Advanced Energy Industries Inc (AEIS) 2016 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Advanced Energy Q4 2016 earnings conference call. (Operator Instructions) As a reminder, today's conference is being recorded.

女士們先生們，美好的一天，歡迎來到 Advanced Energy 2016 年第四季度收益電話會議。（操作員說明）提醒一下，今天的會議正在錄製中。

I would now like to turn the call over to Ms. Annie Leschin. Ma'am, you may begin.

我現在想把電話轉給 Annie Leschin 女士。女士，您可以開始了。

Thank you, operator, and good morning, everyone. Welcome to Advanced Energy's fourth-quarter 2016 earnings conference call. With me on today's call are Yuval Wasserman, President and CEO, and Tom Liguori, Executive Vice President and CFO.

謝謝接線員，大家早上好。歡迎參加 Advanced Energy 2016 年第四季度收益電話會議。與我一起參加今天電話會議的有總裁兼首席執行官 Yuval Wasserman 和執行副總裁兼首席財務官 Tom Liguori。

By now, you should have received a copy of the earnings release that was issued yesterday afternoon. For a copy of this release, please visit our website at advancedenergy.com.

到目前為止，您應該已經收到一份昨天下午發布的收益報告。如需本新聞稿的副本，請訪問我們的網站 advancedenergy.com。

Before we begin, I would like to mention that AE will be participating in the Susquehanna Semi, Storage & Technology Summit on March 9 in New York.

在我們開始之前，我想提一下 AE 將參加 3 月 9 日在紐約舉行的 Susquehanna Semi、存儲和技術峰會。

As other events occur, we will make additional announcements. I would like to remind everyone that, except for historical financial information contained herein, matters discussed on this call contain certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Statements that include the terms believe, expect, plan, objective, estimate, anticipate, intent, target, goals or the like should be viewed as forward-looking and uncertain. Such risks and uncertainties include but are not limited to the volatility and cyclicality of the markets we serve; the timing of orders received from our customers; and unanticipated changes in our estimates, reserves, or allowances, as well as other factors listed in our press release. These and other risks are described in Forms 10-Q, 10-K, and other forms filed with the SEC.

當其他事件發生時，我們將發布額外的公告。我想提醒大家，除了此處包含的歷史財務信息外，本次電話會議討論的事項包含某些前瞻性陳述，這些陳述受已知和未知的風險和不確定性的影響，這些風險和不確定性可能導致實際結果與此類明示或暗示的結果存在重大差異聲明。包含相信、預期、計劃、目標、估計、預期、意圖、目標、目標等術語的陳述應被視為前瞻性和不確定性。此類風險和不確定性包括但不限於我們所服務市場的波動性和周期性；從我們的客戶那裡收到訂單的時間；我們的估計、儲備或津貼的意外變化，以及我們新聞稿中列出的其他因素。這些風險和其他風險在向美國證券交易委員會提交的 10-Q 表格、10-K 表格和其他表格中進行了描述。

In addition, we assume no obligation to update the information that we have provided you during this call, including our guidance provided in yesterday's press release. Guidance will not be updated after today's call until our next scheduled quarterly financial release.

此外，我們沒有義務更新我們在本次電話會議中向您提供的信息，包括我們在昨天的新聞稿中提供的指導。在我們下一次預定的季度財務發布之前，今天的電話會議之後不會更新指南。

And, just as a reminder, in today's call, we will refer to both GAAP and non-GAAP results. Non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation, and amortization of intangibles and restructuring costs, as well as acquisition-related costs and other nonrecurring items. A reconciliation of non-GAAP income from operations and per share earnings is provided in the press release table. We will be referring to earnings slides posted on the Investor Relations section of our website.

而且，提醒一下，在今天的電話會議中，我們將同時參考 GAAP 和非 GAAP 結果。非 GAAP 措施排除了非現金相關費用的影響，例如基於股票的薪酬、無形資產攤銷和重組成本，以及與收購相關的成本和其他非經常性項目。新聞稿表中提供了非 GAAP 運營收入和每股收益的對賬。我們將參考發佈在我們網站投資者關係部分的收益幻燈片。

And, with that, I would like to turn the call over to Yuval Wasserman. Yuval?

而且，有了這個，我想把電話轉給 Yuval Wasserman。尤瓦爾？

Thank you, Annie. Good morning, everyone, and thank you for joining us for our fourth-quarter earnings conference call.

謝謝你，安妮。大家早上好，感謝您加入我們的第四季度收益電話會議。

2016 was a standout year for AE. Our focus on enabling breakthrough technologies with our advanced precision power products accelerated our growth and drove exceptional profitability. For the fourth year in a row, we saw sizable, double-digit increases in our revenue and significant acceleration across key financial metrics, boosted by another year of record semiconductor and service revenue. This resulted in $484 million in revenue, $127 million in operating income, and $3.11 in non-GAAP EPS for the year. Our differentiated business model generated over $126 million of cash from continuing operations during the year, allowing us to continue to invest in advanced precision power solutions and explore inorganic opportunities.

2016 年對 AE 來說是傑出的一年。我們專注於通過先進的精密電源產品實現突破性技術，加速了我們的增長並推動了卓越的盈利能力。連續第四年，在又一年創紀錄的半導體和服務收入的推動下，我們的收入實現了兩位數的可觀增長，並且關鍵財務指標顯著加速增長。這導致當年的收入為 4.84 億美元，營業收入為 1.27 億美元，非 GAAP 每股收益為 3.11 美元。我們差異化的業務模式在這一年中從持續經營中產生了超過 1.26 億美元的現金，使我們能夠繼續投資於先進的精密電源解決方案並探索無機機會。

We extended our leadership in existing markets, expanded our distribution channels, and entered new applications. Our pursuit of operational excellence played a crucial role as our manufacturing capabilities responded to the significant increases in demand for our products. By year-end, we were within the range of our non-GAAP EPS aspirational growth of between $3 to $3.50 laid out last January. As a result, more recently announced and new three-year aspirational goals of greater than $800 million in revenue, greater than $4 of non-GAAP EPS, and greater than $350 million in cumulative cash generation.

我們擴大了在現有市場的領導地位，擴大了分銷渠道，並進入了新的應用領域。我們對卓越運營的追求發揮了至關重要的作用，因為我們的製造能力響應了對我們產品需求的顯著增長。到年底，我們處於去年 1 月制定的 3 美元至 3.50 美元的非 GAAP 每股收益理想增長范圍內。因此，最近宣布的新三年宏偉目標是收入超過 8 億美元，非 GAAP 每股收益超過 4 美元，累計現金產生超過 3.5 億美元。

The fourth quarter capped off this exceptional year with total revenue of $135 million, non-GAAP EPS of $1.06, and strong cash generation of $44 million from continuing operations in the quarter. Semiconductor revenue led the way aided by strong service revenue that bucked the trend of the difficult fourth-quarter slowdown. Industrial revenues declined as expected after large third-quarter shipments.

第四季度以 1.35 億美元的總收入、1.06 美元的非 GAAP 每股收益和 4400 萬美元的強勁現金流為本季度的持續經營創造了輝煌的一年。半導體收入在強勁的服務收入的幫助下一路領先，服務收入逆勢而行，扭轉了第四季度艱難的放緩趨勢。在第三季度大量出貨後，工業收入如預期下降。

As the semiconductor wafer fabric equipment industry surged in the fourth quarter and the year, AE semiconductor business followed suit. The accelerated ramp of 3D NAND remained the primary contributor, while the migration to 1X nanometer logic picked up and ramped high volume in the factory. Korean OEMs showed particular strength in the quarter in (inaudible) position, which is enabling the migration to 3D technology.

