ACM Research Inc (ACMR) 2017 Q3 法說會逐字稿

Welcome to the ACM Research Third Quarter 2017 Earnings Conference Call.

歡迎參加 ACM Research 2017 年第三季財報電話會議。

(Operator Instructions)

（操作員說明）

I must advise you that this conference is being recorded today, December 7, 2017.

我必須通知您，本次會議將於今天（2017 年 12 月 7 日）進行錄製。

I would now like to hand the conference over to your first speaker today, Mr. Gary Dvorchak.

現在我想將會議交給今天的第一位發言者，加里·德沃查克 (Gary Dvorchak) 先生。

Thank you for joining us on ACM's Conference Call. We'll provide a business update as well as discuss the company's financial results. We released third quarter 2017 results earlier today and they're available on the company's website as well as from these wire services.

感謝您參加我們的 ACM 電話會議。我們將提供業務更新並討論公司的財務表現。我們今天稍早發布了 2017 年第三季業績，這些業績可在公司網站以及這些通訊社上取得。

On the call with me today are Dr. David Wang, President and Chief Executive Officer, and Mr. Min Xu, Chief Financial Officer.

今天與我通話的有總裁兼執行長王大衛博士和財務長徐敏先生。

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act in 1995. Forward-looking statements involve inherent risks and uncertainties. And such, the company's results may be materially different from the views expressed today.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，該公司的結果可能與今天表達的觀點有重大差異。

Further information regarding this and other risks and uncertainties is included in the company's perspectives and other documents filed with the U.S. Securities and Exchange Commission. ACM does not assume any obligation to update any forward-looking statement expect as required under applicable law. Please note that unless otherwise stated all figures mentioned during the conference call are in U.S. dollars.

有關此風險和其他風險和不確定性的更多資訊包含在該公司向美國證券交易委員會提交的觀點和其他文件中。 ACM 不承擔根據適用法律的要求更新任何前瞻性聲明的義務。請注意，除非另有說明，電話會議中提到的所有數字均以美元為單位。

With that, let me know turn the call over to our CEO, David Wang. David?

接下來，請讓我將電話轉給我們的執行長 David Wang。大衛？

Thanks to everyone for joining our first earning call. ACM story maybe relatively new to many of you. So, I will give you an overview of the quarter and provide updated business operations followed by some strategic comments. I will then hand over the call to over to Min, our CFO, to review our financial results.

感謝大家參加我們的第一次獲利電話會議。 ACM 的故事對你們中的許多人來說可能相對較新。因此，我將向您介紹本季度的概況，並提供最新的業務運營情況，然後是一些策略評論。然後我會將電話轉交給我們的財務長 Min，以審查我們的財務表現。

First of all, we're excited now that we have successfully completed our IPO and private placement last month, raising about 20 million to help fuel our future growth. The public offering of our stock market key milestone to our company's history. It also demonstrates our commitment to our customer.

首先，我們很高興我們上個月成功完成了 IPO 和私募，籌集了約 2000 萬美元，以幫助推動我們未來的成長。我們股票市場的公開發行是我們公司歷史上的重要里程碑。這也體現了我們對客戶的承諾。

We now have more resource to drive product innovation, world-class service and we believe our financial disclosure will help build the confidence, is that the ability of our business, we are positioned to grow and intend to be major global player in semiconducting manufacturing equipment, producing the most effective way wafer cleaning tools which will enable our customer to achieve higher yields and better return on their prior investments.

我們現在擁有更多資源來推動產品創新和世界一流的服務，我們相信我們的財務揭露將有助於建立信心，即我們的業務能力，我們有能力發展並打算成為半導體製造設備的全球主要參與者，生產最有效的晶圓清潔工具，這將使我們的客戶獲得更高的產量和更好的先前投資回報。

Since our story is new for many of you, I would like to spend a minute to discussing our technologies. We have a strong competitive position because of our differentiated technology and product offerings. The foundation of our differentiations is our innovative proprietary space alternate phase shift or SAPS for short and timely energized bubble oscillation or TEBO technologies. Both of them, technology, control how energy and put into megaphonic cleaning process thus, reducing the change that a cleaning would damage a wafer structure.

由於我們的故事對你們中的許多人來說都是新的，因此我想花一點時間討論我們的技術。由於我們提供差異化的技術和產品，我們擁有強大的競爭地位。我們差異化的基礎是我們創新的專有空間交替相移或 SAPS，用於短時且及時的通電氣泡振盪或 TEBO 技術。這兩種技術都控制能量如何投入清洗過程中，從而減少清洗損壞晶圓結構的變化。

With better control comes greater cleaning efficiency which improves yield. We have been shipping tools based on SAPS for some time. We are now adjusting ramping the TEBO based tools.

