Cohu Inc (COHU) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by, and welcome to Cohu's First Quarter 2024 financial results conference call. At this time, all participants are in a listen only mode after the speakers' presentation, there will be a question and answer session to ask a question. During the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one.

您好，感謝您的支持，歡迎參加 Cohu 2024 年第一季財務業績電話會議。此時，所有參與者都處於聆聽模式，演講者演講結束後，將有一個問答環節來提問。在會話期間，您需要在電話上按下星號 11。然後您將聽到一條自動訊息，告知您已舉手。若要撤回您的問題，請按星號 11。

Again.

再次。

Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jack Jones, Chief Financial Officer. Please go ahead.

請注意，今天的會議正在錄音。現在，我想將會議移交給財務長傑克瓊斯。請繼續。

Good afternoon and welcome to our conference call to discuss Cohu's First Quarter 2024 results and second quarter outlook. I'm joined today by our President and CEO, Luis Müller. If you need a copy of our earnings release, you may access it from our website at cohu.com or by contacting Cohu Investor Relations.

下午好，歡迎參加我們的電話會議，討論 Cohu 2024 年第一季的業績和第二季的展望。今天和我一起出席的還有我們的總裁兼執行長路易斯·穆勒 (Luis Müller)。如果您需要我們的收益報告副本，您可以透過我們的網站 cohu.com 或聯絡 Cohu 投資者關係部取得。

There's also a slide presentation in conjunction with today's call that may be accessed on Cohu's website in the Investor Relations section. Replays of this call will be available via the same page after the call.

今天的電話會議還附有幻燈片演示，可在 Cohu 網站的「投資者關係」部分查看。通話結束後，可在同一頁面上重播本次通話。

Concludes.

結束。

Now to the Safe Harbor. During today's call, we will make forward-looking statements reflecting management's current expectations concerning Cohu's future business. These statements are based on current information that we have assessed, but which by its nature, is subject to rapid and even abrupt changes. We encourage you to review the Forward-Looking Statements section of the slide presentation and the earnings release as well as Cohu's filings with the SEC, including the most recently filed Form 10 K and Form 10 Q. Our comments speak only as of today, May second, 2024, and Cohu assumes no obligation to update these statements for developments occurring after this call.

現在來到安全港。在今天的電話會議中，我們將做出前瞻性陳述，反映管理層對 Cohu 未來業務的當前預期。這些聲明是基於我們評估的當前訊息，但就其性質而言，這些資訊可能會發生快速甚至突然的變化。我們鼓勵您查看幻燈片簡報和收益報告中的前瞻性陳述部分以及Cohu 向美國證券交易委員會提交的文件，包括最近提交的10 K 表和10 Q 表。 。

Finally, during this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings release and slide presentation for reconciliations to the most comparable GAAP measures.

最後，在本次電話會議中，我們將討論某些非 GAAP 財務指標。請參閱我們的收益報告和幻燈片演示，以了解與最具可比性的 GAAP 指標的對帳。

Now I'd like to turn the call over to Luis Müller Cohu's President and CEO. Luis.

現在我想將電話轉給 Luis Müller Cohu 總裁兼執行長。路易斯。

Good afternoon. First quarter results were in line or better than guidance, with non-GAAP gross margin of 46% and EPS of $0.01. As we navigate through the eye of the storm in this semiconductor cycle. We estimated test cell utilization at the end of first quarter, up one point to 72%. We expect business conditions to remain more or less at this level for another quarter or two before we start seeing improvement test cell utilization at IDMs was down one point to 74% with computing, industrial and automotive demand down sequentially, both asset utilization improved slightly to 70%, although still well below the trigger threshold for capacity buys at approximately 80%. There are a couple of bright spots in the quarter, a leading U.S. fabless semiconductor manufacturer has selected our SaaS plus system with micro sense for testing their next-generation high-fidelity microphones. This micro sense microphone tester is coal use latest product in our mems solution portfolio. And when combined with the SaaS plus automation platform deliver state-of-the-art testing of up to 96 devices in parallel according to industry analysts, the MEMS microphone sensor market is projected to grow 14.5% annually over the next seven years, reaching an estimated revenue of $6.2 billion, we estimated buy rate of approximately 1% for integrated test in vision inspection systems, making this an attractive market opportunity over the midterm.

午安.第一季業績符合或好於預期，非 GAAP 毛利率為 46%，每股收益為 0.01 美元。當我們在這個半導體週期中穿越風暴眼。我們估計第一季末的測試單元利用率將上升一個百分點，達到 72%。我們預計，在未來一兩個季度內，業務狀況將或多或少保持在這個水平，然後我們才會開始看到IDM 測試單元利用率的改善，下降了1 個百分點，至74%，計算、工業和汽車需求季減，資產利用率均略有改善，至70%，但仍遠低於容量購買的觸發門檻（約80%）。本季有幾個亮點，一家領先的美國無晶圓廠半導體製造商選擇了我們的具有微感的 SaaS plus 系統來測試他們的下一代高保真麥克風。這款微感測麥克風測試儀是我們微機電系統解決方案產品組合中煤用最新產品。根據行業分析師的預測，當與 SaaS plus 自動化平台相結合時，可以同時對多達 96 個設備進行最先進的測試，MEMS 麥克風傳感器市場預計在未來七年內每年將增長 14.5%，達到預計收入為62 億美元，我們估計視覺檢測系統中整合測試的購買率約為1%，這使得這在中期內成為一個有吸引力的市場機會。

In the optoelectronics market, we saw increased demand for our testers, handlers and interface products for automotive, LED production from a European customer, a leading automotive, a best customer, has selected core use high performance RF contactors for testing automotive radar sensors.

在光電市場，我們看到一家歐洲客戶對我們的汽車、LED生產測試儀、處理器和介面產品的需求不斷增加，這家領先的汽車客戶、最佳客戶已選擇核心使用高性能射頻接觸器來測試汽車雷達感測器。

Finally, we completed the qualification of Bionix for final test of display driver ICs at a large customer in Korea, opening the door for the next stage of revenue growth in this important market that we started developing a few years ago. This has been a fundamental strategy for a tester business to add a market segment in which cause you can differentiate and diversify revenue as the industry moves through his cycle, it remains critical to Cohu strategy to leverage our profitable recurring business, which provides for a more stable revenue stream of mostly consumable products. Recurring was approximately 66% of revenue in the first quarter, serving an installed base of about 24,700 systems worldwide. Corvus recurring business delivered revenue of EUR304 million over the last 12 months with a three year compound growth rate of 2.7%.