隨著半導體晶圓佈設備行業在四季度和全年的大漲，AE半導體業務也緊隨其後。3D NAND 的加速增長仍然是主要貢獻者，而向 1X 納米邏輯的遷移在工廠中加速並增加了產量。韓國原始設備製造商在本季度的（聽不清）位置表現出特別強勢，這使得向 3D 技術的遷移成為可能。

As a critical enabler of advanced technology nodes and 3D devices, AE continues to benefit from the additional position and etch process steps required for these types of technology and transitions and applications.

作為先進技術節點和 3D 設備的關鍵推動者，AE 繼續受益於這些類型的技術、轉換和應用所需的額外定位和蝕刻工藝步驟。

Throughout the year, our ongoing investment in next-generation power solutions drove an increasing number of design wins, expanded our market presence, and capitalized on timely market trends. This quarter, we won multiple designs in advanced memory applications, including two substantial wins for PECVD processes for 3D NAND applications.

全年，我們對下一代電源解決方案的持續投資推動了越來越多的設計中標，擴大了我們的市場佔有率，並利用了及時的市場趨勢。本季度，我們贏得了先進內存應用的多項設計，包括 3D NAND 應用的 PECVD 工藝的兩項實質性勝利。

We also won designs for etch applications related to lights and mems for the manufacturing of sensors used in the IOT solutions. In our high-voltage semiconductor business, we won another important (inaudible) power supply design, due to our high reliability, adding to our growing presence in [PChux].

我們還贏得了與照明相關的蝕刻應用設計和用於製造物聯網解決方案中使用的傳感器的 mems。在我們的高壓半導體業務中，由於我們的高可靠性，我們贏得了另一個重要的（聽不清）電源設計，增加了我們在 [PChux] 中不斷增長的影響力。

Advanced memories should continue to drive the majority of our semiconductor business in the first quarter. Strong demand for solid-state drives and growing memory control content for handsets should lead to further expansion of 3D NAND. Early signs of recovery in DRAM spending combined with a buildout of 10 nanometers logic and the development of 7 nanometers and 5 nanometers currently underway, all lead to a positive outlook as we enter 2017.

高級存儲器應該會在第一季度繼續推動我們的大部分半導體業務。對固態硬盤的強勁需求和手機不斷增長的內存控制內容應該會導致 3D NAND 的進一步擴展。DRAM 支出複甦的早期跡象，加上 10 納米邏輯的擴建以及目前正在進行的 7 納米和 5 納米的開發，所有這些都為我們進入 2017 年帶來了積極的前景。

In our industrial markets, while certain areas show signs of recovery during the year, 2016 revenues were relatively flat with 2015. Up to three quarters of sequential growth, industrial revenue declined in the fourth quarter, following a high concentration of major project installations in the third quarter for OLED panel display, solar PV, and glass coating markets. This is typical of many of our industrial (inaudible) markets where investment can be lumpy in nature, leading to fluctuations in revenue.

在我們的工業市場，雖然某些領域在年內出現復甦跡象，但 2016 年的收入與 2015 年相對持平。繼第三季度 OLED 面板顯示器、太陽能光伏和玻璃鍍膜市場的主要項目安裝高度集中之後，第四季度工業收入連續三個季度出現下降。這是我們許多工業（聽不清）市場的典型情況，在這些市場中，投資本質上可能是不穩定的，從而導致收入波動。

In specialty industrial power, we saw a similar trend as revenues softened across our thermal and high-voltage markets due to a combination of cyclical investments, project timing, and delivery schedules.

在特種工業電力方面，我們看到了類似的趨勢，因為周期性投資、項目時間安排和交付時間表相結合，我們的熱力和高壓市場的收入疲軟。

During the quarter, we won a number of designs across the industrial business. In industrial thin films, we had a win in flat-panel display, while the rest of the wins centered around our solar PV business. We won a high capacity crystal and silicon application in China, displacing an incumbent, with a newer SAM AP product that offers advanced power controls to optimize process performance.

在本季度，我們贏得了整個工業業務的多項設計。在工業薄膜方面，我們在平板顯示器方面取得了勝利，而其餘的勝利都集中在我們的太陽能光伏業務上。我們在中國贏得了大容量晶體和矽應用，取代了現有的，具有更新的 SAM AP 產品，該產品提供先進的功率控制以優化工藝性能。

We also won the first phase of a project with a major North American solar company and a PECVD solar cell application. We continue to see increased demand for AE products created by capacity additions for solar cells.

我們還贏得了北美一家主要太陽能公司的一期項目和 PECVD 太陽能電池應用。我們繼續看到太陽能電池產能增加對 AE 產品的需求增加。

In specialty industrial power, we had several wins in both thermal power control modules and in our high-voltage business. In thermal, we won our first order in North America for an integrated power system. This is an important win because it represents a key step in our thermal strategy to expand from modules to systems as we move up the value chain. We also want one a PCM project for a solar PV application, extending our existing relationship with a customer and increasing our offering by adding an additional AE product -- in this case, a PCM -- for another application in the same factory. This win is indicative of our success in introducing acquired products such as the PCMs, historically used in specialty industrial core applications into new regions and applications such as thin films and semiconductor processing.

在特種工業電源方面，我們在熱功率控制模塊和高壓業務方面都取得了多項勝利。在熱力方面，我們贏得了北美的第一個集成電源系統訂單。這是一個重要的勝利，因為它代表了我們在價值鏈上游時從模塊擴展到系統的熱戰略的關鍵一步。我們還想要一個用於太陽能光伏應用的 PCM 項目，以擴展我們與客戶的現有關係，並通過添加額外的 AE 產品（在本例中為 PCM）來增加我們的產品，以用於同一工廠中的另一個應用。此次勝利表明我們成功地將收購的產品（例如 PCM）引入新的領域和應用，例如薄膜和半導體加工，這些產品歷來用於特種工業核心應用。

Also this year, we had a project win for a new glass float line and a design win for an industrial scanning electron microscope application with our new high-voltage platform recently released for this market.

同樣在今年，我們贏得了新玻璃浮法線的項目和工業掃描電子顯微鏡應用的設計，我們最近為該市場發布了新的高壓平台。

Finally, as we look through the first quarter of 2017, our industrial business should increase as our specialty industrial power markets bounce back with a recovery in PCMs and high-voltage, particularly for mass spectrometry and x-ray applications. The industrial thin-film business and slight increasing glass and industrial coating should be partially offset by the ongoing pause in FPD and solar PV as capacities absorbed at our customers.

最後，展望 2017 年第一季度，我們的工業業務應該會增加，因為我們的專業工業電力市場隨著 PCM 和高壓的複蘇而反彈，尤其是質譜和 X 射線應用。工業薄膜業務以及玻璃和工業塗層略有增長應該被 FPD 和太陽能光伏業務的持續停頓部分抵消，因為我們的客戶吸收了產能。

Our service business finished the year with yet another all-time high quarter. For the second year in a row, the fourth quarter saw sequential growth rather than the typical year-end seasonal slowdown. Once again, we increased our share in traditional precision power services, particularly in the Americas, Japan and EMEA. Our investment in developing highly engineered service products also contributed to our success by driving new business and adding growth of specialty industrial power markets.

