Good day, and thank you for standing by. Welcome to the MKS third quarter 2025 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 the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Paretosh Misra. Please go ahead. Good morning, everyone. I'm Paretosh Misra, Vice President of Investor Relations, and I'm joined this morning by John Lee, President and Chief Executive Officer, and Ram Mayampurath, Executive Vice President and Chief Financial Officer. Yesterday, after market close, we released our financial results for the third quarter of 2025, which are posted to our investor website at investor.mks.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, 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 non-GAAP financial measures. Unless otherwise noted, all income statement-related financial measures will be non-GAAP other than revenue and gross margin. Please refer to our press release and the presentation materials posted to the Investor Relations section of our website for information regarding our non-GAAP financial results and the reconciliation to our GAAP measures. Our investor website also provides a detailed breakout of revenues, like end market and division. Now, I'll turn the call over to John. Thanks, Paretosh, and good morning, everyone. MKS delivered a solid third quarter with revenue and EPS in the upper half of our guided ranges and healthy results across each of our three end markets. Third quarter revenue of $988 million was up 10% year- over- year, driven by strong demand in our semiconductor and electronics and packaging end markets. We continue to demonstrate strong execution in delivering value to our customers' most critical needs. Net earnings per diluted share total $1.93. We also continue to take advantage of our improved cash flow to reduce our leverage with another voluntary prepayment of $100 million on our term loan completed in October. MKS is uniquely positioned at the forefront of accelerating innovation and enabling the advanced technologies that power the AI era. Increasing device complexity is creating significant challenges and opportunities in both the semiconductor and advanced packaging markets. We are differentiated in our ability to serve many critical applications with our comprehensive portfolio of semiconductor capital equipment subsystems, advanced packaging chemistries, and advanced packaging equipment systems. Our Q3 performance in our end market demonstrates how we are benefiting in this dynamic environment. Starting with our Semiconductor market, we reported solid revenue growth year over year, driven by continued strength in our products supporting deposition and etching applications, which are increasingly critical for advanced memory and logic manufacturing. Our dissolved gas systems for advanced logic applications were also a solid contributor to our performance, and our services business continues to contribute steady year-over-year growth. Lower NAND upgrade activity, which was expected after a very strong second quarter, drove the sequential decline in semiconductor sales. However, our leadership and power delivery remains as strong as ever in this space. We expect fourth quarter semiconductor revenue to remain flat on a sequential basis, which would translate into a healthy double-digit year-over-year growth for 2025. This underscores how well-positioned we are with the broadest portfolio of products and technologies to drive our industry's increasingly challenging technology roadmaps. In Electronics and Packaging, revenue exceeded the midpoint of our expectations, growing 25% year over year. This strong performance reflects continued momentum across our portfolio, driven by robust demand for our chemistry solutions and, in particular, our chemistry equipment. The investments we have made over the past several years to position MKS to optimize the interconnect in advanced electronics are now paying off as we gain momentum in AI-related applications. Today, our chemistry revenue growth reflects our position as a leader of the most advanced packaging technologies used in high-performance computing applications. Longer term, our chemistry equipment business highlights how critical we are to our customers as they rapidly build their next-generation infrastructure. The high attach rates from our equipment sales are a leading indicator of sustainable longer-term revenue from our proprietary chemistries. It's important to keep in mind that once we build and install the equipment, it can take six to 12 months for customers to qualify it and then put it into production. Once in production, chemistry provides a long-tail, steady, consumable revenue, generally for the life of that equipment. With high single-digit growth in chemistry revenues and strong equipment sales through Q3, we have confidence our proprietary chemistry will be a key revenue generator for us in the years ahead. In Q4, we expect revenue from our electronics