最後，我們完成了Bionix在韓國一家大客戶處顯示驅動器IC最終測試的認證，為我們幾年前開始開發的這個重要市場的下一階段收入增長打開了大門。這是測試儀業務增加細分市場的基本策略，因為隨著行業在其周期中的發展，您可以實現收入差異化和多樣化，對於Cohu 戰略而言，利用我們盈利的經常性業務仍然至關重要，這為我們提供更多收入來源穩定，主要來自消耗品。經常性收入約佔第一季營收的 66%，服務全球約 24,700 個系統的安裝基數。Corvus 經常性業務在過去 12 個月內實現了 3.04 億歐元的收入，三年複合成長率為 2.7%。

Finally, we published our 2023 sustainability report with improvements in many areas. Renewable source energy usage increased to 32%. We completed construction of a new modern facility in the Philippines with rainwater harvesting system in our investing solar energy installations at our factories in Malaysia and the Philippines. Co-view has also recently committed to engage with the science-based targets initiative or SBTI. with the goal to develop near term science-based emissions reduction targets. As the industry grows through this cycle, we remain focused on managing cash flow while continuing to execute critical new product developments in customer design win initiatives to enable growth when customers resume test capacity buys.

最後，我們發布了2023年永續發展報告，其中在許多領域都有改進。再生能源使用率增加至32%。我們在菲律賓完成了一座新現代化設施的建設，並在馬來西亞和菲律賓的工廠投資太陽能裝置，配備了雨水收集系統。Co-view 最近也承諾參與科學碳目標倡議（SBTI）。目標是製定近期以科學為基礎的減排目標。隨著產業在這一週期中發展，我們仍然專注於管理現金流，同時繼續在客戶設計獲勝計畫中執行關鍵的新產品開發，以便在客戶恢復測試能力購買時實現成長。

So let me now turn it over to Jeff to provide further details on first quarter results and second quarter 2024 guidance.

現在，讓我將話題交給傑夫，讓他提供有關第一季業績和 2024 年第二季指引的更多詳細資訊。

Jeff?

傑夫？

Thanks, Louise. Before I walk through the Q1 results and Q2 guidance, please note that my comments that follow all refer to non-GAAP figures, information about the non-GAAP financial measures, including the GAAP to non-GAAP reconciliations and other disclosures are included in the accompanying earnings release and investor presentation, which are located on the investor page of our website.

謝謝，路易絲。在我介紹第一季業績和第二季指引之前，請注意，以下所有評論均指非 GAAP 數據，有關非 GAAP 財務指標的資訊（包括 GAAP 與非 GAAP 的對帳和其他揭露）均包含在隨附的收益報告和投資者介紹，位於我們網站的投資者頁面上。

Now turning to the Q1 financial results. Cohu delivered revenue and profitability above the midpoint of our guidance. Q1 revenue was $107.6 million, recurring revenue, which is largely consumable driven and more stable than systems revenue represented 66% of total revenue in Q1 during the first quarter, one customer and the automotive market accounted for more than 10% of sales. Q1 gross margin was 46%, about 100 basis points higher than guidance, driven by better than forecasted margins on Cohu's resilient recurring business. Operating expenses for Q1 were lower than guidance at $50.2 million, driven by lower labor and labor related costs. First quarter non-GAAP operating income was approximately breakeven and adjusted EBITDA was 2.6%. Interest income, net of interest expense, loss on extinguishment of debt and a foreign currency loss of approximately $0.5 million was 1.6 million. Q1 pretax income consists of foreign profits, combined with a loss in the US for Q1 tax provision reflects tax on foreign profits, but no tax benefit from the U.S. loss due to our valuation allowance against deferred tax assets. Additionally, the non-GAAP tax provision in Q1 of 300,000 is net of a one-time 2.7 million credit for the reversal of reserves for uncertain tax positions in foreign jurisdictions. Non-gaap EPS for the first quarter was $0.01.

現在來談談第一季財務表現。Cohu 的收入和利潤高於我們預期的中位數。Q1 收入為 1.076 億美元，經常性收入主要由消耗品驅動，比系統收入更穩定，佔第一季總收入的 66%，其中來自一個客戶和汽車市場的收入佔銷售額的 10% 以上。第一季毛利率為 46%，比預期高出約 100 個基點，這得益於 Cohu 強勁的經常性業務利潤率好於預期。由於勞動力和勞動力相關成本的下降，第一季的營運費用低於預期的 5,020 萬美元。第一季非公認會計準則營業收入約為損益平衡，調整後 EBITDA 為 2.6%。利息收入減去利息支出、債務清償損失和約 50 萬美元的外幣損失後為 160 萬美元。Q1 稅前收入包括海外利潤加上美國的損失，因為 Q1 稅收準備金反映了海外利潤的稅收，但由於我們對遞延所得稅資產的估值準備金，因此沒有來自美國損失的稅收優惠。此外，第一季的非公認會計準則稅務準備金為 30 萬，扣除了因外國司法管轄區不確定稅務狀況的準備金逆轉而產生的一次性 270 萬美元抵免。第一季非公認會計準則每股收益為 0.01 美元。

Moving to the balance sheet, cash and investments decreased by 64 million during Q1 to $271 million due to variable comp and payroll taxes totaling approximately $20 million, plus 29 million used to pay off the remaining term loan B balance and approximately $11 million to repurchase 334,000 shares of COU. common stock CapEx in Q1 was $3.3 million with approximately $2 million related to our factories in the Philippines and Malaysia supporting operations for our interface and automation businesses. Overall, Cohu continues to maintain a strong balance sheet to support investment opportunities to expand our served markets and technology portfolio in line with our growth strategy and return capital to shareholders through our share repurchase program.

