Entegris Inc (ENTG) 2023 Q2 法說會逐字稿

Welcome to the Entegris Second Quarter 2023 Earnings Conference Call. (Operator Instructions)

歡迎參加 Entegris 2023 年第二季度收益電話會議。 （操作員說明）

I would now like to turn the call over to Bill Seymour, Vice President of Investor Relations.

我現在想將電話轉給投資者關係副總裁比爾·西摩 (Bill Seymour)。

Good morning, everyone. Earlier today, we announced the Financial Results for our Second Quarter of 2023. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, and actual results could differ materially from those projected in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in our most recent annual report and subsequent quarterly reports that we have filed with the SEC. Please refer to the information on the disclaimer slide in the presentation.

大家，早安。今天早些時候，我們公佈了 2023 年第二季度的財務業績。在開始之前，我想提醒聽眾，我們今天的評論將包括一些前瞻性陳述。這些陳述涉及許多風險和不確定性，實際結果可能與前瞻性陳述中的預測存在重大差異。有關這些風險和不確定性的更多信息包含在我們向 SEC 提交的最新年度報告和後續季度報告中。請參閱演示文稿中免責聲明幻燈片上的信息。

On this call, we will also refer to non-GAAP financial measures as defined by the SEC and Regulation G. You can find a reconciliation table in today's news release as well as on our IR page of our website at entegris.com. On the call today are Bertrand Loy, our CEO; and Linda LaGorga, our CFO.

在本次電話會議上，我們還將參考 SEC 和 G 條例定義的非 GAAP 財務指標。您可以在今天的新聞稿以及我們網站 entegris.com 的 IR 頁面上找到調節表。今天參加電話會議的是我們的首席執行官伯特蘭·洛伊 (Bertrand Loy)；和我們的首席財務官 Linda LaGorga。

With that, I'll hand the call over to Bertrand.

這樣，我就把電話轉給伯特蘭。

Thank you, Bill. Good morning to all, and welcome again, Linda, to the Entegris team. I will start by saying that I am pleased with our solid execution in the second quarter, especially in light of the dynamic industry environment. During the quarter, we delivered strong results within or above our guidance. Sales were $901 million. EBITDA margins were over 27%, and non-GAAP EPS was $0.66.

謝謝你，比爾。大家早上好，再次歡迎 Linda 加入 Entegris 團隊。首先我要說的是，我對第二季度的穩健執行感到滿意，特別是考慮到充滿活力的行業環境。在本季度，我們取得了符合或高於我們指導的強勁業績。銷售額為 9.01 億美元。 EBITDA 利潤率超過 27%，非 GAAP 每股收益為 0.66 美元。

Let me make a few additional comments on our financial performance. Sales were down sequentially as expected, but we did see growth in product lines that are of increasing importance to our customers' technology road maps. These include liquid filtration and etching chemistries which also explains the relative strength in our MC and SCEM divisions in the second quarter. Meanwhile, performance was mixed, but in line with our expectations in our CapEx-driven solutions. While we saw a contraction in sales of FOUPs and gas filters, consistent with the decline in WFE, we did see steady demand for our fluid handling and gas purifications solutions in line with the level of new fab construction activity, which so far this year remains resilient. In terms of profitability, we continued to execute well and performed in line with our expectations.

讓我對我們的財務業績發表一些補充評論。銷售額按預期連續下降，但我們確實看到了產品線的增長，這些產品線對客戶的技術路線圖越來越重要。其中包括液體過濾和蝕刻化學品，這也解釋了我們的 MC 和 SCEM 部門在第二季度的相對優勢。與此同時，業績好壞參半，但符合我們對資本支出驅動解決方案的預期。雖然我們看到FOUP 和氣體過濾器的銷售出現收縮，與WFE 的下降一致，但我們確實看到對我們的流體處理和氣體淨化解決方案的穩定需求，與新晶圓廠建設活動的水平一致，今年到目前為止，新晶圓廠建設活動的水平仍然保持不變有彈性的。在盈利能力方面，我們繼續執行良好，表現符合我們的預期。

Next, I would like to highlight a few important items that the team is focused on. First, on the CMC integration. One of the guiding principles of the integration is the fast and effective migration to a common ERP system. To that end, we have already completed three major ERP transitions in the past 12 months. And I don't want to jinx it, but we expect to complete the final go-live migration in just a few days. A major accomplishment for the team, certainly an accomplishment that puts us on track to achieve our $75 million of run rate cost synergy target by the fourth quarter.

接下來，我想強調一下團隊重點關注的幾個重要事項。首先，關於CMC整合。集成的指導原則之一是快速有效地遷移到通用 ERP 系統。為此，我們在過去 12 個月內已經完成了三項主要的 ERP 轉型。我不想搞砸它，但我們希望在幾天內完成最終的上線遷移。對於團隊來說，這是一項重大成就，這一成就無疑使我們有望在第四季度實現 7500 萬美元的運行成本協同目標。

As you know, debt pay down is a high priority for us and divestitures of non-core assets or a significant lever we are using to reduce our debt. So far this year, we have entered into definitive agreements for the sale of three businesses, totaling more than $1 billion in proceeds. Two of these businesses were part of CMC Materials. The first of those was QED, which closed in March with $135 million in proceeds. The second was the sale of Electronic Chemicals which we announced on May 10 for $700 million in proceeds. We have already received regulatory approval for the EC transaction in several jurisdictions, including the U.S., and just as a reminder, we do not need the regulatory approval in China for this transaction. We are currently waiting for a few final regulatory approvals and continue to expect the EC transaction will close by the end of this year.

