Camtek Ltd (CAMT) 2023 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek's results Zoom Webinar. My name is Kenny Green, and I'm part of the Investor Relations team at Camtek. (Operator Instructions) I would like to remind everyone that this conference call is being recorded, and the recording will be available on Camtek's website from tomorrow. You should have all by now received the company's press release. If not, please view it on the company's website.

女士們，先生們，謝謝你們的支持。歡迎大家參加 Camtek 的成果 Zoom 網絡研討會。我叫 Kenny Green，是 Camtek 投資者關係團隊的一員。 （操作員說明）我想提醒大家，這個電話會議正在錄音中，錄音將從明天開始在 Camtek 的網站上提供。你們現在應該都收到了公司的新聞稿。如果沒有，請到公司網站查看。

With me today on the call, we have Mr. Rafi Amit, Camtek's CEO; and Mr. Moshe Eisenberg, Camtek's CFO; and Mr. Ramy Langer, Camtek's COO. Rafi will open by providing an overview of Camtek's results and discuss recent trends, and Moshe will then summarize the financial results of the quarter, following that, Rafi, Moshe and Ramy will be available to take your questions.

今天和我一起打電話的有 Camtek 的首席執行官 Rafi Amit 先生；以及 Camtek 的首席財務官 Moshe Eisenberg 先生；和 Camtek 的首席運營官 Ramy Langer 先生。 Rafi 將首先概述 Camtek 的業績並討論近期趨勢，然後 Moshe 將總結本季度的財務業績，之後 Rafi、Moshe 和 Ramy 將回答您的問題。

Before we begin, I would like to remind everyone that certain information provided on this call are internal company estimates, unless otherwise specified. This call may also contain forward-looking statements. These statements are only predictions and may change as time passes. Statements 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 and expectations or otherwise. Investors are reminded that 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, risks related to the concentration of a significant portion of Camtek's expected business in certain countries, particularly China from which Camtek expects to generate a significant portion of its revenues for the foreseeable future but also Taiwan and Korea, including the risks of deviations from our expectations regarding timing and size from (inaudible) customers in these countries, changing industry and market trends, reduced demand for services and products, time when a development of new services and products and their adoption by the market, increased competition in the industry and price reductions as well as due to other risks identified in the company's filings with the SEC.

在我們開始之前，我想提醒大家，除非另有說明，否則本次電話會議提供的某些信息是公司內部估計。此電話會議還可能包含前瞻性陳述。這些陳述只是預測，可能會隨著時間的推移而改變。關於本次電話會議的聲明截至今日發表，公司不承擔更新任何前瞻性聲明的義務，無論是由於新信息、未來事件、變化和預期或其他原因。提醒投資者，這些前瞻性陳述受風險和不確定性的影響，可能導致實際事件或結果與預期大不相同，包括由於一般經濟狀況的影響，與大部分集中相關的風險Camtek 在某些國家/地區的預期業務，特別是 Camtek 預計在可預見的未來將產生很大一部分收入的中國，以及台灣和韓國，包括偏離我們對（聽不清）客戶的時間和規模預期的風險這些國家、不斷變化的行業和市場趨勢、對服務和產品的需求減少、開發新服務和產品並被市場採用的時間、行業競爭加劇和價格下降以及由於本報告中確定的其他風險公司向美國證券交易委員會提交的文件。

Please note that the safe harbor statements and today's press release also covers the contents 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 are useful to investors' understanding and assessment of the company's ongoing core operations and prospects for the future. A full reconciliation of non-GAAP to GAAP financial measures are included in today's earnings press release.

請注意，安全港聲明和今天的新聞稿也涵蓋了本次電話會議的內容。此外，在本次電話會議期間，還將討論某些非 GAAP 財務指標。管理層使用這些來製定戰略決策、預測未來結果和評估公司當前的績效。管理層認為，非公認會計原則財務指標的列報有助於投資者了解和評估公司持續的核心業務和未來前景。今天的收益新聞稿中包含非 GAAP 與 GAAP 財務指標的全面對賬。

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

現在我想把電話轉給 Camtek 的首席執行官 Rafi。拉菲，請繼續。

Thanks, Kenny. Good morning or good afternoon, everyone. Camtek closed the first quarter with revenue of $72.5 million. The gross margin came in at 47.3%, affected mainly by product mix and cost increase of some of the components.

謝謝，肯尼。大家早上好或下午好。 Camtek 第一季度的收入為 7250 萬美元。毛利率為 47.3%，主要受產品結構和部分零部件成本增加影響。

Operating margin was 24%. Over 60% of our revenue came from advanced interconnect packaging applications. Front-end and compound semi segment accounted for about 20% of our revenue. In the first quarter, we shipped multiple system orders to 6 Tier 1 customers in the field of advanced packaging and heterogeneous integration. These orders accounted for over 40% of the quarterly revenue.

營業利潤率為 24%。我們超過 60% 的收入來自先進的互連封裝應用。前端和復合半部分占我們收入的 20% 左右。第一季度，我們向先進封裝和異構集成領域的6家一級客戶交付了多個系統訂單。這些訂單佔季度收入的 40% 以上。

Regarding the DRAM field, customers in the HBM segment account for over 10% of our revenue. If our revenue in Q1, which represents a significant increase over Q1 last year. We see expansion of our DRAM business in spite of the decline in the memory market. In the front-end segment, we delivered a system with a new other module for the first time. These systems were installed at 2 customers. This module will expand our inspection capability in the front-end segment and we anticipate potential for growth at this customer and other in the coming quarters. We installed 2 Golden Eagle systems for pattern inspection at a new customer site for fan-out application. We plan to ship additional systems to this customer in Q2 and Q3. During the first quarter, we received an order for 9 systems from a Tier 1 customer for advanced packaging to be delivered in the second and third quarters of this year.

在DRAM領域，HBM部門的客戶占我們收入的10%以上。如果我們第一季度的收入比去年第一季度有顯著增長。儘管內存市場下滑，我們仍看到 DRAM 業務的擴張。在前端部分，我們首次交付了一個帶有新的其他模塊的系統。這些系統安裝在 2 個客戶處。該模塊將擴大我們在前端領域的檢測能力，我們預計未來幾個季度該客戶和其他客戶的增長潛力。我們在扇出應用的新客戶現場安裝了 2 套 Golden Eagle 系統進行圖案檢測。我們計劃在第二季度和第三季度向該客戶運送更多系統。在第一季度，我們收到了來自一級客戶的 9 台先進封裝系統訂單，將於今年第二和第三季度交付。

Regarding the second quarter, we estimate the sales to be similar to Q1 '23, which represents a decline of 9% year-over-year. As we have stated in our previous call, we continue to believe that our leading position in specific segments, broad and diversified customer base and long-term strategic relationships with customers will enable us to outperform the industry.