轉到資產負債表，第一季現金和投資減少了6,400 萬美元，降至2.71 億美元，原因是可變薪資稅和工資稅總計約2,000 萬美元，加上用於償還剩餘定期貸款B 餘額的2900 萬美元和用於回購334,000 股的約1100 萬美元COU 的股份。第一季普通股資本支出為 330 萬美元，其中約 200 萬美元與我們位於菲律賓和馬來西亞的工廠有關，用於支援我們的介面和自動化業務的運作。總體而言，Cohu 繼續保持強勁的資產負債表，以支持投資機會，擴大我們的服務市場和技術組合，符合我們的成長策略，並透過我們的股票回購計畫向股東返還資本。

Now moving to our Q2 outlook, we're guiding Q2 revenue to be in the range of $105 million, plus or minus 6 million, reflecting continued weakness across end markets and low test cell utilization at customers' production facilities. Q2 gross margin is forecasted to be approximately 45% better than the financial target model at this level of revenue due in large part to coal use differentiated products and our stable, high-margin recurring business, which adds resilience to profitability and provides consistent cash flow through industry cycles. We expect gross margin to increase again, when our revenue recovers with a broader semiconductor device market recovery and with better absorption of our factories, infrastructure costs, operating expenses for Q2 are projected to decrease about 1.5 million quarter over quarter to approximately $48.5 million, due primarily to a reduction in force and optimizations as we completed certain product developments. As I noted during our last earnings call, we have taken action to reduce operating expenses without sacrificing critical new product investments while navigating through the trough of this cycle. As a result, we're now modeling operating expenses to average approximately 48 million per quarter in the second half of this year. For projecting Q2 interest income, net of interest expense and foreign currency impacts to be approximately $2 million at current interest rates, we expect Q2 adjusted EBITDA to be approximately 2%. Q2 non-GAAP tax provision is expected to be approximately 1.6 million because of tax on foreign profits without benefit from the U.S. loss. Additionally, the 2.7 million credit recorded in Q1 is not expected to repeat in Q2 until the markets recover we expect a similar tax provision profile as we navigate through this cycle. The basic share count for Q2 is expected to be approximately 47 million shares.

現在談到我們的第二季展望，我們預計第二季營收將在 1.05 億美元左右，上下浮動 600 萬美元，這反映了終端市場的持續疲軟以及客戶生產設施的測試單元利用率低。預計第二季毛利率將比這一收入水準的財務目標模型高出約45%，這在很大程度上要歸功於煤炭用途的差異化產品和我們穩定、高利潤的經常性業務，這增加了獲利能力的彈性並提供了穩定的現金流經歷行業週期。我們預計，隨著半導體設備市場整體復甦，我們的收入將恢復，工廠的吸收能力也將增強，隨著基礎設施成本的提高，第二季的營運費用預計將比上一季減少約150 萬美元，至約4850 萬美元，這是由於主要是由於我們完成某些產品開發後減少了人力並進行了優化。正如我在上次財報電話會議上所指出的那樣，我們已採取行動削減營運費用，同時又不犧牲關鍵的新產品投資，以度過本輪週期的低谷。因此，我們目前預計今年下半年每季的營運費用平均約為 4,800 萬美元。預計第二季的利息收入（扣除利息支出和外匯影響）將按當前利率約為 200 萬美元，我們預計第二季調整後的 EBITDA 約為 2%。由於不計入美國損失而產生的海外利潤稅，預計第二季非公認會計準則稅務準備金約為 160 萬美元。此外，預計第一季記錄的 270 萬個信貸不會在第二季重複，直到市場復甦，我們預計在這一週期中會出現類似的稅務準備金狀況。預計第二季基本股數約為4,700萬股。

That concludes our prepared remarks, and now we'll open the call to questions.

我們的準備好的演講到此結束，現在我們開始提問。

As a reminder, if you'd like to ask a question at this time, please press star one one on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star one one. Again, please stand by while we compile the Q&A roster. Our first question comes from the line of Brian Chin of Stifel and other.

提醒一下，如果您此時想要提問，請按按鍵電話上的星號 11，然後等待播報您的名字。若要撤回您的問題，請按星號 11。再次提醒，請稍候，我們正在編制問答名單。我們的第一個問題來自 Stifel 的 Brian Chin 和其他人的問題。

Good afternoon.

午安.

Thanks for letting us ask a few questions. Tom, maybe to start with, I'd say that the the recurring revenue was even maybe a little bit more, even even down less than I might have anticipated sequentially, given that I think a lot of industrial automotive semi related companies seem to have curtailed production quite a bit. But again, your revenue Q-on-Q actually did not decline by that much. Do you feel that now that maybe some of your customers utilization rates are starting to stabilize you think that revenue is also stabilized and sort of Q1 Q2, but sort of the trend you're seeing and even if you don't have full visibility on the system business, you have more confidence that this the recurring revenue improved in the second half?

感謝您讓我們提出幾個問題。湯姆，首先，我想說的是，經常性收入可能比我預期的要多一點，甚至比預期的要少一點，因為我認為許多工業汽車半相關公司似乎大幅削減產量。但實際上，你們的收入環比下降幅度並沒有那麼大。您是否覺得現在您的一些客戶的利用率可能開始穩定下來，您認為收入也趨於穩定，並且在第一季度和第二季度，但是您所看到的趨勢，即使您沒有完全了解系統業務，您是否對下半年經常性收入的改善更有信心？

Hi, Brian, this is Luis. Yes, yes, the way we see it right now with stabilizing utilization, recurring seems to be stable as well. And obviously, the expectation and what we've seen in the past is when utilization starts to increase. So those recurring both from a usage of the equipment and therefore increased spares, typically customers and up cannibalizing some underutilized equipment for spares. And then eventually there is a quick turnaround on that when the utilization picks up as well as device kits and contactor. So at this moment of utilization stable, so is recurring and would expect it to returned to an increase, particularly when utilization starts to rise again.

你好，布萊恩，我是路易斯。是的，是的，從我們現在看到的情況來看，利用率穩定了，重複性似乎也穩定了。顯然，我們的預期和過去看到的情況是利用率開始增加。因此，這些費用既來自設備的使用，也來自備件的增加，通常是客戶費用，以及拆卸一些未充分利用的設備以獲取備件。然後，當利用率以及設備套件和接觸器回升時，最終會出現快速的轉變。因此，此時利用率穩定，所以正在重複出現，並預計它會恢復成長，特別是當利用率再次開始上升時。

Got it.