如您所知，償還債務是我們的首要任務，剝離非核心資產或我們用來減少債務的重要槓桿。今年到目前為止，我們已經就出售三項業務達成了最終協議，收益總額超過 10 億美元。其中兩項業務屬於 CMC Materials 的一部分。其中第一個是 QED，該項目於 3 月份結束，募集資金 1.35 億美元。第二個是我們於 5 月 10 日宣布以 7 億美元的收益出售 Electronic Chemicals。我們已經獲得了包括美國在內的多個司法管轄區對 EC 交易的監管批准，需要提醒的是，我們不需要中國監管部門批准本次交易。我們目前正在等待一些最終的監管批准，並繼續預計 EC 交易將在今年年底前完成。

On March on June 5, we announced the termination of our distribution agreement for copper plating chemistries with Element Solutions in exchange for $200 million. We received $170 million at the time of announcement and expect to receive the balance no later than this -- once customer transitions are completed. We have used all of the proceeds received from the QED and Element transactions for debt pay down, and the $700 million of proceeds from the EC sale when realized are also expected to be used to pay down debt. That brings us to one more potential divestiture PIM, which sells drag-reducing agents for the oil and gas industry and which also was a part of CMC Materials. The PIM business has performed very well so far this year, and we do intend to sell this business. We will provide an update on this when we have more to communicate.

3 月和 6 月 5 日，我們宣布終止與 Element Solutions 的鍍銅化學品分銷協議，以換取 2 億美元。在宣布這一消息時，我們收到了 1.7 億美元，並預計在客戶轉換完成後最遲收到餘額。我們已將 QED 和 Element 交易獲得的所有收益用於償還債務，EC 出售的 7 億美元收益在實現後預計也將用於償還債務。這給我們帶來了另一個潛在的剝離 PIM，該公司為石油和天然氣行業銷售減阻劑，也是 CMC Materials 的一部分。今年到目前為止，PIM 業務表現非常好，我們確實打算出售該業務。當我們有更多信息需要溝通時，我們將提供相關最新信息。

Another important update I would like to share is that we will be combining the SCEM and APS divisions starting next month. The SCEM and APS businesses are highly complementary. They are both unit-driven and the majority of what they sell or specialty materials that are consumed in the manufacturing of semiconductors. Our customers will benefit from a more robust end-to-end solution set critical to their road maps, the solution set that reduces their time to yield and provides superior cost of ownership. Frankly, we considered doing this immediately at the close of the CMC transaction, but we did not have definitive line of sight to the divestitures we were contemplating. Now that those divestitures are done or solidly in the works, combining the two divisions into one will enhance its size, scale and focus. And as we always do, we continue to look at our cost structure and align it with the current industry environment. To that end, we would expect our total head count to be down approximately 5% this year, even net of new hires in our new facility in Taiwan.

我想分享的另一個重要更新是，我們將從下個月開始合併 SCEM 和 APS 部門。 SCEM和APS業務具有很強的互補性。它們都是單位驅動的，其銷售的大部分產品或半導體製造過程中消耗的特種材料。我們的客戶將受益於對他們的路線圖至關重要的更強大的端到端解決方案集，該解決方案集可以縮短他們的產出時間並提供卓越的擁有成本。坦率地說，我們考慮在 CMC 交易結束時立即這樣做，但我們對我們正在考慮的資產剝離沒有明確的看法。既然這些剝離已經完成或正在紮實進行中，將這兩個部門合併為一個部門將擴大其規模、規模和重點。正如我們一貫所做的那樣，我們繼續審視我們的成本結構，並使其與當前的行業環境保持一致。為此，我們預計今年的總員工人數將減少約 5%，即使扣除台灣新工廠的新員工也是如此。

Well, it is critical we get our cost structure where it needs to be in the short term, it is equally critical, we get ready when the industry ultimately returns to growth. To that end, the capacity expansions in Taiwan and Colorado Springs are vital for us to fully realize our long-term growth potential. Our facility in Taiwan is expected to begin initial shipments later this year and Colorado Springs will begin shipments in early 2025. In addition, we are also using this downturn to our advantage, spending valuable time collaborating with our customers while making elevated levels of R&D spending to support our promising R&D pipeline.

嗯，至關重要的是，我們必須在短期內達到所需的成本結構，同樣重要的是，我們要在行業最終恢復增長時做好準備。為此，台灣和科羅拉多斯普林斯的產能擴張對於我們充分實現長期增長潛力至關重要。我們在台灣的工廠預計將於今年晚些時候開始首批發貨，科羅拉多斯普林斯工廠將於2025 年初開始發貨。此外，我們還利用這次經濟低迷的優勢，花費寶貴的時間與客戶合作，同時提高研發支出水平支持我們有前途的研發管線。

Looking at the rest of 2023. For the full year, we continue to expect the market will be down in the mid-teens. And given our strong position in the new technology nodes, we also continue to expect to outperform the market by at least 6 points. Putting it all together, we continue to expect our pro forma sales in 2023 to be down approximately 8%.

展望 2023 年剩餘時間。全年來看，我們仍然預計市場將下跌至十幾歲左右。鑑於我們在新技術節點的強勢地位，我們還繼續預計跑贏市場至少 6 個百分點。綜上所述，我們繼續預計 2023 年預計銷售額將下降約 8%。

We also continue to expect EBITDA will be approximately 27% to 28% of revenue for the year. And we are increasing our full year 2023 non-GAAP EPS expectation to greater than $2.50 per share. While our expectations for industry recovery in the second half of this year are modest, we are extremely optimistic about the long-term secular growth of the semiconductor industry on the way to $1 trillion by 2030. The growth is being driven by overall demand for both logic and memory chips and in many end markets that will drive that growth, including the much discussed emergence of AI and, of course, power electronics and high-performance computing, to name just a few.

