Good day, and thank you for standing by. Welcome to the MKS Instruments 1st quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one on your telephone. Please be advised today's conference may be recorded. If you require any further assistance, please press star, then zero. I would now like to hand the conference over to your host today, David Ryzhik, Vice President of Investor Relations. Please go ahead. Good morning, everyone. I am David Ryzhik, Vice President of Investor Relations, and I am joined this morning by John T.C. Lee, President and Chief Executive Officer, and Seth H. Bagshaw, Senior Vice President and Chief Financial Officer. Yesterday, after market close, we released our financial results for the 1st quarter of 2022, which are posted to our website, mksinst.com. As a reminder, various remarks about future expectations, plans, and prospects for MKS comprise forward-looking statements. Actual results may differ materially as a result of various important factors, including those discussed in yesterday's press release and in our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q. These statements represent the company's expectations only as of today and should not be relied upon as representing the company's estimates or views as of any date subsequent to today, and the company disclaims any obligation to update these statements. During the call, we will be discussing various financial measures. Unless otherwise noted, all forward-looking financial measures excluding any contribution from Atotech, the acquisition of which is still pending. Also, unless otherwise noted, all income statement-related financial measures will be non-GAAP other than revenue. Please refer to our press release and the presentation materials posted to our website for information regarding our non-GAAP financial results, a reconciliation of our GAAP and non-GAAP financial measures, and certain pro forma financial information. Now, I'll turn the call over to John. Thanks, David. Good morning, everyone, and thank you for joining us today. I'm very pleased with our Q1 results, especially given the significant industry supply chain challenges. 1st quarter revenue of $742 million was within 1% of the midpoint of our guidance range. Profitability was strong, with net earnings per diluted share of $2.71, exceeding the midpoint of our guidance range and an increase of 6% year-over-year. We credit this profitability to excellent execution at our factories and an emphasis on cost control while continuing to make targeted R&D investments across our portfolio. We believe our performance highlights prudent management of our expenses while still investing in the long-term growth of our business. While underlying demand trends remain very healthy, industry supply chain constraints are limiting growth, which is particularly true in our semiconductor business. Before I review the key trends across our end markets, I want to explain a change in how we will present our revenue. Beginning with this quarter, we have divided what we previously referred to as our advanced markets into 2 separate end markets, advanced electronics and specialty industrial. We believe this change better represents the end markets we serve and will enable you to better understand the key drivers of our business. There will be no change to our semiconductor market, which includes deposition, etch, lithography, metrology, inspection, wet clean, and packaging applications. In the 1st quarter, revenue from our semiconductor market comprised 66% of overall revenue. Advanced Electronics represents revenue from advanced printed circuit board, solar, display, and electronic component applications. We view our Advanced Electronics market as a close cousin to the semiconductor market, each of which benefits from the same defining trends of miniaturization and complexity. We believe packaging technologies will become increasingly critical to enabling better performance, design, and cost of electronic devices, from high-end smartphones to electric vehicles to high-performance microprocessors for data centers and artificial intelligence. Advanced PCBs and packaged substrates are the next key drivers of these trends, underscoring the strategic rationale of our pending acquisition of Atotech, where we plan on leveraging Atotech's electroplating solutions and our advanced laser drilling solutions to accelerate our customers' roadmaps. In the 1st quarter, revenue from our Advanced Electronics market comprised 11% of overall revenue. Our specialty industrial market represents a broad array of industrial, life sciences, research, and defense applications. These are businesses that leverage our domain expertise in semiconductor and advanced electronics. They represent a collection of proprietary technologies with strong margins. In the 1st quarter, revenue from our specialty industrial market comprised 23% of overall revenue. Now I'd like to provide more detail on our 1st quarter results and my thoughts on 2nd quarter demand trends. Sales to our semiconductor market declined 1% sequentially in the 1st quarter, in line with our expectations, reflecting continued continued supply chain constraints as well as a temporary shutdown at our Shenzhen facility due to local government COVID-19 measures. Our operations and engineering teams continue to respond