知道了。

And I guess sort of branching out of that in terms of going back to your comment about maybe revenues kind of stay at this levels on a quarter or two on what is there something you're after this sort of retrenchment period here in first half in terms of system business, which sort of now is kind of across every every end market right at this point. What when you talk to your customers, what this does give you more degrees of optimism in terms of saw some pickup at some point in second half the two things.

我想從這個角度來看，回到你剛才的評論，也許收入會在一個或兩個季度內保持在這個水平，那麼在 2019 年上半年的這種緊縮時期之後，你會做些什麼呢？就係統業務而言，它現在已經涵蓋了每個終端市場。當您與客戶交談時，這確實會給您帶來更多樂觀的感覺，因為您看到下半年的某個時候這兩件事會有所回升。

One is we have not everybody turns at the same point, right? It's never been that way. But we are seeing some customers starting to claim a correction is over in the inventories and their inventory line. So particularly in IoT, we've seen that happening and seeing a little bit of traction so much so that actually our mobile segment revenue was up sequentially from Q4 to Q1, and we still have other customers that are at the bottom, but they're basically claiming stability now. So stability indicates that the next step is improvement. So we're starting to see sort of the turnover turn of the tide a little bit, as I commented in my prepared remarks here, right at the beginning, actually, I called it navigating through the eye of the storm. And I really mean it in the sense of we're now at that point of on the the headwinds have stopped. And we see a few customers starting to see a little bit of tailwind. So we'd expect that and in a couple of quarters, we'll be having more customers. It's a win utilization starting to pick up and eventually capacity buys. Now, obviously, capacity buys require utilization of existing capacity installed to pick up to a level where you need to buy new equipment. Like I said, not all customers will be on the same phase and in the same quarter, that probably will straddle over a couple of quarters. But it gives us confidence that we're heading towards better, better wins ahead here. I don't know if it's a a quarter or two quarters away from now when things start to pick up again.

一是，不是每個人都會在同一點轉彎，對嗎？從來沒有這樣過。但我們看到一些客戶開始聲稱庫存和庫存線的調整已經結束。特別是在物聯網領域，我們看到了這種情況的發生，並且看到了一些牽引力，實際上我們的行動部門收入從第四季度到第一季度連續上升，我們還有其他客戶處於最低水平，但他們現在基本上已經恢復穩定了。因此穩定表明下一步就是改進。因此，我們開始看到情況的稍微轉變，正如我在準備好的發言中所說的那樣，實際上，在一開始，我稱之為穿越風暴眼。我真正想說的是，我們現在已經到了逆風停止的階段。我們看到一些客戶開始看到一點順風。因此，我們預計在未來幾季內我們將擁有更多的客戶。這是一個勝利，利用率開始回升，並最終實現容量購買。現在，顯然，容量購買需要利用現有安裝的容量來達到需要購買新設備的水平。就像我說的，並非所有客戶都處於同一階段和同一季度，這可能會跨越幾個季度。但它讓我們有信心，我們正朝著更好的方向前進。我不知道從現在起還有一個季度還是兩個季度，情況才會再次好轉。

And then maybe just one quick question actually for Jeff, just yes, obviously very high gross margins here at trough.

然後也許實際上只想問傑夫一個簡單的問題，是的，顯然這裡的毛利率非常高。

I know if you also raised the target model gross margin to 50%, anything that goes into that in terms of composition of revenue mix at 1 billion or what considerations kind of go went into that increase and these historical results really went into that decision to increase we've sort of maintaining the same mix of product at that billion 1 billion of revenue with roughly 40% automation and 30% test, 20% interface, 10% for inspection metrology. So that doesn't change. It's just we've seen some better cost profiles, lower cost profiles, better, better margins. So that gave us the confidence based on what we've achieved here over the last four to eight quarters to set the target to 50.

我知道如果你也將目標模型毛利率提高到 50%，那麼在 10 億美元的收入組合構成方面，或者在增加這一收入時需要考慮哪些因素，這些歷史結果確實影響了這一決定。在保持產品結構不變的情況下，將收入提高到10 億美元，其中自動化約佔40%，測試約佔30%，介面約佔20%，檢測計量約佔10%。所以這並沒有改變。我們只是看到了一些更好的成本狀況，更低的成本狀況，更好的利潤率。因此，根據過去四到八個季度所取得的成績，我們有信心將目標設定為 50。

Okay, great.

好的，太好了。

Thank you.

謝謝。

Thank you. Our next question will come from the line of Ross Cole with Needham.

謝謝。我們的下一個問題來自尼德姆的羅斯·科爾 (Ross Cole)。

Thank you for taking my call and I'll ask this question on behalf of Charles Shi.

感謝您接聽我的電話，我代表 Charles Shi 提出這個問題。

So first of all, can you provide some color on what you see on the mobile side of the end market, which drives your tester business.

首先，您能否介紹一下您在終端市場行動端看到的情況，這對您的測試儀業務有推動作用。

Are you more incrementally positive or cautious here?

您對此是更加積極還是更加謹慎？

Hi, Ross. Yes, we are. We are incrementally more positive on mobile. I'm not calling this really broad market recovery yet, but what we've seen and particularly IoT devices, so talking about RF in the mobile space, we've seen a little bit of an improvement in orders in the fourth quarter revenue in the first quarter, as I mentioned before in a prior call. The prior question, sorry, the mobile segment is the only segment of our market that we saw an increased revenue quarter over quarter, and now that's more particularly focused on the Android segment and some of them as we understand customer our customers' opportunity for sales in China and Korea. I'm not yet a broad-based recovery. So I think mobile will be incrementally better going forward. But realistically, I think a full-blown recovery is more of late this year. To 2025 story.

你好，羅斯。是的。我們對行動端的態度逐漸變得更加積極。我還沒有將其稱為真正的廣泛市場復甦，但我們已經看到，特別是物聯網設備，所以談到行動領域的射頻，我們看到第四季度訂單收入略有改善。我之前在電話會議中提到的那樣。前面的問題，抱歉，行動市場是我們市場中唯一一個營收季增的市場，現在我們主要關注的是安卓市場，我們了解客戶的銷售機會。我尚未實現全面復甦。因此我認為行動端未來將會越來越好。但現實地說，我認為全面復甦要到今年年底。到2025年的故事。

Great.