我們的服務業務以又一個歷史最高的季度結束了這一年。連續第二年，第四季度出現連續增長，而不是典型的年底季節性放緩。我們再次增加了在傳統精密電源服務中的份額，尤其是在美洲、日本和 EMEA。我們在開發高度工程化的服務產品方面的投資也通過推動新業務和增加專業工業電力市場的增長為我們的成功做出了貢獻。

Our service strategy is resonating with the market as more customers are responding to AE's strong value proposition of lower total cost of ownership, vastly superior (inaudible) royalty, and exclusively engineered service solutions.

隨著越來越多的客戶響應 AE 的強大價值主張，即更低的總擁有成本、極其優越（聽不清）的特許權使用費和獨家設計的服務解決方案，我們的服務戰略正在與市場產生共鳴。

This quarter, AE was very proud to receive a partnership award from Samsung in Korea. The award was in recognition for the ongoing superior support provided by AE's Korean service team. In the first quarter, service revenue looks to increase sequentially as various regions see growth and we capture additional third-party market share.

本季度，AE 非常自豪地獲得了韓國三星頒發的合作夥伴獎。該獎項是對 AE 韓國服務團隊持續提供的卓越支持的認可。在第一季度，隨著各個地區的增長以及我們獲得更多的第三方市場份額，服務收入有望環比增長。

Overall, 2016 was perhaps the strongest year that AE has known in terms of high quality revenue growth and profitability. Clearly, this success reflects our commitment to focus solely on our expertise and precision power conversion and to maintain our distinct business model. By continually investing in and keeping R&D in close proximity to our customers, we are enabling their technological roadmaps and increasing our position as a critical and enabling partner. By exposing our required products and technologies to new applications and geographies through our worldwide distribution channels, we are expanding our SAM. Maintaining our high-quality centralized manufacturing allows us to meet our customers' standards and deadlines amidst high level of demand.

總體而言，2016 年可能是 AE 在高質量收入增長和盈利能力方面最為強勁的一年。顯然，這一成功反映了我們致力於專注於我們的專業知識和精密電源轉換，並保持我們獨特的商業模式。通過不斷投資並使研發與我們的客戶保持緊密聯繫，我們正在實現他們的技術路線圖，並提高我們作為關鍵和支持合作夥伴的地位。通過我們的全球分銷渠道將我們所需的產品和技術展示給新的應用程序和地區，我們正在擴展我們的 SAM。保持我們高質量的集中製造使我們能夠在高需求的情況下滿足客戶的標準和最後期限。

As we enter 2017, with new aspirational growth goals and a variety of organic and inorganic opportunities, we are excited to build upon the accomplishments of 2016.

隨著我們進入 2017 年，隨著新的雄心勃勃的增長目標和各種有機和無機機會，我們很高興在 2016 年取得的成就的基礎上再接再厲。

I would like to thank our customers, partners, shareholders, and our valued employees for their support. Thank you for joining us, and we look forward to seeing many of you in the upcoming quarter.

我要感謝我們的客戶、合作夥伴、股東和我們尊貴的員工的支持。感謝您加入我們，我們期待在即將到來的季度見到你們中的許多人。

I would like to turn the call now to Tom. Tom?

我現在想把電話轉給湯姆。湯姆？

Thank you, Yuval. The fourth quarter wrapped up an outstanding year for AE. Not only did we execute on our operational strategy, as Yuval laid out, we exceeded our guidance on the top and bottom line and reached important financial milestones. Overall, our business fundamentals have never been stronger. Total revenue continued its upward trajectory, growing for the fourth straight quarter in a row to $135.3 million, up 6.9% sequentially. Non-GAAP operating margin rose to 30.7%, driving non-GAAP EPS of $1.06, an increase of 37.7% over the third quarter. These strong financial results validate our strategic direction and execution and provide a profitable base from which to pursue our growth plan.

謝謝你，尤瓦爾。第四季度結束了 AE 出色的一年。我們不僅執行了我們的運營戰略，正如 Yuval 所製定的那樣，我們還超出了我們在頂線和底線的指導，並達到了重要的財務里程碑。總體而言，我們的業務基礎從未如此強大。總收入繼續保持上升趨勢，連續第四個季度增長至 1.353 億美元，環比增長 6.9%。非 GAAP 營業利潤率升至 30.7%，推動非 GAAP 每股收益為 1.06 美元，比第三季度增長 37.7%。這些強勁的財務業績證實了我們的戰略方向和執行力，並為實施我們的增長計劃提供了盈利基礎。

Let me start with fourth-quarter sales by market. Semiconductor sales increased 19.3% sequentially to a record $96.8 million due to strong industry momentum and robust demand for our products. Service revenues increased 2.9%, reaching another new high of $19.5 million, as more and more customers recognize the value of our service offerings to lower their total cost of ownership. This strategy has resulted in the consistent growth of our service business over the past four quarters.

讓我從按市場劃分的第四季度銷售額開始。由於強勁的行業發展勢頭和對我們產品的強勁需求，半導體銷售額環比增長 19.3%，達到創紀錄的 9680 萬美元。服務收入增長 2.9%，再創新高，達到 1950 萬美元，這是因為越來越多的客戶認識到我們提供的服務在降低總體擁有成本方面的價值。這一戰略使我們的服務業務在過去四個季度持續增長。

Industrial sales declined 28.1% sequentially to $19.1 million in the fourth quarter. The third-quarter industrial revenues had a large number of major project installations, and therefore, we expected a decline this quarter. We expect our industrial revenue (technical difficulty) in the first quarter of 2017.

第四季度工業銷售額環比下降 28.1% 至 1,910 萬美元。第三季度工業收入有大量重大項目安裝，因此，我們預計本季度將下降。我們預計 2017 年第一季度我們的工業收入（技術難度）。

We continued to aggressively pursue inorganic opportunities to grow and diversify our business in order to reach our goal of one-third of total revenue from industrial. Non-GAAP operating margin exceeded our guidance range for the quarter at 30.7%. Margins have expanded as we managed our cost structure in this high-growth environment. At the same time, we continued to invest in R&D to keep pace with our customers' next-generation technology. Non-GAAP earnings-per-share reached $1.06 in the fourth quarter compared with $0.77 in the third quarter, significantly outpacing revenue growth.

我們繼續積極尋求無機機會來發展和多元化我們的業務，以實現工業總收入的三分之一的目標。非 GAAP 營業利潤率超過我們本季度的指導範圍 30.7%。隨著我們在這種高增長環境中管理成本結構，利潤率有所擴大。同時，我們繼續投資於研發，以跟上客戶下一代技術的步伐。第四季度非美國通用會計準則每股收益達到 1.06 美元，而第三季度為 0.77 美元，大大超過收入增長。

In the fourth quarter, we had a tax benefit of $1.8 million. This resulted from a year-end tax adjustment of approximately $6 million or $0.16 per share related to several discrete items, primarily closure of audits and a favorable pretax income and geographic mix. As a result, we had an annual tax rate of 8.7% for 2016. For 2017, we anticipate a more normalized tax rate of approximately 15%, assuming existing tax regulations.

第四季度，我們獲得了 180 萬美元的稅收優惠。這是由於與幾個離散項目相關的年終稅收調整約為 600 萬美元或每股 0.16 美元，主要是審計結束以及有利的稅前收入和地域組合。因此，我們 2016 年的年稅率為 8.7%。假設現有稅收法規，我們預計 2017 年的正常稅率約為 15%。

Turning to the balance sheet, we generated $44.4 million of cash from continuing operations in the fourth quarter and ended the year with $286.7 million in cash and marketable securities.

