Camtek Ltd (CAMT) 2020 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Camtek's Second Quarter 2020 Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. You should have all received by now the company's press release. If you have not received it, please contact Camtek's Investor Relations team at GK Investor & Public Relations at 1 (646) 688-3559 or view it in the News section of the company's website, www.camtek.com.

女士們，先生們，感謝您的耐心等待。歡迎參加 Camtek 2020 年第二季業績電話會議。 （操作員指示）溫馨提示：本次會議正在錄音中。各位現在應該已經收到公司的新聞稿了。如果您尚未收到，請聯絡 Camtek 投資者關係團隊（GK 投資者與公共關係部），電話：1 (646) 688-3559，或造訪公司網站 www.camtek.com 的「新聞」版塊查看。

I would now like to hand over the call to Mr. Ehud Helft of GK Investor Relations. Mr. Helft, would you like to begin, please?

現在我想把電話交給GK投資者關係部門的Ehud Helft先生。 Helft先生，請您開始吧。

Yes. Thank you, and good day to all of you. I would like to welcome all of you to Camtek's Second Quarter 2020 Results Conference Call, and I would also like to thank Camtek's management for hosting this call.

是的。謝謝大家，祝大家有個愉快的一天。歡迎大家參加 Camtek 2020 年第二季業績電話會議，同時也感謝 Camtek 管理階層主持此電話會議。

With us on the line today are Mr. Rafi Amit, Camtek's CEO; Mr. Moshe Eisenberg, Camtek's CFO; and Mr. Ramy Langer, Camtek's COO. Rafi will provide the overview of Camtek's results and discuss market trends in the second quarter of 2020 and Moshe will then summarize the financial results of the quarter. We will then open the call to take your questions.

今天與我們線上的嘉賓包括 Camtek 執行長 Rafi Amit 先生、Camtek 財務長 Moshe Eisenberg 先生以及 Camtek 營運長 Ramy Langer 先生。 Rafi 將概述 Camtek 的業績並討論 2020 年第二季的市場趨勢，Moshe 隨後將總結本季的財務表現。之後我們將開始回答大家的提問。

Before we begin, I'd like to remind our listeners that certain information provided on this call are internal company estimates, unless otherwise specified. This call also may contain forward-looking statements. These statements are only predictions and may change as time passes. Statement on this call are made as of today, and the company undertakes no obligation to update any of the forward-looking statements contained whether as a result of new information, future events, changes in expectation or otherwise.

在開始之前，我想提醒各位聽眾，除非另有說明，本次電話會議中提供的某些資訊均為公司內部估計。本次電話會議也可能包含前瞻性陳述。這些陳述僅為預測，可能會隨著時間的推移而改變。本次電話會議中的陳述截至今日為止，本公司不承擔因新資訊、未來事件、預期變更或其他原因而更新任何前瞻性陳述的義務。

Investors are reminded these forward-looking statements are subject to risks and uncertainties that may cause actual events or results to differ materially from those projected, including as a result of the effects of general economic conditions; the effects of the COVID-19 crisis on the global market and on the market in which we operate, including the risk of a continued reduction to our and our customers' provider business, providers business partners and contractor business as a result of the outbreak and the effect of the COVID-19 pandemic; risks relating to the consideration of the significant portion of Camtek's expected business in certain countries, particularly China, from which we expect to generate significant portion of our revenues for the second half of 2020, but also Taiwan and Korea, including the risk of deviation from our expectation regarding timing and size of orders from customers in this country; changes to market trends; reduced demand for services and products; the timing and development of the new services and products and the adoption by the market; increased competition in the industry and price reduction; as well as due to other risks identified in the company's filing with the SEC.

提醒投資者，這些前瞻性陳述受風險和不確定因素的影響，可能導致實際事件或結果與預測存在重大差異，包括一般經濟狀況的影響；COVID-19 危機對全球市場和我們經營所在市場的影響，包括由於疫情爆發和 COVID-19 大流行的影響，我們和客戶的提供商業務、提供商業務合作夥伴和承包商業務持續減少的風險； 2020 年下半年產生很大一部分收入，但也包括台灣和韓國，包括我們對該國客戶訂單時間和規模的預期偏離風險；市場趨勢的變化；服務和產品需求的減少；新服務和產品的時機和開發以及市場採用；行業競爭加劇和價格下降；以及公司向美國證券交易委員會提交的文件中確定的其他風險。

Please note that the safe harbor statement in today's press release also covers the content of this conference call. In addition, during this call, certain non-GAAP financial measures will be discussed. These are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes that the presentation of non-GAAP financial measures is useful to investor understanding and assessment of the company's ongoing cooperation and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures is included in today's earnings release.