偉大的。

Thank you.

謝謝。

And if I can ask a second question, a little more broadly and what are the ordering or quoting activities like right now, especially relative to three months ago, are you starting to see some green shoots and the activity is still very much focused on new technologies, new applications, our customers win of a particular socket that drives some some demand, you know, like I can't say that there is much of a broad-based capacity addition at this point, Ross, it's a we have we have qualifications we have design wins. As I referenced here on the call, we had a design win for a mems microphone application. It's a new product and customer selected. We already shipped a first system here going into into their lab and we have a production system shipping in the summertime. We had a design win completed of a qualification of our tests are with the new instrument for display driver IC final test, which we call P. two.

我可以再問第二個問題，更廣泛一點，目前的訂購或報價活動是什麼樣的，特別是相對於三個月前，你是否開始看到一些復甦的跡象，而且活動仍然非常集中在新的技術、新應用、我們的客戶贏得特定插座，從而推動一些需求，你知道，我不能說目前有廣泛的產能增加，羅斯，這是我們擁有的我們擁有設計勝利的資格。正如我在電話中提到的，我們在 MEMS 麥克風應用的設計上取得了勝利。這是一個新產品，也是顧客選擇的。我們已經將第一個系統運送到他們的實驗室，我們將在夏季運送一個生產系統。我們已完成一項設計認證，我們的測試採用新儀器進行顯示驅動 IC 的最終測試，我們稱之為 P.2。

So the second insertion of test, this is the same customer that has selected us for P. one last year and drove a $20 million revenue in 2023. So we now got qualified for P2. So so basically, new products, new opportunities, more so than the general capacity that that is not happening so much at the moment.

因此，第二次插入測試，這是去年選擇我們進行 P.one 的同一個客戶，並在 2023 年帶來了 2000 萬美元的收入。所以我們現在有資格獲得 P2 了。所以從根本上來說，新產品、新機會比整體產能更重要，但目前這種情況並不多見。

Okay, great.

好的，太好了。

Then just to clarify.

那麼只是為了澄清一下。

Our next question comes from the line of David Chu with Steelhead Securities.

我們的下一個問題來自 Steelhead Securities 的 David Chu。

Yes.

是的。

So taking my question. I was wondering when business does recover which segments of your equipments, do you think the handlers or testers will recover first and perhaps maybe just handicap which end market you think will turn on first for us, Kelvin?

那麼，回答我的問題吧。我想知道，當業務確實恢復時，您認為設備的哪些部分會首先恢復，還是處理人員或測試人員會首先恢復，也許只是阻礙您認為哪個終端市場會首先為我們打開，凱爾文？

Hi.

你好。

This is Luis again. So we've been thinking that and it's really a good question. But we've been thinking that the but the mobile segment and computing will start coming in first. With that said, with that comment said, the reality of utilization dynamics today, it's still higher in the automotive and industrial segment and we look at utilization by market and auto and industrial is hovering at about 78%. So it's pretty close to that capacity addition threshold that we call that is at 80 while computing is much lower at 66 and mobile is at 67. So it's a tale of two stories here because one, we believe that the mobile and computing should be the one coming on. First, on the other hand, we're a lot closer to that threshold in the auto and industrial. I think that's another way of saying it could actually flip from what I have originally said, if it could come back on the auto ahead of mobile.

我又是路易斯。所以我們一直在思考這個問題，這確實是一個好問題。但我們一直認為，行動領域和運算領域將首先進入市場。話雖如此，根據上述評論來看，今天的利用率動態現實，在汽車和工業領域仍然較高，我們按市場來看，汽車和工業的利用率徘徊在 78% 左右。因此，它非常接近我們所說的容量增加閾值 80，而計算閾值要低得多，為 66，移動閾值為 67。所以這是兩個故事的故事，因為第一，我們相信行動和運算應該是未來的趨勢。首先，從另一方面來說，我們在汽車和工業領域已經更接近這個門檻了。我認為，換句話說，如果它能夠在行動裝置之前重新回到汽車領域，那麼它實際上可能會與我最初所說的相反。

Okay. I'm with the industrial and automotive utilization rates for hanging in there, I guess that suggests for you and your customers that that end market has stabilized. And we're done. I don't want to take done with the inventory correction, but we're done going down in the in your biggest segment?

好的。我同意工業和汽車利用率保持現狀，我想這對您和您的客戶來說意味著終端市場已經穩定下來。我們就完成了。我不想完成庫存調整，但是我們最大的細分市場的下滑已經完成了嗎？

I think that's correct, Dave. I think we're done going down across segments right now. I mean mobile has been fairly depressed for the last three quarters. And auto and industrial is also very depressed right now. It's what is encouraging about auto and industrial is our customers' ability to actually operate just below that threshold that 80% threshold, it hasn't really sunk. The utilization hasn't really sunk in as much. Nevertheless, customers have largely stopped buying capacities right now. They are buying specific technologies, but not general capacity. So yes, I mean, I'm encouraged by the on an industrial base.

我認為這是正確的，戴夫。我認為我們現在已經完成了各個部分的討論。我的意思是，過去三個季度裡行動市場一直相當低迷。目前汽車和工業情勢也十分低迷。汽車和工業領域令人鼓舞的是，我們的客戶實際上能夠在略低於 80% 的門檻下運營，這個門檻並沒有真正下降。利用率實際上還沒有那麼高。儘管如此，客戶目前基本上已經停止購買容量了。他們購買的是特定技術，而不是一般產能。是的，我的意思是，我對工業基礎感到鼓舞。

Okay.

好的。

And then on, can you just remind us what your lead times are now? I imagine they're back to normalized levels, but I'm just kind of curious what normalized levels are now?

然後，您能否提醒我們一下您現在的交貨時間是多少？我想它們已經恢復到正常水平了，但我只是有點好奇現在的正常水平是多少？

We are largely unchanged from last quarter.

與上一季相比，我們基本上沒有變化。

Dave, it's a little tricky to talk about lead times when we're selling new technologies, right? So if you talk about our handlers on about 15 weeks is a fair number of testers about 12 weeks and contactors about seven weeks with that, I have to say we're selling a lot of handler configurations that are brand new, super high power dissipation, a key core system for sort of for four processor test well, that's and you had it's a new thermal system and the lead time on that is a little longer. So we're selling new technology applications. The lead times are a little longer. I would expect if we get more capacity buys of standard products that despite having greater demand, we probably would see lead times go down a little bit first at first before they go up again.