更好的控制帶來更高的清潔效率，從而提高產量。我們推出基於 SAPS 的工具已有一段時間了。我們現在正在調整基於 TEBO 的工具的升級。

Okay. Let's return to the quarterly operation highlights. In Q3, our Ultra C TEBO Model 2 tool was qualifying and used there in production line and leading foundry and large group of customers. TEBO is designed to provide effective damage free cleaning for both measure 2D wafers and advance 3D patterns wafers. Our TEBO wafer cleaning services provide industry the most advance solutions for -- from IT manufacturing's. We believe the market for this tool will be developed rapidly.

好的。讓我們回到季度經營亮點。在第三季度，我們的 Ultra C TEBO Model 2 工具通過了資格認證，並在生產線、領先的鑄造廠和大型客戶群中使用。 TEBO 旨在為測量 2D 晶圓和高級 3D 圖案晶圓提供有效的無損傷清潔。我們的 TEBO 晶圓清洗服務為 IT 製造業提供業界最先進的解決方案。我們相信該工具的市場將會迅速發展。

In addition, our Ultra C SAPS V tools are gaining attraction in the marketplace. Several of this tool were successfully deployed and are both leading memory chip producer in career and the new memory chip produced in China. The SAPS V tool is equipped with a 12 single wafer cleaning chambers and a can holder and using model chemicals. This helps increase the efficiency and thus, the throughput of the cleaning process step.

此外，我們的 Ultra C SAPS V 工具在市場上越來越有吸引力。其中幾個工具已成功部署，並且都是職業生涯中領先的記憶體晶片生產商和中國生產的新型儲存晶片。 SAPS V 工具配備 12 個單晶圓清潔室和一個罐架，並使用模型化學品。這有助於提高效率，從而提高清潔製程步驟的吞吐量。

Now, I would now like to make some strategic comments before I turn the call over the Min for the financial results. We are optimistic about our business perspectives due to the several factors. First, semiconductor are foundation of digital technology and applications. Shipments are expected will reach 1 trillion units in 2018 due to a continued migration of computing, networking and storage to the Cloud and raising trends of the independent, autonomous vehicle and robotics.

現在，在將財務表現轉交給 Min 之前，我想發表一些策略評論。由於多種因素，我們對我們的業務前景感到樂觀。首先，半導體是數位技術和應用的基礎。由於運算、網路和儲存持續向雲端遷移，以及獨立、自動駕駛汽車和機器人技術的發展趨勢，預計 2018 年出貨量將達到 1 兆台。

Second, is our China opportunity. According to the industrial data source, China's share of the worldwide semiconductor manufacturing capacity expanded from 7.3% in 2006 to 12.7% in 2015. And the current semiconductor manufacturing revenue increased at a compound gross rate of 17.6% over the 10-year period ending in 2015.

第二，是我們中國的機會。產業數據顯示，中國在全球半導體製造產能的份額從2006年的7.3%擴大到2015年的12.7%。截至2015年的10年間，目前半導體製造收入的複合毛利率增加了17.6%。2015年。

In 2006, we established our operational center in Shanghai and we currently conducted most of our development and the manufacturing activity in China. Our Shanghai operation position us near potential customer in not only China but also Taiwan, Korea and throughout Asia, giving us increased access to those customers and reducing shipping manufacturing cost for agreement they purchase.

2006 年，我們在上海設立了營運中心，目前大部分開發和製造活動都在中國進行。我們的上海業務使我們不僅靠近中國，而且還靠近台灣、韓國和整個亞洲的潛在客戶，使我們能夠更多地接觸這些客戶，並降低他們購買協議的運輸製造成本。

Additionally, the Chinese government is implementing a policy to create any support and independent semiconductor supplier chain spending from design to final production. The policy including stabilized investment of funding. Third, semiconductor capital equipment keep growing. According to their research firm, SEMI, equipment spending expected to grow up to 49 billion this year, which is 23% growth then another 80% growth in 2018.

此外，中國政府正在實施一項政策，以創造從設計到最終生產的任何支援和獨立的半導體供應鏈支出。該政策包括穩定資金投入。三是半導體資本設備持續成長。據他們的研究公司 SEMI 稱，今年設備支出預計將成長至 490 億美元，增幅為 23%，2018 年將再成長 80%。

Furthermore, according to transparency market research, the global market for single wafer cleaning agreement total of 2.6 billion in 2015 and expect to increase to estimate of 3.7 billion in 2020, a gross rate of 6.8% annually. Due to this driving force, we're excited about our opportunity. We believe we are positioned to capture market share and achieve suspended long-term growth. Our team is focused on excluding our bill strategy to provide our customers with high value high quality products.