and packaging market to be up on a sequential basis, and up double digits on a year-over-year basis. Our strong performance reflects our ability to capture emerging AI-driven demand, even as broader industry demand trends remain stable in markets such as smartphones and PCs. We anticipate continued strength in our chemistry equipment business, supported by AI, offset by modest sequential declines in chemistry due to seasonal factors consistent with prior years. Assuming the midpoint of our Q4 guidance, our electronics and packaging business is on track to deliver robust full-year growth of approximately 20%. Our Specialty Industrial market revenue was consistent with the stable trends we've seen over the past several quarters. Within this market, the industrial category showed sequential improvement, and life and health sciences and research and defense end markets remained steady. We had a healthy quarter of design wins, particularly in research and defense. This success highlights how MKS leverages its semi and electronics R&D investments to unlock new opportunities in specialty industrial markets that generate attractive incremental margins and cash flow. Looking ahead to Q4, we expect specialty industrial revenue to remain relatively flat sequentially. Overall, MKS is continuing to perform at a high level in 2025, with year-over-year growth powered by our semiconductor and electronics and packaging markets. Our broad portfolio of differentiated products and technologies in areas such as vacuum, power, photonics, laser drilling, and advanced chemistries positions us favorably to win new opportunities in applications critical to enabling the AI transformation. Against this exciting backdrop, we are executing with financial discipline, aligning our business to win in our key markets and reducing our leverage. I'll close by extending my thanks to our MKS team for their tireless work driving the great results we are reporting today, and also to our customers and our suppliers across the globe for their collaboration and support. With that, let me turn it over to Ram to run through the financial results and fourth quarter guidance in more detail. Ram. Thank you, John, and good morning, everyone. We delivered strong results in the third quarter, driven by healthy demand in our semiconductor and electronics and packaging end markets and continued stability in our specialty industrial end market. As in prior quarters, our execution remained strong, with healthy margins, robust free cash flow, and continued progress on our deleveraging goals. Third quarter revenue was $988 million, up 2% sequentially and up 10% year- over- year. The result was at the high end of our guidance and reflected better-than-expected trends in key end markets. Third quarter Semiconductor revenue was $415 million, down 4% sequentially but up 10% year- over- year. This result was at the high end of our expectations. The sequential decline was driven by lower RF power sales due to the timing of NAND upgrade activity, as expected. The year-over-year growth was driven by strength in many product categories, including our vacuum products and plasma and reactive gas businesses. The fundamentals of our Semiconductor business remained strong. Third quarter Electronics and Packaging revenue was $289 million, up 9% sequentially, driven by growth in our chemistry and equipment businesses. On a year-over-year basis, sales were up 25%, driven by growth in chemistry, chemistry equipment, and flexible PCB drilling equipment sales. These strong results underscore the strength of our electronics and packaging business as we deliver enabling technologies for high-growth emerging AI applications and today's advanced consumer electronics. Chemistry revenue was up 10% year over year, excluding the impact of FX and palladium pass-through. Continuing the strong growth trend over the last year. In our Specialty Industrial market, third quarter revenue was $284 million, an increase of 3% sequentially, mainly due to the improvement in the industrial market. Revenue was down 1% on a year-over-year basis. Overall, our specialty industrial business has remained steady for well over a year. Third quarter gross margin was 46.6%, just above the midpoint of our guidance. Gross margin was stable relative to the prior quarter, with tariff impacts of about 80 basis points, 35 basis points better than last quarter, offset by a higher mix of chemistry equipment sales. As we have stated before, the strong equipment sales we have seen throughout 2025 are a good indicator of future high-margin chemistry revenues. Third quarter operating expenses were $256 million, at the high end of our guidance and higher sequentially, primarily as a result of an increase in variable costs, mostly related to employee incentive compensation tied to stronger business performance. Third quarter operating income was $205 million, with an operating margin of 20.8%. Third quarter