戴夫，當我們銷售新技術時，談論交貨時間有點棘手，對吧？因此，如果您談論我們的處理器，大約 15 週，相當數量的測試器大約 12 週，接觸器大約 7 週，我不得不說，我們正在銷售許多全新的、超高功耗的處理器配置，對於四個處理器進行測試的關鍵核心系統，這是一個新的熱系統，而且它的準備時間會更長一些。所以我們正在銷售新技術應用程式。交貨時間稍微長一點。我預計，如果我們能夠增加標準產品的產能，儘管需求量更大，但我們可能還是會看到交貨時間首先略有下降，然後再上升。

Okay.

好的。

Now a final question from me. As you kind of look out over the server upgrade cycle that's pending for artificial intelligence and, you know, all that associated components that are going to go into those new servers, there's going to be a lot more GPU and CPU content.

現在我要問最後一個問題。當你觀察即將實現的人工智慧伺服器升級週期，以及即將進入新伺服器的所有相關元件時，你會發現 GPU 和 CPU 的內容會越來越多。

Could you just talk about, you know how that upgrade cycle might impact your product lines like I would think that maybe your thermal conditioning handlers would see an uptick from the server upgrade cycle. But so that's my question is like when we do hit that part of the AI upgrade cycle for servers, how will that impact your?

您能否談談升級週期可能對您的產品線產生什麼影響，例如我認為您的熱調節處理器可能會從伺服器升級週期中看到上升趨勢。但我的問題是，當我們確實達到伺服器 AI 升級週期的部分時，這會對您產生什麼影響？

Yes. So the server upgrade cycle is going to be better for us than the actual data center cycle of the data center cycle is lower volume, very high ASP semiconductors from very low volumes. The data center, you know, changes the equation here. You get a bit more volume. So and computing was, I think, five or 6% of our revenue last quarter.

是的。因此，對我們來說，伺服器升級週期將比實際資料中心週期更好，因為資料中心週期的產量較低，半導體的 ASP 非常高，而產量卻很低。您知道，資料中心改變了這裡的等式。您的音量會稍微大一些。所以我認為，計算業務佔了上個季度我們收入的 5% 或 6%。

Sorry, in Q4, it came out at about 3% in Q. one come out, I would expect it to improve a little bit in the second half of the year, assuming that that data center cycle is really going to pick up momentum has been as it's been said.

抱歉，在第四季度，第一季的成長率約為 3%。

And just want to understand, when you're saying the data center versus the SuperVAR, what do you mean? And just help me understand which cycle you're referring to there the traditional servers or a I said earlier, I'm sorry, I'm sorry, I meant to say the server cycle.

只是想了解一下，當您說資料中心與 SuperVAR 時，您的意思是什麼？請幫我理解您所指的週期是傳統伺服器週期還是我之前說的，對不起，對不起，我的意思是伺服器週期。

Okay. Thank you.

好的。謝謝。

Thanks.

謝謝。

Our next question comes from the line of Krish Sankar, P/T, Cowen.

我們的下一個問題來自 Cowen 的 P/T 的 Krish Sankar。

Hi, this is Robert fish. Thanks for taking my question. I know a bit of it's already been answered, but just in terms of the auto and industrial markets, how this has sort of shaped up compared to, I guess, three months ago, if I remember correctly, in the December quarter, sales were down, but the test utilization was actually on the higher side. You mentioned you can can you see a bit higher utilization in the March quarter despite sales down a bit? Just trying to think of how you are looking at that business or market entering the June quarter and second half of the year?

你好，我是羅伯特‧菲什。感謝您回答我的問題。我知道有些問題已經得到解答了，但就汽車和工業市場而言，如果我沒記錯的話，與三個月前相比，今年 12 月的銷售額雖然測試利用率有所下降，但實際上卻偏高。您提到，儘管銷售額略有下降，但 3 月季度的利用率是否能提高？只是想想想您如何看待進入六月季度和下半年的業務或市場？

Yes. So look, I'm going to start with first quarter, right? The utilization as I said it's holding up pretty well, but revenue was down first quarter sequentially from fourth quarter, both in the both on the auto and the industrial side and pretty much the same at the same rate.

是的。那麼看，我要從第一季開始，對嗎？正如我所說，利用率保持得很好，但第一季的收入環比下降，無論是汽車方面還是工業方面，而且下降速度幾乎相同。

Looking at looking forward?

期待嗎？

We don't really I'll go ahead to predict revenue by market segment for future quarters, but I'd be tempted to say just based on the our order pattern that industrial industrial will be weaker. Automotive automotive may hold up a little bit better than the industrial side. I think the industrial side continue to lose some ground relative to the other markets in in the first quarter orders and therefore second quarter revenue.

我們實際上不會繼續預測未來幾季按市場細分的收入，但我很想說，僅根據我們的訂單模式，工業收入將會變得更弱。汽車業的表現可能比工業業好一點。我認為，工業市場在第一季的訂單和第二季的收入方面相對於其他市場繼續下滑。

Great.

偉大的。

Thank you.

謝謝。

That's very helpful.

這非常有幫助。

As a reminder, that is star one one to ask a question.

提醒一下，那是明星一對一提問。

Our next question comes from the line of Craig Ellis with B. Riley.

我們的下一個問題來自 B. Riley 的 Craig Ellis。

Yes, thanks for taking the question. And what I wanted to do. Luis, just tried a shorter-term question and then a longer-term question on the shorter term side and done this when it goes back to some of the comments around downstream utilization and for the businesses over the next couple of quarters, but assuming utilization is near current levels or maybe drifts up a little bit in a seasonally stronger second half, how do we think about the gives and takes with normal seasonality in the fourth quarter. Typically the business would be down much more in the system side than recurring, but John, but typically that would be off much more significantly inflated levels. So can you just help us understand how we should think about some of the seasonal dynamics given the unusual year we have thus far?

