Hello, ladies and gentlemen, and Welcome to Himax Technologies, Inc.'s Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we conduct a question-and-answer session. Instructions will follow at that time. You will need to press star one on your phone. Again, that is star one on your phone to ask a question. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Mark Schwalenberg from MZ Group. Please go ahead. Thank you. Welcome everyone to The Himax Second Quarter 2022 Earnings Call. Joining us from the company are Mr. Jordan Wu, President and Chief Executive Officer, Ms. Jessica Pan, Chief Financial Officer, and Mr. Eric Li, Chief IR/PR Officer. After the company's prepared comments, we have allocated time for questions in a Q&A session. If you have not yet received a copy of today's results release, please email HIMX@mzgroup.us. Access the press release on financial portals or download a copy from Himax's website at www.himax.com.tw. Unless otherwise specified, we will discuss our financials based on non-IFRS measures. You can find the related reconciliation IFRS on our website. Before we begin the formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call. A list of risk factors can be found in the company's SEC filings, Form 20-F for the year ended December 31, 2021 in the section entitled Risk Factors as may be amended. Except for the company's full year of 2021 financials, which were provided in the company's 20-F and filed with the SEC on March 23, 2022. The financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audits by an independent auditor to which we subject our annual consolidated financial statements and may vary materially from the audited consolidated financial information for the same period. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. I will now turn the call over to Mr. Eric Li. Eric, the floor is yours. Thank you, Mark, and thank you everyone for joining us. My name is Eric Li, Chief IR/PR Officer at Himax. On today's call, I will first review Himax's consolidated financial performance for the second quarter 2022, followed by our third quarter 2022 outlook. Jordan will then give an update on the status of our business, after which we will take questions. The second quarter presented a challenging business environment, yet we continued to diligently focus on navigating these obstacles while positioning ourselves for long-term sustainable growth. Accelerating interest rate hikes to combat rising inflation, ongoing rolling lockdowns in China, and the Russo-Ukrainian war continued to plague business activities and reduce consumer confidence. The gloomy visibility of our end customer led to reduced and shorter forecasts, along with the more stringent inventory control across the board from brands to panel houses. We revised our guidance on June 20, 2022 to better reflect these soft conditions. Our second quarter revenues, gross margin, and EPS were all in line with the updated guidance range. Second quarter net revenues of $312.6 million decreased 24.3% sequentially, but were within our updated guidance of a decline of 22%-27%. Our gross margin came in at 43.6%, a decrease from 47% last quarter, but within our initial guidance of around 43%-45%. Non-IFRS profit per diluted ADS was $0.439 at upper range of the updated guidance of $0.40-$0.45. Non-IFRS profit per diluted ADS was $0.404 at high end of the updated guidance of $0.365-$0.415. Revenue from large display drivers was $68.6 million in Q2, a decrease of 38% sequentially. TV and notebook IC revenues were down double digits sequentially due to customers' inventory control on the backdrop of slowing end market sales trough and the reduced business visibility. Monitor IC sales declined sequentially in Q2, but increased more than 100% year-over-year for the six months ended June 30, 2022. Thanks to substantial shipment growth for high-end area, such as. Hello, this is Eric from Himax. Can you hear us now? Yes. Okay. Sorry. There was some interruption in our connectivity, but we are using the backup smartphone, so we'll carry on. Eric. I'll probably start from the revenue for our large display drivers. Our revenue from the large display driver was $68.6 million in Q2, a decrease of 38% sequentially. TV and notebook IC revenue were down double digits sequentially due to customers' ongoing inventory control against the backdrop of slowing end-market sales and reduced business visibility. Monitor IC sales declined sequentially in Q2, but increased more than 100% year-over-year for the six months that ended June 30, 2022. Thanks to substantial shipment growth for high-end area such as the high-frame-rate gaming monitor. Large panel Driver IC sales accounted for 22% of total revenues for this quarter, compared to 26.8% last quarter and 23.4% a year ago. Moving on to our Small and Medium Size Display Driver segment. Revenue was $201.6 million, a decline of 22% sequentially. Our business, as was the case in Q1, was once again the largest revenue contributor