to these challenges with agility, flexibility, and determination in partnership with our customers and suppliers. Overall, semiconductor demand trends remained robust in the 1st quarter, with broad-based strength across our vacuum and photonics portfolio. We continue to see strong demand for our RF power solutions for dielectric etch applications, as well as for our dissolved ozone solutions for advanced foundry applications, especially in new fab expansions. I'm also pleased to announce that we commenced the shipment of our new Cleanline solution in the 1st quarter. This innovative system is a compact remote plasma source used to reduce buildup of byproducts that arise from vacuum processing, which improves fab yields and lowers preventative maintenance costs. It is a direct result of our Surround the Chamber strategy, as it leverages our expertise across our RF power, remote plasma, valve, and integrated process solutions teams to deliver a unique solution, which again demonstrates the strength of MKS's innovation engine. We are seeing very positive interest from multiple customers. We also continue to see strong demand for our photonics solutions, with particular strength in our precision motion subsystems, securing design wins across multiple back-end applications, including annealing and advanced packaging lithography. As we look to the 2nd quarter, demand trends in our semiconductor market remain very strong. However, we expect supply chain constraints to remain a factor. Accordingly, we expect revenue from our semiconductor market to be consistent to slightly down as compared to 1st quarter levels. Before I discuss our advanced electronics and specialty industrial markets, I want to share my thoughts on 2021 critical subsystem market share data published earlier this month by the independent market research firm, TechInsights, formerly VLSIresearch. The report validated that MKS has continued to take share in the overall critical subsystem category in 2021. In fact, their research shows MKS is now the market leader in RF power supplies. This achievement was a culmination of many years of targeted investments, innovation, execution, and close collaboration with our customers. I'm extremely proud of the MKS team for achieving this milestone, which took hard work, dedication, and expertise. We see additional opportunities on the horizon for RF power, fueled by continued industry investments into vertical scaling. TechInsights also highlighted our share gains across other critical subsystem categories, such as RF matching networks, remote plasma sources, pressure sensing, residual gas analyzers, and linear motion subsystems. As a critical subsystem leader with the broadest set of capabilities in the industry, we are well-positioned to capitalize on many opportunities that lie ahead in the semiconductor market. Moving to our advanced electronics market, revenue in the 1st quarter declined 15% sequentially and 29% year-over-year. Declines were primarily a result of softer industry demand for flexible PCB via drilling equipment. We believe our customers have taken a risk-averse approach to expanding flex PCB capacity at this time, given the growing uncertainty resulting from factors such as supply chain constraints, geopolitical tensions, inflation risk, and its impact on consumer end demand. As we look to the 2nd quarter, we expect revenue from advanced electronics to be down sequentially, led by continued softness in flexible PCB equipment spending. Excluding flexible PCB via drilling, our advanced electronics revenue is expected to be consistent with 1st quarter levels. Revenue from our specialty industrial market declined 1% sequentially, but grew 2% year-over-year. We saw good sequential and year-over-year growth in life sciences applications, offsetting seasonal softness in research spending. For the 2nd quarter, we expect revenue from our specialty industrial market to remain consistent with 1st quarter levels. Before I hand the call over to Seth, I wanted to share a few thoughts regarding our pending acquisition of Atotech. As you may have seen on April 1, we announced an extension of the date for completing the acquisition to September 30, 2022. The strategic benefits of acquiring Atotech have become increasingly compelling as the trends towards advanced packaging continue to accelerate. We believe the unique combination of MKS's laser drilling and Atotech's advanced electroplating solutions will allow MKS to become a foundational enabler of electronic devices, spanning from the transistors on a chip to the interconnects in an advanced PCB. The defining trends of miniaturization and complexity that have driven continuous innovation in the semiconductor industry for decades are rapidly disrupting the PCB and package substrate landscape. Just like what we did in semi more than 2 decades ago, we are positioning ourselves to be at the forefront of these trends. We believe Atotech's general metal finishing business will fit nicely within our specialty industrials business, sharing the common thread of leveraging core domain expertise to address a wide variety of specialty industrial applications. We continue to work with China's State Administration for Market Regulation to obtain regulatory clearance, which is the remaining jurisdiction for which approval is a condition