial to the observed behavior. The ability to watch memories form and to program new neural pathways is leading to a dramatic advancement in our understanding of brain physiology and laying the groundwork for advances in the treatment of neurodegenerative diseases. Coherent's optical technology has enabled the fight against COVID, is underpinning the revolution in personalized medicine, and is at the forefront of optogenetics research. The evolution of techniques from the lab to treatment sees laser technology evolving alongside this medical advancement. In 1994, flow cytometry was a research technique requiring a Coherent ion laser the size of a desk and consuming over 10 kW of electrical power. In 2001, the Coherent Sapphire laser was launched about the size of a spectacle case, flow cytometry was enabled in instruments with higher throughput. Today, the technique is enabled by the Coherent OBIS CORE laser, the size of a small matchbox. This enables us to package multiple OBIS lasers into an integrated package and eliminate the need for our customers to undertake complex beam delivery challenges. Coherent has followed and enabled the journey from lab to instrument. Over the last 20 years, we have launched the broadest spectrum of laser colors with increased performance, especially in the ultraviolet, in the smallest packages, and at lower cost points, enabling our customers to build the most capable, compact, and cost-effective instruments. Integrating these lasers with optics and control electronics into light engines has been a focus for the last five years. This enables our customers to buy a more cost-effective, higher-performing, smaller package, allowing us to capture a larger part of the addressable market. Multiphoton microscopy and optogenetics are earlier in the translational path. However, Coherent is laying the groundwork for the continuing revolution in multiphoton science. In 1990, these laser systems were unwieldy beasts, spanning an optical table and requiring careful nursing by a Ph.D. physicist. Coherent released the Chameleon laser for this market in 2007 when research was still in its infancy. A fully automated and single box, the system no longer required the attendant physicist, and the market expanded rapidly. More recently, the Axon laser, a fraction of the cost and size, positions Coherent well as multiphoton microscopy and optogenetics translate from the lab and into biological instrumentation. Each step on this translational evolution sees dramatically increased volumes. Over 3,000 Chameleon lasers were shipped to research labs, generating over half a billion dollars in sales since launch in 2007. We expect that these already impressive numbers will increase dramatically when the technique shifts from research to instrumentation. In the life sciences instrumentation market, Coherent has shipped more than 150,000 OBIS and Sapphire lasers since 2001. Next-generation instrumentation technologies will reduce platform size, improve measurement speeds, increase accessibility, and enable higher sensitivity. Today's instrumentation techniques will evolve to point-of-care technology, multiplying the installed base of technology from centralized facilities to doctor's offices or even the home. In the race to deploy this personalized medicine revolution, instrumentation vendors will develop new platform designs, drive decreasing times to market, reduce costs, and improve performance. These applications use and integrate Coherent's materials, optics, lasers, and thermoelectrics. Instrumentation manufacturers may externally source components for these products and integrate in-house, and Coherent is well-placed in all of these product areas. Others may not have the optical, thermal, or system integration expertise internally, and it will then become critical to choose a vertically integrated supply partner that can offer a broad portfolio across different applications. Coherent is unique in this position as its products span all of these applications, both on the component and sub-assembly level. Can support all aspects of the design cycle. Coherent understands biological instrumentation, offers multiple components throughout the system, and has the capability to vertically integrate into higher-level sub-assemblies and subsystems. From materials and lasers to optics and thermoelectrics, either at the component level or as part of an integrated sub-assembly or subsystem, Coherent offers a diversified product and application portfolio that enables life sciences instrumentation manufacturers to innovate whilst achieving their cost and performance objectives. Looking over the last five years, Legacy II-VI and Legacy Coherent both grew at a compound annual growth rate of about 15%. This is about twice the overall growth rate of the market that analysts are predicting over the next five years. Personalized medicine will continue to drive strong demand for our products. We expect to continue to grow our revenue in instrumentation significantly faster than the market, not only because of our market