in the second quarter, representing over 30% of total sales. We expect this upward trend in sales contribution to continue throughout 2022. Meanwhile, for AMOLED business, we successfully piloted the production of our total solution, covering DDIC and the T-Con for the premium tablet for a global leading name as a sole source supplier. Our AMOLED business in the second quarter accounted for more than 4% of total sales. Small and Medium-Size Driver IC segment accounted for 64.5% of total sales for the quarter, compared to 62.6% in the previous quarter and 63.1% a year ago. IC sales in Q2 decreased low teens sequentially as the market was adversely impacted by logistical hurdles brought on by Chinese city lockdowns. However, on a year-over-year basis, IC sales for the quarter were up almost 100%, thanks to broad design win coverage and a better product mix. Our IC sales in the first half were up 130% year-over-year, despite macroeconomic headwinds and the supply chain disruption. Second quarter smartphone and the tablet revenues both declined double digits sequentially. Channel inventory across panel houses, OEMs and end brands remained stubbornly high against the backdrop of continuously sluggish demand. Both the smartphone and the Tablet Driver IC sales represented almost equal sales weightings in the second quarter. Our ePaper business grew more than 100% sequentially in the second quarter, stemming from increasing demand by a leading customer, along with the catch-up shipments that were delayed last quarter due to logistical disruption from lockdowns in China. Second quarter Non-Driver revenue was $42.4 million, slightly down from a quarter ago. Our T-Con business was flat sequentially. Supported by increasing T-Con shipment for Automotives, AMOLED for tablet and high-end display. T-Con business represented over 8% of our total sales in the second quarter. Non-Driver Products in Q2 accounted for 13.5% of the total revenues, as compared to 10.6% in the previous quarter and 13.5% a year ago. Now, IFRS gross margin for the second quarter was 43.6%, a decrease from 47% of last quarter and 47.5% of the same period last year. As we previously reported, there were two primary factors that adversely impacted our growth, our margin profile. First, price adjustments in support of our non- customers amidst soft demand worldwide. Second, our cost of goods sold for Q2 reflected the higher foundry prices for the previous quarters. IFRS gross margin was also 43.6% for the quarter. Our non-IFRS operating expenses for the second quarter were $45 million, up 2.1% from the previous quarter and up 14.4% from a quarter ago. From a year ago. From a year ago. The sequential increase was caused mainly by increased R&D expenses, while year-over-year expenses increased because of higher salaries and R&D expenses. IFRS operating expenses were $52.6 million for the second quarter, up 2.1% from the preceding quarter and up 32.9% from a year ago. The higher IFRS figures were mainly due to the tranche of annual bonus compensation, which we award employees at the end of September each year. The 2021 annual bonus compensation, including RSU and the cash awards, totaled $74.7 million, out of which $24.8 million was immediately vested and recognized in the third quarter of 2021. The remainder will be equally vested in three tranches at the first, second, and the third anniversary of the grant date. The remaining compensation expenses will be recognized on a straight line basis over the vesting period of each tranche. The second quarter non-IFRS operating income was $91.5 million or 29.3% of sales vs 36.3% of sales in the last quarter and 36.8% of sales from a year ago. Non-IFRS after-tax profit was $76.8 million or $0.439 per diluted ADS, decreased from $121.9 million or $0.697 per diluted ADS last quarter. Turning to the balance sheet, we had $461.6 million of cash equivalents, and other financial assets as of June 30, 2022, compared to $270.4 million at the same time last year, and $447.1 million a quarter ago. The higher cash balance was mainly from $9.1 million of operating cash inflow during the quarter and payments received from customers to secure their long-term chip supply. We had $49.5 million of long-term unsecured loans as of end of Q2, of which $6 million was the current portion. It was worth noting that our cash balance at the end of the third quarter will be substantially reduced following the annual cash dividend payout of $217.9 million in July. The annual dividend of $1 and a quarter per ADS is equivalent to 50% of last year's net profit. The payout ratio was lower than our historical average, reflecting our decision to reserve cash in the light of macroeconomic uncertainty. Our quarter end inventory as of June 30, 2022, were $337.3 million, up from $253.1 million last quarter and up from $134.2 million a year ago. Our high inventory level reflected the abrupt drop in demand triggered by strict customer inventory control due to sluggish end