關於第二季度，我們估計銷售額與 23 年第一季度相似，同比下降 9%。正如我們在之前的電話會議中所說，我們仍然相信，我們在特定領域的領先地位、廣泛而多元化的客戶群以及與客戶的長期戰略關係將使我們能夠超越行業。

Regarding the second half of '23. Based on our discussions with customers, there is a potential for a moderate improvement in the business situation of our customers. At this stage, and considering the lead times which are becoming shorter, it is hard to foresee when this potential translate into orders. At times like this, when the world is experiencing an economic slowdown, we conduct our business with utmost care. We are monitoring our expenses carefully and adjusting them to the current situation rather than to the long-term forecast.

關於 23 年下半年。根據我們與客戶的討論，我們客戶的業務狀況有適度改善的潛力。在這個階段，考慮到交貨時間越來越短，很難預見這種潛力何時會轉化為訂單。在這樣的時刻，當世界經濟放緩時，我們會非常謹慎地開展業務。我們正在仔細監控我們的開支，並根據當前情況而不是長期預測對其進行調整。

The field in which we cannot afford to reduce expenses is R&D because our customers continue to develop a new technology such as hybrid bonding and erogenous integration. They set a very aggressive road map with a very tough schedule, thus committing us to offer solutions on time. At the same time, we are aware of the fact that transition from slowdown to growth is swift in our segment. That is why we need to maintain a sufficient inventory that will allow us to meet the requirement for quick delivery of systems.

我們無法削減開支的領域是研發，因為我們的客戶不斷開發新技術，例如混合鍵合和性感集成。他們制定了一個非常積極的路線圖和一個非常嚴格的時間表，從而使我們承諾按時提供解決方案。與此同時，我們意識到我們的細分市場正在迅速從放緩到增長的轉變。這就是為什麼我們需要保持足夠的庫存，使我們能夠滿足快速交付系統的要求。

Looking at the investment and increasing capacity in the R&D road map that our major customers are making in relevant segments we are optimistic about growth potential. The release of new products later this year will expand our portfolio, allowing us to penetrate new applications. In addition, we continue our efforts in the M&A we will further increase our total available market.

看看我們的主要客戶在相關領域所做的研發路線圖的投資和增加的能力，我們對增長潛力持樂觀態度。今年晚些時候發布的新產品將擴大我們的產品組合，使我們能夠滲透到新的應用程序中。此外，我們在併購方面繼續努力，我們將進一步增加我們的可用市場總量。

And now Moshe will review the financial results. Moshe?

現在 Moshe 將審查財務結果。摩西？

Thank you, 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.

謝謝你，拉菲。在我接下來的財務摘要中，我將提供非 GAAP 基礎上的結果。 GAAP 結果與非 GAAP 結果之間的對賬顯示在今天早些時候發布的新聞稿末尾的表格中。

First quarter revenue came at $72.5 million, a decrease of 6% compared with the first quarter of 2022. The geographic revenue split for the quarter was as follows: Asia was 90% and U.S.A. and Europe accounted for 10%. We expect to return to the 80-20 mix for the year as a whole. Gross profit for the quarter was $34.3 million. The gross margin for the quarter was 47.3% versus 52% in the first quarter of last year and 49% last quarter. This decline is a result of the sales mix as well as continued inflationary pressures on raw materials and labor, which we cannot fully pass on to customers.

第一季度收入為 7250 萬美元，與 2022 年第一季度相比下降 6%。本季度的地域收入分配如下：亞洲佔 90%，美國和歐洲佔 10%。我們預計全年將恢復到 80-20 的組合。本季度的毛利潤為 3430 萬美元。本季度毛利率為 47.3%，去年第一季度為 52%，上季度為 49%。這種下降是銷售組合以及原材料和勞動力持續通脹壓力的結果，我們無法將其完全轉嫁給客戶。

As we mentioned last time, we have initiated a process focused on improving the gross margin through engineering and design changes, which in some cases, require customer qualifications as well as supply chain initiatives. We expect gradual improvement in the gross margin from the current level. But I note that it will take time until we see the full benefit of this step.

正如我們上次提到的，我們已經啟動了一個專注於通過工程和設計變更來提高毛利率的流程，在某些情況下，這需要客戶資格和供應鏈計劃。我們預計毛利率將從當前水平逐步改善。但我注意到，我們需要時間才能看到這一步的全部好處。

Operating expenses in the quarter were $16.2 million. This is compared with $18 million in the first quarter of last year and to the $17.4 million reported in the previous quarter. The current strength of the U.S. dollar versus the Israeli shekel is beneficial to our current operating expenses level. Operating profit in the quarter was $17.4 million compared to $22.2 million in the first quarter of last year and $22.8 million reported in the previous quarter. Operating margin was 24% compared to 28.8% last year and 27.8% in the previous quarter. The decline is due to the decrease in business volume and gross profit.

本季度的運營費用為 1620 萬美元。相比之下，去年第一季度為 1800 萬美元，上一季度為 1740 萬美元。目前美元兌以色列謝克爾的強勢有利於我們目前的運營費用水平。本季度營業利潤為 1740 萬美元，去年第一季度為 2220 萬美元，上一季度為 2280 萬美元。營業利潤率為 24%，去年為 28.8%，上一季度為 27.8%。下降是由於業務量和毛利下降。

Financial income for the quarter was $5.1 million compared with $3.8 million in Q4 and only $400,000 last year. The majority of the increase relates to the significantly higher interest rates on our deposits on an increased cash balance. Net income for the first quarter of 2023 was $20.4 million or $0.42 per diluted share. This is compared to a net income of $21 million or $0.44 per share in the first quarter of last year. Total diluted number of shares as of the end of Q1 was $48.4 million.

本季度的財務收入為 510 萬美元，而第四季度為 380 萬美元，去年僅為 40 萬美元。增加的大部分與現金餘額增加導致我們的存款利率顯著提高有關。 2023 年第一季度的淨收入為 2040 萬美元或攤薄後每股收益 0.42 美元。相比之下，去年第一季度的淨收入為 2100 萬美元或每股 0.44 美元。截至第一季度末，稀釋後的總股數為 4840 萬美元。

Turning to some high-level balance sheet and cash flow metrics. Starting from cash. Total cash, including cash, cash equivalents, short and long-term deposits as of March 31, 2023, was $493 million. During the first quarter, we had a positive cash flow, and we generated $17.1 million in cash from operations. Accounts receivables decreased from $81 million at the end of last quarter to $66 million, primarily due to a strong collection within the quarter.

轉向一些高級資產負債表和現金流量指標。從現金開始。截至 2023 年 3 月 31 日，包括現金、現金等價物、短期和長期存款在內的現金總額為 4.93 億美元。第一季度，我們的現金流為正，我們從運營中產生了 1710 萬美元的現金。應收賬款從上一季度末的 8100 萬美元減少到 6600 萬美元，這主要是由於本季度收款強勁。

Days outstanding for Q1 were 84 days, down from 90 days last quarter. Inventory level was at similar level as of last quarter. In terms of guidance, in Q2, we expect revenue at a similar level as achieved in Q1.

