Good afternoon. Welcome, everyone. I'm really delighted to have the team from Nova Management join us this afternoon. Dror David, the current CFO. Mm-hmm. Really lucky to have Guy Kizner also, corporate, sorry, vice president of corporate finance and the incoming CFO as of July first. So you have just a few more weeks to relax, and then you are in the hot seat, as so to say. We're really happy that you can join as well. Exactly. So maybe, Dror, just to kind of bring people who are on the webcast and in the room up to speed, could you maybe just take a high-level perspective of Nova? You know, describe what are your areas of strategic focus. And then importantly, as you know, the company is so well levered to AI, which specific areas are you playing in, and how levered are you to that big growth driver? Sure. So, obviously, we are operating in the semiconductor process control segment, selling control equipment to the semiconductor industry. Actually, I think one of the elements of Nova story is its wide exposure across the different segments of the industry. The company is exposed to memory, leading edge, trailing edge, also to advanced packaging. So across the segments, practically, there is no single fab being built today without Nova equipment. In terms of the AI, obviously, I would say that in all elements related to semiconductors, almost, we are exposed. We are exposed to HBM, to advanced packaging, hybrid bonding, and obviously, the high-end chips, which are manufactured in the front end to eventually get into the AI chiplets and applications. In all these fabs we are present. Got it. Now, many in the US, right, know of the large competitor, right, KLA, in this market. How does Nova differentiate itself from KLA? Yeah. So 25 years ago or 30 years ago, when the company was established, it was established around the Optical CD arena and technology. This is optical instrumentation, which is doing high-end measurements of the specific transistors. And we were competing with KLA since the beginning of this process. Actually, since then, the company has developed or acquired many different technologies, and today, actually, between around 40% of our business is not competing with KLA. These are mainly the materials metrology tools. Within the segments that we do compete with KLA, which is the Optical CD, it's around 40%-50% of our business. We do have unique capabilities also in this arena related to technology developments that we have. The latest one is the Nova PRISM, which has a unique capability that enables to measure deep vias and deep structures, and we can discuss exactly what it means. Exactly. Okay. So first, in terms of the broader, spending environment, I think that, at the start of the year, you described the wafer fab equipment, WFE market this year, kind of growing, you know, mid-single digit. That's what a lot of your peers, right, have suggested also. Now that we are roughly kind of halfway through the year, is that still a reasonable way to think about, just the overall WFE environment? And if you could help unpack, right, whether it's foundry logic or, or memory as part of that, how are you seeing it today? So, the answer is yes. We still see the same, I think, level of investments on an annual basis from where we are right now. In terms of the different segments and their impact on the market, obviously, trailing edge China was very strong in the first half. Actually, we do believe that there will be some moderation from the high level of H1 into H2 of China investments. Not a significant reduction, but some moderation. On the other hand, we have other vectors which should positively impact the investments in the second half. One that I can mention is, for example, TSMC, which invested around $10 billion in the first half of the year of 2024, and their plan for the year is around $30 billion. Right. So we will see some additions in the second half. In terms of memory, we do see investments in mainly in HBM applications, the LPDDR and the DDR5. Regular DRAM expansions have not yet started. Some will start in the second half. And in terms of leading edge, Gate-A ll-A round investment, this is more of a 25 plan. So overall, still mid-single-digit in 2024. And obviously, Nova, with its exposure to the different elements and the new technologies, we expect to significantly outperform this mid-single-digit level. Got it. That was actually my next question, that you know, Nova has been able to consistently outgrow the WFE right environment, and I assume you expect, you know, that to happen this year. How's typically your visibility? Does it extend one quarter? Does it extend two quarters? How is the visibility in the second half of the year? So visibility is actually quite good right now in terms of backlog, bookings also into the second half of the year. It's very important to know the numbers, because when you look at the last five years, the industry grew on average wafer fab equipment around 10%-12% a year. In the last five years, Nova grew approximately 20%. So we actually significantly outperformed the market around 50%. We expect to do the same