market demand and the reduced visibility, which led to growing customer inventory, particularly in consumer electronics. The halt in demand adversely affected our sales and in turn caused elevated inventory levels, as our production always begins months in advance. Accounts receivable at the end of June 2022 was $371 million, down from $442.2 million last quarter, but up from $329 million a year ago. DSO was 93 days at the quarter end as compared to 88 days a year ago and 96 days from last quarter. Second quarter capital expenditures were $2.5 million, vs $3.6 million last quarter and $1.4 million a year ago. The second quarter CapEx was mainly for R&D related equipment for our IC design business. As of June 30, 2022, Himax has $174.3 million ADS outstanding, unchanged from last quarter. On a fully diluted basis, total number of ADS outstanding for the second quarter was $174.8 million. Turning to our third quarter 2022 guidance. We expect third quarter revenue to decrease 35%-39% sequentially. Himax's gross margin is expected to be around 35.5%-37.5%, depending on final product mix. Himax's profit attributable to shareholders is expected to be in the range of $0.116-$0.156 per fully diluted ADS. The third quarter Himax's profit attributable to shareholders is estimated to be in the range of $0.002-$0.042 per fully diluted ADS. Similar to our usual practice, we will grant employees annual bonus, including RSU and cash awards on or around September 30 this year. The third quarter guidance for Himax's profit per diluted ADS has taken into account the expected 2022 annual bonus. Which, subject to board approval, is now assumed to be around $40 million, out of which $17.6 million or $0.08 per diluted ADS will be vested and expensed immediately on the grant date. As a reminder, the total annual bonus amount and the immediately vested portion are our current best estimate only, and the actual amounts could vary materially depending on, among other things, our Q4 profit and the final board decision for the total bonus amount and its vesting scheme. As is the case for previous years, we expect the annual bonus grant in 2022 to lead to higher third quarter IFRS operating expenses compared to other quarters of the year. In comparison, the 2021 annual bonus totaled $74.7 million, out of which $24.8 million was vested immediately. As a side note, regarding the proposed resolution regarding the company's LTIP, Long-Term Incentive Plan, at this year's annual general meeting to be held on August 15, 2022. We'd like to clarify that the proposal is to extend the duration of the company's existing LTIP for another three years rather than to initiate a new plan. As mentioned earlier, we grant an annual bonus including cash and RSU to employees on or around September 30 every year to award them for their devotion to the company. The existing LTIP, which was initiated in 2011 for a duration of five years, and thereafter extended a couple of times at annual general meeting in the past few years, will expire again on September 6, 2022. Therefore, unless the plan is extended again this year or a new plan is initiated. For this year's annual bonus, we will be able to grant only cash to employees at the end of September and lose RSU as the other means of compensation. We believe RSU is an important incentive for employees to focus on long-term success of the company. As of the end of June this year, among the total number of 20 million authorized ordinary shares of the existing LTIP, 49% have already been granted, with the remaining 51% still valid to award our employees if the plan is extended. I will now turn the call over to Jordan. Jordan, the floor is yours. Thank you, Eric. Several macro-level factors continue to present significant headwinds to our business, while also clouding visibility as we enter the second half of the year. Decades-high inflation, rapidly rising interest rates in addition to the ongoing war and potential for more Chinese city lockdowns, have caused widespread disruption to demand. Faced with frozen demand, piled up inventory and eroding panel prices, end brands are downsizing their panel procurement plans. Consequently, panel makers all initiated downward and extended fab utilization adjustments, along with rigorous excess inventory cuts. The sudden halt in demand, together with the length of our production lead time, has led to elevated inventory level for Q3. While in the midst of this, inventory offloading cycle, we are naturally cutting back on new orders with our suppliers. However, the contracts that we entered with foundries and back-end suppliers when the industry experienced unprecedented demand in 2021 may incur charges if the minimum purchase orders are not fulfilled. While the negotiations with suppliers are still ongoing as we seek ways to increase flexibility in executing the agreements. Such supplier charges have already been factored in for our Q3 guidance and is the predominant factor for the Q3 gross margin