第一季度的未償還天數為 84 天，低於上一季度的 90 天。庫存水平與上一季度持平。在指導方面，我們預計第二季度的收入水平與第一季度相似。

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

這樣，Rafi、Ramy 和我本人將願意回答您的問題。肯尼？

Thank you, Moshe. (Operator Instructions) Our first question will be from Brian Chin of Stifel.

謝謝你，摩西。 （操作員說明）我們的第一個問題將來自 Stifel 的 Brian Chin。

Yes, I guess maybe to start with, you've referenced some meaningful Tier 1 customer activity. And I guess, one, what kind of impact does this have typically on blended gross margins? And two, can you describe what you're seeing from also your broader customer base? Clearly, wafer starts and utilization is lower as inventory corrections continue. But what are the specific areas where you do have some indications for some pickup in the second half? And I'm thinking also about China specifically.

是的，我想也許首先，您引用了一些有意義的一級客戶活動。我想，第一，這通常會對混合毛利率產生什麼樣的影響？第二，你能描述一下你從更廣泛的客戶群中看到的情況嗎？顯然，隨著庫存調整的繼續，晶圓開工和利用率較低。但是，您確實有跡象表明在下半年有所回升的具體領域是什麼？我也在特別考慮中國。

So let me start with the answer. So first of all, when we talk about the second half, we are talking about multiple territories. It's not related to a specific territory. Definitely, it's not just China. The main drivers, I would say, are the advanced packaging. No doubt this segment is healthy, show some strength. And you can see that our Tier 1 customers are continuing to buy equipment, they are investing and they are still increasing the capacity for certain applications.

所以讓我從答案開始。所以首先，當我們談論下半場時，我們談論的是多個地區。它與特定區域無關。當然，不僅僅是中國。我想說，主要的驅動因素是先進的封裝。毫無疑問，這個細分市場是健康的，表現出一定的實力。你可以看到我們的一級客戶在繼續購買設備，他們在投資，他們仍在增加某些應用程序的容量。

The second area that is driving the growth or will drive the growth is the compound in semi. Definitely, the automotive market is strong, and this market will continue to be healthy at least for the foreseeable future. So I would say these are the major opportunities through general. I would also like to specify here that we have POs on hand, for some of these opportunities. Now in general, the Tier 1 customers do not have a negative but a positive effect on our gross margin. Where we will see, and I think Moshe mentioned it in his notes is the mix here part from the issues of the, I would say, the increase in some of the cost side, there is definitely a mix issue or a mix -- a product mix in this quarter that is not favorable. And 2 of these reasons are for the low gross margin. I would say, I would state again, it's reiterated it's important. Our Tier 1 customers affect positively on the gross margin.

推動增長或將推動增長的第二個領域是半複合材料。毫無疑問，汽車市場很強勁，至少在可預見的未來，這個市場將繼續保持健康。所以我想說這些是通過一般的主要機會。我還想在此說明，對於其中一些機會，我們手頭有採購訂單。現在一般來說，一級客戶對我們的毛利率沒有負面影響，而是正面影響。我們將看到的地方，我認為 Moshe 在他的筆記中提到的是這裡的混合部分，我想說的是，一些成本方面的增加，肯定存在混合問題或混合 - 一個本季度的產品結構並不有利。其中 2 個原因是毛利率低。我會說，我會再次聲明，重申這很重要。我們的一級客戶對毛利率產生積極影響。

Okay. That's helpful. And then just for my follow-up, was the significant advanced packaging order that's shipping in 2Q and 3Q? Is that memory related? And I guess, whether or not it's high bandwidth memory related, can you also discuss how large that market opportunity is your market share? And how process control intensity is maybe favorably impacted as more die are stacked together?

好的。這很有幫助。然後只是為了我的後續行動，是在第二季度和第三季度發貨的重要先進包裝訂單嗎？跟記憶有關嗎？而且我想，無論它是否與高帶寬內存相關，您能否也討論一下您的市場份額有多大的市場機會？隨著更多芯片堆疊在一起，過程控制強度可能會受到怎樣的有利影響？

So first of all, the 9 machine orders are not related to memory. So that's, I would say, it's other advanced packaging applications. So now going back to the memory and the DRAM specifically, first of all, this is obviously a healthy segment because there is a transition to the use of high-bandwidth memory I think everybody is using it. This is very much what they tied with the (inaudible) integration segment or for the high-performance memory going into servers and gaming and other applications. definitely, that's an area that is going to grow, and we are seeing the other business.

所以首先9個機器指令與內存無關。所以，我會說，這是其他先進的封裝應用程序。所以現在回到內存和 DRAM，首先，這顯然是一個健康的部分，因為正在過渡到使用高帶寬內存，我認為每個人都在使用它。這與他們與（聽不清）集成部分或進入服務器、遊戲和其他應用程序的高性能內存相關聯。當然，這是一個將會增長的領域，我們正在看到其他業務。

So in general, we have a very strong market share, and we serve all the major players. From the size of the business, I think we mentioned it in the notes, it was 10% of our revenues in this quarter. It's still too early to say what it will be in the next quarters, but it will be meaningful this year.

所以總的來說，我們擁有非常強大的市場份額，我們為所有主要參與者提供服務。從業務規模來看，我想我們在註釋中提到過，它占我們本季度收入的 10%。現在說下幾個季度會怎樣還為時過早，但今年會很有意義。

Our next question will be from Charles Shi from Needham.

我們的下一個問題將來自 Needham 的 Charles Shi。

I think the first thing I want to clarify a little bit more is that nine machine order. You used that in the press release, it's a strategically important order, can you expand a bit -- I understand it's not in memory, it's other advanced packaging, but why you consider a strategically important quarter? Just need a little bit more color on that.

我想我首先要澄清的是九機令。你在新聞稿中使用了它，這是一個具有戰略重要性的訂單，你能擴展一下嗎——我知道它不在內存中，它是其他先進的包裝，但你為什麼認為一個具有戰略重要性的季度？只是需要多一點顏色。

Charles, the reason that we see this as a strategic order, this is, first of all, a very important customer of ours. It's in the advanced packaging and there is a potential for significant number of machines in the second half of this year and in '24. So definitely, it's the strategic nature is the potential quantity of machines that we will be selling to these specific customers in, I would say, the next 18 months.

查爾斯，我們之所以將其視為戰略訂單，首先是我們非常重要的客戶。它在先進的封裝中，並且有可能在今年下半年和 24 年生產大量機器。因此，可以肯定的是，戰略性質是我們將在未來 18 個月內向這些特定客戶銷售的潛在機器數量。

Is there any -- I mean, I understand the size of the business, yes, definitely sounds it's strategic, it's important, but from a technology or product perspective, any other thing noteworthy, these nine machine order, is it something like fine pitch, higher bump density, I mean, something that basically requires a high level of capability from your machines, important for your technology road map or something else. I just really want to understand why it is this strategically important understand the business side, but also we do understand technology side. Yes.