請注意，今天新聞稿中的安全港聲明也涵蓋了本次電話會議的內容。此外，本次電話會議也將討論某些非公認會計準則 (non-GAAP) 財務指標。管理階層使用這些指標來制定策略決策、預測未來績效並評估公司當前績效。管理層認為，非公認會計準則 (non-GAAP) 財務指標的呈現有助於投資者了解和評估公司目前的合作和未來前景。今天的收益報告中已包含非公認會計準則 (non-GAAP) 和公認會計準則 (GAAP) 財務指標的完整對照表。

And now I'd like to hand over the call to Rafi. Camtek's CEO. Rafi, go ahead, please.

現在我想把電話交給拉菲。他是 Camtek 的執行長。請拉菲發言。

Hi, everyone. The second quarter represents continued demand for our system, primarily from Asia. Total sales in the second quarter were $37 million, a record quarterly level. Gross margin was 46.1%, and operating margin was over 17%, marking a significant improvement in profitability compared with the first quarter. We expect continued improvement in profitability in the third quarter as well.

大家好。第二季度，我們系統的需求持續成長，主要來自亞洲。第二季總銷售額達3700萬美元，創下季度新高。毛利率為46.1%，營業利益率超過17%，獲利能力較第一季大幅提升。我們預計第三季獲利能力也將持續提升。

The ongoing demand from our customers for various applications point to a strong third quarter with encouraging backlog going into the fourth quarter. Our revenue guidance for the third quarter is $38 million to $39 million, with persistent improvement in the profitability. This indicates strong performance in the second half of the year. We have significantly increased our market share in 2D inspection, mainly because our system performance and competitiveness has been dramatically improved in all 2D applications.

客戶對各種應用的持續需求預示著第三季業績強勁，第四季的訂單積壓也令人鼓舞。我們第三季的營收預期為3,800萬至3,900萬美元，獲利能力持續提升。這顯示下半年業績表現強勁。我們在二維檢測領域的市佔率顯著提升，這主要得益於我們系統在所有二維應用領域的效能和競爭力的顯著提升。

A key element in our strategy is having in place local professional teams that can independently install and support machines in all our territories, hence, enabling us to continue growing our business even during the COVID-19 pandemic. We have also established a remote training and support infrastructure allowing us to remotely operate systems, upgrade machine with recently developed feature and train local team on a regular basis. We invest considerable development effort in providing appropriate technological solutions to our RDL and Tier 1 customers who develop innovative packaging technologies in the field of heterogeneous integration. We have received a few initial orders, and we believe we will soon receive multiple machines orders for production. We expect this segment to become meaningful to our business.

我們策略的關鍵要素之一是擁有本地專業團隊，能夠在所有區域獨立安裝和支援機器，使我們能夠在新冠疫情期間繼續成長業務。我們還建立了遠端培訓和支援基礎設施，使我們能夠遠端作業系統、使用最新開發的功能升級機器，並定期培訓本地團隊。我們投入了大量開發精力，為在異質整合領域開發創新封裝技術的RDL和一級客戶提供合適的技術解決方案。我們已經收到了一些初始訂單，並相信很快就會收到更多機器的生產訂單。我們期待這項業務部門對我們的業務產生深遠的影響。

Let me give you some highlights of the second quarter. Taiwan and China continues to be the largest territory in the quarter. U.S.A. and Europe are starting to pick up. We have received multiple machine orders for over 30 systems from four Tier 1 OSATs for 2D applications, mainly for advanced packaging. Some of these machines will be installed in the second half of the year. The 2 Golden Eagle inspection system for 600-by-600 millimeter panels, this were installed at two Tier 1 customers in Q2, are running Fan-Out panels in production. We expect to deliver additional system later this year. Our customers believe that Fan-Out packaging on panel will continue to grow as this is the cost effective solution.

讓我來介紹一下第二季的一些亮點。台灣和中國大陸仍然是本季最大的市場。美國和歐洲也開始復甦。我們已收到來自四家一級OSAT廠商的30多台設備訂單，這些設備主要用於二維應用，主要用於先進封裝。其中一些設備將於下半年安裝。兩台用於600 x 600毫米麵板的Golden Eagle檢測系統已於第二季安裝在兩家一級客戶處，目前正在生產扇出型面板。我們預計今年稍後將交付更多系統。我們的客戶相信，扇出型面板封裝將繼續成長，因為這是一種經濟高效的解決方案。

Soon, we will start planning our budget and work plan for year 2021. One of the most significant challenges facing management during COVID-19 is to assess what will be the scope of business activity in 2021. We base our strategy of achieving continuous growth on several drivers and trends. The first is the increase in demand for semiconductor devices. The main drivers in our markets are advanced packaging, memory, CMOS Image Sensor and RF filter for 5G smartphones.

我們很快就會開始規劃2021年的預算和工作計畫。在新冠疫情期間，管理層面臨的最大挑戰之一是評估2021年的業務範圍。我們實現持續成長的策略基於多種驅動因素​​和趨勢。首先是半導體裝置需求的成長。我們市場的主要驅動因素是先進封裝、記憶體、CMOS影像感測器和用於5G智慧型手機的射頻濾波器。

5G is pushing demand for high-end smartphone sales. Compared to previous generation, these 5G phones include more silicon, more advanced packaging and larger number of RF chips in each phone. As a result, we are experiencing demand for 5G-related applications. Regarding memory, new memory cards are under construction in Korea and China, and we expect investment in capital equipment for memory packaging to increase in 2021.