我們還繼續預計 EBITDA 將佔今年收入的 27% 至 28% 左右。我們將 2023 年全年非 GAAP 每股收益預期提高至 2.50 美元以上。雖然我們對今年下半年行業復甦的預期並不高，但我們對半導體行業的長期長期增長極為樂觀，預計到2030 年將達到1 萬億美元。這一增長是由半導體和半導體行業的整體需求推動的。邏輯和存儲芯片以及許多終端市場將推動這種增長，包括備受討論的人工智能的出現，當然還有電力電子和高性能計算等等。

In addition to that, device architectures like gate-all-around and higher layer count structures are becoming much more complex, trends which ultimately play to our strength. These trends and Entegris' breadth of capabilities in material science and materials purity are expected to translate into rapidly expanding content per wafer and market share growth for Entegris. Finally, I want to take a moment to thank our customers for the trust and confidence they place in Entegris. And I would like to thank the Entegris team for their dedication and strong execution as we navigate this dynamic industry environment.

除此之外，環柵和更高層數結構等器件架構正變得更加複雜，這種趨勢最終會發揮我們的優勢。這些趨勢以及 Entegris 在材料科學和材料純度方面的廣泛能力預計將轉化為快速擴大的每片晶圓含量以及 Entegris 市場份額的增長。最後，我想花點時間感謝我們的客戶對 Entegris 的信任和信心。我要感謝 Entegris 團隊在我們應對這個充滿活力的行業環境時所表現出的奉獻精神和強大的執行力。

Let me turn the call to Linda. Linda?

讓我把電話轉給琳達。琳達？

Good morning, everyone, and thank you, Bertrand. I had a terrific first 3 months at Entegris, traveling to our U.S. sites and getting to know the team. I am delighted to be on a team that is eager to win, and I'm proud to review solid results on this first call as the new CFO of Entegris.

大家早上好，謝謝你，伯特蘭。我在 Entegris 的前 3 個月過得很愉快，參觀了我們的美國工廠並了解了我們的團隊。我很高興能加入一支渴望勝利的團隊，並且很自豪能夠在作為 Entegris 新任首席財務官的第一次電話會議上回顧可靠的結果。

Our sales in the second quarter were $901 million, down 11% year-over-year on a pro forma basis and down 2% sequentially. Sales were up 30% year-over-year on a reported basis. As a reminder, the CMC transaction closed in July 2022. FX negatively impacted revenue by approximately $9 million year-over-year on a pro forma basis and negatively impacted revenue by $5 million sequentially in Q2. FX headwinds were primarily driven by the Japanese yen.

我們第二季度的銷售額為 9.01 億美元，預計同比下降 11%，環比下降 2%。據報導，銷售額同比增長 30%。需要提醒的是，CMC 交易於 2022 年 7 月完成。預計，外匯對收入同比產生了約 900 萬美元的負面影響，對第二季度收入產生了 500 萬美元的負面影響。外匯逆風主要由日元推動。

Gross margin on a GAAP and non-GAAP basis was 42.6% in the second quarter within our guidance range. The sequential decline in the non-GAAP gross margin was driven by lower volumes and the Taiwan facility ramp-up costs. In addition, we had an FX benefit in Q1 that did not repeat in Q2 as expected.

第二季度按 GAAP 和非 GAAP 計算的毛利率為 42.6%，在我們的指導範圍內。非公認會計原則毛利率的連續下降是由於銷量下降和台灣工廠的成本上升所致。此外，我們在第一季度獲得了外匯收益，但在第二季度並沒有像預期那樣重複。

Operating expenses on a GAAP basis were $117 million in Q2. Non-GAAP items totaled $67 million and included a $155 million gain on the termination of our distribution agreement with Element. Operating expenses on a non-GAAP basis in Q2 were $183 million, slightly below our guidance. As you would expect, we continue to manage our cost structure in this dynamic environment.

第二季度按照 GAAP 計算的運營費用為 1.17 億美元。非 GAAP 項目總計 6700 萬美元，其中包括因終止與 Element 的分銷協議而獲得的 1.55 億美元收益。第二季度非 GAAP 運營費用為 1.83 億美元，略低於我們的指導。正如您所期望的，我們將繼續在這個動態環境中管理我們的成本結構。

Operating income on a GAAP basis in Q2 was $268 million and non-GAAP operating income was $201 million. Adjusted EBITDA in Q2 was $245 million or just over 27% of revenue within our guidance range. The GAAP tax benefit in the quarter was driven by the EC asset held-for-sale treatment. The non-GAAP tax rate was approximately 16%. GAAP diluted EPS was $1.31 per share in the second quarter, which includes a gain on the termination of our distribution agreement with Element. Non-GAAP EPS was $0.66 per share above our guidance.

第二季度按 GAAP 計算的營業收入為 2.68 億美元，非 GAAP 營業收入為 2.01 億美元。第二季度調整後 EBITDA 為 2.45 億美元，略高於我們指導範圍內收入的 27%。本季度的 GAAP 稅收優惠是由 EC 持有待售資產處理推動的。非 GAAP 稅率約為 16%。第二季度 GAAP 攤薄後每股收益為 1.31 美元，其中包括終止與 Element 的分銷協議帶來的收益。非 GAAP 每股收益比我們的指引高出 0.66 美元。

Now looking at our performance by division. The year-on-year sales comparisons I am referencing are on a pro forma basis for the SCEM and APS divisions. MC sales in the quarter of $284 million were up 3% from last year and up 5% sequentially. The sequential sales growth was driven by liquid filtration and gas purification solutions. Adjusted operating margin for MC was 35.5% for the quarter. The sequential margin decline was driven primarily by costs associated with the ramp of our new facility in Taiwan and the impact of lower plant production due to the inventory reductions.

現在看看我們按部門的表現。我所引用的同比銷售額比較是 SCEM 和 APS 部門的預計銷售額。本季度 MC 銷售額為 2.84 億美元，比去年增長 3%，比上一季度增長 5%。銷售額連續增長是由液體過濾和氣體淨化解決方案推動的。 MC 本季度調整後營業利潤率為 35.5%。利潤率連續下降的主要原因是我們台灣新工廠的擴建所產生的成本以及庫存減少導致工廠產量下降的影響。

AMH sales in Q2 of $190 million were down 15% versus last year and down 13% sequentially. As Bertrand indicated, the sequential sales decline in AMH was driven by products more tied to WFE like FOUPs and was partially offset by growth in fluid handling products, which are more tied to fab construction, which, again, has been more resilient. Adjusted operating margin for AMH was approximately 19%, down sequentially, primarily driven by lower volumes and the ramp of our new facility in Taiwan.