adjusted EBITDA was $240 million and above the midpoint of our expectations, with adjusted EBITDA margin of 24.3%. Net interest expenses were $45 million, in line with our guidance. Third quarter effective tax rate was 17.9%, just below the midpoint of our guidance. Third quarter net earnings were $130 million, or $1.93 per diluted share, and above the midpoint of our guidance. Free cash flow generation was very strong at $147 million, representing over 100% of our net earnings and 15% of our revenue. Through the first three quarters of 2025, we generated cumulative free cash flow of $405 million, nearly as much as we did in all of 2024. We invested $50 million in capital expenditure in the quarter. We expect CapEx to sequentially increase in Q4 but fall within the low end of our annual CapEx guidance of 4%-5% of revenue. We closed the quarter with approximately $1.4 billion of liquidity, comprised of cash and cash equivalents of $697 million and our undrawn revolving credit facility of $675 million. As John highlighted, we made a voluntary principal prepayment of $100 million in October. In total, we have made $400 million in voluntary payments thus far in 2025. We remain focused on executing our long-term capital allocation priorities of investing in organic growth opportunities while reducing our leverage through principal prepayments and working with our banking partners to reduce our interest expenses as market opportunities arise. We exited the quarter with a gross debt of $4.4 billion and a net leverage ratio of 3.9x, based on our trailing 12-month adjusted EBITDA of $953 million. We continue to bring down our net leverage ratio as we generate strong free cash flow, make proactive principal prepayments, and deliver high year-over-year adjusted EBITDA. Finally, during the quarter, we paid a dividend of $0.22 per share, or $15 million. Let me now turn to our fourth quarter outlook. The guidance we are providing represents our best estimate based on the dynamic trade environment in which we are operating. We expect revenue of $990 million, ± $40 million. By end market, we expect semiconductor revenue to be $415 million, ± $15 million, reflecting the continued strong fundamentals of our business. Revenue from electronics and packaging market is expected to be $295 million, ± $10 million, which would be up 16% year-over-year at midpoint. As we look to model 2026, we would remind you that chemistry equipment revenue is poised to have a record year in 2025 and has historically varied significantly from year to year. Chemistry revenue, which is the majority of our E&P revenue, is much steadier and more predictable. Revenue from our Specialty Industrial market is expected to remain relatively steady at $280 million, ± $15 million. We are guiding gross margin of 4%-6%, ± 100 basis points. The sequential decline is due to higher chemistry equipment sales in the mix and lower chemistry sales due to seasonality, partially offset by lower tariff-related impacts. We anticipate our mitigation actions will nearly offset tariff costs, dollar for dollar, beginning in Q4. However, these costs are passed through at zero margins, and we anticipate tariffs will continue to dilute our gross margin in Q4 and moving forward by approximately 50 basis points. With our mitigation initiatives in place, we remain confident in our plan to deliver our long-term gross margin objective of 47% plus. We expect fourth quarter operating expense of $255 million, ± $5 million. As a reminder, OpEx is typically higher in Q1 as a result of higher stock-based compensation and fringe benefits consistent with prior years. We expect fourth quarter adjusted EBITDA of $235 million, ± $24 million. We expect tax rates of approximately 2% in the fourth quarter, benefiting from certain favorable discrete tax items in the quarter and bringing our full-year tax rate to just over 14%. We expect fourth quarter net earnings per diluted share of $2.27, ± $0.34. Wrapping up, MKS has executed at a high level through the third quarter, and we are expecting this momentum to continue in Q4. We are winning exciting opportunities across our semiconductor and electronics and packaging end markets, and we are focused on managing our business with discipline to drive profitability and free cash flow. We remain focused on reducing our leverage. With our broad portfolio of products, strong secular tailwinds, and an improving balance sheet, MKS is in a great position as we look to 2026. With that, operator, please open the call for Q&A. Yes, thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our question-and-answer roster. Your first question comes from the line of Melissa Weathers with Deutsche Bank. Your line is now open. Hey, there. Thank you, guys, for letting me ask a question. I think first I want to touch on the E&P side. You said a couple of times in your commentary that equipment orders generally precede chemistry orders, and that can take