also in 2024. And this the reason for that is the fact that we are expanding our addressable markets, entering new applications within the semiconductor that were not in our revenue stream before, such as advanced packaging, HBM. And also we have a very wide presence across the foundry and the memory segment. So we do expect to outperform in 2024. Obviously, 2025, 2026, a new story of investments in the U.S., Gate-All-Around, which we have a very good position. Probably we'll discuss that later on. Right. Just one thing about the next few years. So there's a lot of, you know, interest in the different CHIPS Act, right? That are being implemented, whether it's in the U.S. or right there are versions of that in Europe and- Mm-hmm ... China and, you know. I think China this weekend said, what? 45 plus- Yeah ... $47 billion. Another fund. Right, plus. Have you already started to see some benefits of that reshoring, or you think that is still to come as we look over the next 1-2 years? So most of the investments in areas outside China are yet to happen in the coming years. The best example is, for example, TSMC investments in Arizona. Most of that will be 2025 and forward. Some of that already started. Intel, definitely, mainly 2025, 2026. Samsung Taylor Fab in the US, the same 2025, probably, and not this year. So most of these investments are going to happen in the coming years and probably derive another step up in WFE. I see. Do you think that increases WFE intensity, you know, in that, you know, now that you have a lot more new fab construction, does that step up WFE intensity versus what the trend line would have been otherwise? Yeah, that's a good point, because we all know there is an end in terms of the intensity, right? If intensity is too high, it becomes unbearable for the manufacturers, and it becomes a problem. I think that what has changed in the recent years is the profit profile of the semiconductor manufacturers. And if you take WFE relative to their profitability, and not necessarily relative to their revenues, you would see that the trend has not really changed significantly, and it's still on a reasonable level relative to profitability. Although relative to revenues, it might increase in the coming years. I see. Which is a good thing. That's right. Right, it's success-based spending rather than- Yes ... building it for its own sake. How much is trailing edge exposure for Nova right now, and where do you see it heading this year or next year? Trailing edge currently is mainly China. We are not disclosing, you know, our allocation in these areas on a quarterly basis. Right. Last year, trailing edge was around 50% on an annual basis. I think overall, trailing edge at the beginning of the year was slightly higher because of the major investments in China, which most of them are trailing edge. However, on an annual basis, with the expectation for more investments in leading edge of the second half, should be probably, hopefully, the same as last year, maybe a little bit higher. Okay. And your broader assumption about China is that spending is flattish, you know, this year, plus, minus? Actually, you know, dollar-wise, China level would probably increase. Increase. Yeah, even off of high level of last year. Obviously, they are spending a lot. They have this new fab, $50 billion, which was just- Right ... just announced, and we see the orders, we see the projects. So I think dollar-wise, it will be a little bit higher than last year, also because they have started to invest also in DRAM capacity in parallel to foundry. Right. So that's another function of increase, but as a percent of revenues, this year it will be probably the same as last year, and next year it will start to reduce. We do have visibility to many 2025 projects, so we do expect China to remain stable, at least in the foreseeable future from where we are right now. All right. You know, one thing we hear from your kind of end customers, right, is just this supply shortages that they are seeing in, in packaging, right? Especially CoWoS, right, and that's out there. I think for Nova, last year, advanced packaging was about 10% or so of sales. You know, this year, I think the outlook is, what, for it to grow 50%? Yes. Right, or so. But is that a conservative view? Because when we look at what's happening to accelerator demand, right, that's like more than doubling this year. Obviously, there are timing differences between when they sell something- Yeah ... versus when you sell, something. But do you think there is upside to that, upside potential to that, market outlook? For advanced packaging? Yeah. There is some upside, because a lot is happening in advanced packaging, and I think the market is eager for new developments and new capabilities. Anyway, you know, 50% growth relative to WFE growing 5%- Still pretty- ... is still significant. So, anything at that range is probably where we will be at by the end of the year. ... Okay, and how does the visibility look in that business going into next year? Because, you know, we are all making assumptions about, you know, TSMC's packaging, right? There's