第二季度 AMH 銷售額為 1.9 億美元，比去年下降 15%，比上一季度下降 13%。正如Bertrand 所指出的，AMH 的銷售額環比下降是由與WFE 更相關的產品（如FOUP）推動的，並被流體處理產品的增長所部分抵消，這些產品與晶圓廠建設更相關，而晶圓廠建設也更具彈性。 AMH 調整後的營業利潤率約為 19%，環比下降，主要是由於銷量下降和台灣新工廠的產能增加所致。

SCEM sales in Q2 of $200 million were down 11% year-over-year and up 1% sequentially. The modest sequential sales increase was driven by growth in etching chemistries. Adjusted operating margin for SCEM was approximately 10% for the quarter in line with our expectations. The modest sequential margin decline was primarily driven by unfavorable mix.

第二季度 SCEM 銷售額為 2 億美元，同比下降 11%，環比增長 1%。銷售額連續小幅增長是由蝕刻化學品的增長推動的。本季度 SCEM 調整後營業利潤率約為 10%，符合我們的預期。利潤率環比小幅下降主要是由不利的組合造成的。

APS sales in Q2 of $241 million were down 21% year-over-year and down 4% sequentially. The year-over-year sales decline was primarily driven by the overall decline in the memory market and the impact of the sales restrictions in China. The sales decline sequentially was driven primarily by lower volumes across most product lines, particularly in memory applications. We did continue to see strong growth in SiC slurries in the quarter. Adjusted operating margins for APS of approximately 23% were up modestly sequentially.

第二季度 APS 銷售額為 2.41 億美元，同比下降 21%，環比下降 4%。銷售額同比下降主要是由於內存市場整體下滑以及中國銷售限制的影響。銷售額連續下降的主要原因是大多數產品線的銷量下降，特別是在內存應用領域。我們確實繼續看到本季度碳化矽漿料的強勁增長。 APS 調整後營業利潤率較上一季度小幅上升約 23%。

Moving on to cash flow and the balance sheet. Second quarter cash flow from operations was $127 million and free cash flow was $11 million. We continue to be committed to improving free cash flow. Excluding Electronic Chemicals inventory balances, which were moved to asset held-for-sale. Our inventory was down 5% in the second quarter. That is progress, but more work needs to be done and this will remain a major area of focus for the team in the second half of the year.

轉向現金流和資產負債表。第二季度運營現金流為 1.27 億美元，自由現金流為 1100 萬美元。我們繼續致力於改善自由現金流。不包括電子化學品庫存餘額，該餘額已轉至持有待售資產。第二季度我們的庫存下降了 5%。這是進步，但還需要做更多的工作，這仍然是團隊下半年的主要關注領域。

CapEx for the quarter was $116 million. We have moderated our CapEx investments in response to market conditions and now expect to spend approximately $450 million in total CapEx in 2023, lower than our previous expectation of $500 million.

本季度資本支出為 1.16 億美元。我們根據市場狀況調整了資本支出投資，目前預計 2023 年資本支出總額約為 4.5 億美元，低於我們之前 5 億美元的預期。

Next, let's discuss our capital structure. We remain committed to lowering our leverage toward our target of 3.5x gross leverage by the end of 2024. Bertrand mentioned, a key component of our debt pay down includes divestitures. At the end of Q2, our gross debt was $5.6 billion, and our net debt was $5 billion. This equates to a gross leverage ratio of 5.2x and a net leverage ratio of 4.7x pro forma for the announced cost synergies. Our variable rate debt is expected to be a bit more than 10% of the total outstanding debt. The blended interest rate on our debt portfolio is approximately 5.5%. Overall, a very solid rate considering the interest rate environment was experienced since we announced the CMC deal.

接下來，我們來討論一下我們的資本結構。我們仍然致力於降低杠桿率，以實現到 2024 年底達到 3.5 倍總槓桿率的目標。Bertrand 提到，我們償還債務的一個關鍵組成部分包括資產剝離。第二季度末，我們的總債務為 56 億美元，淨債務為 50 億美元。對於已宣布的成本協同效應，這相當於預計總槓桿率為 5.2 倍，淨槓桿率為 4.7 倍。我們的浮動利率債務預計將略高於未償債務總額的 10%。我們債務組合的混合利率約為 5.5%。總體而言，自從我們宣布 CMC 交易以來，考慮到利率環境，利率非常穩定。

Moving on to our Q3 outlook. We expect sales to range from $875 million to $900 million. We expect the EBITDA margin to be approximately 26% to 27%. We expect GAAP EPS to be $0.23 to $0.28 per share and non-GAAP EPS to be $0.57 to $0.62 per share.

繼續我們的第三季度展望。我們預計銷售額將在 8.75 億美元至 9 億美元之間。我們預計 EBITDA 利潤率約為 26% 至 27%。我們預計 GAAP 每股收益為 0.23 至 0.28 美元，非 GAAP 每股收益為 0.57 至 0.62 美元。

Let me provide some additional modeling items. We expect gross margin to be 41% to 42% in the third quarter, both on a GAAP and non-GAAP basis. The modestly lower margin compared to Q2 reflects the temporary impact of the termination of our distribution agreement with Element, higher costs associated with the ramp of our new facility in Taiwan and lower plant volumes driven by our continued focus on inventory reduction. We expect GAAP operating expenses to be approximately $245 million in Q3 and non-GAAP operating expenses to be approximately $180 million. Depreciation is expected to be approximately $45 million in Q3 and $50 million in Q4. This depreciation estimate reflects moving the Electronic Chemicals business to held-for-sale status starting in the second quarter and timing of our capital expenditures.