有沒有 - 我的意思是，我了解業務規模，是的，這聽起來絕對具有戰略意義，很重要，但從技術或產品的角度來看，還有其他值得注意的事情，這九台機器訂單，是否像精細音調，更高的凸點密度，我的意思是，基本上需要你的機器具有高水平的能力，這對你的技術路線圖或其他東西很重要。我真的很想了解為什麼了解業務方面具有戰略重要性，但我們也確實了解技術方面。是的。

From a technology point of view, no doubt, this entire industry is tightening the dimensions of all the applications. And we will see a similar trend on this customer as well as we increase the number of bumps, we reduce the page -- the RDLs for the fan-out applications are coming down and also the defect size is becoming smaller and smaller. So I think from the application requirements point of view, and I would say the number of applications in this customer first, there will be quite a few of them. And definitely, from a technology point of view, it's definitely going to be tighter for these customers as well. And I think this is as much as I can disclose at this stage, Charles.

從技術的角度來看，毫無疑問，整個行業都在收緊所有應用程序的尺寸。我們將在這個客戶身上看到類似的趨勢，我們會增加凸塊的數量，減少頁面——扇出應用的 RDL 正在下降，缺陷尺寸也變得越來越小。所以我覺得從應用需求的角度來看，我會先說這個客戶的應用數量，會有很多。當然，從技術的角度來看，對於這些客戶來說肯定也會更加嚴格。查爾斯，我認為這就是我現階段可以透露的內容。

Yes, Ramy. No problem. I appreciate the color as always. So Moshe, I have a question on the financial side. In terms of your financial planning here. I understand that you want to exercise more cost discipline going into the next few quarters. I think you said you're going to respond to the near-term dynamics a little bit more. So wonder what's your thought on the overall OpEx this year, are you thinking about flat year-on-year? Or -- and based on what kind of market assumption, especially in the second half, are you making improvement on the second half in terms of the business for any of the OpEx budgeting you're thinking as of today?

是的，拉米。沒問題。我一如既往地欣賞這種顏色。所以 Moshe，我有一個關於財務方面的問題。就您的財務計劃而言。我知道你想在接下來的幾個季度中實施更多的成本紀律。我想你說過你會對近期的動態做出更多的反應。那麼想知道您對今年的整體運營支出有何看法，您是否考慮同比持平？或者——基於什麼樣的市場假設，尤其是在下半年，你是否在下半年對你今天考慮的任何運營支出預算的業務進行改進？

So in terms of the operating expenses, first of all, in general, we are -- you already see in the first quarter somewhat reduced operating expenses versus last year. And we will continue with this level pretty much throughout the year. As Rafi mentioned in his prepared notes, the focus will be on R&D. So you will see over the next 2 quarters an increase in the R&D level, and somewhat -- if we want to keep the OpEx at the same level, you see on the other aspect, the SG&A, a reduced level of expenses.

因此，就運營費用而言，首先，總的來說，我們 - 你已經看到第一季度的運營費用與去年相比有所減少。我們幾乎全年都會繼續保持這一水平。正如拉菲在他準備好的筆記中提到的那樣，重點將放在研發上。因此，您將在接下來的兩個季度看到研發水平的提高，並且在一定程度上 - 如果我們希望將運營支出保持在同一水平，您會在另一方面看到 SG&A 的支出水平降低。

Got it. Got it. That's kind of based on stable business outlook. Or do you expect some moderate improvement in the second half in that assumption? Just really want to understand how you're thinking about OpEx here relative to the market environment.

知道了。知道了。這是基於穩定的業務前景。還是您預計下半年該假設會有所改善？只是真的想了解您如何看待與市場環境相關的 OpEx。

So just in general, we still don't have a clear view on the second half. On one hand, we do hear some positive feedback from customers, but we are not taking it to the bank yet, and we don't have all the orders in hand to support growth. So at this point, we provided guidance for the second quarter.

所以總的來說，我們對下半場仍然沒有明確的看法。一方面，我們確實從客戶那裡聽到了一些積極的反饋，但我們還沒有把它帶到銀行，而且我們手頭沒有所有訂單來支持增長。因此，在這一點上，我們為第二季度提供了指導。

We gave some indication for the second half. It's too early to say whether the second half is going to be stronger. So my current assumption on the operating expenses is based on the current level of business.

我們為下半場給出了一些指示。現在說下半場是否會更強還為時過早。所以我目前對運營費用的假設是基於目前的業務水平。

I would like just to add one more thing, Charles, and I think I said it in the previous answer, but I want to reiterate it. The -- I would say, the positive signs that we see are coming from discussions with customers in multiple territories.

查爾斯，我想再補充一件事，我想我在之前的回答中已經說過，但我想重申一下。我想說的是，我們看到的積極跡象來自與多個地區客戶的討論。

It's just not related to 1 or 2 customers. So yes, we are hearing in multiple customers from major customers, I would say, some positive note. But as Moshe said, some of it isn't supported by POs, but still, it is too early in the game to really say what will be the second half. I believe that in a few months, we'll -- let's say, I would say, in the third quarter, we'll be in a much better position to discuss it.

它只是與 1 或 2 個客戶無關。所以是的，我們從主要客戶那裡聽到了多個客戶，我想說的是一些積極的說法。但正如 Moshe 所說，其中一些內容不受 PO 支持，但在遊戲中真正說下半場會是什麼還為時過早。我相信在幾個月後，我們會——比方說，我會說，在第三季度，我們將能夠更好地討論它。

Our next question will be from Craig Ellis from B. Riley.

我們的下一個問題將來自 B. Riley 的 Craig Ellis。

Congratulations on your revenue execution team. I wanted to start just by following up on one of the comments around type band with memory and just clarifying the business's potential for this year. Is the view that the strength you're seeing in high bandwidth memory sufficient to drive year-on-year growth in 2023 versus 2022 level. So was that more about the business' strength in the very near term, perhaps in either 2Q or 3Q.

祝賀您的收入執行團隊。我想首先跟進有關 type band with memory 的評論之一，並澄清今年的業務潛力。是否認為您在高帶寬內存中看到的優勢足以推動 2023 年與 2022 年水平的同比增長。因此，更多關於業務在短期內的實力，可能在第二季度或第三季度。

So first of all, I'm expecting, let's say, we are about 10% revenue of our revenues for this segment alone. And I would say that I'm expecting something similar at least for the next quarter.

因此，首先，我預計，僅此部分的收入就占我們收入的 10% 左右。我會說我預計至少在下個季度會出現類似的情況。

I think throughout the year, this is an area that is picking up and you see all everybody is talking, and it's not just related to one specific vendor, people understand that this is a growth area. So definitely, this is something that will be significantly larger what we saw in '22, it would be meaningful, and I think it will help us to keep the numbers.

我認為全年，這是一個正在回升的領域，你會看到每個人都在談論，這不僅僅是與一個特定的供應商有關，人們明白這是一個增長領域。所以肯定的是，這將比我們在 22 年看到的要大得多，這將是有意義的，我認為這將幫助我們保持數字。

That's really helpful, Ramy. And then the second question is regarding the compound semiconductor part of the business. And it's a longer-term question. One of the things that investors have been concerned about over the last few months given some of the pressures that have been seen in the global automotive market is the ability for compound semiconductor to be an intermediate term growth driver.