談到資產負債表，我們在第四季度從持續經營中產生了 4440 萬美元的現金，並在年底以 2.867 億美元的現金和有價證券結束。

And, finally, we reached our target range for working capital. We reduced our networking capital days to 64 days from 77 days last quarter and from 108 days a year ago by improving inventory turns, reducing receivables DSO, and managing our cash more efficiently.

最後，我們達到了營運資金的目標範圍。通過改善庫存周轉率、減少應收賬款 DSO 以及更有效地管理現金，我們將網絡資本周轉天數從上一季度的 77 天和一年前的 108 天減少到 64 天。

2016 was an exceptional year for AE. We grew revenues by 16.6% to $483.7 million, increased non-GAAP operating margin by 90 basis points to 28.4%, and saw non-GAAP EPS rise to $3.11. Just one year after we laid out our three-year aspirational goals, we ended 2016 within our non-GAAP EPS goal of $3 to $3.50 per share, prompting us to issue new goals just a few weeks ago. Our new three-year aspirational goals are revenues greater than $800 million, non-GAAP EPS of more than $4, and cash generation over $350 million.

2016 年對 AE 來說是不平凡的一年。我們的收入增長了 16.6% 至 4.837 億美元，非 GAAP 營業利潤率提高了 90 個基點至 28.4%，非 GAAP 每股收益增至 3.11 美元。在我們制定三年遠大目標僅一年後，我們在 2016 年底實現了每股 3 美元至 3.50 美元的非 GAAP 每股收益目標，這促使我們在幾週前發布了新目標。我們新的三年宏偉目標是收入超過 8 億美元，非 GAAP 每股收益超過 4 美元，現金產生超過 3.5 億美元。

In 2016, we generated $126 million in cash from continuing operations, which is affording us the financial flexibility to pursue organic and inorganic opportunities that we believe will establish an even stronger foundation to support future growth.

2016 年，我們從持續經營中獲得了 1.26 億美元的現金，這為我們提供了財務靈活性，以尋求有機和無機機會，我們相信這些機會將為支持未來增長奠定更堅實的基礎。

This concludes our prepared remarks for today. Operator, I would like to open the call for questions.

我們今天準備好的發言到此結束。接線員，我想打開問題電話。

(Operator Instructions) Joe Maxa, Dougherty & Company.

（操作員說明）Joe Maxa，Dougherty & Company。

Congrats on a strong quarter and outlook. Just wondering on the strength of the Q1 outlook, if you think that is sustainable going forward, how are you looking at 2017 overall?

祝賀強勁的季度和前景。只是想知道第一季度前景的強度，如果你認為這是可持續的，那麼你如何看待 2017 年的整體情況？

Joe, as we stated in the past, we expect 2017 in general to be stronger than 2016. We can't specifically predict the profile of the quarters. All I can tell you is that we expect that Q1 revenues will grow across all product lines and service.

喬，正如我們過去所說，我們預計 2017 年總體上會比 2016 年更強勁。我們無法具體預測季度的概況。我只能告訴你的是，我們預計第一季度的收入將在所有產品線和服務中增長。

That is helpful. On the industrial side, to be clear, are you looking for sequential growth? I mean, you called out sequential growth for service, but -- just said growth for industrial.

這很有幫助。在工業方面，需要明確的是，您是否在尋求連續增長？我的意思是，你提到了服務的連續增長，但是 - 只是說工業的增長。

We expect to see a recovery in the industrial product lines in Q1 compared to Q4. Q4 was a decline coming after a very strong Q3. We expect Q1 to be a recovery and growth across all industrial applications.

與第四季度相比，我們預計第一季度工業產品線將出現復甦。在非常強勁的第三季度之後，第四季度出現了下滑。我們預計第一季度將是所有工業應用的複蘇和增長。

That is great. And last for me, I will ask on the margins. Strong margins, of course, in the guidance. But when I look at the guidance and the (technical difficulty)

太棒了。最後對我來說，我會在邊緣詢問。當然，指導中的利潤率很高。但是當我查看指南和（技術難度）

Joe, you cut out.

喬，你停止了。

I am still here.

我還在這裡。

Now we can hear you. We lost you in the middle of a sentence.

現在我們可以聽到你的聲音了。我們在一句話中間失去了你。

Okay. I was just thinking of the Q1 op margin guidance, given the revenue uptick sequentially. I would think it would be a little bit higher margin, but you guided maybe a little bit lower, at least in the midpoint. So are there additional OpEx expenses you are expecting more than normal, or do you have a product mix maybe affecting gross margin?

好的。考慮到收入連續增長，我只是在考慮第一季度的營業利潤率指導。我認為利潤率會高一點，但你的指導可能會低一點，至少在中點是這樣。那麼，您是否期望有比正常情況更多的額外運營支出，或者您的產品組合是否可能影響毛利率？

It is very close. It is more a product mix. We do continue to invest in R&D, and I think you will see that, Joe. I wouldn't read too much into what you are observing.

它非常接近。它更像是一種產品組合。我們確實會繼續投資研發，我想你會看到的，喬。我不會過多地了解您所觀察到的內容。

Sorry?

對不起？

Mostly product mix.

主要是產品組合。

All right. Thanks, guys.

好的。多謝你們。

Edwin Mok, Needham and Company.

Edwin Mok, Needham and Company。

So, first question on the semi cap side, I think you highlight Korea being strong this last quarter. I was wondering is this strength just on your Korean end customer, or are you starting to see some of the Korean equipment manufacturers pick up in this quarter, and are you seeing that continuing in the first quarter?

所以，關於半上限方面的第一個問題，我認為你強調韓國在上個季度表現強勁。我想知道這種優勢是否只存在於您的韓國終端客戶身上，或者您是否開始看到一些韓國設備製造商在本季度有所回升，您是否看到這種情況在第一季度繼續？

What we talk about revenue to Korea, we mean our Korean OEM customers.

我們所說的韓國收入，是指我們的韓國 OEM 客戶。

So is that a sign that your business is broadening and -- because I think obviously the space is pretty concentrated with a few big players. Are you seeing signs of barn brining with some of the local Asian supplier picking up share or growing and there is good volume?

這也是你的業務正在擴大的跡象——因為我認為顯然這個空間非常集中於一些大公司。您是否看到一些當地亞洲供應商正在增加份額或增長並且銷量不錯的跡象？

So the general answer is yes, we see increase in activity among our Korean OEMs, and usually our assumption is that it is driven by device technology mix. In general, you can assume that a lot of the Korean OEMs benefit from investment in DRAM. And what we saw is a combination of basically memory-driven increase in demand in Q4 among our Korean customers -- OEMs -- equipment manufacturers.

所以一般的答案是肯定的，我們看到我們的韓國 OEM 之間的活動有所增加，通常我們的假設是它是由設備技術組合驅動的。總的來說，你可以假設很多韓國 OEM 都從 DRAM 投資中受益。我們看到的是我們的韓國客戶——原始設備製造商——設備製造商在第四季度基本由內存驅動的需求增長的組合。

Okay. Actually, that is helpful. And then, on the PECVD (inaudible) wins, just curious if you can give us some sense, (inaudible) historically the power content and etch processors are historically the highest? Are you seeing deposition processes such as PECVD started to catch up to etch, or are we still seeing a pretty big (multiple speakers)?

好的。事實上，這很有幫助。然後，關於 PECVD（聽不清）的勝利，只是好奇您是否可以給我們一些感覺，（聽不清）歷史上功率內容和蝕刻處理器是歷史上最高的？您是否看到 PECVD 等沉積工藝開始趕上蝕刻，或者我們仍然看到一個相當大的（多個揚聲器）？

No. Edwin, you can assume in general that the power supply content in PECVD is significantly lower than etch, both in terms of the number of power supplies per chamber and the sophistication of complexity of the power supplies.