讓我提供一些額外的建模項目。我們預計第三季度的毛利率將為 41% 至 42%，無論是按 GAAP 還是非 GAAP 計算。與第二季度相比，利潤率略有下降，反映出我們與 Element 的分銷協議終止的暫時影響、台灣新工廠擴建帶來的成本上升以及我們持續關注庫存減少導致的工廠產量下降。我們預計第三季度 GAAP 運營費用約為 2.45 億美元，非 GAAP 運營費用約為 1.8 億美元。預計第三季度折舊約為 4500 萬美元，第四季度折舊約為 5000 萬美元。這一折舊估計反映了電子化學品業務從第二季度開始轉為持有待售狀態以及我們資本支出的時間安排。

We expect interest expense to be approximately $80 million per quarter going forward until we collect the proceeds from the pending divestiture of EC. We expect the non-GAAP tax rate for the second half of the year to be approximately 15%. The lower expected tax rate in both the second half of this year and going forward is due to the integration of CMC into the Entegris business model. Just to be clear, all the guidance we have provided today both for Q3 and the full year includes both the Electronic Chemicals business until it closes and the distribution agreement we have with Element until that fully transitions.

我們預計未來每季度的利息支出約為 8000 萬美元，直到我們收到即將剝離的 EC 的收益為止。我們預計下半年的非 GAAP 稅率約為 15%。今年下半年和未來的預期稅率較低是由於 CMC 融入了 Entegris 業務模式。需要明確的是，我們今天為第三季度和全年提供的所有指導都包括電子化學品業務（直至其關閉）以及我們與 Element 簽訂的分銷協議（直至其完全過渡）。

I'll now hand it back to Bertrand for some closing remarks.

現在我將把它交還給伯特蘭，讓他做一些結束語。

Thank you, Linda. In this uncertain environment, we are showcasing the resilience of our unit-driven business and strong market position. I am also very pleased with the team's execution. We're making good progress on the divestiture of non-core assets, all critical CMC integration milestones are being met and we will realize the full cost synergies by year-end as planned.

謝謝你，琳達。在這個不確定的環境中，我們展示了我們單位驅動業務的彈性和強大的市場地位。我對團隊的執行力也非常滿意。我們在非核心資產剝離方面取得了良好進展，所有關鍵的 CMC 整合里程碑都已實現，我們將按計劃在年底前實現全部成本協同效應。

We are effectively balancing short-term cost management while making the right investments for the future. And we're making those investments because we have conviction in the long-term secular growth of the semiconductor industry and because of our strong conviction in the growing importance of our value proposition, which will translate into an increase in the Entegris content per wafer and Entegris outperformance.

我們正在有效地平衡短期成本管理，同時為未來做出正確的投資。我們進行這些投資是因為我們對半導體行業的長期長期增長充滿信心，也因為我們堅信我們的價值主張日益重要，這將轉化為每片晶圓和 Entegris 含量的增加Entegris 表現出色。

With that, operator, let's open the line for questions.

那麼，接線員，讓我們打開提問線路。

(Operator Instructions) Our first question is coming from Toshiya Hari with Goldman Sachs.

（操作員說明）我們的第一個問題來自高盛的 Toshiya Hari。

I do apologize for the background noise. Bertrand, my first question is on the market environment. You mentioned for the full year, you're still expecting your TAM or SAMto be down in the mid-teens, so consistent with what you have said 3 months ago. But I'm guessing you've experienced quite a few puts and takes over the past 3 months just based on what your peers have said on trailing [debt] being stronger and perhaps advanced logic foundry, memory being weaker. But curious if you can kind of walk through some of the pluses and minuses that you've experienced over the past 3 months? And if you could point to what your expectations are for both CapEx and MSI for the full year, that would be great.

對於背景噪音，我深表歉意。 Bertrand，我的第一個問題是關於市場環境的。您提到全年，您仍然預計您的 TAM 或 SAM 會下降到十幾歲左右，這與您 3 個月前所說的一致。但我猜你在過去 3 個月裡經歷了相當多的看跌和接受，只是根據你的同行所說的尾隨 [債務] 更強，也許是先進的邏輯鑄造廠，記憶力更弱。但您是否想了解一下您在過去 3 個月中所經歷的一些優點和缺點？如果您能指出您對全年資本支出和 MSI 的期望，那就太好了。

Yes. Toshiya. As I said, I mean, the industry remains very dynamic, and it is still challenging to really forecast with a great degree of accuracy, and we've seen a lot of puts and take in the market. But our views on balance have not really changed all that much since last quarter.

是的。俊哉。正如我所說，我的意思是，該行業仍然非常活躍，並且真正準確地進行預測仍然具有挑戰性，而且我們已經在市場上看到了很多看跌期權和買入期權。但自上季度以來，我們對平衡的看法並沒有真正改變太多。

When it comes to MSI, we do not really expect any meaningful recovery in the back half of the year. We expect a little bit of an uptick in advanced logic and likely as well in DRAM. But this will be offset by some downdraft pressure coming from 3D NAND wafer starts and mainstream wafer starts. So again, a lot of puts and takes here and not a lot of real recovery in the back half of the year. And on the CapEx front, we believe that we have reached bottom in Q2, but we do not really expect any recovery in side. So that's for the industry backdrop, and that's really what leads us to that view that the industry will be down in the mid-teens for us. And as you said, in that context, we are pleased with our performance.

就 MSI 而言，我們並不真正期望下半年會出現任何有意義的複蘇。我們預計先進邏輯領域將出現一些增長，DRAM 領域也可能如此。但這將被 3D NAND 晶圓開工和主流晶圓開工帶來的一些下行壓力所抵消。再說一次，這裡有很多看跌期權，但下半年並沒有太多真正的複蘇。在資本支出方面，我們相信我們已在第二季度觸底，但我們並不真正預計側面會出現任何復蘇。這就是行業背景，這確實讓我們認為該行業將下降到十幾歲左右。正如你所說，在這方面，我們對我們的表現感到滿意。

I mean our Entegris content per wafer continues to grow. We are seeing actually more wafer production migrating to the leading edge, especially in memory. A lot of the cuts and wafer starts in memory are taking place in older generations of memory, and we are seeing more production transferring to the leading edge where we have higher wafer start -- higher content per wafer. So that's positive. We are continuing to gain share. And we are also resolving some supply chain constraints that were headwinds in 2022. So that's the basis for the level of outperformance that we expect to deliver in 2023.