這真的很有幫助，拉米。然後第二個問題是關於業務的化合物半導體部分。這是一個長期的問題。鑑於全球汽車市場的一些壓力，投資者在過去幾個月一直擔心的一件事是化合物半導體能否成為中期增長動力。

So without providing any guidance, can you just talk about your confidence, the compound semi after what looks like will be a strong this year could be a business that could provide growth in 2024. What are the gives and takes to that being a sustainable pro driver?

因此，在不提供任何指導的情況下，您能否談談您的信心，今年看起來很強勁的複合半成品可能是一項可以在 2024 年實現增長的業務。作為一個可持續的專業人士，有哪些讓步和付出？司機？

First of all, we are continuing at a similar rate than we experienced last year, which is already a good note. Now in this area, looking forward for this year, we are backed by POs from some of the customers. And definitely, we are seeing and with discussions with specific customers that are thinking of expanding or getting into this market.

首先，我們繼續以與去年相似的速度發展，這已經是一個很好的說明。現在在這個領域，展望今年，我們得到了一些客戶的 PO 的支持。當然，我們正在與正在考慮擴展或進入該市場的特定客戶進行討論。

I'm getting the feeling that this market and will continue to invest in increasing the capacity at least throughout '23 and '24. So from that point of view, I would say we are looking at this market positively.

我感覺這個市場至少在 23 年和 24 年期間將繼續投資增加產能。所以從這個角度來看，我想說我們正在積極地看待這個市場。

That's really helpful, Ramy. And then for my last question, and I'll flip it over to Moshe. Moshe, can you just talk a little bit more about some of the things that are happening with gross margin, there were repeated references to mix dynamics in the quarter. Was that mostly on a product line basis or with the end market serves, whether it was advanced packaging or high bandwidth memory, et cetera. And then you mentioned that there would be some improvement in gross margin. Can you provide a little bit more color on the timing with which you'd expect it to see that?

這真的很有幫助，拉米。然後是我的最後一個問題，我將把它交給 Moshe。 Moshe，你能否多談談毛利率正在發生的一些事情，本季度反复提到混合動態。這主要是基於產品線還是終端市場服務，無論是先進封裝還是高帶寬內存等等。然後你提到毛利率會有一些改善。您能否提供更多關於您希望它看到的時間的顏色？

Thank you, Craig. with respect to gross margin, first of all, obviously, this is an area of focus of us at this point, and we understand that we need to improve the gross margin. So on the product mix, I would say that it's across the board. And Rafi -- Ramy mentioned before, the Tier 1 customers, which are driving relatively higher gross margin.

謝謝你，克雷格。關於毛利率，首先，顯然，這是我們目前關注的一個領域，我們明白我們需要提高毛利率。所以在產品組合上，我會說它是全面的。而 Rafi——Ramy 之前提到過，一級客戶推動了相對較高的毛利率。

So it's relatively -- the smaller customers that are driving the margin a little bit down. But that's not the whole story that most of the issue is on the cost side. And here, we are very much focused on reducing the bill of material of the product through a few initiatives.

所以它是相對的 - 較小的客戶正在推動利潤率下降一點。但這並不是大部分問題都在成本方面的全部。在這裡，我們非常專注於通過一些舉措減少產品的材料清單。

First of all, we -- and obviously, we cannot pass on to the customer, all these inflationary pressures. So what we do is, first of all, we do some -- we are making some changes in the design of the system. But you have to take into account that in some cases, we need to get customer qualifications for that. And it's a long process. So it takes time until we will see the benefit of that.

首先，我們 - 顯然，我們不能將所有這些通脹壓力轉嫁給客戶。所以我們所做的是，首先，我們做了一些——我們正在對系統的設計進行一些改變。但是您必須考慮到，在某些情況下，我們需要為此獲得客戶資格。這是一個漫長的過程。因此，我們需要時間才能看到這樣做的好處。

The other aspect is obviously through supply chain initiatives, negotiation with customers and now -- the market is a little bit softer. So we believe that we will be able to achieve here some savings as well. Taking into account the fact that we are seeing with certain level of inventory with the higher cost structure. So as I said, gradually, we will see improvement, but it takes time until we see the full benefit of this activity.

另一個方面顯然是通過供應鏈舉措、與客戶的談判以及現在——市場有點疲軟。因此，我們相信我們也將能夠在這裡實現一些節省。考慮到我們看到具有較高成本結構的一定水平的庫存這一事實。所以正如我所說，我們會逐漸看到改善，但需要時間才能看到這項活動的全部好處。

Our next question will be from Dougson Zhang of Bank of America.

我們的下一個問題將來自美國銀行的 Dougson Zhang。

Just a follow-up on the margin front. I know you guys have a target model out that's 52% gross margin target. Could you just remind us or what year that target is for? And if you still think that is a reachable target?

只是保證金方面的後續行動。我知道你們有一個目標模型，即 52% 的毛利率目標。你能提醒我們一下這個目標是哪一年嗎？如果您仍然認為這是一個可以實現的目標？

Yes. The target was not specific to a year, but more for a revenue level. And the target was for about $400 million business. Yet, we are still operating at this point below our target model even for the $300 million revenue for the reasons that we've mentioned before. And yes, the answer is we are committed and we have a path. We know exactly what we need to do, and we are executing based on this plan to return to the 50-ish percent gross margin level. But again, I would say that it's a gradual process and it's we will see the full benefit in a few quarters.

是的。該目標並不特定於一年，而是更多地針對收入水平。目標是獲得約 4 億美元的業務。然而，由於我們之前提到的原因，即使收入為 3 億美元，我們仍低於目標模型。是的，答案是我們承諾並且我們有一條路。我們確切地知道我們需要做什麼，我們正在根據這個計劃執行，以恢復到 50% 左右的毛利率水平。但我要說的是，這是一個漸進的過程，我們將在幾個季度後看到全部收益。

Understood. And then just one on China. So some of your front-end peers recently have received clarification from the U.S. government, they believe they can ship incremental revenue to Chinese customers that they previously thought were restricted I know you guys said you didn't have any direct impacts from this kind of restriction before.

明白了。然後只有一個關於中國的。所以你們的一些前端同行最近收到了美國政府的澄清，他們相信他們可以向中國客戶運送他們以前認為受到限制的增量收入我知道你們說你們沒有受到這種直接影響之前的限制。

But are you seeing any sort of increased activities around this? Do you have any revenue potential from this new clarification?

但是您是否看到圍繞此的活動有所增加？你有沒有從這個新的澄清中獲得任何收入潛力？

I would say that definitely, we can see from China, a lot of efforts to come with a solution where they cannot get or imported, the high-end component and that should find a different way to get a high performance. And I would say the efforts are focused on advanced packaging. This is the only way for them to try to get good performance and high performance. And this is a fit that we are very strong. And definitely, we can benefit from that.