other CoWoS players, right, coming up. So are you seeing, number one, the demand broaden? And number two, how is the visibility looking like as you look into next year? So two elements are happening for Nova. First of all, the visibility for investments in advanced packaging is quite good, I would say. The projects are clear. All the customers are doing actions to take their market share. We just heard the Micron announcement regarding HBM, and by the way, they did not really start to invest. So they are just doing whatever they can in order to move some capacity to this direction, but they have not really started to invest, and this will happen in the coming quarters. So on the visibility side, we are okay, and I think one of the major elements for us is that we are doing a lot of qualifications right now for advanced packaging applications with the big customers, which once they will qualify, and we move to the next steps, we're talking about HBM4 and others, and many applications by Intel, by CoWoS. These qualifications will translate to more business and not just sustainable business in the coming years from advanced packaging for Nova. Okay. How do you see this mix between chemical and optical as you look at how customers are making these investments? For advanced packaging? Yeah. So, today, I would say that, approximately, 10% of the 15 is chemical, and the rest is optical. And, I think that given the qualifications that we are at and the new applications that we see for Optical CD, the opportunity there might be even higher than for growth in the coming years than for this, the chemical metrology. I see. On memory, let's go through the DRAM side first. Mm-hmm. You know, what we hear from the memory companies as is that they are transitioning more of their capacity towards HBM. They're not really adding a lot more wafers per se. Is that what you are seeing also? And like, so how does it benefit you, this, this transition, versus them adding more wafers for, for DRAM? So first of all, this is the case that we see. We just discussed Micron as well. Right. So, you would expect that they would invest heavily, right now in HBM, but this is not necessarily the case. They are just transitioning, capacity. Right. The issue is that during this transition, in an HBM-related DRAM chip, relative to a regular DRAM chip, there are other applications and new applications and new structures- Right ... that you need to do in order, in order for it to be ready for HBM stacking. This includes TSV, this includes flatness of the wafer, which needs- Right ... to be at a different level. These applications are the ones that we are selling the Optical CD tools into. Therefore, despite the fact that it's only migration of capacity, we do see additional business in these areas. All right. You know what? Obviously with HBM, right, it requires like almost 3 times the wafers versus DRAM. So do you think that is helping to kinda help them eat up into the existing supply fast enough? When do you... Let me ask the question this way: When do you think the memory industry will be ready to add new capacity to DRAM? Is it this year? Is it next year? This year. This year you're starting to see. The second half of the year, we should see starting to build, you know, regular DRAM and expand the regular DRAM investments. How fast, how much will fall into this year is yet to be seen. Okay. The challenge with the memory industry that it's, you know, highly sensitive to what's going on in the market. Therefore, the cycle of investment- Right ... is actually very fast. The lead time of the equipment and everything related to it is very, very fast in terms of turn around, but we are ready. I can tell that, that we are ready. Okay. Is there a simple way to look at how your content and opportunity changes as the mix moves more to HBM over time? In terms of quantification of dollar value, I'm not sure we are there yet. But again, these 5% of business which is going into HBM- Right ... is most of it related to HBM, so. Okay. Have you seen a pickup on, NAND yet? No. Actually, no special activity in NAND. We actually do not see also clear plans from the customers in terms of this, of the next step of investment in NAND. It seems like this is, will be more of a 25, 26 play. You know, and on one hand, we're waiting for this, on the other hand, it's good because 2024 will be a great year for Nova, and then we add all these new factors coming in so- Right ... it will help us continue to grow. Okay. Some of the NAND players have, you know, made this linkage to AI, that, you know, AI servers have a lot more NAND also, and that, as enterprises start adopting AI, right, the demand for SSDs is going to grow. You think it's too early to start feeling, you know, comfortable with those drivers, that they are not big enough to matter quite yet? ... I think it's too early. Yes, I agree. Okay. Next thing in terms of the different metrology products, ELIPSON, METRION, and PRISM, right? Can you talk about the evaluation pipeline? Where are you, and is that again more a 25 or 26 growth driver? Mm-hmm. Yes. So actually