不。Edwin，一般而言，您可以假設 PECVD 中的電源含量明顯低於蝕刻，無論是在每個腔室的電源數量還是電源的複雜程度方面。

The other thing is -- the other thing that you will usually find in a typical PECVD chamber is a power supply and matching network and a remote plasma source for cleaning. So the opportunity per chamber is much lower than etch, but at the same time, as we see the introduction of new PECVD applications in the market, including, for example, ALD applications, you have a new growth that is driven by new applications.

另一件事是——您通常會在典型的 PECVD 室中找到的另一件事是電源和匹配網絡以及用於清潔的遠程等離子體源。因此，每個腔室的機會遠低於蝕刻，但與此同時，隨著我們看到市場上引入了新的 PECVD 應用程序，例如 ALD 應用程序，您將獲得由新應用程序驅動的新增長。

Okay. That's helpful. One last question I have. You guys have (inaudible) layout this strong aspirational goal of greater revenue and EPS. Any way we can kind of think about how you guys think about organic versus inorganic growth for you to achieve this goal. For example, you laid out over $800 million of revenue for a longer-term goal. Just curious how you can break that down and where you help us think about any kind of framework would be helpful.

好的。這很有幫助。我有最後一個問題。你們已經（聽不清）制定了增加收入和每股收益這一強烈的理想目標。我們可以通過任何方式思考你們如何看待有機增長與無機增長，以實現這一目標。例如，您為一個長期目標安排了超過 8 億美元的收入。只是好奇您如何將其分解以及您在何處幫助我們思考任何類型的框架都會有所幫助。

Sure. So the inorganic growth, Edwin, is to get to industrial revenues about a third of our total, which would imply M&A of about $150 million to $200 million in additional revenue. If you go through the math on the aspirational goals, if we are at $800 million, we can hit $4 per share at an operating margin slightly under 25%, and what that is reflecting is that you see strong operating margins. In our core business today, that will continue, or we expect it to continue. And when we add acquisition, we may be looking at companies that have operating margins in the midteens, and that is going to get to that blended rate. But overall, about half of that growth is inorganic growth.

當然。因此，埃德溫，無機增長將使工業收入達到我們總收入的三分之一左右，這意味著併購將帶來約 1.5 億至 2 億美元的額外收入。如果你對理想目標進行數學計算，如果我們達到 8 億美元，我們可以在略低於 25% 的營業利潤率下達到每股 4 美元，這反映出你看到了強勁的營業利潤率。在我們今天的核心業務中，這種情況將繼續下去，或者我們預計它會繼續下去。當我們添加收購時，我們可能會關注營業利潤率在 15% 左右的公司，而這將達到混合利率。但總的來說，大約一半的增長是無機增長。

Great. That's helpful. Can I squeeze one in about cash? How much of the cash is onshore versus offshore and any thought about buyback?

偉大的。這很有幫助。我可以擠一個現金嗎？在岸和離岸有多少現金，是否考慮過回購？

Over two-thirds of our cash is offshore, and we look at our buyback and shareholder distributions every year, and we have 100 million authorization outstanding. I think we have about two years left on that, and our intent is to execute on that over two years.

我們超過三分之二的現金都在海外，我們每年都會查看我們的回購和股東分配，我們有 1 億未完成的授權。我認為我們還有大約兩年的時間，我們的意圖是在兩年內執行。

Great. That's all I have. Thank you.

偉大的。這就是我的全部。謝謝。

Amanda Scarnati, Citi.

花旗銀行的阿曼達·斯卡納蒂 (Amanda Scarnati)。

Just to kind of pick up on Edwin's last question, in terms of the $4 in EPS and the aspirational target, if the semiconductor market continues to grow on the memory side with DRAM starting to pick up and then eventually in 2018 we are going to start to see demand from China, is there a way to kind of hit those aspirational targets outside of doing the $150 million to $200 million in revenue acquisition on the industrial side?

就 Edwin 的最後一個問題而言，就每股收益 4 美元和理想目標而言，如果半導體市場在內存方面繼續增長，DRAM 開始回升，那麼最終在 2018 年我們將開始看看來自中國的需求，除了在工業方面進行 1.5 億至 2 億美元的收入收購之外，還有什麼方法可以實現這些理想目標嗎？

So, good question. The aspirational goals usually are a result of our three years out strategic planning process. When we set the goals, we said our goal is to be greater than $4 per share, and it depends, obviously, on two things: the rate of increase in revenue in the semiconductor industry and you point to three important things. One of them is China that is anticipated to accelerate the demand, time to be determined, and obviously the inorganic contribution. Is it possible that we will accomplish the $4 per share bottom of the target earlier than three years? It is. It depends on the market conditions.

那麼，好問題。理想目標通常是我們三年戰略規劃過程的結果。當我們設定目標時，我們說我們的目標是每股收益超過 4 美元，這顯然取決於兩件事：半導體行業收入的增長率，你指出了三件重要的事情。其中之一是中國有望加速需求，時間待定，無機貢獻明顯。我們是否有可能在三年內提前實現每股 4 美元的底部目標？這是。這取決於市場情況。

And then the other question on the memory side, the content in DRAM versus in NAND. Is there a difference in content there, a difference in ASPs in the products, or is it kind of -- it doesn't really matter in terms of growth whether it is DRAM picking up or if it is NAND really accelerating?

然後是內存方面的另一個問題，DRAM 中的內容與 NAND 中的內容。那裡的內容是否存在差異，產品中的 ASP 是否存在差異，或者它是否 - 就增長而言，無論是 DRAM 回升還是 NAND 是否真正加速並不重要？

So I will answer it in two ways. The first one is the number of power supplies required for wafer pass or wafer manufacturing between plain or in 3D. Our assumption is that as you go from planar devices to 3D devices, our SAM grows by about 50%. So, basically, to serve a building, market grows.

所以我會用兩種方式來回答。第一個是平面或 3D 之間晶圓通過或晶圓製造所需的電源數量。我們的假設是，當您從平面設備轉向 3D 設備時，我們的 SAM 增長約 50%。因此，基本上，為建築物服務，市場就會增長。

In addition to that, the power supplies that I used in advanced 3D devices, mainly etch, are more sophisticated. They are more what we call pulse RAF advanced control systems. By default these are more expensive and have higher ASPs.

除此之外，我在高級 3D 設備（主要是蝕刻）中使用的電源更加複雜。它們更像是我們所說的脈衝 RAF 先進控制系統。默認情況下，這些更昂貴並且具有更高的 ASP。

Great. Thank you.

偉大的。謝謝。

Weston Twigg, Pacific Crest.

韋斯頓·特維格，Pacific Crest。

First question, just wondered if you could comment on the big increase in income from discontinued operations and if there is anything to read into that related to the old inverter business?

第一個問題，只是想知道您是否可以對停產業務收入的大幅增長發表評論，以及是否有任何與舊逆變器業務相關的內容可以解讀？

No, that is just really the successful wind down and selling off of assets, collecting receivables, and doing better than we expected, Wes.

不，這真的只是成功的結束和出售資產，收回應收賬款，並且做得比我們預期的更好，韋斯。

Okay. And then, I was also wondering, there was a pretty big increase in services gross margin. Is that a relatively sustainable increase moving forward in terms of the gross margin on the services business?