contraction. While we are uncertain about when the current business environment could turn around, we believe our inventory will peak in Q3 as we curtail our new orders stocks and our customers continue to restock after inventory digestion. On the revenue front, we believe the growth will be restored in Q4, boosted by healthy demand for and tablet segments where there is better visibility. Yet, the LDI IC sector is still set to remain sluggish for the remainder of the year. Against the backdrop of challenging market conditions, we expect our Q4 gross margin to be still under pressure because the cost of goods sold still reflect high prices from previous quarters, while inventory offloading will lead to selling price erosion. However, the sequential decline in Q4 gross margin will likely be modest, as there is still solid price support from a few product areas, notably T-Con, AMOLED and AI image sensor, which altogether now accounts for more than 40% of our total sales. Our sales especially have a high likelihood of a strong fourth quarter rebound from the trough of Q3. From a longer-term perspective, we are very optimistic about our business and continue to look to expand our leading market position. With that, I will begin with an update on the large panel Driver IC business. Our third quarter large display Driver IC revenue is projected to decline by double digit sequentially and below what we typically see on a seasonal basis, as customers impose tight inventory control measures to reduce near-term inventory due to continuous deterioration of forecast visibility from their customers. The outlook for Large-Size Driver IC business remains soft, with moderating TV sales through and muted Chromebook sales, where monitor customers exercise strict inventory control. Q3 monitor, notebook and TV IC sales are expected to decline double digit, reflecting the overall market softness, reduced business visibility and destocking pressure from our customers. Now, turning to the small and medium-sized display Driver IC business. In the third quarter, revenue is expected to decline double digits sequentially. Our Q3 Driver IC sales are anticipated to be down double digits sequentially as customers destock inventory accumulated during the second quarter when production was severely disrupted by the widespread city lockdowns in China. However, the extent of the sequential revenue decline for is likely to be less than those suffered by other product areas, while business visibility into Q4 and next year are also much better for our business. As indicated earlier, despite the Q3 decline, we expect our Driver IC sales to see strong business momentum in Q4. With TDDI sales outgrowing those of DDIC. We expect our TDDI business to continue to be a key driver of high-margin growth for Himax for many quarters to come. In the meantime, smartphone and Tablet Driver IC sales are set to decline double digits as a result of the ongoing deterioration of forecast visibility, as our customers prolong their efforts to reduce inventory amidst the backdrop of soft demand and the weaker macro environment. Now, for a quick update on each of the major sectors in our small and Medium-Sized display Driver IC business. First, on the sector, as Eric mentioned earlier, now is our largest revenue contributor, set to represent over 35% of our total sales in Q3. We are poised to sustain our leading position and dominant global market share as we offer the most comprehensive product portfolio ranging from traditional DDICs to technologies such as TDDI, low-voltage T-Con, LPDDI and M-OLED. Additionally, we are the pioneer of mass production for TDDI, a technology that is essential for large-sized, interactive, stylish and curved displays. While TDDI is still in early stage of mass deployment for market, it is on track to be a fast-growing segment. We are glad to report that we expect our TDDI to reach a milestone of over 10 million units cumulatively shipped by the end of Q3. TDDI adoption rate for has been advancing at a rapid pace, and our design win coverage continues to quickly expand with panel makers, Tier 1s, and auto brands. Meanwhile, China's government recently created incentives to stimulate more NEV sales, which may trigger accelerating adoption of higher displays by incorporating in-cell TDDI. While our sales for 2022 might be less than previously predicted, the growing reliance on electrification and small cabin and smart cabin dictates that semiconductor content values are increasing rapidly per vehicle. We'll be a key beneficiary of these trends, and expect to see sustainable growth in the market on top of the already strong 2021 base. Next, regarding smartphone and tablet businesses. We expect both product lines to decline double digits sequentially as earlier stated. With that said, our shipments for high-end AMOLED tablet growth providers, DDIC and T-Con to certain leading brands are on the rise, with momentum expected to last in the foreseeable future. As