what is happening right now is that, the industry is very aggressive in terms of concluding the preparations for Gate-All-Around manufacturing. Right. So, we do expect that by the end of this year, most of the qualifications of the production tools and also the process control tools will we need to conclude. Obviously, we are in the midst of this qualification processes- Right ... with all the customers, which are planned to do Gate-All-Around. So, assuming we conclude these evaluations successfully, assuming the Gate-All-Around major investments are starting to happen next year, we will see a significant adoption cycle of these products that you mentioned. By the way, Nova PRISM is also being qualified for additional advanced packaging applications. So, we are quite optimistic that the usage of these technologies, Nova PRISM, ELIPSON, MTERION, will significantly increase next year. Okay. Starting next year. Again, kind of a similar question to what I asked before. Is there a content lift for Nova? Is there a greater opportunity, right, like if you go back to the transition from planar to FinFET, right? As an example, how would you contrast, you know, what we might see in the move from FinFET to Gate-All-Around versus what you saw in the prior transition? Actually, we are very excited about the next transition to Gate-All-Around. We can look at it from several, I would say, directions or vectors. First of all, in the move to Gate-All-Around from FinFET, we expect to see 30% more metrology steps, which is a larger, significantly larger opportunity, you know, as a market for us in process control. On top of that, some of the products that we have, technologies, which include Nova PRISM, METRION, ELIPSEN, are going through the technology adoption cycle within this move, and these products are with high ASP relative, relative to our existing product portfolio. On top of that, when you analyze the customers that are going to go through the Gate-All-Around transition, and there are four customers right now, the usual three suspects, plus one in Japan. In each one of these customers, we already know that we have a better position in terms of the number of technologies that each of these customers is adopting, is higher than in FinFET. In some cases, it's a new customer, like the Japanese one. So, the ripple effect of 30% more business, adoption of technologies and higher position is something we are excited about looking forward. Got it. So you have already seen those Gate-All-Around orders this year? What percentage- Um ... of the business is it today? So first of all, yes, we just issued a press release, I think, one month ago, saying that we received, in parallel, orders from all these four customers. Obviously, these are not the capacity expansion volume orders that we should see in the coming years, but they are initial orders for pilot lines and obviously R&D processes. In terms of how much is Gate-All-Around of our revenue, I'll, I can't disclose, obviously, because it's customer information. There is only one who is really investing in 2024. But all of them are starting. We received orders that will be shipped in the next 12 months, over the course of the next 12 months. And again, it's a significant opportunity for Nova. I see. The reason I asked that, Rohr, is that, you know, we have had Lam say, oh, they will have almost $1 billion, right, of sales. I think, Applied, I think, had actually more than twice of that. Mm-hmm. So is it that your opportunity comes a little later? Is it coincidental? Like, if you were to... I know you haven't disclosed the absolute number- Mm-hmm. But if you look at and work backwards from what those companies are seeing, are you seeing that kind of similar proportional benefit for Nova also, or is that still to come next year? So the answer is yes. But most of our deliveries are in the first half of 2025, which is probably one quarter after, you know, the big guys, the equipment is coming in. Normally, the process control tools are coming a little bit in a lag after the equipment, the process equipment itself. In terms of the booking itself, again, these bookings that we received were initial orders for the first phases. These are not, you know, the capacity expansions, high volume we expect looking forward. Not to go off on a tangent, but is there always a lag that process control sees it a bit later? And where I'm going with that question is that, you know, all these CHIPS Act and all these reshoring and the new fabs that are being built, is process control, an early beneficiary, or, or is it like one step after some of these other, front-end tools are, It depends from which angle you look. So if you look from the angle of how much equipment they are buying in the first, you know, six months of running the fab.... I think process control is beneficial because you buy a little bit more process control to ramp up the capability and so forth. Right. In terms of the timing, it's always a little bit, a little bit afterwards. The way to think about it is on ASML, right? ASML is the first tool in the fab. You put it in, you make it work, and