5G 正在推動高階智慧型手機的銷售需求。與上一代相比，這些 5G 手機每支手機包含更多矽片、更先進的封裝和更多數量的射頻晶片。因此，我們對 5G 相關應用的需求正在成長。就記憶體而言，韓國和中國正在生產新的記憶體卡，我們預計 2021 年記憶體封裝的資本設備投資將會增加。

The second driver is the adoption of new packaging technologies by our customers. In general, we see considerable efforts in Tier 1 in Q1 IDM and OSATs to adopt new packaging technologies and execute basic production. Adoption of new technologies require extensive use of inspection and metrology systems. For example, logic CPU and graphics CPU shifts to heterogeneous integration technique, continued transition of DRAM to wire bonding to 3D IC advanced packaging or power devices shift to advanced packaging, specifically Fan-Out.

第二個驅動因素是客戶對新封裝技術的採用。總體而言，我們看到第一季的一級IDM和OSAT廠商在採用新封裝技術並進行基礎生產方面做出了巨大努力。採用新技術需要廣泛使用檢測和計量系統。例如，邏輯CPU和圖形CPU正在轉向異構整合技術，DRAM正在持續向引線鍵合和3D IC先進封裝過渡，功率元件也正在向先進封裝（尤其是扇出型）過渡。

The third is penetrating to new segment in the front end. We have already penetrated the front end market in the past 2 years. And we continue to discover most segment that our system can provide suitable solutions for. To summarize, 2020 is shaping up to be another solid growth year for Camtek. But it is important to stretch that we are still seeing the coronavirus pandemic effect, which include risks and uncertainties. Camtek is a dynamic and flexible company that can adapt to any development in the market and to take advantages of the rapid changes in our industry.

第三是滲透到前端的新領域。過去兩年，我們已經滲透到了前端市場。我們仍在繼續探索，我們的系統能夠為這些領域提供合適的解決方案。總而言之，2020年有望成為Camtek又一個穩健成長的一年。但要強調的是，我們仍在經歷新冠疫情的影響，這其中蘊含著風險與不確定性。 Camtek是一家充滿活力且靈活的公司，能夠適應市場的任何發展，並充分利用行業的快速變化。

Before I hand over to Moshe for more details on the financial results, I would like -- especially like to thank our employees for their dedicated work during this challenging time. Moshe?

在我將財務結果的更多細節交給 Moshe 之前，我想特別感謝我們的員工在這段充滿挑戰的時期所做的辛勤工作。 Moshe？

Thanks, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today.

謝謝，拉菲。在接下來的財務摘要中，​​我將提供非公認會計準則 (Non-GAAP) 的績效。 GAAP 業績和非 GAAP 業績之間的對帳表已在今天早些時候發布的新聞稿末尾的表格中列出。

As Rafi mentioned, second quarter 2020 revenues were $37 million. It's a record quarterly revenue level and an increase of 8% compared with the $34.3 million reported in the second quarter 2019 and 22% increase versus the previous quarter. Due to the fact that U.S. and Europe were heavily affected during the second quarter, Asia accounted for most of our revenues with 95% installations. The rest of the world, therefore, only accounted for 5%. Based on orders on hand, we expect U.S. and Europe to pick up in the second half.

正如拉菲所說，2020年第二季的營收為3,700萬美元。這是創紀錄的季度收入水平，與2019年第二季的3,430萬美元相比增長了8%，環比增長了22%。由於美國和歐洲在第二季受到嚴重影響，亞洲佔了我們大部分的收入，安裝量比達95%。因此，世界其他地區僅佔5%。根據現有訂單，我們預計美國和歐洲的市場將在下半年回升。

Gross profit for the quarter was $17 million. The gross margin for the quarter was 46.1% versus 48.4% in the second quarter of last year and 45% in the previous quarter. As we mentioned in our last call, in the first half of 2020 we have received orders for multiple 2D inspection machines with basic configurations, with relatively lower ASP, which resulted in lower gross margins. We see a change in trend with order for quarter for machines with more base capabilities compared with the first 6 months. And as Rafi mentioned, we expect continued improvement in the gross margin in the second half of the year.

本季毛利為1700萬美元。本季毛利率為46.1%，去年第二季為48.4%，上一季為45%。正如我們在上次電話會議中提到的，2020年上半年我們收到了多台基礎配置的二維偵測機的訂單，這些機器的平均售價相對較低，導致毛利率下降。與上半年相比，我們發現本季訂單趨勢有所變化，主要集中在基礎功能較強的機器上。正如Rafi所提到的，我們預計下半年毛利率將繼續改善。

Operating expenses in the quarter were $10.7 million. This is compared with $9.6 million in the second quarter of last year and to the $10 million reported in the previous quarter. The increase versus the first quarter is mainly due to increased R&D activity. The COVID-19 environment resulted in certain savings, mainly in travel expenses, which were partially offset by higher shipping expenses. Operating profit in the quarter was $6.4 million, an improvement of over 70% versus the $3.7 million in the previous quarter.