to closing. We're looking forward to closing the transaction and welcoming the talented Atotech team to MKS. With that, I'd like to turn the call over to Seth. Thank you, John. I will first provide additional detail on updated end market classification, then cover our 1st quarter 2022 results, followed by guidance for the 2nd quarter. Let's start with advanced electronics, which is a key enabler of laser-based manufacturing solutions for cutting-edge electronics applications. This market includes flexible and HDI PCB via drilling, laser and vacuum processing for solutions for solar and display applications, a number of other precision manufacturing applications for electronic devices. We believe our unique Surround the Workpiece portfolio of lasers, motion, optics, and other photonic solutions, combined with our applications expertise from our Equipment Solutions Division, provide us with a unique opportunity to be the go-to enabler of advanced electronics manufacturing. These applications offer attractive secular growth, although maybe some level of cyclicality, given this market is tied to capital equipment spending. Looking ahead, our pending acquisition of Atotech would add critical electroplating solutions for advanced interconnects. With these solutions, along with our laser drilling systems, we believe we're well-positioned to optimize the interconnect and accelerate customer roadmaps for next-generation electronic devices. We also believe Atotech's electronics business would add a large base of stable, recurring revenue with a strong margin profile. The 2021 revenues from the advanced electronics market comprised 15% of MKS's total revenue, and on a pro forma basis, with Atotech's 2021 reported financial results, it would have comprised 32% of overall revenue. Our specialty industrial market represents a broad array of leading technologies across industrial, life and health sciences, research, and defense markets. Examples of applications include vacuum solutions for synthetic diamond manufacturing, lasers for ophthalmic surgery, vibration isolation for advanced research, and infrared zoom lenses for both commercial and defense application. This market provides more stable revenues and strong margins and cash flow. In this market, we leverage product and technology capabilities that we developed from our investments in the semiconductor and advanced electronics markets. Atotech's general metal finishing business would fall into our specialty industrial market. Similar to our existing specialty industrial applications, there's important domain expertise in chemistry that's leveraged across a wide array of applications, such as surface finishing and functional coatings for electric vehicles, renewable energy, and a host of other industrial and commercial applications. In 2021, revenues from our specialty industrial market comprised 23% of MKS's total revenue. On a pro forma basis with Atotech's 2021 reported financial results, it would have comprised about 27% of overall revenue. In addition to dividing our advanced market into 2 separate markets, we also modified the names of three divisions. Our Vacuum and Analysis Division is now our Vacuum Solutions Division. Our Light and Motion Division is now our Photonics Solutions Division. And our Equipment and Solutions Division is now our Equipment Solutions Division. A historical snapshot of our results, broken down by our divisions and new markets for the prior 3 years, is available in the Investor Relations section of our website. With that, let's now discuss our 1st quarter results and outlook for the 2nd quarter. Sales for the 1st quarter were $742 million. It declined 3% sequentially, but up 7% year-over-year. While overall revenue was below the midpoint of our guidance, we are very pleased with how we executed in the quarter, given ongoing global supply chain constraints, as well as temporary shutdown of our Shenzhen facility due to local COVID-19 restrictions. In the 1st quarter, semiconductor sales were $488 million, down 1% sequentially, but up 19% year-over-year, reflecting broad-based demand from our vacuum and photonics solutions. While supply chain constraints draw much attention these days, our relentless focus on innovation is as strong as ever. The market share gains we delivered in 2021 are a clear reflection of our ability to accelerate our customer roadmaps. We are innovating in areas key to advanced electronics, advanced semiconductor manufacturing, including vertical scaling, atomic layer processing, advanced lithography, metrology and inspection, as well as wet clean applications. We have significant domain expertise across each of these areas, and in many cases where we combine our broad expertise to introduce new solutions that create new market applications, such as our Cleanline solution that John discussed. We have a long track record of gaining market share, and we continue to leverage new opportunities. Moving to advanced electronics market, revenue in the 1st quarter was $82 million. It declined 15% sequentially and 29% year-over-year. The primary driver behind the decline was a soft industry demand for flexible PCB via drilling equipment. As a result of the factors John highlighted, we expect demand for our flexible PCB equipment to remain relatively muted in the 2nd quarter. This market continues