我的意思是，我們每片晶圓的 Entegris 含量持續增長。我們實際上看到更多的晶圓生產正在轉向前沿，尤其是在內存領域。存儲器領域的大量削減和晶圓開工都發生在老一代存儲器中，我們看到更多的生產轉移到了前沿，在那裡我們擁有更高的晶圓開工——每片晶圓的含量更高。所以這是積極的。我們正在繼續擴大份額。我們還在解決 2022 年的一些供應鏈限制。因此，這是我們預計在 2023 年實現優異業績水平的基礎。

That's super helpful. And then as my follow-up, I guess, on your last point regarding your (inaudible) outperformance. I think for this year, you noted at 6% or higher, which again is consistent with what you had said 3 months ago. I know 2024 is distance. But as you think about your customer technology road maps and your presence across the important inflections in memory and advanced logic and foundry. Do you think repeating 6% plus or minus outperformance in '24 is a high bar. I know in your long-term model with the midpoint is lower than 6%. But given the gate-all-around, your (inaudible). Would it be a little too much to expect under your 6% outperformance in 2024?

這非常有幫助。然後，我想，作為我的後續行動，關於您關於（聽不清）出色表現的最後一點。我認為今年您提到的增長率為 6% 或更高，這再次與您 3 個月前所說的一致。我知道2024年是遙遠的。但當您考慮您的客戶技術路線圖以及您在內存、高級邏輯和代工廠的重要變化時的存在。您認為 24​​ 年重複 6% 的正負表現是一個很高的標準嗎？我知道在你們的長期模型中，中點低於 6%。但考慮到周圍的門，你的（聽不清）。 2024 年 6% 的優異表現會不會有點太高了？

Well, so Toshiya, I would say two things. I would probably start by saying that it's too early for us to talk about 2024 and probably will end with that same statement. But in between those two, beginning points and ending points. I would say that, number one, there are reasons to believe that wafer starts will be a little bit more positive next year. And we are keeping an eye on the node transitions that what customers have been talking about then, and we expect to see a fair amount of activity in terms of node transitions. But again, we know that things change. And that's why I would say that it's too early for us to go into too many specifics.

好吧，Toshiya，我想說兩件事。我可能首先會說，現在談論 2024 年還為時過早，並且可能會以同樣的聲明結束。但在這兩者之間，有起點和終點。我想說，第一，有理由相信明年晶圓開工將會更加積極。我們正在密切關注客戶當時談論的節點轉換，我們預計會看到大量的節點轉換活動。但我們再次知道事情會發生變化。這就是為什麼我會說現在討論太多細節還為時過早。

Our next question comes from John Roberts with Credit Suisse.

我們的下一個問題來自瑞士信貸銀行的約翰·羅伯茨。

Just the normal lumpiness of new fab construction timing? Or is it more delays in new fab construction I don't know if you can untangle those effects? And why wasn't Fluid Handling affected similarly?

只是新晶圓廠建設時間的正常混亂嗎？或者是新工廠建設的更多延誤我不知道你是否可以解決這些影響？為什麼流體處理沒有受到類似的影響？

It's a great question. And so it really has to do with the timing of the demand for those products and solutions when new fabs are being built. So typically, fluid handling products are being ordered and used really early on when the buildings are built, when the subfab, chemical Loops are being installed. So that actually happens relatively early in the construction projects. And if you look around, there's been a fair amount of activity in terms of new fab constructions this year and fluid handling products have been benefiting from that.

這是一個很好的問題。因此，這確實與新建工廠時對這些產品和解決方案的需求時機有關。因此，通常情況下，流體處理產品是在建築物建成、安裝郊區、化學環路時儘早訂購和使用的。所以這實際上發生在建設項目的相對早期。如果你環顧四周，就會發現今年新工廠建設活動相當多，流體處理產品也從中受益。

When it comes to FOUPs, the timing of the shipments of those products usually coincide more with the tool deliveries and as we know, the tool intakes have been slowing down, right? And that's what has created some lumpiness in our FOUP business. That's the business that was actually fairly stable in Q1, but we saw actually a very significant decline sequentially in Q2. And if you go back in time, you will see that, that lumpiness is something that we site very often in a downturn. Those shipments, especially to the large semiconductor manufacturers can be several millions of dollars. And they can have a big impact quarter-to-quarter.

就 FOUP 而言，這些產品的發貨時間通常與工具交付時間更一致，而且據我們所知，工具的攝入量一直在放緩，對嗎？這就是我們的 FOUP 業務出現一些不穩定的原因。該業務在第一季度實際上相當穩定，但我們在第二季度實際上看到了非常顯著的連續下降。如果你回到過去，你會發現，這種不穩定是我們在經濟低迷時期經常遇到的問題。這些出貨量，尤其是大型半導體製造商的出貨量可能達到數百萬美元。它們可以按季度產生巨大影響。

Having said that, our competitive position remains extremely strong, especially in the leading edge fabs. So it's really a question of timing of shipments as opposed to any concerns you may have in competitive spending.

話雖如此，我們的競爭地位仍然非常強勁，尤其是在領先的晶圓廠中。因此，這實際上是一個發貨時間的問題，而不是您對競爭性支出可能存在的任何擔憂。

Our next question comes from Sidney Ho with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Sidney Ho。

Great. It's good to hear that you're reiterating the expectation for industry MSI and your whole revenue growth this year. My first question is -- I have to ask something about AI. So at least in the near-term, it looks like the demand for GPU is crowding out server demand. How does that impact Entegris? Any way you can help us conceptualize the shift of IT budget from CPU to GPU, how that impacts your business? I don't even know if there's one-for-one trade-off, but this Entegris content higher for GPU or CPU? And if you include both products from SCEM and MC foundry?