本季營運費用為1,070萬美元，相較之下，去年第二季為960萬美元，上一季為1,000萬美元。相較於第一季，營運費用的成長主要源自於研發活動的增加。新冠疫情導致公司節省了一些開支，主要是差旅費，但運輸費用的增加部分抵消了這些開支。本季營運利潤為640萬美元，較上一季的370萬美元成長了70%以上。

Operating margin was 17.2% compared to 12.2% in Q1, mainly as a result of the increased volume. Overall, we expect a significant improvement in our gross and operating margin in the coming quarters. Net income for the second quarter of 2020 was $6.3 million or $0.16 per diluted share. This is compared to a net income of $6.7 million or $0.18 per share in the second quarter of last year and $3.6 million or $0.09 per share in the first quarter 2020.

營業利潤率為 17.2%，而第一季為 12.2%，這主要得益於銷售成長。總體而言，我們預計未來幾季的毛利率和營業利潤率將顯著提升。 2020 年第二季淨利為 630 萬美元，即每股攤薄收益 0.16 美元。相比之下，去年第二季淨利為 670 萬美元，即每股收益 0.18 美元；2020 年第一季淨利潤為 360 萬美元，即每股收益 0.09 美元。

Turning to some high-level balance sheet and cash flow metrics. We generated $11.1 million in cash from operations in the quarter. This quarter, we have received a significant amount of down payment from 1 of our customers, which positively affected our cash flow. Net cash and cash equivalents and short-term deposits as of June 30, 2020, increased to $101.5 million compared with $90.6 million at the end of March 2020.

談談一些高水準的資產負債表和現金流指標。本季度，我們營運產生的現金為1,110萬美元。本季度，我們從一位客戶那裡收到了一大筆首付款，這對我們的現金流產生了積極影響。截至2020年6月30日，淨現金及現金等價物及短期存款增至1.015億美元，而2020年3月底為9,060萬美元。

With the current business momentum, we expect revenues of $38 million to $39 million in the first quarter. It is important to mention that the $37 million reported in Q2 included approximately $3 million as a result of the COVID-19 related delays from Q1 as discussed in our previous call. So practically, our guidance for Q3 represents significant increase of around 15% over Q2.

鑑於目前的業務發展勢頭，我們預計第一季營收將在3800萬至3900萬美元之間。值得一提的是，第二季報告的3700萬美元收入中包含了約300萬美元，這筆收入是由於新冠疫情導致第一季業務延誤，這一點我們在之前的電話會議上已經討論過。因此，實際上，我們對第三季的預期比第二季大幅成長了約15%。

And with that, Rafi, Ramy and myself will be open to take your questions. Operator?

接下來，拉菲、拉米和我願意回答大家的問題。接線生？

(Operator Instructions) The first question is from Quinn Bolton of Needham & Company.

（操作員指示）第一個問題來自 Needham & Company 的 Quinn Bolton。

Congratulations on the nice results. Wanted to ask just in terms of the demand environment. Have you seen any disruptions from your OSAT customers from the Commerce Department actions against Huawei, one of your competitors, on to last evening discussing some order delays as a result of those Commerce Department actions? Just wondering if that's had any impact on your business. And then I've got a couple of follow-ups.

恭喜您取得了不錯的成績。我想問一下需求環境的問題。從商務部針對您的競爭對手華為的行動，到昨晚討論商務部行動導致的一些訂單延遲，您是否發現您的OSAT客戶受到了影響？我想知道這是否對您的業務產生了影響。然後我有幾個後續問題。

This is Ramy. Yes. I saw the discussion last night. We have not seen any disruptions from our OSAT customers, any other customers. And this specific discussion about Huawei at this stage has not affected our business.

我是Ramy。是的。我看到了昨晚的討論。我們沒有看到OSAT客戶和其他客戶有任何中斷。目前關於華為的具體討論還沒有影響到我們的業務。

Great. And then a second sort of business related question. You delivered 2 systems for panel level inspection in the second quarter and expect more in the second half. Just wondering how meaningful can that panel level inspection business become over the next couple of years?

好的。接下來是第二個與業務相關的問題。您在第二季交付了兩套面板級檢測系統，預計下半年還會有更多。我想知道，在未來幾年，面板級檢測業務會有多大意義？

It's hard to say because it depends who you ask. Some people believe it will be significant. Other people tend to say that it will be minimal. So I think we need to wait and see at this stage, at least. If I look only 12 months ahead, I don't think it will be significant.