to be a long-term secular grower, but given our exposure to the capital equipment spending of this industry, our quarterly revenue remains lumpy. For context, between 2019 and 2021, flexible PCB equipment revenue grew at a 40% compounded annual growth rate. We continue to work closely with HDI PCB via drilling beta customers to drive further qualifications, while continuing to generate interest from new customers. We have dozens of tools in high-volume manufacturing running 24/7, which is a clear validation of our technology. One of the attractions of this market is that it is sticky once you get designed in. While we'd have liked to have made faster progress gaining share, we are encouraged by the customer conversations and the performance of our offering. Moreover, we're excited about the growing attention on advanced HDI PCBs and packaged substrates. In the role he's played in optimizing performance, cost, and designs of advanced electronic devices. We expect this to become more critical to enabling high-end smartphone applications, those high-performance servers, wearables, electric vehicles, and other electronic devices. Importantly, these increasing market requirements align very well with MKS and Atotech's capabilities, and we believe our combined capabilities will allow us to optimize the interconnect and drive better and faster solutions for our customers. Turning now to specialty industrial market, revenue was $172 million in the 1st quarter, declining 1% sequentially, but growing 2% year-over-year. On a sequential basis, we saw growth in life and health sciences and defense applications, offset by seasonal softness in the research market. Our 1st quarter gross margin was 45%, which is at the midpoint of our guidance. As expected, we were negatively impacted by higher inflation. We were pleased with how we executed our gross margin despite revenue being below the midpoint. While 1st quarter research and development expenses remained flat sequentially, reflecting continued investment in product development, 1st quarter operating expenses were down $3 million sequentially to $144 million and below our guidance range as a result of strong cost controls as well as the timing of certain equity compensation expenses, which will be reflected in the 2nd quarter. 1st quarter operating margin was 25.6%, 100 basis points above the midpoint of our guidance to near the high end of our guidance range. Operating income was $190 million, up $11 million year-over-year. 1st quarter adjusted EBITDA was $211 million, and adjusted EBITDA margin was 28.4%. Net interest expense for the 1st quarter was $6 million, and our tax rate was approximately 18%. Net earnings for the 1st quarter were $151 million, or $2.71 per diluted share. Exiting the 1st quarter, we maintained a strong balance sheet and liquidity position with cash and short-term investments at a record over $1 billion, which well positions us ahead of the pending Atotech acquisition. Our term loan principal balance was $822 million at the end of the 1st quarter. We exited the 1st quarter with a $231 million net cash balance. In terms of working capital, days sales outstanding were 59 days at the end of the 1st quarter, compared to 53 days at the end of the fourth quarter, reflecting the timing of revenue during the quarter. Inventory turns were 2.6 times at the end of the 1st quarter, compared to 2.8 times at the end of the fourth quarter, which was impacted by supply chain constraints. These metrics, combined with our annual bonus payment, resulted in 1st quarter operating cash flow of $41 million and free cash flow of $22 million. Consistent with prior quarters, we had dividend payment of $12 million, or $0.22 per share. I'll now turn to our 2nd quarter outlook. Even though business levels remain robust, we expect 2nd quarter revenue of $730 million ± $30 million, primarily due to continued supply chain constraints. Based on anticipated product mix and revenue levels, we estimate 2nd quarter gross margin of 43.5% ± 1 percentage point. Like many other companies, we're not immune to exceptional macroeconomic inflationary challenges impacting our markets. However, we have a strong track record of driving continuous improvement in our operating model. We will continue to take all the necessary steps to counteract these inflationary impacts over time. We expect operating expenses of $156 million ± $4 million. The sequential increase is largely due to timing of annual compensation increases. For the 2nd quarter, net interest expense is expected to be approximately $6 million, and our tax rate expected to be approximately 18%. Given these assumptions, we expect 2nd quarter net earnings of $2.28 per diluted share ±$0.24. Before I turn the call back to the operator, I'd like to share a few thoughts on our pending acquisition of Atotech. I am pleased to announce we successfully re-syndicated our debt financing earlier this month following the expiration of the previous syndication. Our updated financing includes a Term Loan B with a $3.6 billion U.S. dollar tranche and a EUR 600 million tranche, both of which were substantially oversubscribed. We also diversified our lending base with a $1 billion Term Loan A. Funding will coincide with the close of the pending acquisition of Atotech. Given the current debt market environment, the