for smartphone, despite being awarded a growing number of projects by prime customers, much of our shipments to key customers for their next-generation new redesigns that support high frame rate, ultra-slim bezel, and high resolution features have been postponed in the midst of excess inventory for their older models on the backdrop of frozen end market demand. Turning to the ePaper driver business, another product in our small and medium-sized driver lineup. Our ePaper business is expected to decline double-digit quarter-over-quarter due to customers downsizing their annual business plans amidst soft consumer electronics market. As the world continues to transition towards green energy and carbon footprint reduction, we expect long-term demand for ePaper to endure. Therefore, we continue to collaborate with world-class customers for certain ASIC projects, with increased R&D efforts spent on their next generation products towards larger size, higher resolution, and colored ePaper displays. We are glad to report that one of our ePaper ASICs in collaboration with E Ink for their latest eBook solution was awarded Best Choice Award on COMPUTEX 2022. The ASIC enables fast handwriting speed for ePaper display, while also greatly improving the average latency of the display with reduced power consumption. Characteristics that are critical for next generation ePaper devices. Next, for an update on AMOLED. We continue to gear up for AMOLED Driver IC development jointly with major Korean and Chinese panel makers in various applications. In the third quarter, AMOLED sales are expected to increase more than 50% sequentially with small AMOLED for tablet models commencing mass production this quarter. Our AMOLED business, including T-Con driver, is expected to amount to more than 8% of total sales in Q3 and slated for strong growth in the next few years. As a reminder, we provide both the AMOLED driver and T-Con and are the sole source supplier for global leading tablet customer. In addition, the number of awarded projects for our flexible AMOLED driver and T-Con for is also increasing with worldwide conventional car makers and NEV vendors. Finally, we are making good progress with leading panel houses for the development of AMOLED displays, drivers for smartphone, TV and notebook applications. In light of serious constraints on the capacity for smartphone AMOLED display driver in the next few years, we have secured and continue to vie for more such supply, more such capacity for the future. Now, let me share some of the progress we've made on the Non-Driver IC businesses. Starting with the update on timing controller. We anticipate Q3 T-Con sales to decline double digits sequentially, pressured by lower shipments for TV, monitor and notebook markets. Yet, T-Con shipments for AMOLED tablets, sectors is set to enjoy decent growth, and we expect these two areas to see accelerating design-win momentum in the coming quarters. Our cutting-edge -leading local dimming T-Con has won numerous awards and penetrated into OEMs, Tier 1s, and car makers' premium new car models, with some of which already commencing mass production. We anticipate more than 50% year-over-year sales growth for T-Con, which will represent about 2% of total sales in the third quarter, with additional projects slated for bigger volume shipments starting 2023. For AMOLED tablet T-Con, as reported earlier, in the second quarter, we successfully commenced the mass production of our tablet AMOLED solution, including both T-Con and driver to support a leading tablet brand as a sole source supplier in their newly launched tablet model. Additionally, we are undertaking new design development, supporting even larger panel sizes with more named customers. We expect to gain traction with small shipments to key customers in upcoming quarters and are optimistic about the long-term potential for our T-Con business with secured capacity from our foundry partners in pursuit of sustainable growth. Switching gears to the ultra-low power AI image sensing total solution, which incorporates Himax ultra-low power CMOS image sensor, our proprietary AI processor, and CNN-based AI algorithm. On the AI image sensing business for notebook, we continue to support Dell's production ramp-up in a range of their new models. In addition, a number of other leading laptop vendors and CPU platform players have also shown interest in our AI total solution in their effort to further broaden use cases for next-generation notebooks. In addition to presence, look away, and outlook detections, we are developing a variety of new context-aware AI features for next-generation smart notebook market. Our AI image sensing solution, featuring ultra-low power tinyML vision AI in a tiny form factor is a perfect fit for the resource-constrained and battery-powered endpoint applications. The new AI area, which is now ardently explored by AI communities. Automatic meter reading, or AMR, is one of our successful showcases to the