此外，根據透明度市場研究，2015年全球單晶圓清洗協議市場總額為26億美元，預計2020年將增加至37億美元，年增率為6.8%。由於這種驅動力，我們對我們的機會感到興奮。我們相信，我們有能力佔領市場份額並實現長期成長。我們的團隊專注於排除我們的帳單策略，為我們的客戶提供高價值的高品質產品。

With that, I would now turn the call over the Min to discuss our Q3 financial results.

現在，我將把電話轉交給 Min，討論我們第三季的財務表現。

Let me walk you through our Q3 financial results. Keep in mind that we're referring to non-GAAP figures for three months ending September 30th unless I say otherwise.

讓我向您介紹我們第三季的財務表現。請記住，除非我另有說明，否則我們指的是截至 9 月 30 日的三個月的非 GAAP 數據。

Our non-GAAP financials exclude stock based compensations. Q3 revenue of $4.9 million was essential flat with the prior period. Advance packaging equipment sales were down but we offset that with growth in our single wafer cleaning tool sales.

我們的非公認會計準則財務數據不包括以股票為基礎的薪酬。第三季營收為 490 萬美元，與上一季基本持平。先進封裝設備銷售額下降，但我們透過單晶圓清潔工具銷售額的成長抵消了下降。

Q3 year-to-date revenue of 19.3 million was up 48.3%. This increase was largely due to a higher shipment volume of cleaning tools in the first half of this year. Q3 gross margin of 45.1% was down from 59.5% a year ago but above our normal gross margin of 40%. The year ago quarter was exceptional due to the sales of one of our cleaning tools set at unusually high margin, something we do not expect to happen again.

今年第三季迄今的營收為 1,930 萬美元，成長 48.3%。這一增長主要是由於今年上半年清潔工具的出貨量增加。第三季毛利率為 45.1%，低於去年同期的 59.5%，但高於我們 40% 的正常毛利率。去年同期的情況非常特殊，因為我們的一種清潔工具的銷售利潤率異常高，我們預計這種情況不會再發生。

In general, gross will often vary due to the mix of products and manufacturing utilization. Our previous expenses in the quarter was $3.2 million up from $2.1 million in the same quarter last year. The higher operating expense was due to higher R&D spending. More spending customer support and the cost of preparing for the IPO. Operating loss in Q3 was $1.0 million which compares to operating income of $.08 million a year ago.

一般來說，總金額通常會因產品組合和製造利用率而有所不同。我們本季先前的支出為 320 萬美元，高於去年同期的 210 萬美元。營運費用增加是由於研發支出增加。更多花費客戶支援和IPO準備成本。第三季的營業虧損為 100 萬美元，而去年同期的營業收入為 08 萬美元。

Non-GAAP net loss for the first quarter -- well, for the third quarter was $.06 million was compared to net income of $0.4 million a year ago. Net loss for the first nine months of 2017 was $2.0 million compared to the breakeven net income in the same period last year. The net loss of the nine-month was due to higher operating expenses associated with R&D, services and the cost of IPO preparation.

第一季非 GAAP 淨虧損——嗯，第三季淨虧損為 60 萬美元，而去年同期淨利潤為 40 萬美元。與去年同期的損益平衡淨利相比，2017 年前 9 個月的淨虧損為 200 萬美元。這九個月的淨虧損是由於與研發、服務和IPO準備成本相關的營運費用增加。

Let me briefly touch on developments in our ownership structure. In Q3, we acquired 18.8% of equity in our Shanghai subsidiary, bringing our ownership to 81.6%. In October, we completed an auction process on the Shanghai United Assets and Equity Exchange, also known as SUAEE. This process resulted in agreement between us and the sellers to acquire the remaining 18.4% and thus completely own our Shanghai operations.

讓我簡單介紹一下我們所有權結構的發展。第三季度，我們收購了上海子公司18.8%的股權，持股比例達81.6%。 10 月，我們在上海聯合產權交易所（也稱為 SUAEE）完成了拍賣程序。在此過程中，我們與賣方達成協議，收購剩餘的 18.4% 股份，從而完全擁有我們在上海的業務。

Due to the IPO, our balance sheet is strong. Of course, the September 30 balance sheet did not reflect the IPO. We have $17 million in cash as of quarter end. Subsequent to the quarter, we spent more than $14 million to acquire the remaining outstanding 18.4% equity of our Shanghai subsidiary. In November, we successfully completed IPO for aggregated gross proceeds of $20 million. As of December 1st, our cash position was $20 million.

由於首次公開募股，我們的資產負債表很強勁。當然，9月30日的資產負債表並沒有反映IPO的情況。截至季末，我們擁有 1700 萬美元現金。本季結束後，我們花了超過 1,400 萬美元收購了上海子公司剩餘的 18.4% 股權。 11 月，我們成功完成 IPO，募集資金總額達 2,000 萬美元。截至 12 月 1 日，我們的現金部位為 2,000 萬美元。

With that, I will now turn the call back to David to discuss the Q4 outlook.