price was understandably somewhat higher this time around. However, we are very pleased with the final terms and the mix of debt capital we achieved. We believe the successful pricing demonstrates lenders' belief in the strong credit profile of the combined company. We are confident the cash flow generation of the combined company will position us to aggressively de-lever the balance sheet consistent with prior acquisitions. We're also pleased with Atotech's business performance, as evidenced by their full year 2021 results released on April 4th. In fact, on a pro forma basis, 2021 adjusted EBITDA for the combined company would amount to $1.3 billion. Atotech has also performed slightly better than we expected when we performed our initial due diligence. Furthermore, we originally announced the acquisition. We say that we expected net leverage at closing to be slightly below 3.5x. Given the extension of the timing of the transaction, anticipated cash flow generation for both MKS and Atotech, we now anticipate a more favorable net leverage ratio at closing. MKS is in a strong position to drive shareholder value creation by capitalizing on a number of attractive secular trends, and we believe Atotech would further enhance those efforts. I'd like to now turn the call back to the operator for Q&A. Thank you. If you have a question at this time, please press star then one on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We ask that you please limit yourself to one question and one follow-up question. Our first question comes from the line of Patrick Ho with Stifel. Your line is open. Please go ahead. Thank you very much. John, maybe first off, I know there are a lot of moving parts on the whole supply chain and COVID-related issues, but can you give a little bit of color for the June quarter, what the bigger impacts are? Is it the ability to procure certain components or the Shenzhen lockdowns and the aftereffects still impacting your ability to 'ramp up' the facility there? Maybe as a follow-up to that, what's been the ability on your end to flex some of that capacity to, you know, 'cause you have a large footprint. What's the ability to flex some of that capacity to, I guess, open capacity? Yeah, thanks Patrick for the question. I think I'll take the Shenzhen one. Our factory was closed for about a week or so because of the COVID-19 restrictions. We did recover after about a week. That's factored into our Q2 guidance. I would comment that the supply chain constraints are not getting better. Electronic components remain a big part of it, but also it's broadened to other types of materials, resins, specialty metals. We're factoring that into our Q2 guidance as well. In terms of moving capacity between factories, there's a few factories where we can do that. Mostly our factories are still running pretty well in terms of utilization because they're still constrained by supply. Great. That's helpful. Maybe as my follow-up question for Seth, in terms of gross margins, you guys performed really well despite the shortfall in revenues and the supply chain constraints. Can you just give some of the levers that are keeping gross margins at still pretty high levels, you know, given the current environment? Yeah. Thank you, Patrick. Yeah, I would say that obviously what we do is provide to our customer high value applications. So I think what you're seeing is reflection on margin reflects frankly that value to our customers in the overall, you know, markets we serve. Kind of on the tactical level to your question, we have a number of levers. We've got a world-class operations team. We're really working to qualify potential other sources to mitigate some inflationary pressure. We do have some pricing ability. We've talked about that in the past. That we've definitely leaned into, and there's more opportunity there as well in the future. You know, we have broad-based portfolio across a number of different markets. I think kind of mitigate some of the things that John talked about, you know, in some of the markets we serve. It's a wide range of opportunities. It's a wide range of different levers we pull. I think fundamentally, you'll see our margins go back up over time to historical levels. That's our goal for sure. Great. Thank you again. Yep. Thanks, Patrick. Thank you. Our next question comes from the line of Jim Ricchiuti with Needham & Company. Your line is open. Please go ahead. Hi. Thank you. If I look at the Vacuum Solutions business being down sequentially, guys, that was mainly supply chain and the COVID disruption, and that's, I assume the area of the semiconductor business that you're a little bit more cautious about continuing supply chain issues in the June quarter. Jim, it's John. That's right. You know, give or take, it was about down 1% in our semi business. That is where the majority of the supply chain constraints are hitting our business. Okay. If we look at the Photonics Solutions portion of the business and look at the way you're now characterizing that business, what I'm wondering is if you could provide some color on the non-semi photonics business, how that's performing. For instance, are you seeing any signs of changing demand in the European part of that business, just in light of the geopolitical situation that we're experiencing there? Yeah, Jim, thanks for the