only then you take all the rest of the equipment. So it's more or less, in that context. I see. Do you have any leverage to their adoption of the high-NA EUV tools? I know it comes over a period of time, but now that they are saying that they will start to ship some to all of the leading edge. So is there some benefit to Nova also? In the high-NA, not necessarily, because we are not that strong in the lithography process control. This is an area of where more Applied Materials and KLA are playing, and obviously ASML as well with their process control capability. Okay. One other trend we have seen is front-end tools being converted for back-end. What is Nova doing in that business? And is that accretive overall to your business model? Yes. So actually, we have been waiting for a long time for this process to happen because the technologies that we are using for front-end or the customers are using for front-end are very advanced, relatively high ASP relative to the normal metrology, which you use in the packaging and advanced packaging. So we have been waiting for a long time for the evolution of advanced packaging, it's packaging to be in a way that will require some front-end equipment. And that's a good point because three years ago, Nova had almost zero revenues in advanced packaging, and today it's 15%. Also, because of the adoption of front-end Optical CD tools, mainly Nova PRISM, integrated into the advanced packaging arena. So we are already enjoying that. Right. We expect that to increase with more applications and more business. At the end of the day, we're using more or less the same equipment that we sell for front end for these back-end processes, meaning the pricing is good, gross margins are good. Normally, it's the same customers- Right ... buying practically the same equipment for front end and back end. So, definitely we enjoy that, including pricing and good gross margins. Okay. I had one other question on HBM. You know, we have seen a number of these GPU companies now spell out that they are going to accelerate their product cadence, right, to 1 year from what used to be 2 years. And a part of that seems to be the move towards, you know, better and faster HBM, right? Every year from 8-high to 12-high stacks, HBM4 after that. How does your opportunity change as they move to these denser HBM cubes, and then they move to HBM4? So the way it works, and we have learned that in the V-NAND arena, right, they're doing stacks of not chips, but structures, is that as much as you add more stacks, you need the accuracy of the lower-level stacks and the whole structure to be better. Right. If you don't improve the accuracy and so forth, it just doesn't work. In that context, what we expect is as the industry is stacking more chips on top of the other as part of the HBM evolution, the requirements and the accuracy requirements from each chip will become higher, and this is obviously a good environment for our dimensional and material measurements capabilities. Okay. Two questions on financials. One is, you know, last year, revenues were a little bit over $500 million or so, but, you know, Nova has this plan laid out for the march to $1 billion- Mm-hmm ... or so. How confident are you about that plan? When, when do you think, you know, you'll have line of sight to the, to those kind of revenue levels? And how much of that is organic versus inorganic? So, you are correct that, this plan is aggressive. We, our plan is to move for $500 million in 2023 to $1 billion in 2027. This is four years, doubling the revenues in the semiconductor, arena. So that's one thing. It is an aggressive plan. We believe we have the building blocks to do it, but, we need to execute in that context. I think the good thing is that when we look at the different building blocks that we need in order to execute, this plan, we have two elements. One is the technologies and the product portfolio. And, sorry, three, and second is the market, and when will the market meet these technologies? And the third is obviously infrastructure, manufacturing facilities. Still, this is doubling the revenues of the company. I think in all of these elements, things are already organized in the right manner. The ELIPSON, the METRION are in their final phases of entering the markets. In terms of market meeting technology, we have these transitions of Gate-All-Around, which will help with the adoption of these technologies. In terms of infrastructure, by the end of this year- Right ... we will already have all the manufacturing capacity in order to meet this strategic plan. Our goal is to cross the $800 million revenue mark, organically, and on top of that, add between $150 million-$200 million of M&A, and execute the strategic plan by 2027. Got it. On that optimistic note, thank you so much, Dror. Really appreciate it, and good luck in your next adventure. And now I think Guy has to execute- Yes ... on the billion-dollar plan. Yes. It should be, I'm sure it- He was part of planning it and strategizing it, so. Excellent. Now, executing it. Exactly. All right. Thank you. Thank you so much. Thank you, Vivek.