現在，我將把電話轉回給 David，討論第四季的前景。

First, let me briefly review our revenue recognition policy which matters to how interpret our guidance. If we ship a new tool or just go to a new customer, we recognize revenue, our acceptance by the customer. For repeat order, we recognize revenue upon shipment. To illustrate the impact of this policy, in the first three quarters of 2017, we shipped 23 million of equipment. Yet, only 60 million of those shipments have been recognized as revenue. The difference there is tools not yet accepted.

首先，讓我簡要回顧一下我們的收入確認政策，這對於如何解釋我們的指導至關重要。如果我們發布新工具或只是去找新客戶，我們就會確認收入，也就是客戶對我們的接受。對於重複訂單，我們在發貨時確認收入。為了說明這項政策的影響，2017年前三季度，我們的設備出貨量為2,300萬台。然而，其中只有 6000 萬件被確認為收入。差別在於工具尚未被接受。

So, for Q4, we project a revenue in a range of 11 to 12 million. However, we have one more tool in acceptance testing that might be recognize in the quarter. If accepted, this would resulting revenue higher than this range.

因此，對於第四季度，我們預計營收將在 1.1 至 1200 萬美元之間。然而，我們還有一個驗收測試工具可能會在本季度得到認可。如果被接受，這將導致收入高於此範圍。

Now, let's open the call for any questions that you may for us. Operator, please go ahead.

現在，讓我們開始通話，詢問您可能向我們提出的任何問題。接線員，請繼續。

(Operator Instructions)

（操作員說明）

Suji DeSilva from Ross Capital.

羅斯資本 (Ross Capital) 的蘇吉·德席爾瓦 (Suji DeSilva)。

Can you talk about the demand environment you're seeing in the SemiCap environment generally and the visibility into the orders that you have at this point?

您能否談談您在 SemiCap 環境中看到的整體需求環境以及您目前所擁有的訂單的可見性？

You're talking about general market, Suji?

你說的是一般市場嗎，Suji？

Yes. The SemiCap. Yes. The SemiCap equipment market.

是的。半資本。是的。 SemiCap 設備市場。

Well, again as I mentioned, is this year, the semi equipment expanding quite a bit, all right, almost a total of 49 billion. And I see that trend continue to grow and the major driver is all this AI application, autonomous vehicle and robotics and we see that trend continuously or I can see that in China, we got more fab build up here.

嗯，正如我再次提到的，今年，半設備擴大了很多，好吧，幾乎總共 490 億美元。我看到這種趨勢繼續增長，主要驅動力是所有這些人工智慧應用、自動駕駛汽車和機器人技術，我們不斷看到這種趨勢，或者我可以看到在中國，我們在這裡建立了更多的晶圓廠。

And what -- which is a number of our next four or five-year, probably 42% of that is going to build in China in that real mega semiconductor company excited, right, as our new SAPS, new demand and the new requirement. So, we like to see that happen and it's really exciting for everybody in the SemiCap market.

我們接下來的四年或五年，可能有 42% 的專案將在中國建設，那家真正的大型半導體公司令人興奮，因為我們的新 SAPS、新需求和新要求。因此，我們希望看到這種情況發生，這對 SemiCap 市場的每個人來說都非常令人興奮。

Can you talk about on the financial side of the gross margin here, the trend you're expecting, should it be a stable level? Is there any puts and takes that might cause it to expand in the next few quarters?

您能否談談毛利率的財務方面，您預期的趨勢，應該是穩定的水平嗎？是否有任何看跌期權和看跌期權可能會導致其在未來幾季內擴張？

I think gross margin were still in a range about 40% range wise. And obviously for the small company and we want penetrate to the market, right. And pricing wise, we have the balance between the penetration speed versus our gross margin.

我認為毛利率仍然在 40% 左右。顯然，對於小公司來說，我們希望滲透到市場，對吧。在定價方面，我們在滲透速度與毛利率之間取得了平衡。

And our goal is to try to increase gradually our gross margin and temporarily quarter base, it really depend on the customer new customer penetration strategy, it may vary. However, looking long-term with the overall mutual or more captured market and also with the TEBO to be more our operator market, we see that gross margin what we consider to increase.

我們的目標是嘗試逐步增加我們的毛利率和暫時的季度基數，這實際上取決於客戶的新客戶滲透策略，可能會有所不同。然而，從長遠來看，整個共同市場或更多佔領市場以及 TEBO 更多地成為我們的營運商市場，我們認為我們認為毛利率會增加。

Our ultimate goal is above 45% and for next probably two to three-year and that's our goal right now.