是的，感謝您回答這個問題。以及我想要做的事。路易斯，我剛剛嘗試問了一個短期問題，然後又問了一個長期問題，這些問題是在回到關於下游利用率和未來幾個季度業務的一些評論時提出的，但假設利用率接近目前水平，或在季節性較強的下半年略有上升，我們如何看待第四季度正常季節性的影響。通常情況下，系統方面的業務下降幅度會比經常性業務下降幅度大得多，但約翰，但通常情況下，這會偏離更顯著的膨脹水平。那麼，您能否幫助我們理解，考慮到今年迄今為止的不同尋常的情況，我們應該如何看待一些季節性動態？

First, Greg, as you know, well, this industry has both seasonality and cyclicality with seasonality essentially being the obviously the 12 months cycle, right or the 12 month pattern of the wave and the cyclicality being more of a multiyear, I tend to call it is a four year, give or take four year period. When you when you overlay the two, you may have one obscuring the other. And I think this is this is a classical year where you're not going to see in as much the seasonality because we're coming off of a trough where we are at the moment. And all the indications is the market starts to improve in the second half of the year and going into a 2025 recovery in other words, I don't think you see your typical seasonality this year. That's just not possible when the cycle is dominating. What's happening in the market is very, very likely. And I've seen this happen in prior cycles that you exit that you exit the year with a strong order momentum going into the next year when otherwise you should have seen a pretty weak seasonal period in the fourth quarter. And I think that's going to be the case again this year. Again, I think cyclicality just overshadows seasonality in this environment.

首先，格雷格，正如你所知，這個行業既有季節性，也有周期性，季節性本質上顯然是12 個月的周期，或者12 個月的波浪模式，而周期性更像是多年的，我傾向於稱之為這是一個四年的時間，大概是四年。當您將兩者重疊時，可能會有一個遮蔽另一個。我認為這是一個典型的年份，你不會看到太多的季節性，因為我們目前正走出低谷。所有跡像都表明，市場將在下半年開始好轉，並將在 2025 年進入復甦階段，換句話說，我認為今年不會出現典型的季節性特徵。當週期占主導地位時，這是不可能的。市場上發生的事情是非常非常有可能的。我在之前的周期中看到過這種情況，即在去年結束時，訂單勢頭強勁，進入下一年，而否則，你應該在第四季度看到一個相當疲軟的季節性時期。我認為今年的情況仍將如此。再次，我認為在這種環境下週期性會掩蓋季節性。

That's really helpful. The reason.

這真的很有幫助。原因。

And the second question is related to the target model. So great to see the business from Breeze. The gross margin target by 100 basis points to 50%. You guys have had really strong trailing two to three year gross margin execution. So I can see that my question was more on the line above that revenue. So from third quarter levels, we annualize a little north of 400 million. And so the target is about 2.5 times. But what I wanted to do is give you the opportunity just to talk about the path that you see for the business to go from P&O annualizing at 400 million back to 1 billion. What are some of the things that are going to be the biggest drivers to that growth, whether it's on the product side or other things that you and the team are working on that will in a much better demand environment deliver revenues that are out on your targets.

第二個問題與目標模型有關。很高興看到 Breeze 的業務。毛利率目標提高100個基點至50%。你們過去兩三年的毛利率執行情況非常強勁。因此我可以看出我的問題更多是關於收入的問題。因此，從第三季的水平來看，我們的年化收入略高於 4 億。因此目標大約是 2.5 倍。但我想做的是給你一個機會來談談你看到的業務從 P&O 年化 4 億美元回到 10 億美元的路徑。哪些因素將成為這種成長的最大驅動力，無論是在產品方面，還是您和您的團隊正在努力的其他方面，這些因素將在更好的需求環境下帶來超出您預期的收入？

Thank you.

謝謝。

I can talk I can talk a little bit about the business dynamic heading to that target.

我可以稍微談一下實現該目標的業務動態。

Craig, we you can't necessarily pick the trough for the cycle and then tried to tried to explain it to on to that 1 billion target. I think you've got to look at more of a through cycle. What is the number at a true to cycle level, which tends to be somewhere in the 750 to low $800 million? And what we typically call a normalized through cycle revenue level. How do we how do we grow from there? It's a combination of design wins on the tester side, which we have been scoring. And by the way, they just don't translate into volume at the moment. Some optimization in wins on the interface side, which is holding pretty well, considering the overall low utilization levels in the industry right now and in expansion expansion of our inspection and metrology business, right? Those are the primary focus areas we are from a market perspective. We're putting a tremendous amount of effort right now to align more to computing applications. We're a very strong believer on the long prospect, long-term prospects for computing. And I don't mean necessarily just a data centers, which are low volume. But I think the wave that comes after that, which is computing at the edge or AI at the edge, if you will, when those get proliferated into cell phones into cars with higher level of autonomous driving when when you get more robotic systems and automated manufacturing tools. So basically a IoT Edge should be a significant driver of sensors, communication and ultimately computing processing power. So one of the key areas of investments for us today is on the thermal subsystems and the implementation of those thermal systems into our equipment to enable on capturing of share and supplying supporting our customers when they start proliferating AI at the edge, so to speak or more computing processing at the consumer level products so that those are the primary drivers as we see our target to get to get up to 1 billion.

克雷格，我們不一定能選擇週期的低谷，然後試圖解釋 10 億的目標。我認為你必須更多地觀察整個週期。在真實的周期水準上，這個數字是多少？這就是我們通常所說的標準化週期收入水準。我們怎樣才能從那裡成長？這是我們一直在評分的測試人員方面的設計勝利的組合。順便說一句，目前這些還不能轉化為銷售量。考慮到目前行業整體利用率較低以及我們檢驗和計量業務的擴張，在界面方面進行了一些優化，效果還不錯，對嗎？從市場角度來看，這些是我們主要關注的領域。我們現在正投入巨大的努力來使更多計算應用保持一致。我們堅信計算的長期前景。我所指的不一定只是資料中心，因為它們的容量較小。但我認為，接下來的浪潮是邊緣運算或邊緣人工智慧，當你將這些技術擴展到手機、更高水平的自動駕駛汽車、更多的機器人系統和自動化時，製造工具。因此從根本上來說，IoT Edge 應該是感測器、通訊以及最終計算處理能力的重要驅動因素。因此，我們今天的一個關鍵投資領域是熱子系統，以及將這些熱系統應用到我們的設備中，以便在客戶開始在邊緣普及人工智慧時，能夠佔領市場份額並為他們提供支援。需要更多的計算處理，因此這些是主要的驅動力，我們的目標是達到10 億。

Great. Thank you.