endpoint AI industry, where our AI total solution has been adopted by several Chinese vendors, and shipments is slated to begin in the second half of this year after some delays caused by city lockdowns in China. We've also kicked off projects jointly with water authorities, utility companies, meter OEM/ODMs, and/or IoT network providers from China, Japan, Europe, and India over the past few quarters. Our power-efficient AMR solution can operate with a battery pack for over five years, and is easy to install over the existing conventional water meters for real-time water consumption readout and detection of abnormalities such as water leakage. We also see expanding adoption of our tinyML-based endpoint AI solution in new areas such as shared bike parking, capsule endoscope, and more broadly in areas of, smart office, smart home, agriculture, and environmental preservation. In smart office, we have several projects ongoing with office automation ODMs, where our ultra-low power AI solution is used for meeting room human presence detection, and people counting, with an aim to save energy for lighting and temperature control. For environmental conservation, we are collaborating with Seeed Studio, Edge Impulse and Hackster.io, jointly organizing the event of IoT Into the Wild Contest for Sustainable Planet 2022. Aiming to cluster AI experts around the world to tackle different real-world environmental challenges. We are excited by the traction this diverse new AI product line has generated and expect to see increasing sales contribution throughout 2022 and beyond. Lastly, I'd like to give an update on our optical related product lines covering WLO, LCoS, and 3D Sensing. Himax continues to work on strengthening our optical related technologies. At the same time, better positioning ourselves to capture the vast opportunity presented by the future of the metaverse. Equipped with exceptional know-how and years of proven track record for mass production, Himax is playing a key role in enabling next-generation metaverse related applications. Currently, we have multiple intensive collaborations ongoing with world-leading tech giants who are aggressively investing in this emerging field with a lot of potential. Now to quickly go over a few recent updates. First, on our micro display, we continue to have steady joint collaboration with leading tech names and OEMs for their next generation products in AR glasses, where we offer a leading edge from this micro display. That features lightweight, small form factor and full color with unique characteristics of high illumination and low power consumption, which are critical for the success of future AR glasses. We have received promising feedback thus far and we'll report more progress in due course. Moving on to the updates for 3D gesture control for human interface sensing. Our WLO technology is deployed in this 3D camera to empower 3D perception sensing for precise gesture control. A technology that can be applied to current AR/VR goggles for controller-free gesture recognition. Last, for an update on 3D scanning and reconstruction project. Our 3D sensing technology is deployed for customers' 3D scanning device for the purpose of generating real-time, digital twins, avatar and 3D environments around it. The collaboration is still underway, and we expect to begin engineering build from the end of 2022. While the opportunity in optical and metaverse, related products is vast, it is still very much in the earliest innings. We are optimistic about its potential, though, and continue to work to position our strong optical product portfolio for future growth in the years to come. For Non-Driver IC business, we expect revenues to decline double digits sequentially in the third quarter. That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate your joining today's call, and we are now ready to take questions. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by. We compile the Q&A roster, and we do ask that you limit yourself to two questions. Again, we ask that you limit yourself to two questions. One moment for questions. Our first question comes from Jerry Su from Credit Suisse. Your line is now open. Okay. Thank you. Thanks for taking my question. Jordan, I want to, you know, ask you about, you know, I think, regarding the LTAs and the wafer capacity. I think this has, you know, wafer has been turning less, you know, tight for most of the, possibly, you know, I think except for the OLED related. What is your, you know, current, you know, structure of these contracts with the wafer foundries? Are you able to renegotiate, you know, for new terms or you are, you know, pretty much forced to keep the obligation and then perhaps, you know, pay some penalties, you know, to the foundry suppliers? That's the first question. The second question is more regarding your comment about fourth quarter for the revenue to rebound. I know you mentioned about and tablet, you know, but can you give us more color