很難說，因為這取決於你問誰。有些人認為影響會很大。另一些人則傾向於認為影響很小。所以我認為至少在現階段我們需要觀望。如果只展望未來12個月，我認為影響不會很大。

Okay. Great. Then for Moshe, you talked about some meaningful increase in gross and operating margins into the third quarter and I think beyond. Any chance you might be able to quantify what you think gross and operating margins may -- how they will trend in the third quarter and whether that trend will continue into the fourth quarter and into '21?

好的。太好了。然後，關於Moshe，您提到了第三季以及之後的毛利率和營業利潤率將顯著增長。您能否量化一下您認為的毛利率和營業利潤率——它們在第三季度的趨勢如何，以及這種趨勢是否會持續到第四季和2021年？

Particularly results of our specific gross margin guidance or operating margin guidance, specifically, third quarter and fourth quarter that we are starting to shape up is populated with more favorable product mix, with more machines are coming with more capabilities. And as a result, we see a better gross margin, coming back to the more normal gross margin that we have seen in previous quarters. This is probably -- obviously will affect our operating margin as well.

特別是我們具體的毛利率或營業利潤率指引，具體來說，第三季度和第四季度，我們開始逐步完善，產品組合更加有利，機器也更加豐富，功能也更加強大。因此，我們的毛利率有所提高，回到了前幾季較為正常的水平。這很可能——顯然也會影響我們的營業利潤率。

Understood. And lastly, you talked about your backlog giving you some visibility into the December and being supportive of a pretty healthy December quarter. Should we interpret those comments that the fourth quarter may be sort of flattish with the third quarter? Or how should we interpret those backlog comments?

明白了。最後，您提到積壓訂單能讓您更了解12月份的情況，並支援12月份季度的良好表現。我們是否應該解讀「第四季可能與第三季持平」的評論？或者，我們應該如何解讀積壓訂單的評論？

It's a bit too early for us to provide specific guidance for the fourth quarter, but currently it's looking good. I can't really quantify exactly how the fourth quarter is going to look like.

現在就為第四季提供具體的業績預期還為時過早，但目前來看情況良好。我無法準確量化第四季的業績表現。

The next question is from Craig Ellis from B. Riley FBR.

下一個問題來自 B. Riley FBR 的 Craig Ellis。

Congratulations on the real nice second quarter execution. The first question is a follow-up on the earlier gross margin inquiry. I think Camtek and most other companies were impacted by adjustments to COVID-19 with COGS costs and certainly freight costs have been higher. Moshe, can you just help us understand to what extent those costs are lingering in the business in the third quarter and the fourth quarter? And to what extent are you seeing any abatement in any of those costs? That would be the first question.

恭喜您第二季取得如此出色的業績。第一個問題是關於先前毛利率調查的後續問題。我認為Camtek和大多數其他公司都受到了新冠疫情調整的影響，銷貨成本（COGS）和運費成本肯定都上漲了。 Moshe，您能否幫助我們了解這些成本在第三季和第四季在多大程度上影響了業務？您認為這些成本在多大程度上下降？這是第一個問題。

Craig, it's -- there are some ins and outs as you usually use the terms. The positive that we have certain savings related to travel expenses, entertainment, conferences and things like that. On the same time, there are higher -- there is a higher level of expenses, mainly on the shipments. So all in all, we do see some savings, and this will take us all the way through the end of the year until the COVID-19 will be over.

克雷格，這……正如你通常所說的那樣，有一些細節。積極的一面是，我們在差旅費、娛樂、會議等方面節省了一些開支。同時，我們的支出也更高了，主要是在運輸方面。所以總的來說，我們確實看到了一些節省，這將持續到年底，直到新冠疫情結束。

Okay. And then another one to a couple of inquiries to Rafi. So there was a customer deposit in the quarter that helped increase the cash balance above $100 million. Is that kind of customer deposit something that we could -- we should expect in the future? Or is this more of an unusual circumstance that we shouldn't expect to recur either in the back half of this year or next year?

好的。然後我再問拉菲幾個問題。本季有一筆客戶存款，幫助現金餘額超過1億美元。這種客戶存款是我們未來可以預期的嗎？還是說，這只是一種特殊情況，我們不應該預期在今年下半年或明年再次發生？

No. It's kind of a onetime event. This is why we obviously disclose this. Typically, we don't get a significant amount of loan payments in advance. So no, we are not -- we should not expect something like this in the next few quarters.

不，這只是一次性事件。這就是為什麼我們當然會披露這一點。通常情況下，我們不會提前收到大量貸款。所以，我們不應該預期未來幾季會出現類似的情況。

Got it. And then turning to some of the product dynamics and end market dynamics. Rafi, you had mentioned the visibility for the fourth quarter. What I was hoping to understand is, how that is shaping up from an end use standpoint. You've had a real strong CMOS Image Sensor business, year-to-date high-bandwidth memories sort of prior to that. It sounds like RF is really picking up with 5G. Any color on what you're seeing bottoms-up for the fourth quarter would be helpful.