about six to 12 months. You also mentioned that chemistries were at, I think, a record year in 2025. I was not quite clear on how you were guiding 2026, whether or not that should maybe come down or be stable. Any color on how we should be thinking about the chemistry's flow-through into 2026 after all the strong equipment sales? Yeah, Melissa, it's John. Thanks for the question. We're not really guiding 2026, obviously, for chemistry or for the company. I would say this. The equipment that we are building and installing now puts us in a very good position for additional chemistry revenue starting in 2026 and forward. I would say this. We really look at the whole market and its growth, and we've kind of said in our E&P market, we would grow 300 basis points above GDP. That was what we said at the analyst day, and that was made up of higher growth substrate business, mid-single-digit HDI business, and GDP-type MLB business. Those numbers are what we are staying with for now. Obviously, when we gave those numbers, AI was not in the mix, right? I think, generally, things are better. Our ability to hit the 300 basis points above GDP, our longer-term target, is we're very confident in that fundamentally because we are shipping a lot of that equipment, and a lot of that chemistry that goes with it will help us get to those longer-term targets. Great. Thank you. Maybe on the semiconductor side, it seems we've seen some really positive pricing data points in memory in the last couple of weeks or months. I think a lot of people are expecting a shortage situation in memory in 2026. Can you talk about the order patterns that you guys saw in the quarter? Have you seen an acceleration in orders ahead of maybe potential capacity additions in the memory space? Yeah, we read those same reports as you do, Melissa. I think, in general, we're happy that memory is recovering, pricing is recovering, and that the industry is moving towards a more supply-constrained environment. I think our customers are probably better to answer whether they're going to be ordering more equipment from us. Certainly, in general, I think everything is positive in the trend towards memory equipment. Thank you. Thank you, Melissa. Thank you. Your next question comes in the line of Jim Ricchiuti with Needham & Company. Your line is now open. Hi, thanks. Good morning. I'm wondering if you could give us a little bit of a better sense within the E&P business. If you could comment on Q3 or nine months, how much of that growth is actually coming from equipment, which admittedly has been strong and we know can be a little bit lumpy? Yeah, thanks for the question, Jim. I think we've said historically, when we looked at the MSD business. Equipment can be anywhere from 5% of total revenue to 15%. I would say, because of the last four quarters of really strong orders and therefore revenues, we're towards a higher end of that range and maybe a little higher than that. It is really going to be probably a historic four quarters or a year for the equipment business. John, also curious, there's another element of equipment in the PCB area. Are you seeing any signs of a cyclical pickup in the flex PCB drilling equipment business, just given somewhat improving smartphone shipments and, I guess, the potential that there may be some form factor changes coming in the market next year? Yes, we are actually seeing a pickup in flex. The business there, as you know, we're market share leader in flex laser drilling. And so we have seen that pickup. This is actually the second year where we've seen a healthy business there. It's not at the historic rates that were kind of in the 2000 timeframe, 2021 timeframe, but it has recovered to a very healthy level. Thank you. Thanks, Jim. Thank you. Your next question comes in the line of Shane Brett with Morgan Stanley. Your line is now open. Thank you for letting me ask a question. I want to follow up on that E&P question earlier, but considering that your chemistry sales for this year are up high single digits, some back-of-the-envelope math indicates that your tooling business could be almost doubling this year. One, is that kind of the right way to think about it? Is that in the right ballpark? Just how much visibility do you have on equipment sales on a go-forward basis? Thank you. Yeah, Shane, I think your math is roughly right with respect to the equipment business for chemistry equipment. I think what we can say is that we've had four strong quarters of bookings for that chemistry equipment. We can look out, certainly, the lead times of our equipment are four to 12 months. We have added some capacity to some of our equipment factories, not new buildings, but just expanding within the space that we have. We look forward to a couple more quarters, at least, of large equipment builds. We know that we have the backlog for that. Got it. For a follow-up, your semi-customers have spoken about a pickup in equipment