opportunities now and coming up next in personalized medicine, but also because of what's beyond. The market opportunities that we see emerging through optogenetics, rising to the challenges of neurodegenerative disorders. Thank you. Now back to Mary Jane. Thanks a million to Chris and Kai. We will now turn to the Q&A portion of our day today. I think the way we're gonna do this is I think my colleagues are gonna join me up here. If we can have Chris and Kai, Chuck, and Giovanni, that would be fantastic. For those of you on the phone, our leader of corporate communications, Mark Lourie, is monitoring the website, and he will help by calling out your questions to us, which we will answer. If you have a question, just please raise your hand, and we have some runners who will help us. Why don't we start with Ruben? We'll be sure to get all of you in. We're usually pretty good at doing that. Just maybe tell us your name and your firm, and we'll go from there. Great. Thank you. Ruben Roy from Stifel. Thanks for the presentations. I had a question for Dr. Schmidt. I wanted to see if we could talk a little bit more about the Laser-Induced Forward Transfer process. LIFT, I think, has been used in additive manufacturing. Is it a similar process for the display business, or is it different? Also, is the incremental dollar add similar to some of the other processes that you talked about, like lift-off and cutting? The laser lift-off is certainly a process which is since long time around. What we did is for the specifics of the MicroLED transfer, we optimized it. We did a lot of investigations, how you have to shape the beam, how you have to position the wafer and the target display, what the distance should be, et cetera, all those things together. That's specific to MicroLED. To answer the first part of the question and the second part of the question, I cannot comment on the laser additive manufacturing market because I'm not a specialist in that. I said $1 billion over 10 years. That's a conservative approach what we take. Might be more, I think with a conservative estimation, we should be fine. Thank you. I guess just a quick follow-up on the TAM or the SAM assumption. That's for the entire MicroLED market, right? Small to large displays. Yeah. Mostly large displays because we are in a display equipment manufacturing business and our opportunity scales with the area. Small displays. Ananda? Oh, Nathan. Oh, hey, thanks. Yeah, thanks. Hey, Ananda Baruah, Loop Capital. Two, if I could. Just I guess sticking there, how do these new opportunities impact, you know, the display cycle, the classic display cycle? How would you see that changing in the coming years, if at all? If you could, while we have you, if you could give us any sense of where you think we are right now in the display cycle and what the dynamics of that might look like over the next couple years, that'd be helpful. I'd love to ask a follow-up of Chris also, if I could. Chris, you're in luck there, buddy. Good. The first question was regarding the position where we are on the cycle with respect to transitioning eventually to MicroLED. As of today, you see a number of announcements from companies saying they wanna go MicroLED. You see that our products already shipped from companies with space on MicroLED. They are certainly not that small yet, and they are really expensive in the moment, so nothing for the broad market. The estimation we have is based on the knowledge of the market, based on the feedback we get from the display customers. It's really three to five years. That's the time we see until it reaches, let's say, a broader market. Got it. Just quickly for Chris. Any thoughts on sort of market size, acceleration of market size? Like, when do you think all of this starts to manifest? These are all very long-term trends. We've been on the journey of flow cytometry and gene sequencing and PCR testing. For many years, they evolved from the lab. They go through instrumentation. They evolved to therapeutics. Each of these different techniques is on that journey. Each is marching in the direction of growth. It's difficult to answer specifically, you know, whether one's gonna fire at any one point, but these are all part of a general large mega trend towards personalized medicine and brain science. Got it. Thanks. Thanks for the context. James? Thank you. James Ricchiuti with Needham & Company. Couple of questions on the display side. I just wanna make sure I understand. Python is a new tool for manufacturing the OLED backplane. Is there a retrofit opportunity just given the cost efficiencies that you're talking about versus, you know, with the install base that you have? Yeah, good question. You need to know PYTHON solid-state laser operates at a different wavelength than the excimer laser. They are around about 40 nanometer wavelength difference. That has no effect on the annealing result. In fact, with PYTHON, as I said, the laser annealing result is even better than with VYPER, with our existing platform. Due to the fact that it uses a different