明白了。然後談談一些產品動態和終端市場動態。拉菲，您提到了第四季度的可見性。我希望了解的是，從終端用途的角度來看，情況如何。在此之前，你們的CMOS影像感測器業務一直非常強勁，今年迄今的高頻寬記憶體業務也表現不俗。聽起來射頻(RF)技術在5G時代確實正在蓬勃發展。如果您能透露您對第四季度的整體情況，那將會很有幫助。

Yes. I would say that, in general, the mix application is very similar. We think about -- there are 3 major drivers, as we mentioned, is that advanced packaging, CMOS Image Sensor and RF and RF related devices. This will almost take most of the capacity here.

是的。我想說的是，總的來說，混合應用非常相似。我們考慮了三個主要驅動因素，如我們所提到的，分別是先進封裝、CMOS影像感測器以及射頻和射頻相關設備。這些幾乎佔據了這裡的大部分產能。

Got it. And then as we look to calendar '21, it seems like it should be just a real strong year for Camtek because in addition to what should be a doubling in 5G smartphone units from 200 plus million, over 400 million and the strong RF and CMOS Image Sensor demand that would imply. But it seems like we've seen a lot of indications more broadly that high-bandwidth memory on new memory capacity and new memory products is going to see an increase. So if we were to look at calendar '21, how would you, Rafi, rank the growth drivers in the business largest to less significant on a year-on-year basis from what you see today?

明白了。展望21年，Camtek似乎應該會是真正強勁的一年，因為5G智慧型手機出貨量將從目前的2億多台翻一番，達到4億多台，而且這意味著對射頻和CMOS影像感測器的需求強勁。但似乎我們已經看到很多更廣泛的跡象表明，高頻寬內存在新記憶體容量和新記憶體產品上的需求將會增加。那麼，如果我們展望21年，Rafi，您如何根據目前的情況，按同比排名，將業務中成長動力從大到小排列呢？

Look, as I mentioned before, there are a few, I would say, elements or parameter that affects our growth. It's the technology, it's the level of support, our positioning, installed base. All of this, we are in very good position. The only thing that we cannot predict is the market behavior. We definitely do not know what is this -- all the coronavirus effect, what the effect and even the amount -- the demand in the industry. This is something that we cannot expect. But as I mentioned, we are very flexible, and we are ready for any change, any trend. And I think it's very important because if we deliver today, we are at a very large installed base. We are in very high position, a Tier 1 supplier to the industry. I think that this is very important to growth. We are in a very good position to take advantage of any demand. So in general, as I mentioned before, we talk about advanced packaging, heterogeneous integration, memory, CMOS, RF, all this continue to grow up definitely.

正如我之前提到的，我想說，有一些因素或參數會影響我們的成長。它們是技術、支援水平、我們的定位以及客戶群。所有這些，我們都處於非常有利的位置。唯一我們無法預測的是市場行為。我們完全不知道新冠病毒的影響是什麼，甚至不知道產業需求的規模。這是我們無法預料的。但正如我之前提到的，我們非常靈活，我們為任何變化、任何趨勢做好了準備。我認為這非常重要，因為如果我們今天交付，我們將擁有非常龐大的客戶群。我們處於非常高的地位，是業界的一級供應商。我認為這對成長非常重要。我們處於非常有利的位置，可以利用任何需求。所以總的來說，正如我之前提到的，我們談論的先進封裝、異質整合、記憶體、CMOS、射頻，所有這些都肯定會繼續成長。

Got it. And then the last question for me, and it goes back to a clarification that I had to Moshe with a different spin. Very significant cash balance, so congratulations. I think the $100 million plus is easily a record for the company. How should we think about the way the company will deploy that cash balance to create value for shareholders? I think in the past, there have been some special dividends. The company has also in the past expressed M&A interest. How do we think about the priorities and how quickly the company could act on those priorities?

明白了。接下來是最後一個問題，這又回到了之前我向Moshe解釋的問題，只是換了一個說法。現金餘額非常可觀，所以恭喜你。我認為超過1億美元的現金餘額對公司來說無疑是創紀錄的。我們應該如何考慮公司將如何運用這些現金餘額來為股東創造價值？我認為過去公司確實派發過一些特別股息。公司過去也曾表達過併購意願。我們如何考慮公司的優先事項，以及公司能夠多快地對這些優先事項採取行動？

I think, definitely, the first priority before we consider dividend is to look for opportunities and M&A. But we don't want to go to any adventure. Sometime you make M&A and then all the management invest all the effort and attention, and it can affect in our potential to grow and to take advantage of the organic growth. So we have to do it very carefully. We are looking for mature companies, companies who don't tend to do micro management, companies that show stable profit. This is okay for us. And also, of course, we would like to look for a company in the semiconductor arena. We don't want to start this company that we have no clue about market, what they do. I think that we have no -- we cannot contribute this. It was a very strong organization. And definitely, we can take small, midsized companies and we give them a lot of tool to leverage their success. So right now, we are evaluating a few companies. But as I said, we do it very carefully, and we don't intend to make any venture by looking for startup a company that targeted the stage of investing and losing money. This is not the type of M&A that we are considering.