shipments from the second half of next year. I think your peers have been kind of cautiously optimistic towards a pickup from Q2. Just where are you guys in terms of your expectations towards semi-revenue cadence through 2026? If there is sort of any idiosyncratic tailwinds for MKS that should drive your shipments above WFE in 2026, that would be very helpful. Thank you. Yeah, Shane, certainly we read the same things. Yeah, a lot of folks are saying kind of second half 2026 is where WFE really picks up. I think we're just focused on this quarter, next quarter, and the next six months. I would say this. Our Semi revenue has improved. Double digits year- over- year on a quarterly basis as well as year- over- year. This is really not with a lot of NAND upgrade yet, right? We had a good NAND upgrade in Q2, not so much in Q3. That is still yet to come. Certainly, our customers think that is going to happen. I think we know and are very confident in our position and our power for the high aspect ratio dielectric etch. We're very confident that when those upgrades occur, that will be us. Certainly, even without the NAND upgrade, you can see the broad portfolio of semiconductor critical subsystems we have has continued to outgrow WFE even this year. We look forward to 2026 where if WFE follows the trend that people are expecting, another maybe high single-digit increase, we're going to enjoy some of that as well. Great. Thank you very much. Thanks, Shane. Thank you. The next question comes in the line of Krish Sankar with TD Cowen. Your line is now open. Yeah, thanks for taking my question. I had two of them too. John, just to follow up on the previous question, if you do assume that in the second half of next year, let's just take a timeframe and say in Q3 of next year's inflection, in theory, should you not start seeing it one quarter earlier, or do you think there's something else different this cycle? No, in general, I think that's still true, Krish. If our customers are shipping in Q3, for instance, to your assumption, then we would certainly see that at least a quarter ahead of time. Our lead times have come back to historically low lead times, anywhere from four to eight weeks, sometimes 12 weeks, depending on how complex the system is. Even a four-week timeframe and eight-week timeframe, we do see a lot of in-quarter turns, as we talked about in the last couple of quarters. Yes, I don't see any changes to that assumption, Krish. Got it, John. I just had a two-part question. One is, how much of your E&P sales was advanced packaging chemistry, and how much within that was AI? On the PCB drilling side, are drill bits a constraint, and is that impacting your business, or you're not seeing any of that? Yeah, maybe I'll talk about chemistry and how AI has played a part in that. In the past, we have talked about AI servers driving the top third of the PCB industry. The PCB industry calls that the substrate, right? That top third was the AI part of that top third was going from 5% to 10% to 15% of that top third of the PCB industry. Since then, though, as we now know, AI is also driving the equipment for HDI and MLB. This is the next third and the last third of the PCB industry. Of course, the chemistry that goes with those. In general, our AI revenue has gone from, for the chemistry, kind of like 5% of the total PCB business, not just the top third, to double that over the last year, so kind of 10%. If you add equipment to that, of course, we're pushing the mid-teen percentage of the MSD business. Due to AI. I think your second question is about, maybe you can clarify your second question about drill bits. I was just wondering, on the PCB drilling side, is drill bits a constraint, and is it impacting your PCB drilling business? I do not know if I can comment on that. Drill bits, we do not do that. That is mechanical drilling, I think, what you are referring to. We are really doing laser drilling, but I have not heard that mechanical drilling is constraining the industry. Thanks, John. Thanks, Krish. Thank you. Your next question comes to the line of Michael Mani with BofA Securities. Your line is now open. Hi, thanks for taking my question. On E&P, could you help us parse through. When you look at your growth drivers, what is exactly secular versus more idiosyncratic to MKS? I mean, it seems like a lot of the HDI and MLB momentum reflects some of this secular uptake in the AI. Obviously, with Atotech, you're able to go into many of these opportunities to sell in both equipment and chemistry. Is there a share gain overlay aspect to it that you're seeing? Can you attribute these wins to that deal, or is it mainly just broad-based secular growth? Thank you. Yeah, I think it's both, Mike. The regular growth is, we're an industry leader in it, and more square meters of PCB boards than the chemistry, we're going to just enjoy that. I would say the thing that is different this time and that's