偉大的。很高興聽到您重申對今年行業 MSI 和整體收入增長的預期。我的第一個問題是——我必須問一些關於人工智能的問題。因此，至少在短期內，GPU 的需求似乎正在擠出服務器的需求。這對 Entegris 有何影響？您可以通過什麼方式幫助我們概念化 IT 預算從 CPU 到 GPU 的轉變，這對您的業務有何影響？我什至不知道是否存在一對一的權衡，但是這個 Entegris 的 GPU 含量更高還是 CPU 含量更高？如果您同時包括 SCEM 和 MC 代工廠的產品呢？

Yes, it's a great question. I would just say that remember that AI, it's exciting. I think it's going to be a big catalyst for some semiconductor demand in the years to come. But today, it remains relatively small. It's been growing very rapidly, but it's small. When it comes to the difference in Entegris content between CPUs and GPUs, I would say that we are very well positioned on those two types of architectures. The one difference, which is positive, is that GPUs typically are larger-sized [dyes]. And as we had, I believe, mentioned during a recent Analyst Day, those larger-sized dyes create actually some complexity in terms of effect management. And that actually requires much more focus in terms of the purity of the chemistries that are used and that obviously creates a very significant opportunity for our microcontamination filtration solutions.

是的，這是一個很好的問題。我只想說，記住人工智能，它令人興奮。我認為這將成為未來幾年某些半導體需求的重要催化劑。但今天，它仍然相對較小。它增長得非常快，但規模很小。當談到 CPU 和 GPU 之間 Entegris 內容的差異時，我想說我們在這兩種類型的架構上處於非常有利的位置。一個積極的區別是 GPU 通常尺寸較大[染料]。我相信，正如我們在最近的分析師日期間提到的那樣，這些較大尺寸的染料實際上在效果管理方面造成了一些複雜性。這實際上需要更多地關注所使用的化學物質的純度，這顯然為我們的微污染過濾解決方案創造了非常重要的機會。

Okay. That's helpful. Maybe a follow-up question is, looking at this geopolitical tension seems to have stepped up a little bit in the last few months. Clearly, China is trying to build a self-sufficient ecosystem here. Can you talk about the competition in domestic chemicals and material suppliers, especially for lagging edge products, which is what all these new fabs seems to be focusing on?

好的。這很有幫助。也許後續的問題是，地緣政治緊張局勢在過去幾個月似乎有所加劇。顯然，中國正試圖在這裡建立一個自給自足的生態系統。您能否談談國內化學品和材料供應商的競爭，尤其是落後產品的競爭，而這正是所有這些新晶圓廠似乎關注的重點？

So Sidney, I think we have seen the emergence of domestic competitors in China. This is not new. Many of those companies were created 10, 15 years ago or even longer. And there has been a big push by our domestic Chinese customers to qualify those domestic alternatives. So far, in many cases, we've been able to demonstrate the superior value proposition of Entegris. And I would say that we've been able to hold their share pretty effectively. And I think that will likely continue to be the case in the short- to midterm. Having said that, I fully expect to see the emergence of very capable Chinese competitors longer term. So that's something that we're going to continue to watch. But the punchline is that today, we continue to compete very effectively in China, you can probably see that in our results in China, which -- I mean we saw a big step down, obviously, following the new export control restrictions between Q3 and Q4 and Q1. But then I think things have stabilized, and we are seeing growth as the mainstream fabs in China are starting to ramp up production.

所以西德尼，我認為我們已經看到了中國國內競爭對手的出現。這並不新鮮。其中許多公司是在 10 年、15 年前甚至更長時間前創建的。我們的中國國內客戶大力推動這些國內替代品的質量。到目前為止，在許多情況下，我們已經能夠展示 Entegris 的卓越價值主張。我想說的是，我們已經能夠非常有效地持有他們的份額。我認為這種情況在中短期內可能會持續下去。話雖如此，我完全期望看到長期來看非常有能力的中國競爭對手的出現。所以這是我們將繼續關注的事情。但有趣的是，今天，我們繼續在中國進行非常有效的競爭，你可能可以從我們在中國的業績中看到這一點，我的意思是，在第三季度和第三季度之間實施新的出口管制限制之後，我們顯然看到了很大的下滑。 Q4 和 Q1。但後來我認為情況已經穩定下來，隨著中國主流晶圓廠開始提高產量，我們看到了增長。

Our next question comes from Bhavesh Lodaya with BMO Capital Markets.

我們的下一個問題來自 BMO 資本市場的 Bhavesh Lodaya。

On your Taiwan facility, can you quantify how much was the start-up cost impact for the second and maybe the third quarter? And we have heard around some new announcements for fabs in the region. Focused more on AI, perhaps more on the advanced packaging side of things. Any color there around your opportunity set and how it relates to the ramp-up of utilization that you expect for your new facility?

對於您的台灣工廠，您能否量化啟動成本對第二季度甚至第三季度的影響有多大？我們已經聽到了該地區晶圓廠的一些新公告。更多地關注人工智能，也許更關注事物的先進封裝方面。您的機會集周圍有什麼顏色嗎？它與您期望的新設施利用率提升有何關係？

Yes. So I mean the reason we invested in Taiwan is that we actually continue to believe in the importance of the Taiwanese ecosystem. We expect to see significant investments in the years to come, and we wanted to be in a position to appropriately support the growth of our customers and their extended ecosystem. So that's why we're investing. And as we said, we had a great opening a few months back. Our customers are giving us all of the conviction we need to really accelerate the qualification of those new manufacturing lines. So that's our focus.