wavelengths, if you think about an upgrade scenario, it would mean that the customer has to exchange all the optical elements because they have coatings which are wavelength specific. If you do this, then it's a significant investment, so all the optics and the laser. If you ask whether customers would do this, it's a difficult question. Maybe, I would guess, if a fab is aged 10 years or more, then they might decide to upgrade an entire fab. That could well be. We think for the moment, PYTHON is our answer and strategy for Gen 8. That's what we designed it for, and that's where we start marketing it. There's been a significant recurring revenue stream associated with the ELA tool. This tool sounds like there would not be? No, there would also. There would- There would also be a revenue stream associated with the service for PYTHON, but it would be in addition to what we have. Right. On the, on the Excimer laser annealing side. Yeah. Final question, if I may. You talked about the number of Gen 8 fabs that you expect, five to eight fabs planned over the next couple of years. Is it your expectation that those fabs will have the ELA technology or PYTHON later in some of these fabs coming online? Definitely some. I cannot answer whether all, but some for sure. Okay. Thank you. Meta? Meta Marshall, Morgan Stanley. Either Chuck or Giovanni, just, you know, you guys have done a great job with different acquisitions of kind of finding other products to sell into the markets that the acquired companies have sold into, and kind of vice versa. This is a great overview on kind of the core Coherent businesses, but just other opportunities that you see to kind of sell into healthcare and display or other areas where you feel like you can take Coherent into other areas you'd already been in? Okay. I'll take a shot. When we announced the deal, you know, we went well beyond display and, you know, the life sciences opportunities, right? We said that we thought that the synergies with the Legacy II-VI platforms was really around industrial lasers, if you recall. Of course, the fourth one was the Aerospace & Defense. These are very exciting on their own. You know, we went well beyond these two market application on whether it's consumer display for consumers or automotive, whatever the application is for displays or whether it's for, you know, scientific or therapeutics application for the lasers that Chris Dorman talked about. In addition to those, we had envisioned that industrial, the combination of two companies on the industrial applications, where, again, they go through from cutting, welding, drilling, cladding, you name it. The Aerospace & Defense, we thought they were gonna be incredibly synergistic, not only from a cost standpoint, which we quantified, but most importantly on the top line, which we never quantified, but we expect that to be significant. Follow-up? Good. Okay. Next question, please. Sidney. Name please. Thanks. Sidney Ho with Deutsche Bank. I wanna go back to display business. You talk about smartphone likely staying with OLED, mostly because of the high cost. Do you see any part of the smartphone adopting MicroLED, even maybe at the very high-end, just like what you're seeing in the TV market? Are your customers even talking to you about adopting MicroLED in smartphones? Yeah, it's very good question. We would love to have an answer to that. I think if you, if you approach this from the technical side, smartphone is very challenging. You have about 10 million pixel on a smartphone, on a high-end smartphone. The PPI number is very high, so you have to transfer the tiny MicroLEDs, 10 million, with a very high precision to the spot on the display. We think TV, that's something which will happen much earlier because there, the distance from pixel to pixel is on the order of 500 micrometer. That's a completely different world compared to a smartphone. We cannot comment whether some smartphone maker will go into that for their very high-end smartphones. We thought that a smartphone costs above $1,000, but meanwhile that's normal. Yeah, it could well be. Well, that's fair. Maybe a follow-up questions. Just looking at the different technologies, can you talk about the competitive landscape in MicroLED for the tools that you make, both for laser annealing and the transfer? I think the annealing is quite mature already, and you guys are pretty strong in that area, but how about the transfer process? Are there other alternatives that are not laser induced? Thanks. There are other technologies for the transfer, but as I said, those technologies from, as we judge it today, they are much slower. If you just think about 24 million pixels you have to transfer for TV, with all the technologies known today, it would take you, like, a couple of 10 hours to do one TV. With our approach, we bring it down to a couple of 10 minutes. The question. The answer is there are other technologies, but we think they are not viable with respect to speed and throughput to be used for mass production. Let's take a pause, Mark, and see