我可以肯定地說，我們可以從中國看到，在他們無法獲得或進口高端組件的情況下，他們付出了很多努力來提供解決方案，並且應該找到一種不同的方式來獲得高性能。我想說的是，這些努力都集中在先進的封裝上。這是他們嘗試獲得良好性能和高性能的唯一方法。這是我們非常強大的契合。當然，我們可以從中受益。

Our next question will be from Vi (inaudible) of Jefferies.

我們的下一個問題將來自 Jefferies 的 Vi（聽不清）。

So I just have one. So Intel and TSMC have really talked about their bumps shrinking and eventually going into bumpless or hybrid bonding architectures. .

所以我只有一個。因此，英特爾和台積電確實在談論他們的凸塊縮小，並最終進入無凸塊或混合鍵合架構。 .

So how are you sort of strategically positioned for this? Does that involve sort of using the same platform of tools that you have? Or does it involve a full reengineering once we start going into hybrid pointing type architectures?

那麼，您在這方面的戰略定位如何？這是否涉及使用您擁有的相同工具平台？或者一旦我們開始進入混合指向類型架構，它是否涉及全面的重新設計？

So thank you for the question. I would say there are 2 paths here. And definitely, even with people who talk about bumpless, it means very low-profile bumps. It's not exactly without bumps. But definitely, the hybrid bonding is a very big opportunity for us. And we will be able to address some of the applications with the current products that we are doing. But definitely, I think Rafi mentioned in his prepared notes, that we are going to introduce new products and these technologies our targeted party, not only for the hybrid bonding, but definitely, the hybrid bonding is one of the targets of these new products. We are working with customers that are doing hybrid bonding today, we understand the market requirements. And definitely, our products will be able to address the challenges that will be needed from both inspection and metrology I would say, in the future.

謝謝你的提問。我會說這裡有兩條路徑。當然，即使對於談論無顛簸的人來說，這也意味著非常低調的顛簸。它並非完全沒有顛簸。但可以肯定的是，混合鍵合對我們來說是一個非常大的機會。我們將能夠用我們目前正在做的產品解決一些應用問題。但肯定的是，我認為 Rafi 在他準備好的筆記中提到，我們將推出新產品和這些技術我們的目標群體，不僅針對混合鍵合，而且肯定地，混合鍵合是這些新產品的目標之一。我們正在與當今進行混合鍵合的客戶合作，我們了解市場需求。毫無疑問，我們的產品將能夠應對未來檢查和計量所需的挑戰。

And a follow-up to that, does that kind of make this some more competitive part of the market versus where you are right now, do you see yourself competing with some of the like KLA and some of the leading process control players. Does that change the competitive dynamics or...

對此的後續行動，與您現在所處的市場相比，這是否使市場更具競爭力，您是否看到自己與一些像 KLA 和一些領先的過程控制參與者競爭。這會改變競爭動態還是...

It's hard to say at this stage whether it will really change the competitive environment it may change it in certain applications. But I think in most of the applications, I don't think it will change drastically. And again, there are very -- there are many flavors to hybrid bonding. It's not just one flavor. So I don't think there will be a change. But definitely, it's a new process. it's, I would say, making the advanced packaging and heterogeneous integration, even much larger, more people will be using it. So definitely, there are going to be more opportunities. And yes, more opportunities it's going to be competitive. The market today is competitive, but with our technologies and our R&D efforts, we are very confident that we will be able to continue and compete successfully there.

在現階段很難說它是否真的會改變競爭環境——它可能會在某些應用程序中改變它。但我認為在大多數應用程序中，我認為它不會發生翻天覆地的變化。再一次，混合鍵合有很多種。這不僅僅是一種口味。所以我認為不會有變化。但可以肯定的是，這是一個新的過程。我想說的是，讓高級封裝和異構集成變得更大，更多的人會使用它。所以肯定會有更多的機會。是的，更多的機會將具有競爭力。今天的市場競爭激烈，但憑藉我們的技術和研發努力，我們非常有信心能夠繼續在那裡競爭並取得成功。

Okay. That makes sense. And then one final question. So you talked about HBM being 10% of your revenues. And heterogeneous integration sort of being that 40% of the revenues in the quarter. Either gross margin sort of different -- the gross margin profile different when you start targeting a logic kind of an advanced package versus HBM? Or do you think they're similar dynamics?

好的。這就說得通了。然後是最後一個問題。所以你談到 HBM 是你收入的 10%。異構集成佔本季度收入的 40%。毛利率有什麼不同——當你開始針對一種邏輯類型的高級封裝與 HBM 時，毛利率情況會有所不同嗎？或者你認為它們是相似的動態？

So first of all, let's start, we said the 40% or the 6 Tier 1 customers accounted for 40% of the revenues and its advanced packaging and heterogeneous integration.

所以首先，讓我們開始吧，我們說 40% 或 6 個一級客戶佔收入的 40% 及其先進的封裝和異構集成。

So it's both. Heterogeneous integration didn't account for 40% in this quarter, just to correct it. But -- but going back to your question, look, the more complex applications and high bandwidth memory is definitely a complex application. You are required there to inspect a very large number of pumps at a very small time with a nominal accuracies and then do the inspection. These kind of machines, the gross margin is high on them.

所以兩者都是。本季度異構集成沒有占到40%，糾正一下。但是——但是回到你的問題，看，更複雜的應用程序和高帶寬內存絕對是一個複雜的應用程序。您需要在那里以標稱精度在非常短的時間內檢查大量泵，然後進行檢查。這種機器，毛利率很高。

So definitely, all in all, advanced packaging the DRAM portion of it, the heterogenous integration in general, the gross margins are healthy. And I believe that this is a good area that we continue to dominate and will be able there (inaudible) the overall margins will be good.

因此，總而言之，先進封裝的 DRAM 部分，總體上是異構集成，毛利率是健康的。我相信這是一個很好的領域，我們將繼續佔據主導地位，並且能夠在那裡（聽不清）整體利潤率會很高。

Our next question will be from Auguste Richard of Northland.

我們的下一個問題將來自北國的奧古斯特理查德。

Just in terms of your Tier 1s give you a forecast. And I'm just wondering is the deliveries laying on top of that forecast? And how is your expectation for turns in a quarter changed over the last couple of quarters in terms of sort of hitting your guidance?

就您的 Tier 1 而言，給您一個預測。我只是想知道交付量是否高於該預測？在過去幾個季度中，您對一個季度的轉變預期在達到您的指導方面有何變化？

Look, in general, from a focus point of view. So the big customers, the forecast is pretty clear the change is [yester] sometimes pull in and pushouts, but this is very regular in all normal working and it can be a reason for many things. But in general, I think we mentioned it also last quarter, I think today, the difficulty to forecast is customers, they even give you an order, they will give you the delivery or the -- they will allow you to ship only very close to the shipment dates.