我們的最終目標是在未來兩到三年內達到 45% 以上，這就是我們現在的目標。

And then in the press release for the earning, you talked about a TEBO customer, is that a second customer or is that the same customer? Is that a new customer to ACM or is that an existing customer? And just want to understand how that's -- the tracking initially.

然後在財報新聞稿中，您談到了 TEBO 客戶，這是第二個客戶還是同一個客戶？這是 ACM 的新客戶還是現有客戶？只是想了解這是怎麼回事——最初的跟踪。

That is still exist customers happen in Q3, right, probably in a roadshow. We mentioned that why in the roadshow too. Actually, materialized in the Q3. That's their same customer.

這仍然是存在的客戶在第三季度發生的情況，對吧，可能是在路演中。我們在路演中也提到了這個原因。實際上，在第三季度實現了。那是他們的同一個客戶。

And then, lastly, can you update us on the competitive landscape and talk about if there's any changes you're seeing in the competitive landscape? Thank you.

最後，您能否向我們介紹一下競爭格局的最新情況，並談談您在競爭格局中看到的變化嗎？謝謝。

Again, semiconductor technology is not changing daily, right. Any new fundamental technology usually take time, takes innovation. And I couldn't see any now, the new changing this moment. However, I do see the people really looking for removing small particle and no matter is 49 and even down to 10, seven 5 nano, the people's concern is if those small particle can eliminate but not a complete remove, you'll suffer from yield, right.

再說一遍，半導體技術並不是每天都在變化，對吧。任何新的基礎技術通常都需要時間、需要創新。現在我看不到任何新的變化。然而，我確實看到人們真正尋求去除小顆粒，無論是49奈米，甚至低至10、7、5奈米，人們擔心的是，如果這些小顆粒可以消除但不能完全去除，你會受到良率的影響， 正確的。

The most case of the CMD for instance. The particle, fine particle even cleaned from those particle story, that will impact your process staff for -- will impact the yield.

大多數情況以CMD為例。顆粒、細顆粒甚至從這些顆粒故事中清除，這將影響您的製程人員—將影響產量。

Also, after additive you have this structure pattern, a change of year, you have a particle insight that this is a changed area if you cannot clean it well will impact your yield either. So, I feel that trying to continues going on and also, we'll see more demands from our customer try to remove the small fine particles. Which is really -- that's our two technology steps and the TEBO addressing, right.

另外，在添加劑之後，你有這個結構模式，年份的變化，你有一個顆粒洞察力，這是一個變化的區域，如果你不能很好地清潔它也會影響你的產量。因此，我覺得我們會繼續努力，我們會看到客戶提出更多要求，試圖去除細小顆粒。這確實是——這就是我們的兩個技術步驟和 TEBO 尋址，對吧。

So, let me repeat again, our steps of driving the flatter wafer typical after CMD before the position. And then our TEBO could mean the patent wafer will stress in the upper additive in the wafer, you have this residue inside the trench. So, we see that both tool will be more needed for the industry. Again, for the yield improve, most people consider economy factor when moving to their new generation.

因此，讓我再次重複一下，在 CMD 之後、在該位置之前驅動更平坦晶圓的典型步驟。然後我們的 TEBO 可能意味著專利晶圓將在晶圓的上部添加劑中產生應力，並且在溝槽內有這種殘留物。因此，我們認為產業將更需要這兩種工具。同樣，為了提高產量，大多數人在轉向新一代時都會考慮經濟因素。

And so, I'm happy to see that happen, which we try continuously and then we'll prepare ourselves to catch this market.

因此，我很高興看到這種情況發生，我們會不斷嘗試，然後準備好抓住這個市場。

Christian Schwab from Craig-Hallum Capital.

來自 Craig-Hallum Capital 的 Christian Schwab。

On the TEBO based tools and in the opportunity for this to develop rapidly you guys have been talking about, can just give us -- do you feel comfortable to give us an idea yet about what the revenue range for that toolset could be three to five years out if it was, say, just modestly successful to very successful?

關於基於 TEBO 的工具以及您一直在談論的快速發展的機會，您是否願意給我們一個關於該工具集的收入範圍可能是三到五個的想法幾年後，它是否會從適度成功到非常成功？

Christian, how to give you really detail number. Let me give you what's the standard so far, right. We have one TEBO tool has been qualified by one customer in China in the production. We say about four of this tool has evolved. And typically this technology for the most of the people knows this takes a long time to evaluate.