好的。然後，我也想知道，服務毛利率有相當大的增長。就服務業務的毛利率而言，這是一個相對可持續的增長嗎？

I think what is sustainable is improving service margins. The service group has done a lot of work this year, and although it has been a little lumpy on the margin side of the service, it is in the right direction. And the revenue, we continue to take share. We continued to actually do better than expected in service revenue. Every quarter it is a record revenue in the service department. We are very pleased with that. And as that happens, our margins have been improving. So it may not stay -- the margin percentage that was in Q4, but the direction is sustainable.

我認為可持續的是提高服務利潤率。服務組今年做了大量的工作，雖然在服務邊際上有些坎坷，但方向是對的。而收入，我們繼續分享。我們在服務收入方面的實際表現繼續好於預期。每個季度，服務部門的收入都是創紀錄的。我們對此感到非常高興。當這種情況發生時，我們的利潤率一直在提高。所以它可能不會保持——第四季度的利潤率百分比，但方向是可持續的。

Okay. And then, just finally, I don't know if you can tell us or if I missed it here, but can you tell us how much revenue you got from your two largest customers?

好的。然後，最後，我不知道你是否可以告訴我們，或者我是否在這裡錯過了它，但你能告訴我們你從兩個最大的客戶那裡獲得了多少收入嗎？

It will be in the February 23 -- it is substantially consistent with prior quarters. I don't have an exam exact. It will be in the K.

它將在 2 月 23 日發布——與前幾個季度基本一致。我沒有確切的考試。它將在K。

Got it. Okay. Thanks.

知道了。好的。謝謝。

Pavel Molchanov, Raymond James.

帕維爾莫爾查諾夫，雷蒙德詹姆斯。

I want to go back to the three-year targets. So based on the Q1 guidance, you are already on the cusp of that $4 annualized EPS run rate with revenue on an annualized basis below $600 million. So where is the conservatism for adding $200 million of potential future revenue and have earnings be virtually unchanged?

我想回到三年目標。因此，根據第一季度的指導，您已經處於 4 美元的年化 EPS 運行率的風口浪尖，年化收入低於 6 億美元。那麼，增加 2 億美元的潛在未來收入並使收益幾乎保持不變的保守主義在哪裡呢？

Wes, first of all, those goals are greater than, and we did have a very good quarter, and we are very happy with that quarter. And it did exceed expectations, which is very, very clear. So, again, I will go back to -- I think it was Edwin who asked -- what is in our aspirational goals? It is having half of that revenue growth with industrial. That is based on acquisitions. We are assuming a target operating margin in the midteens, and that is how you get to an $800 million, slightly under 25% operating margin. We continue our core business margins. That is how you get to $4. But, yes, we are running (multiple speakers).

韋斯，首先，這些目標大於，我們確實有一個非常好的季度，我們對那個季度非常滿意。它確實超出了預期，這是非常非常明顯的。所以，我將再次回到——我想是埃德溫問過的——我們的遠大目標是什麼？它有一半的收入增長來自工業。那是基於收購。我們假設目標營業利潤率在十幾歲左右，這就是您如何達到 8 億美元，略低於 25% 的營業利潤率。我們繼續我們的核心業務利潤率。這就是你如何獲得 4 美元。但是，是的，我們正在運行（多個揚聲器）。

And you should look at blended operating income post acquisition.

你應該看看收購後的混合營業收入。

Okay. Understood. And clearly, it sounds like you are getting kind of more enthused, perhaps, about getting back into M&A. You have historically talked about buying businesses at 6 to 8 times EBITDA. Is that still the case, and what is the current M&A landscape looking like as you look at the range of potential targets? Is 6 to 8 still plausible?

好的。明白了。很明顯，聽起來您可能對重返併購領域更加熱衷。您過去曾談到以 EBITDA 的 6 到 8 倍的價格收購企業。情況仍然如此嗎？當您審視潛在目標的範圍時，當前的併購前景如何？6 到 8 仍然合理嗎？

First of all, we don't focus on multiples. We focus on two hurdle rates. In the near term, it needs to be equal to or better than a buyback, and the discounted cash flow has to be above our weighted average cost of capital risk-adjusted. That is what we focus on. And I say that because there's many targets that are low multiples, but when we add them, they are not great additions, and there's other companies that are high multiples that when they we add them, it has got a lot of synergies. So that is why we tend to stay away.

首先，我們不關注倍數。我們關注兩個障礙率。在短期內，它需要等於或優於回購，貼現現金流必須高於我們經風險調整的加權平均資本成本。這就是我們關注的重點。我之所以這麼說，是因為有很多目標是低倍數，但當我們添加它們時，它們並不是很好的補充，還有其他高倍數的公司，當我們添加它們時，它產生了很多協同效應。所以這就是為什麼我們傾向於遠離。

To your point, we just reiterated our aspirational goals, and that is based on reviewing our targets. We have a good target list. We are in dialogue. We have been in dialogue. These all have to have -- and with two parties feeling good about the transaction. It is a decent price and is a very good return for AE shareholders, and that is the way we look at it.

就你的觀點而言，我們只是重申了我們的理想目標，這是基於審查我們的目標。我們有一個很好的目標清單。我們在對話。我們一直在對話。這些都是必須的——而且雙方都對交易感覺良好。這是一個不錯的價格，對 AE 股東來說是一個非常好的回報，這就是我們看待它的方式。

All right. Appreciate it, guys.

好的。欣賞它，伙計們。

Tom Diffely, D.A. Davidson.

湯姆·迪菲利，檢察官戴維森。

First, some questions for Tom. Tom, what was the thought process behind putting the tax benefit in the pro forma results versus taking it out?

首先，請問湯姆一些問題。湯姆，將稅收優惠放在備考結果中而不是將其取出的背後的思維過程是什麼？

A what? Well, there is new -- not new. It is very important that we are consistent with our non-GAAP results quarter to quarter. Traditionally, we have not taken out these tax benefits. These tax benefits are related to closure of audits, which is related to our ongoing business. And, therefore, while it may not be recurring in nature, it is reflective of the business.

一個什麼？嗯，有新的——不是新的。非常重要的是，我們每季度都與我們的非 GAAP 結果保持一致。傳統上，我們沒有扣除這些稅收優惠。這些稅收優惠與關閉審計有關，這與我們正在進行的業務有關。因此，雖然它在本質上可能不會重複出現，但它反映了業務。

But, to your point, everybody views it differently, so I just want to be very clear what the amount is and that is $0.16 per share. And we will leave it up to you, Tom, and others to treat as you desire.

但是，就你的觀點而言，每個人都有不同的看法，所以我只想非常清楚這個數額是多少，即每股 0.16 美元。我們將讓你、湯姆和其他人按照你的意願對待。

Okay. That's good. I just wondered what your thought process was. And then, when you talked about the mix impacting the operating margin, is that a mix inside of semi, or is that a mix of industrial versus semi?

好的。那挺好的。我只是想知道你的思維過程是什麼。然後，當您談到影響營業利潤率的組合時，是半成品內部的組合，還是工業與半成品的組合？

It is a product mix. The important thing to know is our semi and our industrial margins are very similar.

這是一個產品組合。重要的是要知道我們的半成品和我們的工業利潤率非常相似。

On average.

一般。

On average.

一般。

Okay. And then, I guess, kind of stepping back, when you look at the year 2017, you are calling for growth. I am curious, though, a couple of the larger etch providers said that 3D NAND is very big in the first half of the year, probably drops off big in the second half. Do you see is it too early to figure out what your linearity is going to be for the year?