beneficial for MKS is that AI is driving these incredibly thick boards, many, many layers of HDI boards, substrate boards, as well as MLB boards. As we talked about, a lot of the equipment orders that we have gotten tied to AI for HDI and MLB are because our equipment is uniquely qualified to process much thicker boards. We had to make modifications to the equipment. We did, and then we got those orders. Now, as we said, we have very high attach rates of chemistry to our equipment. If we are unique in being able to supply that equipment versus our competitors, we're also going to get that chemistry, as we talked about in the call. I think that's unique this time around. Great. Thank you. Maybe a question on gross margins. Given this flow through from potentially higher chemistry revenues over the next couple of quarters, how should we be thinking about as a good baseline for gross margins through next year? It seems like volumes are trending the right way. You are having seen a little more of this margin accretive business. Just any way to think about how to model margins through 2026. Thank you. Hi, Michael. This is Ram. I'll take that. If you look at the progress we have made in gross margin in 2024, all the way to Q1 of 2025, we were well over 47% in gross margin. Since then, a couple of things have happened. One is the impact of the mix that you talk about of very high fast-growing equipment sales and the impact of tariffs. As we said in our prepared remarks, we have offset the impact of tariffs dollar for dollar. We'll see ongoing 50 basis points impact on our gross margin because we are not marking up the tariffs that we pass through, right? In time, we'll offset that with efficiency and ongoing operational excellence programs. In the long term, with a normalized mix, we are very confident we can get back to that 47%+ that we were having before. Thank you. Thank you. Your next call comes in the line of Matthew Prisco with Cantor. Your line is now open. Yeah, thanks for taking the question, guys. I guess to start, how do you see the NAND lumpiness playing out over the next handful of quarters? Kind of what are the primary moving parts you are focused on here as determinants for the linearity of that upgrade cycle? Yeah, Matt. I wish I knew. I would say this. We have plenty of capacity, manufacturing capacity, to meet any kind of uptick in either upgrades or greenfields. I think one of our key customers has said there is a large opportunity still of upgrades just in the 2026 and maybe beyond timeframe. They have said it is lumpy. I think overlay on top of that, the industry discussion of NAND pricing that I think Melissa asked earlier, that is just a tailwind. The discussion by many of the chipmakers that NAND is now constrained. What is exciting is potentially a new application for NAND, driven by AI again, of course, which is in the solid state replacing solid state—sorry, solid state drives. Using more NAND for AI. That would drive another layer of growth. I think we are ready. It is lumpy. It can be lumpy. We will certainly try to guide you guys as best we can in terms of when we see that coming. Things can change, and things probably will change rapidly. Great. Thanks. Maybe you could talk about progress you've made in the litho-inspection and metrology part of your business. Maybe remind us of kind of year-to-date highlights and what success would look like to the team from a share gain perspective through next year. Thank you. Yeah, Matt. As we have talked about. World-class optics, this is our effort to gain more presence, obviously, in lithometrology inspection. And we've talked about in the past revenue from that sector kind of going from $150 million to $300 million. Because we invested in it. And as you know, lithometrology inspection is a little flatter this past year. We are not immune to the cycles, but the cycles are more muted than in depth etch. We are really happy with some of the really difficult things that we have been asked to do and delivered on that are now integral to some of the most advanced lithographic machines in the world. We will continue to invest there and continue to try to grow that share. I do not think anybody would say lithometrology inspection will not be important to Semi, right? It will always be important to Semi, always be a key component of Semi. I think maybe stepping back a little bit, the strategy for MKS is to be a foundational technology supplier to the entire industry. In one decade, depth etch is more important because it's multi-patterning. In the next decade, EUV takes over, and lithometrology inspection becomes a little more important. From an MKS standpoint, we kind of hope that all the markets grow. If something shifts, then we do not have to worry about it shifting away from what we're doing. Thanks, John. Thanks, Matt. Thank you. Your next question comes in the line of Steve Barger with KeyBanc Capital Markets. Your line is now