克里斯蒂安，如何給你一個真正詳細的號碼。讓我告訴你到目前為止的標準是什麼，對吧。我們有一款TEBO工具已經通過中國一位客戶的生產鑑定。我們說這個工具已經進化了大約四個。通常大多數人都知道這項技術需要很長時間來評估。

So, I estimate those TEBO probably will finish their evaluation process within a year or two in that time lime. So, with that qualification and especially when our customer finding this kind of TEBO can really count a year, operational patent structure and that will really help the market grow for taking in this tool.

所以，我估計那些 TEBO 可能會在一兩年內完成他們的評估過程。因此，有了這個資格，特別是當我們的客戶發現這種 TEBO 可以真正計算一年、可操作的專利結構時，這將真正有助於市場採用該工具的成長。

And definitely, as I mentioned in a previous phone call -- I mean, answer to Suji, are people concerned about particle in the patent structure in here, right, especially also in a 3D app. And all this concern is there and also our customer identify those particle is going to cure you. So, that demand we see there.

當然，正如我在之前的電話中提到的——我的意思是，回答 Suji 的問題，人們關心這裡的專利結構中的粒子，對吧，尤其是在 3D 應用程式中。所有這些擔憂都存在，我們的客戶也認為這些顆粒會治癒您。所以，我們在那裡看到了這種需求。

But as a matter of fact, how fast deploy our tool also how fast our customer to test recognize this technology. Plus meanwhile, we're going to continue find tune our process, fine tune our core technology. That will be real determining how fast the technology going on.

但事實上，部署我們的工具的速度有多快，我們的客戶測試認可這項技術的速度有多快。另外，同時，我們將繼續調整我們的流程，微調我們的核心技術。這將真正決定技術發展的速度。

You're asking my opinion for the next five years, definitely, I'd say the tool will be needed and there it's hard for me to come up for the real number, right. And however, I should say, probably in my mind, within five years, that revenue can be maybe 30% of the total revenue of our cleaning tool, that's possible. The reason for that is this tool sell more high pricing. And also, we need more tool around the same process for a process step.

你問我對未來五年的看法，當然，我會說將需要該工具，但我很難得出真實的數字，對吧。然而，我應該說，可能在我看來，五年之內，收入可能會達到我們清潔工具總收入的30%，這是可能的。原因是這個工具的售價更高。而且，對於同一流程，我們需要更多工具來完成流程步驟。

So, again Chris, I couldn't give you magic number at this moment. But they're tool provider and we want to do our best to service the industry and also we want to really solve their constant problem, and that's our intention.

所以，克里斯，我現在無法給你一個神奇的數字。但他們是工具提供者，我們希望盡最大努力為產業服務，我們也希望真正解決他們一直存在的問題，這就是我們的意圖。

As you guys look into your visibility into the Chinese market in '18 and '19, are you seeing any signs that they give you greater confidence of previous spending trends continuing or are they just kind of progressing I guess as advertised?

當你們審視 18 和 19 年中國市場的情況時，你們是否看到任何跡象表明它們讓你們對之前的消費趨勢持續更有信心，或者我認為它們只是像廣告中所宣傳的那樣取得了進展？

You mean, the China market, right. And again --

你指的是中國市場，對吧。然後再次 -

Right.

正確的。

-- yes. There's quite a trend going on China. You look in the recent, there's -- I can tell you only part of the information. One PC is announcing their tremendous progress for a 32-layer 3D map, right. So, they're going to quickly put that into production. And obviously, their future can be divided into four layer of the 3D map.

- 是的。中國有一個相當大的趨勢。你看看最近的情況，我只能告訴你部分資訊。一台 PC 正在宣布他們在 32 層 3D 地圖方面取得了巨大進展，對吧。因此，他們將迅速將其投入生產。顯然，他們的未來可以分成四層的3D地圖。

I see that trend going very well. The announcement will say that their -- piece of their time schedule even ahead of time. So, that's really exciting news for us. That's going to be one of the major revenue quarter driving force for us. Meanwhile, I can see [quality of fab is on] schedule. I can probably get a tool coming to their fab in the next -- probably, I should say, July, June timeline. So, that will keep going.

我認為這種趨勢進展順利。該公告甚至會提前說明他們的時間表。所以，這對我們來說確實是令人興奮的消息。這將成為我們季度收入的主要推動力之一。同時，我可以看到[晶圓廠的質量已達標]進度。我可能會在接下來的時間裡將工具送到他們的工廠——我應該說，可能是七月、六月的時間表。所以，這將繼續下去。

Obviously, some other fab, we'll probably going to see as some might have seen recently their bigger news. You look in there, in the internet, whatever website that Imagination team getting through the ball, our technical power and technical people getting in, I can see that also their tremendous increase for their 4D technology advance and also in 28 nano deployments too.