question. No, we've actually seen it, that part of the business of the Photonics Solutions Division to be pretty stable. You know, we don't have a lot of exposure of business to Russia, if you will, and nor supply chain. The business has been actually pretty stable, as we talked about life and health sciences, research and defense, and other industrials. Okay. Thanks a lot. Thanks, Jim. Thank you. Our next question comes from the line of Scott Graham with Loop Capital Markets. Your line is open. Please go ahead. Yeah. Hi. Good morning. Thanks for taking the question, John, Seth, and David. I'm just looking at, you know, the weakness in the PCB business and, you know, you're alluding to your, you know, sort of the always CapEx weakening there. That's, you know, does seem to be a pivot versus where we were understanding, of course, that this is a lumpy business. How would we read that across. Well, you know, we're gearing up for an acquisition, and just, you know, we're much more than doubling down in PCB, we're, you know, kind of 5x-ing it, right? I'm just wondering, you know, why should we be comfortable the next couple of quarters with, you know, the PCB business weakness and you're, you know, about to, you know, significantly increase the size of a business where the customer's capital spending is weak? Yes, Scott, that's a fair question. You know, I always pivot to the fact that our strategies are always long term. When we look at advanced packaging and package substrates, we see that as a really attractive long-term opportunity for MKS, and that's why we are trying to acquire Atotech. When you look at our flex business, it is lumpy, and I think it's well known that you know, smartphones and consumer demands and some of the uncertainties have made our customers cautious in terms of adding capacity for flex. We also know that we are the leader in flex PCB via drilling. There's been no loss of market share, as far as we know. We always look at the long term, and flex business will come back. HDI business will grow. If Atotech is part of the family, their business for electronics plating will also grow. We're really looking at the long-term play with respect to advanced packaging. Understood. Thank you. I appreciate that, John. It was good. I suspect the same. The other question I had was about, you know, sort of price cost. You know, some companies look at price cost as pricing versus material, some look at it as pricing versus, you know, company-wide deflation. However you look at it does look like the 2nd quarter is gonna be you're gonna be behind that curve. I know you mentioned that there's some opportunity for you in pricing. You know, kind of why does the gross margin sink that much? Why are we not increasing prices maybe a little bit faster, right, to, you know, buffer that 2nd quarter gross margin? Maybe just, you know, talk about price cost in the context of your 2nd quarter guide. Yes, Scott. I think, you know, the inflationary costs have hit us pretty hard, as has hit everybody pretty hard. We have been leaning into price increases, but that does take some time to recover. The pace of which inflationary costs have hit us, and the pace of our, you know, levers in terms of price increases, there's a bit of a gap, I guess, and I think you're seeing that in our guidance in Q2. As Seth said, we expect that to recover over the next outer quarters as well. You know, we have a lot of backlog, and so backlog is, you know, commitments at previous prices. There's a bit of a constraint in terms of how fast we can change prices, you know, versus, for instance, a consumable company where you can just change prices immediately or chip company for that matter. We do have a little bit of a lag there, but rest assured that we expect to recover that gross margin in the outer quarters. I appreciate that, John. Thank you, and I guess it'll be like a two-quarter event, but just to tuck in sort of a question 2 A here, is there any reason why with demand so strong, because it doesn't sound to me like semi is weaker, and that's where the supply chain is, you know, kind of hitting you the hardest. It sounds to me like the end demand is pretty strong. Is there any reason why we can't reprice the backlog? It's always an option that we've looked at, and, you know, we have to balance that with, you know, partnerships and relationships with key customers. We look at that as well, but we also try to make sure that we're partnering in a long-term sense with our key customers. That's really important to us that we maintain those long-term partnerships, and I think we get rewarded for that by our biggest customers. Yeah, just to add what John said is the market share gains we generated back in 2021 is kind of extension what John mentioned. You know, obviously, technology, seeing the right inflection points, investing ahead of that curve is a big driver for share gains. But the fact that our customers trust us to work with us, I think is pretty important as well. I would say it's a big picture view is how we look at it. All right, guys. Hey, thanks a lot for taking my questions. Yeah. Thanks, Scott. Thank you. Our next question comes from the line of Joe Quattrocchi with Wells Fargo. Your line is open. Please go ahead. Yeah, thanks. Thanks for taking the question. Maybe one on the semi side. I'm just