open. Thanks. Good morning. John, you alluded to some of this already, I think, but we've been reading that CoWoS or other packaging formats are evolving from organic interposer to RDL. From your perspective, is that just switching from one format you enable to another, or is that evolution good for you due to more layers or smaller features? Yeah, I think the industry is certainly working hard on various configurations for this redistribution layer, the RDL layer, using CoWoS, CoWoS-R, CoWoS-L. And then even CoWoS, right, on the PCB. I would say this. That RDL layer is more complex as we move to organic layers. That's good for us. That's our traditional strength, organic layers versus silicon. When you go to organic layers, the RDL layers increase a little bit, maybe from one layer to two or three. That's good for us. I think the bigger picture are the 40 layers beneath that that are all the substrates and PCBs. That's really the largest growth factor for us. That used to be 20 layers. Now it's 40. As we visit customers, as we work with our customers, they're already looking at 80 layers. Think about that. It's gone from 20 to 40 just in the last couple of years, and we're working on 80. The one after that is three digits. Let's put it that way in terms of number of layers. Each of these layers is made one at a time. You can imagine the challenges of yield, making sure that when you put 100 layers on top of each other, that it still yields the same as if you had four. Those are great challenges for the industry and for opportunities for us. That's the bigger picture. At the same time, to your point, there's a lot of co-ops, LRS, co-op, and all that going on. We're involved in all of that. If it goes more towards organic, that's a tailwind for us. The bigger picture is 40 layers going to 80, going to 100. Right. That's good detail. And just listening to some of the OSATs, this is being driven by compute right now, which is high growth, but smaller unit volume maybe. At some point, this likely transitions to PC or mobile, higher volume applications. Is that your understanding? Any view on timeline of when that could happen? Yeah. I think our view is consistent with the industry is that as inferencing goes out to PCs and phones and whatnot, the chips will be bigger, more complicated. There will be more chips that need to be integrated together. Therefore, there will be more layers of PCBs or substrates underneath. That still has not really happened much yet, Steve. That is a huge potential growth driver for us. I think everybody's working hard to make sure that things, that AI drives this inferencing need. Think TBD, but we're optimistic that that will happen or some form of that will happen. Got it. Thanks. Thanks, Steve. Thank you. Your next question comes in the line of David Liu with Mizuho. Your line is now open. Hi. Thanks for letting me ask a question. Maybe the first one on revenue by geo. Can you just highlight what types of trends you're looking at, split by geo? I know your customers mentioned some write-offs, but there's also maybe some tailwinds in the U.S. Yeah. Hey, Dave, just to make sure I understand your question, you wanted some color on revenue by geography? Yeah. Just what you're seeing in terms of the demand trends by geo. Yeah. Yeah. Certainly, a lot of Asia is driving a lot of the growth, for sure. As you know, some of that's coming back to the United States as well as to Japan and Europe as people start onshoring chip fabs and packaging fabs for that matter. I think the other larger geographic trend is the China plus one trend as things move to Southeast Asia. As you know, we are building some factories in Southeast Asia to meet that demand because our customers are moving there. I think there is a lot of geographic movement in the industry today, especially the packaging industry, but also the chip industry, as you see fabs coming up in the United States, Europe, Japan, and potentially India as well. Okay. I do not know, any comment on the recent rumors of potentially selling the specialty coating divestiture? We are aware of those articles, but we really do not comment on market speculation, Dave. Got it. Okay. Thank you so much. Thank you. Your next question comes in the line of Joe Quatrocci with Wells Fargo. Your line is now open. Yeah. Thanks for taking the question. Maybe one on the Semi side. Given the entity list affiliate rule, it looks like it's delayed. Have you seen any change in order patterns or discussions with your customers? Yeah. Thanks for the question, Joe. Not really, because I think when that rule came out. We did not have—I do not think the industry had time to react. Some of our customers have said the impact is X, Y, and Z. Now it is delayed. As you know, the tariff environment is kind of a wake-up every day, and it changes. We really have not had any kind of different discussions with our customers based on that specific rule. Got it. And