顯然，我們可能會看到其他一些晶圓廠，因為有些人最近可能已經看到了他們的更大新聞。你看看網路上的任何網站，無論 Imagination 團隊透過什麼網站，我們的技術力量和技術人員進入，我都可以看到他們在 4D 技術進步以及 28 奈米部署方面的巨大進步。

All the three major China customer is real -- well may call a good opportunity. Meanwhile, there's another customer gets behind it, they're also building SAPS and they also almost finish their SAPS or construction. And base their plan, there are -- they said by Q4, they're going to build it starting -- moving into '18 and then we'll be starting make the -- advance their dealing process in the lab SAPS.

這三大中國客戶都是真實的——這或許是一個很好的機會。同時，還有另一個客戶在背後支持，他們也在建立 SAPS，也幾乎完成了 SAPS 或建置。根據他們的計劃，他們說，到第四季度，他們將在 18 年開始建造它，然後我們將開始在實驗室 SAPS 中推進他們的交易流程。

And again that's real, this customer we see that, bigger good news for us. And meanwhile, we are also expanding our new customer base in Taiwan, right, also other new customer we're targeting right now in China. And plus, also, we're actively searching opportunity in Northern America and for the customer there too.

這又是真的，我們看到這個客戶，這對我們來說是更大的好消息。同時，我們也在擴大我們在台灣的新客戶群，對吧，還有我們現在在中國瞄準的其他新客戶。此外，我們也在北美積極尋找機會並為那裡的客戶尋找機會。

So, it's a real exciting year for us, next one, two years. Obviously, maybe next three years with a lot of good opportunity happen in Asia and in China, Korea and Taiwan.

所以，對我們來說，這是真正令人興奮的一年，接下來的一年、兩年。顯然，也許未來三年亞洲以及中國、韓國和台灣會出現許多好機會。

(Operator Instructions)

（操作員說明）

Mark Miller from Benchmark.

來自 Benchmark 的馬克米勒。

I'm just wondering if you could review for both your TEBO and SAPS tool currently opportunities, where you're in and new evaluations and what type of customers?

我只是想知道您是否可以回顧一下您的 TEBO 和 SAPS 工具目前的機會、您所處的位置、新的評估以及哪種類型的客戶？

Again, at the moment, probably customer information, I couldn't really disclose that. Part of the reason is whenever accommodation agreement with a customer. And this moment, I said that we have one in production. We still have four in various production, right. This cover the balance of the business and also with the master memory and with the advance 3D map company and funding too.

再說一次，目前，可能是客戶訊息，我無法真正透露。部分原因是與客戶簽訂住宿協議時。這一刻，我說我們正在生產一個。我們還有四個處於不同的生產狀態，對吧。這涵蓋了業務的平衡以及主記憶體以及先進的 3D 地圖公司和資金。

So, we see that, I should say, a very good, select the customer. We're working close with them. And we're trying to do our best to speed up those evaluation. However the process take time. So, as I mentioned before, we're being expecting maybe next 12 months and the 23 months is our timeline for our customer to finish our evaluation. So, that's probably the information I can disclose right now.

所以，我應該說，我們看到，一個非常好的選擇客戶。我們正在與他們密切合作。我們正在盡力加快這些評估的速度。然而這個過程需要時間。因此，正如我之前提到的，我們預計可能會在接下來的 12 個月內完成，而 23 個月是我們客戶完成評估的時間表。所以，這可能就是我現在可以透露的資訊。

That was four customers for the -- four evaluations for the TEBO tool. What about the SAPS tool, any new evaluations there?

這是四位客戶對 TEBO 工具進行了四次評估。 SAPS 工具怎麼樣，有什麼新的評估嗎？

SAPS tools -- and again the SAPS tool continuous to get a more attention from the customer too because SAPS is basically -- we are removing the small particle for their flat surface, right. And I see that our leading, I should say, prior customer with demand, they want to clean small particle, fine particle. And those fine particle is real the matter to impact the yield.

SAPS 工具——SAPS 工具也不斷獲得客戶的更多關注，因為 SAPS 基本上是——我們正在去除其平坦表面的小顆粒，對吧。我看到我們的領先客戶，我應該說，有需求的先前客戶，他們想要清潔小顆粒、細顆粒。而那些細小的顆粒才是真正影響良率的問題。

So, our SAPS is real engage to clean those small participles, right. We have a very good data for the 90 nano particle above, removing our PIE efficiency. And we're really outstanding, right, their supplies, they really like our data.

所以，我們的 SAPS 確實致力於清潔這些小顆粒，對吧。對於上面的 90 奈米顆粒，我們有非常好的數據，除去我們的 PIE 效率。我們真的很出色，對吧，他們的供應，他們真的很喜歡我們的數據。

So, again, as people migration to the real advanced leads and those SAPS will continue exploring their application and also play their key factor or key role to enhance their yield.