好的。然後，我想，有點退後一步，當你回顧 2017 年時，你正在呼籲增長。不過，我很好奇，一些較大的蝕刻供應商表示 3D NAND 在今年上半年非常大，下半年可能會大幅下降。您認為現在確定今年的線性度是否為時過早？

I think it is too early to figure out the linearity, but I would like to expand on the comment you made. 3D NAND is a really strong driver of the demand of advanced etch tools and deposition tools. At the same time, logic devices and some of the foundry devices are using multi-patenting, and multi-patenting in itself requires a higher content of deposition etch.

我認為現在確定線性度還為時過早，但我想擴展您的評論。3D NAND 是對先進蝕刻工具和沈積工具需求的真正強大驅動力。同時，邏輯器件和部分晶圓代工器件正在採用多重專利技術，而多重專利技術本身對沉積蝕刻的含量要求更高。

So the drivers are multiple, and as we go forward with more advanced logic devices, you will see an incremental increase in the need for PECVD and etch tools that are not driven only by 3D NAND memory, but are driven by just the next generation technology node for logic devices as well.

因此，驅動因素是多種多樣的，隨著我們推出更先進的邏輯設備，您將看到對 PECVD 和蝕刻工具的需求逐漸增加，這些工具不僅由 3D NAND 內存驅動，而且僅由下一代技術驅動邏輯設備的節點也是如此。

Okay. So look at the overall industry trends versus (multiple speakers) lines.

好的。因此，看看整體行業趨勢與（多位發言人）的關係。

Correct.

正確的。

Okay. Thank you.

好的。謝謝。

Patrick Ho, Stifel.

帕特里克·何，Stifel。

Yuval, first, in terms of your services growth this year, traditionally for subsystem suppliers, it has always been a bit of a struggle competing against local vendors. From a big picture standpoint, what has been the key turnaround or some of the key catalysts that have helped you grow the services and keep your customers on board with AE?

Yuval，首先，就你們今年的服務增長而言，傳統上對於子系統供應商來說，與本地供應商的競爭一直是一場鬥爭。從大局的角度來看，幫助您發展服務並讓您的客戶繼續使用 AE 的關鍵轉變或一些關鍵催化劑是什麼？

That is a great question. Thank you. So the first thing that, as we realized that one of the drivers to accelerate revenue growth would be to regain market share from third-party repair shops around the world, and what became clear to us that, although repair shops were competing on price, the quality of the repair and the amount of failures that occurred shortly after the repair, resulted in very high total cost of ownership to the customers.

這是一個很好的問題。謝謝。因此，當我們意識到加速收入增長的驅動因素之一是從全球第三方維修店手中奪回市場份額時，我們首先清楚的是，儘管維修店在價格上競爭，維修質量和維修後不久發生的故障數量導致客戶的總擁有成本非常高。

So we went back, worked with customers directly, to demonstrate to them that value -- long-term value of providing every payer directly by AE and not by the mom-and-pop shops. That is one thing.

所以我們回去，直接與客戶合作，向他們展示價值——由 AE 而不是夫妻店直接為每個付款人提供服務的長期價值。那是一回事。

The other thing is our philosophy regarding service has changed. We are not looking at service anymore as a repair operation. We are looking at service as an aftermarket business, and that includes upgrades, retrofits, repurposing of older equipment, extending the lifetime of equipment to next-generation nodes, by providing upgrades and retrofits and what we called engineered service solutions. All of that combined started to accelerate the growth, and we have been -- I think in the fourth quarter in a row have record quarters every quarter coming from those, both market share gain and also the non-repair products that provide incremental value to our customers.

另一件事是我們關於服務的理念已經改變。我們不再將服務視為維修操作。我們將服務視為售後市場業務，包括升級、改造、舊設備的再利用，通過提供升級和改造以及我們所謂的工程服務解決方案，將設備的使用壽命延長到下一代節點。所有這些結合起來開始加速增長，而且我們已經 - 我認為連續第四個季度每個季度都有創紀錄的季度來自這些市場份額的增長以及提供增量價值的非維修產品我們的顧客。

Great. That's helpful. And my second question is a follow-up. In terms of the working capital management, you noted on the prepared remarks that they have shown dramatic improvement this year.

偉大的。這很有幫助。我的第二個問題是後續問題。在營運資金管理方面，您在準備好的評論中指出，他們今年已顯示出顯著改善。

The first part of this question is, can you give some of the tangible efforts on that front? And, secondly, more specifically with the near-term environment, given the supply chain as a whole, on the semi side of things, it is very strained right now given the high demand. What efforts are you taking right now to ensure that your customers get the necessary products, particularly in this high demand environment?

這個問題的第一部分是，你能在這方面做出一些切實的努力嗎？其次，更具體地說，就近期環境而言，考慮到整個供應鏈，在半方面，鑑於高需求，目前非常緊張。您現在正在採取哪些措施來確保您的客戶獲得必要的產品，尤其是在這種高需求的環境中？

Sure. You said a lot there. So, first of all, yes, we made a lot of improvement in working capital. I think the important thing is we are out where we want to be. So don't expect more improvement, but be happy that it is in the low [60s]. It is very, very good.

當然。你在那裡說了很多。所以，首先，是的，我們在營運資金方面做了很多改進。我認為重要的是我們已經到了我們想去的地方。所以不要指望有更多的改進，但很高興它處於低 [60s]。非常非常好。

You asked how was it accomplished. A lot of people are doing a very good job every day, both receivables, inventory, working with vendors to get their leadtimes down, get them to own their raw material, managing our procurement effectively. Same with on the payables. There's three parts of this. Working with vendors. Somebody is willing to put their inventory on-site, we will pay them quicker. If they are not, we will effect a longer-term. So it is day to day to day.

你問它是如何實現的。很多人每天都做得很好，包括應收賬款、庫存、與供應商合作以縮短交貨時間、讓他們擁有原材料、有效管理我們的採購。與應付賬款相同。這分為三個部分。與供應商合作。有人願意把他們的存貨放在現場，我們會更快地付錢給他們。如果不是，我們將影響更長期。所以這是一天一天。

Yes, you're right. Today, I think everybody is focused on, hey, let's make sure we have the parts on hand, and this is something that even yesterday we talked about in our staff. We look at that every week. Our operations people are on top of it. Right now, we seem to be in good shape to meet what we need to do. But I think you bring up a good point. Other people could miss, which could affect everybody in the industry, but we look in pretty good shape.

你是對的。今天，我想每個人都在關注，嘿，讓我們確保我們手頭有零件，這甚至是昨天我們在員工中談論的事情。我們每週都會看。我們的運營人員在這上面。現在，我們似乎狀態良好，可以滿足我們需要做的事情。但我認為你提出了一個很好的觀點。其他人可能會錯過，這可能會影響行業中的每個人，但我們看起來狀態不錯。

One comment to add to that. We have a unique operation model. We rely (inaudible). So the number of parts at our operation assembly is very small. We rely on an outsourcing of sep components, and we have implemented during the last two years demand flow technology that is basically a pool-based system where our inventories continue to go down and a lot of the inventory is held for us by our suppliers. So it is a process that involve our suppliers, our sales, our customers, and it has been very helpful in continuing to work and trade working capital.

添加一條評論。我們有獨特的運營模式。我們依賴（聽不清）。所以我們操作裝配的零件數量非常少。我們依靠 sep 組件的外包，並且在過去兩年中實施了需求流技術，該技術基本上是一個基於池的系統，我們的庫存繼續下降，我們的供應商為我們保留了大量庫存。因此，這是一個涉及我們的供應商、我們的銷售人員、我們的客戶的過程，它對繼續工作和交易營運資金非常有幫助。

Great. Thank you.