我認為，在考慮派息之前，我們首要任務肯定是尋找機會和併購。但我們不想冒險。有時進行併購，所有管理層都會投入全部精力和注意力，這可能會影響我們的成長潛力和有機成長的利用。所以我們必須非常謹慎地處理。我們尋找的是成熟的公司，不傾向微觀管理的公司，獲利穩定的公司。這對我們來說沒問題。當然，我們也希望在半導體領域尋找一家公司。我們不想創辦一家對市場和業務一無所知的公司。我認為我們無法做出貢獻。它是一個非常強大的組織。當然，我們可以接納中小型公司，並提供他們許多工具，幫助他們成功。所以現在，我們正在評估一些公司。但正如我所說，我們非常謹慎，我們不打算冒險尋找那些瞄準投資和虧損階段的新創公司。這不是我們正在考慮的併購類型。

The next question is from Gus Richard of Northland Securities.

下一個問題來自 Northland Securities 的 Gus Richard。

I just wanted to dig into the advanced packaging opportunities, copackaging chiplets, CPU, GPU, high-bandwidth memory and Fan-Out. Could you sort of talk about where each of those are in terms of demand and sort of what you expect in 2021?

我想深入探討先進封裝的機遇，包括共封裝晶片、CPU、GPU、高頻寬記憶體和扇出型封裝。您能否談談這些領域的需求狀況，以及您對2021年的預期？

Gus, this is Ramy. If we look at '21, first of all, I think we talked about the memory that we believe there will be an opportunity in the memory space, in the bandwidth memory. And I think this will definitely be significant in '21. The rest of the industry -- this is a major segment this year and will continue to dominate our business in '21. I think the area of chiplet or heterogeneous integration definitely is growing. People are getting into it. It's very hard to say at this stage how significant it will be, but it's definitely going to become significant over the next few years. And we are in it. We understand it and we're going to be a major player in this segment.

格斯，我是拉米。如果我們展望21年，首先，我想我們談到了內存，我們相信在內存領域，在頻寬內存領域，將會有一個機會。我認為這在21年肯定會很重要。至於其他行業——這是今年的一個主要領域，並將在21年繼續主導我們的業務。我認為小晶片或異質整合領域肯定在成長。人們正在涉足這個領域。目前很難說它會有多重要，但它肯定會在未來幾年變得重要。而我們正處於這個領域。我們了解它，並且我們將成為這個領域的主要參與者。

Got it. And is there a higher intensity of inspection and metrology on the chiplet side of things versus Fan-Out and HBM?

明白了。那麼，與扇出型和 HBM 相比，Chiplet 方面的檢測和計量強度是否更高呢？

Yes, there are additional steps that we don't see on HBM and on the regular Fan-Out. So I would say there is another level of metrology and inspection that doesn't currently exist. Yes, definitely, we think that this will be heavily present in 2 steps of inspection and metrology. And that's no doubt an opportunity, Gus.

是的，有一些額外的步驟，我們在HBM和常規Fan-Out上看不到。所以我認為，這又增加了一個目前尚不存在的計量和檢測層次。是的，我們肯定會在檢測和計量這兩個步驟中大量反映這一點。毫無疑問，這是一個機會，Gus。

Yes. I would like to add a few comments. The heterogeneous integration actually you take very expensive component and put them together. So nobody wants to take any risk that such module will be rejected because something that doesn't work properly. So this is why customers cannot skip any sampling inspection. They must make even 200% inspection to be sure that this model works perfectly. It's a very expensive model. Talk about a few hundred dollars cost per model. So definitely, everyone needs to make inspection. It's not only inspection. It's inspection and metrology. There are many steps, the interposer, the chiplet sales, the hybrid memory. So there are many steps in this package that inspection and metrology is a must. So this is why we believe that this trend is going up. We will see a lot of machines doing this job.

是的。我想補充幾點。異質整合實際上是把非常昂貴的組件組裝在一起。所以沒有人願意承擔模組因為某些零件無法正常運作而被拒收的風險。這就是為什麼客戶不能跳過任何抽樣檢驗的原因。他們必須進行甚至200%的檢驗，以確保模組完美運作。這是一個非常昂貴的模型，每個模型的成本大約是幾百美元。所以，毫無疑問，每個人都需要檢驗。這不僅僅是檢驗，還包括檢驗和計量。這涉及許多步驟，包括中介層、晶片銷售、混合記憶體。因此，在這個封裝過程中，有很多步驟必須進行檢驗和計量。這就是為什麼我們相信這種趨勢正在上升。我們將看到大量的機器來完成這項工作。

Got it. And then on the panel level inspection, you're sort of uncertain about the demand for that. Is that a function of channel level versus wafer level? Or is that a debate over the proliferation of Fan-Out?