因此，再次強調，隨著人們遷移到真正的高級銷售線索，這些 SAPS 將繼續探索其應用程序，並發揮其關鍵因素或關鍵作用來提高其產量。

Any response from your competitors as you continue to penetrate the market?

當您繼續滲透市場時，您的競爭對手有何反應？

Our competitors?

我們的競爭對手？

Has there been any response by your competitors, whether it's pricing or marketing strategies or tool technology? Do you see your competitors changing their position for?

您的競爭對手是否有任何反應，無論是定價、行銷策略還是工具技術？您是否看到您的競爭對手改變了他們的立場？

Well, again, our SAPS and the TEBO has both strong patents. I couldn't say any guy just blatantly copying our product and put in the market, right. So, obviously, our confidence is our technology and there that's the one thing. So, obviously, we're competing right now with we call the Jet Spree, we call the GAP and water vapor freeze technology and clearly, we showed advantage, right. So, that's something we feel confidence.

好吧，我們的 SAPS 和 TEBO 都擁有強大的專利。我不能說有人公然複製我們的產品並投入市場，對吧。所以，顯然，我們的信心在於我們的技術，這是唯一的一件事。所以，顯然，我們現在正在與我們稱之為 Jet Spree 的競爭，我們稱之為 GAP 和水蒸氣冷凍技術，顯然，我們展示了優勢，對吧。所以，這是我們感到有信心的事情。

All the data show we're better. And there are just moments. Again, it's pricing, always pushing by customer. But more importantly is the more in pricing is the performance. So, I think this moment, I think, we do our best, right. Maybe the customer are going to move over their data solving the problem is our priority.

所有數據都顯示我們更好。也只有一些時刻。再說一遍，定價總是由客戶推動的。但更重要的是定價更重要的是性能。所以，我認為這一刻，我們盡了最大努力，對吧。也許客戶會轉移他們的數據，解決問題是我們的首要任務。

And meanwhile, we have to real increase our margins and maintain our margin and then by reducing our manufacture cost and increase our efficiency and also give the reasonable price to our customer, accept our tool.

同時，我們必須真正增加我們的利潤並保持我們的利潤，然後透過降低我們的製造成本並提高我們的效率，並給我們的客戶合理的價格，接受我們的工具。

First of all, tax rate expected for next quarter if you have any guidance there and for 2018 as well as -- I'm assuming the share cap will b around 19.2 million. Will that be the same for basic share capitals diluted for 2018?

首先，如果您有任何指導的話，預計下個季度的稅率以及 2018 年的稅率 - 我假設股份上限約為 1920 萬股。 2018 年稀釋後的基本股本是否也是如此？

For tax rates, our main option -- main operation is in China and we're getting 15% tax rate here. However, because we have NOL. So, our tax expense actually in terms of operation it's not actually the tax payable. It's mostly related to the deferred tax expenses, which depends on our outlook.

對於稅率，我們的主要選擇——主要業務在中國，我們在這裡獲得 15% 的稅率。但是，因為我們有NOL。所以，我們的稅費其實是在營運方面，它其實並不是應交稅費。這主要與遞延所得稅費用有關，這取決於我們的前景。

So, it is hard to predict at this point. But it's hard for us to give you any color on that other than that it's difficult to predict. And what's your second part of the question?

因此，目前很難預測。但除了很難預測之外，我們很難給你任何顏色。你問題的第二部分是什麼？

Just share count we can estimate for 2018 will be the same for basically diluted or will there be differences?

我們可以估計 2018 年稀釋後的股票數量將是相同的，還是會有差異？

The share count, I will say if we have a net income, then you should fully -- share roughly 19.2 million shares. And if you have -- if we have a net loss, then you probably should use -- exclude the impact from option and then should be around 15.5 million shares.

股份數量，我會說，如果我們有淨利潤，那麼你應該完全——分享大約 1920 萬股。如果你有——如果我們有淨虧損，那麼你可能應該使用——排除期權的影響，然後應該是大約 1550 萬股。

The same for basic and shares and diluted.

基本股和稀釋股的情況相同。

You're correct.

你是對的。

Yes.

是的。

(Operator Instructions)

（操作員說明）

We don't have any questions as of the moment. Please continue.

目前我們沒有任何問題。請繼續。

Thank you all for participating on today's call and for your support. We appreciate your interest and looking forward to reporting to you again next quarter our progress and outlook of 2018.

感謝大家參加今天的電話會議並給予支持。我們感謝您的關注，並期待下個季度再次向您報告我們 2018 年的進展和展望。

Ladies and gentlemen, that does conclude our call for today. Thank you for participating. You may all disconnect.

女士們先生們，我們今天的呼籲到此結束。感謝您的參與。你們都可以斷開連線。