偉大的。謝謝。

(Operator Instructions) Medhi Hosseini, SIG.

（操作員說明）SIG Medhi Hosseini。

A couple of follow-ups. How should we think about your revenue opportunity as a percentage of double your fee spend? You have benefited tremendously from multi-patenting and 3D NAND, and that has basically helped AE to have a semi-revenue or semi-cap revenue that is now twice as much as a percentage of double your fee, like a little bit over 1% of double your fee compared to like 0.4% of double your fee back in 2010/2011. How should we think about this migration? I know you have these opportunities of 3D NAND and multi-patenting. A lot of your OEMs are guarding to double your fee at the turn of the decade, and I am just trying to have a more simplistic way to think about your revenue opportunity. And I have a couple of follow-ups.

一些後續行動。我們應該如何考慮您的收入機會佔費用支出兩倍的百分比？你從多項專利和 3D NAND 中獲益匪淺，這基本上幫助 AE 獲得了半收入或半上限收入，現在是你費用的兩倍，比如略高於 1%費用翻倍，而 2010/2011 年費用翻倍，約為 0.4%。我們應該如何看待這種遷移？我知道你們有 3D NAND 和多項專利的機會。許多原始設備製造商都在小心翼翼地在十年之交將您的費用翻倍，而我只是想用一種更簡單的方式來考慮您的收入機會。我有幾個後續行動。

Maybe I am not sure if I can give you a number or a quantifying -- quantifiable answer. All I can tell you is that, if we look at the expectations of the end markets and the wafer fab equipment market towards the migration or the completion of the migration to 3D devices, we are not even halfway there. And what we hear is it is much more likely 30% to 35% through the transition to 3D. That means that we are going to see a significant continuing investment in equipment for deposition and etch that will be built to advance capacity.

也許我不確定我是否可以給你一個數字或一個量化的——可量化的答案。我只能告訴你的是，如果我們看看終端市場和晶圓廠設備市場對遷移或完成遷移到 3D 設備的期望，我們甚至還沒有完成一半。我們聽到的是，通過向 3D 的過渡更有可能達到 30% 到 35%。這意味著我們將看到對沉積和蝕刻設備的大量持續投資，這些設備將被建造以提高產能。

Now, on top of that, as I mentioned earlier, the migration to more advanced logic technology nodes will drive additional need for multi-patenting, and for another area is something that will be an enabler for the next generation device, ALE and ALD. New applications space that we didn't have significantly in the past. So that will be incremental.

現在，最重要的是，正如我之前提到的，向更先進的邏輯技術節點的遷移將推動對多項專利的額外需求，而對於另一個領域，這將成為下一代設備 ALE 和 ALD 的推動因素。我們過去沒有的新應用程序空間。所以這將是漸進的。

Now, if you add to that the general opinion that China is going to invest significantly in new fabs as part of the government initiative to go aggressively after the semi-market, we view that as another wave of accelerated investment that will benefit the equipment suppliers and, with that, the clinical performance suppliers. We believe that the China initiative to migrate the semi- will not be relying on Chinese equipment initially. And for the next significant number of years, a lot of the Western and Asian equipment suppliers will benefit from investment in China, which will benefit all the subcomponent suppliers.

現在，如果再加上中國將大力投資新晶圓廠作為政府積極進軍半導體市場舉措的一部分的普遍看法，我們認為這是另一波加速投資浪潮，將使設備供應商受益以及臨床性能供應商。我們相信，中國主動遷移半掛車最初不會依賴中國設備。在接下來的相當長的幾年裡，許多西方和亞洲的設備供應商將受益於在中國的投資，這將使所有子組件供應商受益。

It is a long answer. I hope I gave you some color, but I cannot give you a number.

這是一個很長的答案。我希望我給了你一些顏色，但我不能給你一個數字。

Sure. Maybe, as a follow-up, when you look at your backlog, or the expected build for this year, and I characterize it as your backlog, booking backlog (inaudible) backlog, I mean, you compare it to this time last year and the year before, has it changed, or is there different dynamics? And I ask that in the context of your OEM customers' ability to ship. It seems to me that your OEM customers are seeing manufacturing leadtimes extending, and I would think that they may be stepping up and procuring a little bit more earlier compared to previous years. And I would like to hear your views on it and tell me if I am completely wrong with the thought process.

當然。也許，作為後續行動，當你查看你的積壓或今年的預期構建時，我將其描述為你的積壓，預訂積壓（聽不清）積壓，我的意思是，你將它與去年的這個時間進行比較前一年，它發生了變化，還是有不同的動態？我在您的 OEM 客戶發貨能力的背景下提出這個問題。在我看來，您的 OEM 客戶正在看到製造交貨時間延長，而且我認為與往年相比，他們可能會加快步伐並更早地進行採購。我想听聽您對此的看法，並告訴我我的思考過程是否完全錯誤。

Since we operate in the demand for technology, both with our suppliers and our customers, most of the major semiconductor revenue shipments are a just in time, and for that reason, talking about book-to-bill ratios and backlogs is immaterial. We basically get demand signal, and when we get the demand signal, we ship a product.

由於我們在技術需求中運作，無論是與我們的供應商還是我們的客戶，大多數主要的半導體收入出貨量都是及時的，因此，談論訂單出貨比和積壓是無關緊要的。我們基本上得到需求信號，當我們得到需求信號時，我們就會發貨。

And you are flexible enough with internal operation to adjust if the demand exceeds your prior expectation? Is that the right way to think about it?

如果需求超出您之前的預期，您是否有足夠的內部運營靈活性來進行調整？這是正確的思考方式嗎？

Yes, we are. That is the reason we, second year in a row, continue to get awards from our customers on operational excellence and responsiveness. Our demand flow technology, combined with our mixed line configuration, allows us to be in very nimble, very agile, and respond to changes in mix and volume very quickly.

是的我們是。這就是我們連續第二年繼續從客戶那裡獲得卓越運營和響應能力獎項的原因。我們的需求流技術，結合我們的混合線配置，讓我們能夠非常靈活，非常敏捷，並且非常快速地響應混合和數量的變化。

Got it. And just one quick follow-up. You said earlier that industrial will be up in the March quarter. But relative to semi, I would think that semi would be up more than industrial and services. Is that a fair assumption?

知道了。並且只是一個快速跟進。您之前說過工業將在三月季度上漲。但相對於半成品，我認為半成品的漲幅會超過工業和服務業。這是一個公平的假設嗎？

We don't guide by product lines or market segments or applications. As I mentioned earlier, we expect to see increase in our revenue coming from all our product lines.

我們不以產品線、細分市場或應用為指導。正如我之前提到的，我們希望看到來自我們所有產品線的收入增加。

Got it. Okay. Thank you.

知道了。好的。謝謝。

And I am showing no further questions at this time. I would now like to turn the call back to management for any closing remarks.

我現在沒有進一步提問。我現在想把電話轉回管理層，聽取任何結束語。

Thank you, everybody, for your attendance today and attention. Thanks for the good questions. We are looking forward to seeing many of you during the quarter. Thank you very much.

謝謝大家今天的出席和關注。謝謝你的好問題。我們期待在本季度見到你們中的許多人。非常感謝。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.

女士們，先生們，感謝你們參加今天的會議。這確實結束了程序，你們都可以斷開連接。大家，祝你有美好的一天。