偉大的。謝謝。

Our next question comes from the line of Toshiya Hari with Goldman Sachs.

我們的下一個問題來自高盛的Toshiya Hari。

Hi, thank you so much for taking the question from Luis. You've given quite a bit of color in terms of what you're seeing from an end demand or end market perspective, I was hoping you could share on what you're seeing by device type. I know you have exposure to various device types, but some any specific areas of relative strength or relative weakness, MCUs, analog, RF, et cetera, that would be helpful.

你好，非常感謝您回答 Luis 的問題。您已經從最終需求或最終市場的角度給出了相當詳細的描述，我希望您可以分享您按設備類型看到的情況。我知道您接觸過各種類型的設備，但了解一些相對優勢或相對劣勢的特定領域，如 MCU、類比、RF 等，都會很有幫助。

Thank you.

謝謝。

Okay, Toshi, I don't have the data exactly in front of me by device type. I can qualitatively tell you the on the analog, the general analog semiconductor space is weakest at the moment, not signal significant strength. Also in microcontrollers we see is some some interesting dynamics in the processor space. As I said earlier, more of it is on the high ASP, low quantities, but that is said to be migrating more to servers and therefore, a little bit better improvement on the quantity side. We've also seen recently some improvement on our FIC. from manufacturing and demand for for test handling equipment on I would say, battery management systems, which is part of analog at the end of the day. But DMS is becoming a bit of a mixed signal type device. Today. Battery management systems are it's weak, but may be coming to a threshold of threshold of demand again. So hopefully that that gives you a bit of color from a device device segment science. And yes, we don't participate today in memory, right. So I didn't comment on memories like Cohu today does not participate in the memory space.

好的，Toshi，我沒有按設備類型準確列出的數據。我可以定性地告訴你，就模擬而言，一般模擬半導體領域目前是最弱的，沒有訊號顯著的強度。此外，我們在微控制器中也看到處理器領域的一些有趣的動態。正如我之前所說，更多的是高 ASP、低數量，但據說會更多地遷移到伺服器，因此在數量方面會有所改善。我們最近也看到 FIC 有所改善。從製造和對測試處理設備的需求來看，我想說，電池管理系統歸根結底是模擬的一部分。但DMS 正逐漸變成一種混合訊號類型的裝置。今天。電池管理系統雖然比較弱，但可能會再次達到需求的門檻。所以希望這能給你一些關於設備部分科學的知識。是的，我們今天不是為了紀念而參加的，對吧。所以我沒有對記憶發表評論，就像 Cohu 今天不參與記憶空間一樣。

Sure.

當然。

Yes.

是的。

That's really helpful. And a quick follow-up you talked a little bit about on your win in display drivers. I think you've talked about that in the past as well. But on I think that market is currently dominated by one one of your peers. So as I'm sure your Korean customers, very happy that you guys are delivering product and technology. But I guess my question is how big is that TAM today, I think it's a couple of hundred million dollars. But if you think if you can confirm that, that would be super helpful. And how should we think about your ability to grow share over time. I know it takes time, but since you have one of the bigger customers secured must be a promising opportunity for yourselves. So just curious how you're thinking about that business?

這真的很有幫助。接下來您簡單談談您在顯示驅動程式方面的勝利。我想您過去也談論過這個問題。但我認為該市場目前被你們其中一個同行所主導。因此我相信你們的韓國客戶非常高興你們提供產品和技術。但我想我的問題是今天的 TAM 有多大，我認為是幾億美元。但如果你認為如果你能證實這一點，那將非常有幫助。我們應該如何看待您隨著時間的推移增加份額的能力。我知道這需要時間，但既然你們已經獲得了一個大客戶，這對你們來說一定是一個很有希望的機會。所以我很好奇你對這項業務有何看法？

Thank you.

謝謝。

You're right about the a couple of hundred million dollars, we do pack that that that I'm at $200 million. The only problem is you said, what is it now that now part of the now part of it is the problem. So on average, it is a $200 million TAM. We are now supplying to two customers that make up about 50% of that TAM. So we view it as a basically a $100 million opportunity. And that doesn't mean we're going to get 100% of it. I think we will share it with our competitor. We we have had worked very closely with and supplying to the Taiwanese manufacturer and now now we have been engaged with the Korean manufacturer where last year we capture the first insertion into probe represent about 40% of their capital spending and it generated 20 million of revenue for us last year. We've now got qualified for their second insertion, which is final test on. We're yet to see how much of the remaining here, which it could be about a 30 million opportunity. How much of that we're going to get when business conditions normalize again?

您說的對，幾億美元，我們確實打包了這些，我現在有 2 億美元。唯一的問題是你說的，現在是什麼，現在的一部分，現在的一部分就是問題。因此平均而言，TAM 為 2 億美元。我們目前向兩家客戶供貨，佔 TAM 的約 50%。因此我們認為這基本上是一個價值 1 億美元的機會。但這並不代表我們就能獲得 100% 的收入。我想我們會與我們的競爭對手分享它。我們與台灣製造商密切合作並為其供貨，現在我們與韓國製造商合作，去年我們首次插入探針，佔其資本支出的 40%，並產生了 2000 萬的收入對我們來說，去年我們現在已經有資格進行第二次插入，這是最後的測試。我們還沒有看到這裡還剩下多少，這可能是一個大約 3000 萬的機會。當商業環境恢復正常時，我們能獲得多少利益？

So all in all, you're correct about a $200 million TAM, this year's depressed out of that $200 million, I think we can now serve $100 million.

總而言之，您關於 2 億美元 TAM 的說法是正確的，今年從這 2 億美元中抽出，我認為我們現在可以提供 1 億美元。

That's very helpful.

這非常有幫助。

Thank you.

謝謝。

That concludes today's question and answer session. I'd like to turn the call back to Jeff Jones for closing remarks.

今天的問答環節到此結束。我想請傑夫瓊斯作最後發言。

So I'd just like to close with saying thank you for joining our call today, and we look forward to seeing you soon.

最後，我想感謝您今天參加我們的電話會議，我們期待很快與您見面。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。