明白了。那麼，關於面板級檢測，您對此的需求有點不確定。這是通道級還是晶圓級的問題？還是關於扇出型（Fan-Out）普及的爭論？

No, I'd say that, in general, the panel level is something new for the industry. First of all, the beginning of this process, the industry need to wait for the equipment supplier to build the machine for this size of panels. Now the focus on material, we talk about organic materials in most of the cases. And organic material is not silicon. You cannot make the cell density. The target is to make 1, 2 micron line space, although it is impossible right now to make it an organic material. So today, most of the line space is about 10 micron. They claim to achieve 5, 8 microns soon, but not yet. So I think that the density is a key factor to increase the use of panel level. And in textile -- in textile part of the industry, to know how to make it in high vein. This is why we don't see the acceleration in this process.

不，我想說，總的來說，面板級對行業來說還是個新事物。首先，在這個過程的開始階段，產業需要等待設備供應商為這種尺寸的面板製造機器。現在我們關注的是材料，我們大多數情況下談論的是有機材料。有機材料不是矽。你無法達到這樣的單元密度。目標是實現1到2微米的線距，儘管目前不可能用有機材料來實現。所以今天，大多數線距大約是10微米。他們聲稱很快會達到5到8微米，但目前還沒有。所以我認為密度是提高面板級應用的關鍵因素。而在紡織業中，需要知道如何以高密度製造。這就是為什麼我們沒有看到這個過程加速的原因。

Customers now, I would say, is in the learning curve, and they want to make a good yield. And probably after that, they will go step by step. So we don't expect to see dramatic needs for panel. It goes step by step. And I cannot even predict how long it takes. I believe in the next 2 years, we will see more and more use of this technology, but it is not like silicon. Silicon, the industry know how to handle it very well. All the process, everything is actually -- is a nice experience, so we just know how to do it. Panel is totally new, new equipment, new process, new materials and by definition it will take some more time.

我想說，現在的客戶正處於學習階段，他們希望能獲得良好的良率。之後，他們可能會循序漸進地發展。所以我們預計面板需求不會大幅增加。這是一個循序漸進的過程。我什至無法預測需要多長時間。我相信在未來兩年內，我們會看到這項技術的應用越來越多，但它與矽不同。矽，業界知道如何很好地處理它。所有工藝，所有一切都是很好的體驗，所以我們知道如何做。面板是全新的，有新的設備、新的工藝、新的材料，因此必然需要更多時間。

Got it. That was very helpful. And then you mentioned in the front end that you are starting to triple the new applications for your equipment. Can you give a little bit of color? Are you moving from macro-defect to metrology in the front end? What are you seeing there?

明白了。這很有幫助。然後您在前端提到，你們的設備新應用數量正在增加三倍。能稍微介紹一下嗎？你們的前端業務正在從宏觀缺陷轉向計量嗎？您看到了什麼？

Obviously, I don't want to get into too many details, but the applications where we are focused, we are focused in the area, what we call the back end of tenor. And in that space, we -- as more we get experience, we uncover other applications that customers are doing. It's around the macro -- to your call, the macro inspection but not only macro inspection. Definitely, there is room to grow there.

當然，我不想談太多細節，但我們關注的應用領域，也就是所謂的「音調後端」。在這個領域，隨著我們經驗的積累，我們發現客戶正在開發的其​​他應用。它圍繞著宏觀——根據您的需求，包括宏觀檢測，但不僅僅是宏觀檢測。毫無疑問，這方面還有成長空間。

(Operator Instructions) There are no further questions at this time. Before I ask Mr. Amit to go ahead with his concluding statement, I would like to remind participants that a replay of this call will be available on Camtek's website at www.camtek.com beginning tomorrow.

（接線員指示）目前沒有其他問題。在請阿米特先生進行總結發言之前，我想提醒各位與會者，本次電話會議的回放將於明天起在 Camtek 網站 www.camtek.com 上提供。

Mr. Amit, would you like to make your concluding statement?

阿米特先生，您願意做最後發言嗎？

Okay. I would like to thank you all for your interest in our business and to our investors. I thank your long-term support. Unfortunately, we are unable to meet face-to-face during this challenging period. So we will continue to update you on our activities through virtual conferences. Thank you, and goodbye. Operator, concluding the call?

好的。感謝大家對我們業務以及投資者的關注。感謝大家長期以來的支持。很遺憾，在這段充滿挑戰的時期，我們無法進行面對面的交流。因此，我們將繼續透過線上會議的方式，向大家通報我們的活動進度。謝謝，再見。接線員，通話結束了嗎？

Thank you. This concludes the Camtek's second quarter 2020 results conference call. Thank you for your participation. You may go ahead and disconnect.

謝謝。 Camtek 2020 年第二季業績電話會議到此結束。感謝您的參與。您可以斷開連線。