then just your, I guess, conservative comments in terms of looking at chemical growth into 2026. Is there a particular end market that you're maybe a little bit more conservative in the outlook for, as smartphones or PCs, something like that? Yeah. I would say the PC and smartphone markets have been stable, if you will, Joe. There are some things that could drive it higher in the future. We're just not sure if they will. One of which is new form factors for phones, foldables, for instance, more foldables. The other ones that we talked about earlier, I think when Steve asked the question about if inferencing got out to phones and PCs, that certainly would change the outlook in terms of more of a growth outlook for PCs rather than kind of more stable, which is kind of our assumption. Thanks. Thanks, Joe. Thank you. Your next question comes in the line of Mark Miller with The Benchmark Company. Thank you for the question. You noted strengths in depth and etch. Are you getting share in those areas? Yeah. I think we've had a traditional strength there in deposition and etch. That's kind of a legacy MKS business. I would say this. We've gained share in multiple areas. We talked a little bit about even dissolved gas. As the industry moves towards more advanced nodes like two nanometers, the ability to clean wafers, the ability to do soft etching and soft cleaning, these are all things that are driving some of our subsystems in the reactive gas part of our business. We've got a lot of good opportunities there that we've been capitalizing on. Of course, power for NAND is something that we are very confident we will hold that share as that grows into higher aspect ratio etching for things like DRAM. We are working hard on conductor etch. We have some great solutions there that our customers have told us are industry-leading. I was wondering if you could give us some color on lasers and your outlook for next year from the laser business. Yeah. Lasers has been a little muted because, as you know, lasers are used in industrial applications, and industrial applications have been more muted in the last couple of years. PMI is still kind of hovering around that 50 or a little below. I think we really have to see a change in that, Mark, before we would kind of see the lasers part of our business grow. Thank you. Thanks, Mark. Thank you. As a reminder, if you'd like to ask a question, please press star one one on your telephone and wait for your name to be announced. Thank you. Your next question comes in the line of Jim Schneider with Goldman Sachs. Your line is now open. Good morning. Thanks for taking my question. I was wondering if you could maybe kind of comment on, given all the things that were covered earlier with respect to tariffs, how you expect your direct China business to trend directionally heading into next year? What do you expect it to be sort of up, down, or flat-ish? Yeah. In China, we have two markets that go to China. The semiconductor equipment direct to China, that's out of our numbers. We still sell a little bit there, what's allowed. That's been out of our numbers for a while. We do have the indirect exposure to China through our OEM customers, and that's well-known. We also sell, obviously, advanced electronics packaging to customers in China. That still remains a good portion of our business. Many of those customers are also building new capacity in Southeast Asia, as we talked about earlier. We see that trend. Probably China will be a big part of our business from the packaging standpoint, not so much from the semi-direct standpoint. Things start moving, I think, outside of China from the packaging standpoint. Thank you. Maybe relative to your leverage target, you've talked consistently about two times in 2027. Maybe talk about sort of the level of urgency to get there. Could you achieve it perhaps a little bit earlier than that? Maybe talk about some of the levers you might pull to sort of achieve it. Thank you. Hi, Jim. This is Rama. Take that. We have made great progress in keeping our focus on deleveraging. We paid down $400 million in prepayment this year. That is following $426 million of prepayment we did last year. That remains our focus. Our capital allocation strategy has not changed. Investing in our business and then paying our debt down, that has been our focus. In terms of accelerating that, the best way to do that will be with our current cost structures. When we see the top line come back to more normal levels, we will be able to generate more cash and accelerate our debt payment. 2.5, you are right, is the net leverage target we want to get to. That is our goal. I do not want to speculate on a time when we will get there, but 2.5 is our net leverage target. Thank you. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Paretosh Misra for closing remarks. Thank you all for joining us today and for your interest in MKS. Kathy, you may close the call, please.