一般來說，從焦點的角度來看。所以大客戶，預測很清楚，變化是 [yester] 有時會拉進和推出，但這在所有正常工作中都是非常規律的，這可能是很多事情的原因。但總的來說，我想我們在上個季度也提到過，我想今天，很難預測的是客戶，他們甚至給你一個訂單，他們會給你送貨或者——他們只會讓你在非常接近的時候發貨到裝運日期。

And so there is, I would say, they will ask for the machine delivery really when they have the (inaudible), they are sure that they finish the cleaning room, they know that the customer business is secured. And this is part of the difficulty today to give a longer-term forecast. And I think this will be with us for the next month until the industry is less uncertain. But from understanding the size of the business overall, we see the forecast, the pipeline in general, Moshe talked about it.

因此，我想說的是，當他們擁有（聽不清）時，他們會真正要求機器交付，他們確定他們完成了清潔室，他們知道客戶業務是安全的。這也是今天給出長期預測的部分困難。而且我認為這將在下個月與我們同在，直到該行業的不確定性降低為止。但是從整體業務規模的了解來看，我們看到了預測，總的來說，管道，Moshe 談到了它。

We are confident about the certain level that we are now -- we think there is a potential, as we explained, for even a better second half. But the issue is really to get to the industry to be more certain, to feel more comfortable with the long-term forecast. And once this is achieved, I believe, that things will be back to normal.

我們對我們現在的水平充滿信心——正如我們所解釋的，我們認為下半年有可能變得更好。但問題實際上是讓這個行業更加確定，對長期預測感到更加自在。我相信，一旦實現這一點，事情就會恢復正常。

And turns in the quarter, how has that changed? Is there an increase in percentage? Or is it still a low number? Any color around that? .

在本季度，情況發生了怎樣的變化？百分比有增加嗎？或者它仍然是一個低數字？周圍有顏色嗎？ .

Look, in general, I would say that the changes within the quarter are minimum. We don't have too many changes within the same quarter.

看，總的來說，我會說本季度內的變化是最小的。我們在同一季度內沒有太多變化。

Got it. And then for a follow-up, it appears to have higher volume products are adopting heterogeneous integration. And I -- just wondering, is that a trend driving sort of some of these large orders you're seeing?

知道了。然後對於後續行動，似乎有更高容量的產品正在採用異構集成。而且我 - 只是想知道，這是一種推動你看到的一些大訂單的趨勢嗎？

No. Look, hybrid bonding is really starting. So until we will see large orders from hybrid bonding, I think we're a while away. It will take time. I think this is clear. I think this is mostly today in R&D. We are working with our customers that are developing.

不，看，混合鍵合真的開始了。因此，在我們看到混合鍵合的大量訂單之前，我認為我們還有一段時間。需要花時間。我想這很清楚。我認為這主要是在今天的研發中。我們正在與正在發展的客戶合作。

We're involved in these activities, but the orders that you are seeing today are for advanced packaging.

我們參與了這些活動，但您今天看到的訂單是針對先進封裝的。

We are getting there a lot of the high-band memory. Obviously, the -- I think very much like a previous question that was asked, we are seeing more and more bumps going on the wafers, the dimensions are shrinking. The RDLs are becoming -- are tightening to 2 microns and even beyond. So this industry is starting to get the denser and denser. The next step will be hybrid bonding, but we are not there yet.

我們得到了很多高頻段內存。顯然，我認為非常像之前提出的問題，我們看到晶圓上出現越來越多的凸起，尺寸正在縮小。 RDL 正在變得 - 正在收緊到 2 微米甚至更高。所以這個行業開始變得越來越密集。下一步將是混合鍵合，但我們還沒有做到。

Our next question will be from Tom O'Malley from Barclays.

我們的下一個問題將來自巴克萊銀行的 Tom O'Malley。

This is Will Levy on for Tom O'Malley. Just a few questions. First question, it has to do with advanced packaging. Just curious how you see that trending in the second quarter and throughout the second half of the year.

這是湯姆·奧馬利 (Tom O'Malley) 的威爾·利維 (Will Levy)。只是幾個問題。第一個問題，它與高級封裝有關。只是好奇您如何看待第二季度和整個下半年的趨勢。

I think that talking we discussed in one of the previous questions from talking to customers and multiple customers in different territories, we believe that this is strength area.

我認為我們在與不同地區的客戶和多個客戶交談時在前面的一個問題中討論過，我們認為這是優勢領域。

The business we mentioned is solid. And when we talk about a potential improvement in the second half, it's coming with the advanced packaging in compound semi after discussions with customers. So (inaudible), this is an area where we are positive about.

我們提到的業務是可靠的。當我們談論下半年的潛在改進時，它會在與客戶討論後與復合半成品的先進封裝一起出現。所以（聽不清），這是我們樂觀的領域。

Awesome. Quick quick question on gross margin. I know it's been asked about enough. But as you guys introduced new products in the second half, do you see this as a tailwind for gross margin?

驚人的。關於毛利率的快速問題。我知道已經被問得夠多了。但隨著你們在下半年推出新產品，你們認為這是毛利率的順風嗎？

Yes, the answer is yes. The new products will come with a higher gross margin profile. But just to put things in perspective, the impact will be, at least in the second half of this year will be relatively small because we will only introduce them at that point.

是的，答案是肯定的。新產品將帶來更高的毛利率。但從長遠來看，影響至少在今年下半年會相對較小，因為我們只會在那個時候引入它們。

So the big chunk orders and numbers will follow only in 2024. But they will definitely have higher gross margin contribution.

所以大批量的訂單和數量只會在 2024 年出現。但他們肯定會有更高的毛利率貢獻。

(Operator Instructions) Our next question will be from Alona Lahav of (inaudible).

（操作員說明）我們的下一個問題將來自（聽不清）的 Alona Lahav。

Could you please quantify the HBM still potential on the longer-term horizon? What's the size of the potential addressable market? And how do you see it evolving over the next couple of years?

您能否量化 HBM 在長期內的潛力？潛在目標市場的規模有多大？您如何看待它在未來幾年的發展？

First of all, HBM, we mentioned it to be about 10% of our revenues.

首先，HBM，我們提到它大約占我們收入的 10%。

I don't think it can be a lot more. But I think it's not just when you talk about the DRAM, there are other applications that can give us additional growth such as the DDR5 and other applications that are driving the DRAMs to go to advanced packaging to move away from wire bonding. So definitely, all in all memories long term has the potential to be even more than 10%. The HBM, I'm not sure can be a lot more than 10% by itself. .

我不認為它可以更多。但我認為不僅僅是當你談論 DRAM 時，還有其他應用可以給我們帶來額外的增長，例如 DDR5 和其他正在推動 DRAM 轉向高級封裝以擺脫引線鍵合的應用。所以可以肯定的是，總的來說，長期的記憶有可能超過 10%。 HBM，我不確定它本身能超過 10%。 .

Okay. And regarding the regional breakdown, could you please provide some color about which areas, which regions were stronger or less strong this quarter and how do you see the competitive landscape within each region?