about what you think a tablet business by the fourth quarter could see some recovery? Thank you. Thank you, Jerry. Firstly, on LTA. That actually, our LTAs actually cover, mostly, foundry, but also, to some degree, again, as well. Some are expiring towards the end of the year, but that is small portion compared to the total. I've said in my prepared remarks that, we are negotiating indeed. I mean, everybody, if people are getting bigger and better picture about the short-term prospect of the market, right? I mean, there's no need for me to elaborate. I think, us and our partners together, we are working to, as I said in our prepared remarks, to hopefully increase the flexibility for execution of those contracts. We are not saying we are going to cancel the agreement or we are going to walk away from the agreements. Firstly, I mean, certainly as a company we need to honor the agreements. Secondly, we feel if you look into a longer term horizon, time horizon, this contract will still be very important for our long-term growth. I think only mutually, you know, understanding a good way basis, we are working to hopefully increase the flexibility for our execution of these contracts. Having said that, though, I want to repeat because this is important. In our Q3 guidance, we have factored in the potential penalties incurred by this agreement where our new wafer starts will be less than the minimum required according to the agreement. Those have been factored in. In fact, those charges represent the predominant portion of our Q3 margin contraction. In short, I guess, we're negotiating, but we will continue to honor those contracts. I think, hopefully, and if everything goes as planned without any major surprises, I think hopefully Q4 such charges incurred by us will be less than those of Q3 for the simple reason that our obligation is based on wafer starts. Right? If you look back in Q2, towards the end of Q2, there's a sudden freeze in market demand. Everybody was, like, hit by surprise. That's when we started to push our brakes, right? But that was already too late because all the Q2 new wafer starts will come out in Q3, and that explains why our Q3 inventory will reach the peak. Certainly, we have much reduced the new wafer starts, starting from the end of Q2 and also in Q3. That is the main reason why the charges out of LTA will peak also in Q3, because our new wafer starts will be the minimum. In Q4, hopefully, as I said, hopefully there will be some negotiation and certain rules will be rewritten or compromised. Also, after up to our customers' digestion of inventories, hopefully in Q4, we will be able to selectively start up new wafers. That certainly in itself will lower the LTA charges. Right, that certainly will very much depends on the outlook of Q1. With this visibility is so limited, I really can't comment too much on next year or even Q1. That is the plan, and that looks to be the most likely scenario for now. Your second question is about our Q4 revenue. We are saying, there's a good chance of a rebound from Q3, especially supported by and tablet. The visibility now appears to be decent for both sectors. Although I must say, other than our AMOLED or AI and a few, like, new emerging areas where revenue contribution are relatively small, other than these few sectors, I must say, you know, for TV, glass panel, smartphone, et cetera, the visibility remains limited., there's a hiccup in Q3. As we said, in Q2, there's a sudden widespread city lockdowns in China. So the inventories that our customers took during Q2, and which was supposed to be used in Q2 are used, and therefore they are consuming those inventories during Q3. That explains our dip of IC shipment in Q3. Again, visibility strength is relatively strong for and we believe our customers' inventory level will be back to normal towards the end of Q3. Starting Q4, it will be. I can't say exactly business as normal, but I think it will recover a great deal from Q3 loss. A very similar story for tablet. Having said that, tablet, we have suffered from two quarters of pretty significant sequential declines already, and our customers are really just running out of their inventory as we see it. Q4 will be a process of restocking. Having said that, I must say, in terms of longer term visibility for tablet for us, the visibility certainly is lower than that of. Okay. Thank you. That's very clear. Thank you. Thank you, Jerry. Thank you. Again, if you would like to ask a question that is star one one. Again, if you'd like to ask a question that is star one one. One moment for the Q&A register. Now I'm showing no further questions. I would now like to turn the call back over to Jordan for closing remarks. As a final note, Eric Li, our Chief IR/PR Officer, will maintain investor marketing activities and continue to attend investor conferences. We'll announce the details as they come about. Thank you and have a nice day. This concludes today's presentation. You may now disconnect.