curious, you know, several of your customers are talking about, you know, diversifying their supply chains or qualifying additional, you know, critical subcomponents. Have you guys benefited from any of that type of practice in terms of, you know, being able to maybe gain some share in some critical applications that maybe you previously weren't? Joe, it's John. Actually, we have actually been the beneficiary of some of that behavior from our customers. Going back to, you know, Scott Graham's earlier question, that's because our customers trust us, and we partner with them. When they have constraints in their supply chain, MKS is one of the first companies they'll always come to and say, "Can you deliver these other new products, or more of the ones that are designed in?" We actually have been the beneficiary of that. You know, we're working hard in our operations team to continue to deliver and overcome the supply chain constraints. In this kind of environment, the operations team is going to be responsible for share gains, actually. You know, usually we get share gains from technology, new innovations, et cetera, and that's normal. In this kind of constrained environment, our ability to gain market share because of our operational team's excellence and performance is really a great another lever for us. That's helpful. Just as a follow-up on the flex side, how would you characterize the industries or your customers' discipline relative to maybe the last down cycle? Have you seen them maybe pull back on the CapEx somewhat quicker or faster than the past cycle in terms of just, you know, kind of hoping to see a less of a peak to trough? Yeah, no, I think this one is a little different than the last cycle, Joe. I think this one started off the year with kind of uncertainty. People weren't sure, customers weren't sure of their capacity needs because there was uncertainty, you know, by their customers in terms of the signals from them. As the quarter progressed, I think those uncertainties became realized, and that, you know, the inflationary expectations and its effect on consumer demand, the geopolitics of Eastern Europe didn't help. Those uncertainties became realized into kind of a risk off approach, and that's what we're seeing right now in our flex market. Very helpful. Thank you. Thanks, Joe Quattrocchi. Thank you. As a reminder, when asking your questions, please limit yourself to one question and one follow-up question. Our next question comes from the line of Krish Sankar with Cowen and Company. Your line is open. Please go ahead. Hi. Good morning. This is Steven calling on behalf of Krish. Thanks for taking my questions. I guess the first one is just a little bit more of a high level. If you could talk a little bit about the linearity across the three businesses throughout the quarter. I guess just looking at the higher DSOs at 6 in the quarter, I'm kind of wondering whether it was the semis business that saw some of the orders sort of floating near close to the end of the quarter due to the Shenzhen production impact, or if there are other interesting characteristics of the orders and sales across the other segments during the quarter. Yeah. Steven, this is Seth. I'll take that question. Yeah, as said in prepared remarks, the DSO is a little bit higher this quarter versus prior quarters 'cause of the linearity of revenue during the quarter. Usually, we have a little more of a hockey stick at the back end, which is more of photonics piece of the business. I think what you're seeing, we saw in the Q1 is supply chain constraints. It was sort of a linear impact there as well. I wouldn't say it's a timing of orders per se. I think it's more of how we got parts into the operations and how we shipped out products. That was more of the linear impact, I think, on the quarter. That drove up DSO. I mean, the aging is in good shape, everything else. It's really just the time of revenue during the quarter. It's more operational driven than order driven. Got it. Thank you for that, Seth. Also one more for you as well on the gross margin side. Just in terms of the sequential decline in gross margins, can you provide a little more color on, you know, what is the incremental change that's driving that? Is it partly mix or is it more, you know, the inflationary cost becoming a higher burden in the June quarter? Any additional color around that would be great. Yeah. Yeah, exactly. I'll take that one as well, Steven. Yeah, you're right. We're down about 0.5 point sequentially, and it's virtually all inflationary pressure. That's. There's a little bit of mix too 'cause we mentioned the flex, you know, the PCB via drilling revenue in Q2 will be relatively muted. A little bit of mix there, but the lion's share of the sequential decrease is inflationary pressure. We know where it's coming from, as John mentioned. We have actions in place. We're very committed to kinda get back to our historical levels, and you know, that's certainly all hands on deck work on that right now. That's what's driving, at least in the short term, the impact on Q2. Given the magnitude of it, is it the higher cost, is it affecting the semis business more than the other 2 segments? Yeah, correct. Yeah. You'll see it in the Vacuum and Analysis Division is the biggest impact for sure. It's affecting every division, but