好的。關於區域細分，您能否提供一些關於本季度哪些區域、哪些區域更強或更弱的顏色，以及您如何看待每個區域內的競爭格局？

So within Asia, the largest territory was China and then Korea and Taiwan. That's the largest and within -- and the dynamics that with the competitive landscape within each territory (inaudible).

所以在亞洲，最大的領土是中國，然後是韓國和台灣。這是最大的和內部的 - 以及每個領域內競爭格局的動態（聽不清）。

I think the dynamics are not different between the territories.

我認為各地區之間的動態沒有什麼不同。

In general, I think we are ready you would see some, I would say, some more start-ups, local competitors in China, but still there in the market size from their point of view is very small. All in all, I think across the board, we compete with our main competitor, which is on to innovation. And then there are a few, I would say, second-tier players and coming from Taiwan, Korea, one from Singapore. And these guys are competitive. They are competing with us for years.

總的來說，我認為我們已經準備好，你會看到一些，我會說，一些更多的初創企業，中國的本地競爭對手，但從他們的角度來看，市場規模仍然很小。總而言之，我認為從整體上看，我們與我們的主要競爭對手競爭，即創新。還有一些，我想說的是二線球員，他們來自台灣、韓國，還有一名來自新加坡。這些人很有競爭力。他們與我們競爭多年。

So I don't think there is any major difference and I don't see a change in the competitive, I would say, situation in the last few quarters. .

所以我認為沒有任何重大差異，我認為過去幾個季度的競爭情況沒有變化。 .

And what out U.S. and Europe?

美國和歐洲呢？

Same story.

相同的故事。

Did you provide a breakdown of U.S. Europe or what's the size...

您是否提供了美國歐洲的細目分類或尺寸是多少...

I think we mentioned it, and it's 10% for this quarter. It's a little low when compared to the previous year as we look into the rest of the year, we believe that we will finish in the 2018 that we finished last year.

我想我們提到過，這個季度是 10%。當我們展望今年剩餘時間時，與上一年相比有點低，我們相信我們將在去年完成的 2018 年完成。

Last question will be from Shahar Cohen of Investment Capital.

最後一個問題將來自 Investment Capital 的 Shahar Cohen。

Finding it very hard to reconcile the fact that you sell to a higher-margin customer, you enjoy the U.S. dollar depreciation and getting to shekel in your factories, fabs in dynamic and yet experience so 5%, 6% decline in gross -- in growth and stands on the cost side. So -- but it's very high. It's really impactful effect. So what gives you the -- special more color about the cost, something specific happens, maybe some manufacturing mistake, something that can -- you can detail about it. And second is about the HBM. Given what we see correctly with the MD NVIDIA, why do you think HBM basically restate 10% of your business?

發現很難調和你向利潤率更高的客戶銷售的事實，你享受美元貶值，並在你的工廠中獲得謝克爾，充滿活力的晶圓廠卻經歷瞭如此 5%、6% 的毛利率下降——增長並站在成本方面。所以 - 但它非常高。效果真是有衝擊力。那麼是什麼給了你 - 關於成本的更多顏色，一些具體的事情發生了，也許是一些製造錯誤，一些可以 - 你可以詳細說明。其次是關於 HBM。鑑於我們對 MD NVIDIA 的正確看法，您為什麼認為 HBM 基本上重述了您業務的 10%？

So let me start with the HBM and then we'll go to the gross margin question. In -- so first of all, yes, we know the applications that are coming from NVIDIA and the gaming, at least when we talk to our customers, what we understand, this is more or less the business and can it grow, maybe potentially would be more.

因此，讓我從 HBM 開始，然後我們將討論毛利率問題。在 - 首先，是的，我們知道來自 NVIDIA 和遊戲的應用程序，至少當我們與客戶交談時，我們了解到，這或多或少是業務，它能否增長，也許有潛力會更多。

I have doubts of it when you look at the overall numbers and the numbers that it are needed and the machines that will be required. But definitely for us, it's not an issue we'll be able to manufacture more machine. We're not limited if the market grows. And if there is a good opportunity and a good surprise that it will be larger, there's nothing limiting us. But as I said, from our understand discussions with our customers, and we're serving all the big ones this is what is our assumptions from a numbers point of view, at least, I would say, for the foreseeable future.

當您查看總體數字和所需的數字以及所需的機器時，我對此表示懷疑。但對我們來說，這絕對不是我們能夠製造更多機器的問題。如果市場增長，我們不會受到限制。如果有一個很好的機會和一個很好的驚喜，它會更大，沒有什麼限制我們。但正如我所說，從我們與客戶的理解討論來看，我們正在為所有大客戶提供服務，從數字的角度來看，這是我們的假設，至少，我會說，在可預見的未來。

Let me address the first question regarding the gross margin, Shahar. So we have very little Israeli-based expenses on the gross margin level.

讓我來回答關於毛利率的第一個問題，Shahar。因此，我們在毛利率水平上的以色列支出很少。

Most of the salaries are below the line are the OpEx level. So there is very little impact of the favorable exchange rate to the gross margin. Second, this quarter, it's a combination, as we said, the combination of product mix as well as expense structure. And overall, what we have described last time, and this is not -- I mean, this is something that we already discussed is the fact that we experienced a gradual expense increase over the last couple of years of our material. And now most of the inventory is with the higher material costs. This is why it will take time until we see the gradual improvement on the gross margin. I hope that this is helping you to understand the issue.

線下的大部分工資是 OpEx 水平。因此，有利的匯率對毛利率的影響很小。其次，正如我們所說，本季度是產品組合和費用結構的結合。總的來說，我們上次描述的不是——我的意思是，這是我們已經討論過的事實，即我們在過去幾年的材料中經歷了逐漸增加的費用。現在大部分存貨都是材料成本較高。這就是為什麼我們需要時間才能看到毛利率的逐步改善。我希望這可以幫助您理解這個問題。

And that ends our question-and-answer session. So before I hand over to Rafi, I would like to let you know that in the coming hours, we will upload the recording of this conference call to the Investor Relations section of Camtek's website, and you should also soon be able to get to the recording via the zooming. I would like to thank everybody for joining this call and hand back to Rafi for the closing statement. Rafi, please go ahead.

這結束了我們的問答環節。因此，在我交給 Rafi 之前，我想告訴您，在接下來的幾個小時內，我們會將本次電話會議的錄音上傳到 Camtek 網站的投資者關係部分，您也應該很快就能訪問通過縮放錄製。我要感謝大家參加這次電話會議，並將結束語交還給 Rafi。拉菲，請繼續。

Okay. I would like to thank you all for your continued interest in our business. I want to especially thank the employees and my management team for their tremendous performance. To our investor, I thank you for your long-term support. I look forward to talking with you again next quarter. Thank you, and goodbye.

好的。我要感謝大家對我們業務的持續關注。我要特別感謝員工和我的管理團隊的出色表現。對於我們的投資者，我感謝您的長期支持。我期待著下個季度再次與您交談。謝謝，再見。