if you have any on the phone. Yep. We have a question online from Michael Genovese. Corning recently called out near-term weakness in display demand in China and also weakness in supply due to labor in China. Is this a market with a strong mid and long-term outlook but has some issues near-term? I would say that, first of all, with respect to the mid and long-term outlook, it's very, very good. We can continue to see very strong demand in this area, notwithstanding that, say, from 1 quarter to the next, it might have some, you know, change in volume, but at the end of the day, it's a very, very strong demand market, and for sure, the mid to long-term trends are very good. Is that fair, Kai? Yeah. I think that's. Go ahead, Mark. Another question, this one from, Thomas O'Malley. What will share look like at Gen 8 versus Gen 6 annealing? What would the share look like? What will the share look like? You mean the how many fabs, Gen 6 and Gen 8? Or what is it? I think it's also probably a time-dependent answer. It's a share of installed base, I would guess. Installed base. Yep. As I said, we have mostly Gen6 and smaller systems. We have 200 installations worldwide running, and we know of five announced Gen8 fabs, so the number might increase. I don't expect that companies will switch off Gen6 fabs, so that is nothing to be expected, and that means all the Gen8 installations which are come, they are incremental to everything we have right now. I would imagine that we would remain a commanding- Yeah. presence in the Gen 8 market as well. Is that fair, Mark? Dr. Mark Sobey is with us, who is the President of the Lasers Segment. That's a fair comment, Mary Jane. We would expect our market share to remain. Hello, this is Mark Sobey. I'm the president of the laser segment. Thanks, Mary Jane. We'd expect our market share to remain high. I think Kai was stressing the fact that we're the process of record across the industry, and our systems have proven to be very robust in high yield, high manufacturing, and we would expect that to continue at Gen8. Thanks, Mark. Let's do another in the room. Questions? Go ahead, please. Hang on a second. Andy's coming to you. Hi. Hi, it's Andrew O'Neill from Central Securities. A question about the way you, I guess, build products in that life science business. You described a process of bringing the size and I guess the cost down, and how that allows the product to cascade to a much broader market. How important for the economics is vertically integrating some of the other piece parts that you did not previously make into that final product solution? Could you describe how the grab bag of technologies between the two companies now perhaps enhances that opportunity going forward? What is a diode-pumped? These are typically diode-pumped solid-state lasers. Diode-pumped solid-state lasers are, you know, if cut to their simplest, a form of gain medium, a crystal or some kind of semiconductor stack. Optics reflecting the light around and then very precise control of that. What's really important in flow cytometry is being able to access a huge range of wavelengths. Now that came with Legacy Coherent, is this ability to access a wide range of wavelengths as flow cytometry broadens out and as you're making many more measurements at the same time. Of course, more recently, in combination, we have access to significantly increased internal supply, which enables us to continue the journey of reducing the size, reducing the cost of, and increasing the number of wavelengths that we can offer simultaneously to do very high throughput flow cytometry. Yes, the ability to access more of the supply chain is critically important in moving forward. I would say that the laser segment is very similar to the materials and networking segment from a vertical integration focus, meaning we focus on the parts that are operative, the ones that really have an opportunity to change and upgrade what the performance of whether it's a component or a machine is. It actually isn't the goal to make everything. If 10 other people can make it, we may determine that's actually not the best use of our engineers' time, right? When we come to, as Chris is saying, multiple wavelengths that also then tap multiple types of optics, yes, there are many things exactly as Chris just said. The focus of the company will always remain on the operative critical elements for what we actually make inside. Other questions from the floor? Go ahead, James. Sorry, Andrew. Thank you. James Ricchiuti again from Needham & Company. I just wanted to go back to the Gen 8 build-out. When would you anticipate or perhaps some of these systems are already in backlog, and can you equate the number of systems that would be required for that build-out? Yeah. I said the first fabs we expect to come online in 2024. We typically do not disclose how many systems per fabs we are delivering. But if you know what the capacity of a Gen6 fab is, I think the same capacity in sheets per month, but now in Gen8, will have a Gen8 fab. Okay. Just with respect to the