the vast majority is the semi piece of our business. Great. Thanks, Seth. Yep. Thanks, Steven. Thank you. Our next question comes from the line of Paretosh Misra with Berenberg. Your line is open. Please go ahead. Thank you. Good morning. Your photonics business is holding up better sequentially and was up a lot on a year-over-year basis. What are you seeing there? Has it been impacted less by these supply chain issues, or it's just better demand which is driving that? Yeah, Paretosh. You know, we strategic made some decisions early on when we bought Newport, which was to take the photonics technologies that we had and try to leverage that into some of the semi markets where Newport was relatively less levered. That, again, like RF power, was a multiyear strategic decision. We've been, you know, making progress with design wins over the last several years that we've talked about on these calls, and you're starting to see that. You're starting to see that a big part of the Photonics Solutions Division growth is coming from the semi market. You see the special industrials being relatively stable, and you see the advanced electronics for the photonics division also relatively stable. The growth, a lot of that growth is driven by strategic decisions we made to put that technology for the semiconductor market. Got it. As a follow-up, in this specialty industrial segment or market, how should we think about the growth potential in that business? Is it similar to advanced electronics or could it be lower than the electronics over the long run? Yeah, no, that's specialty industrials. We kind of look at it as a GDP plus kind of business. That is lower than what we expect for the advanced electronics. That's stable, much more stable. You can see in our guidance as well. It leverages the research that we put into semiconductors and advanced electronics. We only play in certain niches where we have value and where we can, you know, have that steady gross margin and cash flow from it. Got it. Thanks, John. Thanks, Paretosh. Thank you. Our next question comes from the line of Hanson Chung with D.A. Davidson. Your line is open. Please go ahead. Yeah, thank you for taking my question. First, is it possible to quantify like the impact from the supply chain constraint to our 2nd quarter outlook? Like how much of amount, for example, like without a supply chain constraint, what we can do in terms of top line? What's the backlog at the end of the March quarter versus the three quarters ago? Yeah, Hanson, this is John. It's difficult to quantify exactly what the supply chain constraints are on the top line. I think that's your question. Suffice it to say, though, that our backlog is continuing to increase. We don't publish that backlog. Bookings also continue to increase. It's not a demand problem, it's not a backlog problem, it's a supply chain constraint problem. We're working real hard to try to, you know, increase our output every quarter. As I said before, the supply chain constraints seem. They're not getting better. They continue to surprise. We continue to react. We react better. We have better partnerships with our customers and our suppliers, but they continue to surprise. I think we're also contemplating or including in our guidance the fact that there are COVID shutdowns now. We were affected by Shenzhen in Q1. As you know, there are potential effects of shutdowns in Shanghai and now Beijing. We don't have factories there, but we have offices and certainly, you know, maybe third-tier suppliers have factories there. We're taking all that into account as we guide the revenue going forward. Got it. Okay. The next question is regarding your RF power business. You have gained market share for the past couple of years, I would say. Just kind of how much room for you guys to continue to gain share, particularly in the compact etch side of business? Yeah, no, as you know, we've been talking about design wins and incremental share gains for many years. I think, you know, many of our long-term investors have stayed with us, and they've benefited from that. Many other investors didn't know who to believe, so they might have bailed out. Too bad for them. We were consistent, we were determined, and you can see that, you know, this is something that doesn't happen very often in the semiconductor equipment market because of Copy Exactly. For us to be a distant number 2 in RF power 6 years ago to being number one in RF power, you know, my career, that has happened maybe 2 or 3 times in the entire industry. So that's a really significant change. To your question, going forward, we see that continuing to grow. All that share gain that we talked about in terms of making us distant number 2 to number 1 was almost all driven by dielectric etch. We haven't even tapped into conductor etch, where we have some design wins, and we expect to continue to have more design wins. We think that our power will continue to grow and extend its lead in market share. Got it. Thank you. Thank you. This does conclude today's question and answer session, and I would like to turn the conference back over to David Ryzhik for any further remarks. Thank you, Michelle. Thank you all for joining us today and for your interest in MKS. Operator, you may close the call, please. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.