large area TV opportunity, you seem to be suggesting that's where MicroLEDs will have a greater impact in the market. Where does that do you think in your view, leave OLED TVs, technology? Well, good question. As I said, OLED TVs are, have a very, a perfect image. They will be around. The MicroLED TVs, they offer the higher brightness, and they will certainly gain market share over OLED TVs, especially where you have a bright environment where you need this bright display. If the question is whether OLED TVs will vanish, that's difficult to answer. I think the MicroLED TVs will gain market share because of the just mentioned high brightness. Okay, one final question, if I may. Maybe this one for you, Chuck. You've given us a roadmap in terms of thinking about the silicon carbide opportunity, you know, several years out. Is there a way to think about the life science opportunity for the company as you think about how this business can grow for you? I think it's just the beginning. That's one place to start. Chris pointed out some of these investments, the basic research and development, been going on for 30 years. The problems are not going away. The number of people that are afflicted by them is also increasing rapidly, and the cost associated with it, as Chris said, just in one case for dementia, $1 trillion a year. It's a staggering cost. We maybe just to also try to, try to reflect on Meta's question as well as it relates to the combination of the companies. I would point out that in this life sciences market, we're in an exploratory, let's call it the first phase of this integration. We, we were not able to discuss with the Legacy Coherent people any aspect of the business before July first. We have a, with our global sales force, a focus on our key accounts. That, that focus includes listening to customers, including directly with CEOs, which I have been doing. Just in the last 2 days, we've had meetings with 2 of the largest life science innovators in the world. One of them, attracted over 50 people from that company to come and listen to the broad offerings that we have because they're exploring too. They're focused on getting organized for the future, not for solving just today's problems. I think that, there's a lot more to come. We have a really strong base. I believe that this can be a billion-dollar business before the end of the decade, and that may be a combination of organic investments, as we surely will do, synergies that we're aiming to gain, and then also, strategic acquisitions, which we have been known for. This is an important part of our business, and it's an important part of what we're doing. It's an important part of sustainability. It's an important part of what we're about, and we're really excited about it. Okay? Maybe just one quick follow-up too to James question. Just remember something that Giovanni and Mark probably as well and Chuck have often said when it comes to discussions about technology, whether it be one thing or the other thing, that the operative word is always and. Most technologies coexist. Most technologies coexist. Remember when we were first asked, the CO2 laser will disappear because of one micron? Not only are they both still existing, we have a renaissance in the CO2 laser. Just remember that the operative word is and. I'm sorry, Ananda. Thanks. Yeah, Ananda Lu. That's tough to follow that one, Chuck. Let me ask you a quick clarification, and then I'll ask my question. Is that $1 billion annually by the end of the decade, that order of magnitude, or is it $1 billion? I believe it can be a billion-dollar revenue business by the end of the decade, given the size of the markets and the capabilities and the disruptive power that we have. We will continue to encourage the senior leaders of the company in connection with solving real fundamental problems that our customers have or that they anticipate, and to radically reframe how the world thinks about this technology and this market. Yeah, that's exciting stuff. Thanks for all the context. The follow-up is of Kai. MicroLED, AR/VR opportunity, is there any thought process that in the numbers you gave, the $1 billion, if AR/VR were to reach legitimate volume, I don't know what that would mean for you guys, but it's low volume today. But kind of goggles, glasses, like Oakley style type glasses. If that were to become, say, like a 50 million unit annual worldwide, you know, kind of market, does that change your math at all? Just trying to get some sense anecdotally of that opportunity if it were to become substantive. Yeah. Thanks for the question. I think the answer is in the ratio of the display size. A smartwatch is 2-inch display and a TV, 60 inch plus. That's the ratio also of the number of systems you eventually need. You have on a watch, you have around about 600,000 pixel. On TV you have 24 million pixel. Maybe this gives you an idea what it means for the market size. It will not change the expectation whether the smartwatches will go completely to MicroLED or whether there will some remain on OLED. It's really in the TV. I wanted to add, Ananda. We said this when we announced the combination of two companies. We really believe that these platforms are really future proof. When you talk about AR/VR, I think we are way more ready than actually the MicroLED manufacturers are. Not because of the cost, but there's fundamental challenges that today they're actually not enabling the adoption of MicroLEDs for AR/VR, right? The most important one is efficiency when you go down to very small pixels, right? That's why, as you know, most of the actual products that you see out there are all based on LCoS with the individual source, laser sources. They are not relying on MicroLEDs. It's all about efficiency. We think our technology is, I wouldn't say it's ahead of the game, but we're definitely more ready than maybe the actual technology at device level is. Whether it's a laser transfer, whether it's a laser annealing and so forth, the platforms that we have, we're already future proof now. We're even more future proof with the introduction of these solid-state solutions, which are by far world-leading and ready to be deployed, as Kai said, starting with TVs. Eventually, when the technology will be ready for other applications like AR/VR, okay, we'll be ready too. At this point, at least from what we see in our customers' interactions, the readiness of the MicroLED for AR/VR is probably not there yet, even if there's been a lot of acquisitions and discussions, so forth. It's just for battery-operated products, it's a completely different ballgame when it comes down to efficiency. When you talk about TVs, obviously they're not battery operated, it's not a really a real challenge about efficiencies besides the fact that the pixels can be much larger because you see them at least at, you know, six feet or maybe more distance from your, from your couch. For AR/VR, they're right next to your eye, so the pixels have to be much smaller, and the efficiency goes down very rapidly with those kind of applications. It's definitely we are way ahead of the market from that perspective. As soon as the technology challenges will be resolved, we'll be ready to serve the market as we've been ready we are already ready for the TV market. Cool. Cool. Thanks, guys. Appreciate it. Other questions in the room? Mark, let's go ahead. Yeah. Follow-up from Thomas O'Malley. That's for Kai. You mentioned a 50% cost reduction with a move to Python, for customers. What would that imply or to what extent is this related to ASPs, for these new machines versus the prior Gen 6 cycle? I think that what we should think about is, as technologies are more broadly adopted, naturally what helps in the adoption is the ability for the cost to go down. Oftentimes, the way the company looks at that is not necessarily to speak specifically about ASPs, but to focus on how we retain the margin. Well, besides the fact that we've been more than just one step, laser-enabled step for the coming technologies anyway, so, right? We're a larger addressable market to begin with. Exactly. I would look at the total addressable market rather than individual ASPs, 'cause the number of lasers sold will increase. Exactly significantly. As the volume goes up, right, the company would naturally have the ability to both optimize the cost, but also maintain its margins such that it's simply a different construction of how the financials are achieved. Others on the phone, Mark? Good. Okay. In the room? You sure? Anything any of Chuck, you would like to add to conclude for us then? Well, I'd like to thank everybody for joining us this morning and those who may be in the afternoon timeframe. This is the first time that we set this setting in place to be able to inform investors. I hope it was valuable. We'll do more of it at the Optical Fiber Conference coming up in March. We'll have another session focused on telecom and datacom, and we are intending to host a investor day around May in New York City. We'll have more to say about that. It's an exciting time to be part of this company, and I hope that you gained a lot of insight today about how we think about the world, about the endowments that we have inside the company technologically and in terms of the human capital that we have. The markets that we're playing in, the ones that we select, and our knowledge about the fundamental characteristics, including the profit pools inside those markets. Then finally, our willingness to make moves, including moves on productivity, moves on R&D, moves on capitalization. That combination, along with customer intimacy, product leadership, and operational excellence, we believe will provide a tailwind for the company for many, many years to come. We hope investors enjoyed today's presentation. Thank you for your support and your interest. Mary Jane. Kai. Thank you so much for coming. Thanks to everyone on the webcast. We especially appreciate our equity analysts who came in the middle of earnings. We're looking forward to talking to you next week. We'll see you in at OFC. Take care of yourselves.