是的。所以我的意思是，我們投資台灣的原因是我們實際上仍然相信台灣生態系統的重要性。我們預計在未來幾年會看到重大投資，並且我們希望能夠適當支持客戶及其擴展生態系統的增長。這就是我們投資的原因。正如我們所說，幾個月前我們有一個很好的開業。我們的客戶給了我們真正加速這些新生產線資格認證所需的全部信心。這就是我們的重點。

We're not going to give you a very precise number in terms of the cost headwind. What I can share with you just as an anecdote is that -- to put some context is we had about 100 employees at KSP, which is total calcium site. That's our -- the name of our site. So at the end of 2022, we expect that number to be about 250 by the end of this year. And remember that we do not expect any meaningful levels of production by the end of this year. So it's going to be a drag. We've talked about it very openly now for several quarters. And that's what you are seeing to a great extent in the margin guidance that Linda was providing.

我們不會向您提供有關成本阻力的非常精確的數字。我可以跟大家分享的一個軼事是——為了說明一些背景，我們在 KSP 擁有大約 100 名員工，這是一家全鈣工廠。這是我們網站的名稱。因此，到 2022 年底，我們預計到今年年底這一數字將達到 250 左右。請記住，我們預計到今年年底不會出現任何有意義的產量水平。所以這將是一個拖累。我們已經非常公開地討論了這個問題幾個季度了。這就是您在琳達提供的保證金指導中很大程度上看到的。

Got it. And then around the CMC integration, you have spoken about revenue synergies in the past, basically around co-developing your deposition materials, slurries, filter pad, I guess, combining the two segments is part of that journey. But any color on how that is progressing? Are you already talking to customers around this? Any color on that?

知道了。然後圍繞 CMC 集成，您過去談到過收入協同效應，基本上是圍繞共同開發沉積材料、漿料、過濾墊，我想，將這兩個部分結合起來是這一旅程的一部分。但具體進展如何？您已經與客戶討論過這個問題了嗎？那上面有什麼顏色嗎？

Yes. Good question. So as we said, there will be a number of different phases for us to unlock the revenue synergies. The first phase is really around cross-selling. And we are really focused for that first phase on mainstream fabs and in particular, power electronics, and we are actually made some really great inroads in combining our SiC slurries with our SiC pads and really connecting those solutions to the best known methods of filtration. So we are actually using the sharp increase in volume productions in SiC as a great catalyst to validate this value proposition. So that's happening. That's happening now with success. And then the next phase will be about product co-optimization. And we will be doing that in the context of the new notes. So the engagement, the customer engagements are very active, very promising. We've had a lot of those meetings around the world in the recent months. But again, none of that will really be visible on the top line for probably another year or 2.

是的。好問題。正如我們所說，我們將經歷多個不同的階段來釋放收入協同效應。第一階段實際上是圍繞交叉銷售。我們的第一階段確實專注於主流晶圓廠，特別是電力電子設備，並且我們實際上在將SiC 漿料與SiC 墊相結合併將這些解決方案與最知名的過濾方法真正連接起來方面取得了一些真正的重大進展。因此，我們實際上利用 SiC 產量的急劇增加作為驗證這一價值主張的重要催化劑。所以事情就這樣發生了。現在這種情況正在成功發生。然後下一階段將是產品協同優化。我們將在新註釋的背景下這樣做。因此，客戶的參與非常活躍，非常有希望。近幾個月來，我們在世界各地舉行了很多此類會議。但同樣，這些可能在未來一兩年內都不會在營收上真正顯現出來。

Our next question comes from Charles Shi with Needham.

我們的下一個問題來自查爾斯·史和李約瑟。

Maybe two questions here. First one, Bertrand, you provided Toshiya some color in terms of end market demand. I want to ask about different angle. So specifically on the MSI side, relative to your expectation, let's say, 1 quarter ago, advanced foundry, logic mature and DRAM NAND, relative to your expectation on a quarter ago, how does each of the end markets are trending up versus down? And specifically, I want to understand because your full year guidance seems to imply maybe the revenue is going to bottom either in Q3 or Q4, but 1 quarter ago, you did expect maybe Q2 was the bottom. So I really just wanted to tie these two things together and help us understand what's changed about a quarter ago?

也許這裡有兩個問題。首先，Bertrand，您為 Toshiya 提供了有關終端市場需求的一些信息。我想問一下不同的角度。因此，具體而言，在MSI 方面，相對於您的預期，比方說，1 季度前，先進代工、邏輯成熟和DRAM NAND，相對於您對一個季度前的預期，每個終端市場的上漲與下跌趨勢如何？具體來說，我想了解，因為您的全年指導似乎暗示收入可能會在第三季度或第四季度觸底，但一季度前，您確實預計第二季度可能是底部。所以我真的只是想將這兩件事聯繫在一起，幫助我們了解一個季度前發生了什麼變化？

Yes. As I said, I mean, there's a lot of -- it's very choppy in the industry right now and our views have evolved for sure. So we are today probably a little bit more bullish about DRAM than we were a few months ago, recognizing that we have less exposure to DRAM than we do to 3D NAND, right? And I think we are probably a little bit more pessimistic about 3D NAND today than we were a couple of quarters ago, which translates into probably more modest views in terms of wafer starts for 3D NAND in the back half of the year. We're also seeing some pushouts and no transitions in 3D NAND, both of which have some impact on our business.

是的。正如我所說，我的意思是，現在這個行業非常不穩定，我們的觀點肯定已經發生了變化。因此，我們今天可能比幾個月前更加看好 DRAM，因為我們認識到我們對 DRAM 的了解比對 3D NAND 的了解要少，對吧？我認為我們今天對 3D NAND 的看法可能比幾個季度前更加悲觀，這意味著我們對下半年 3D NAND 晶圓開工的看法可能更為溫和。我們還看到 3D NAND 出現了一些淘汰，但沒有過渡，這兩者都對我們的業務產生了一些影響。

Advanced Logic is expected to recover in a modest way in the back half of the year, and that's good news for us. We're also seeing some interesting node transitions in the back half of the year, and that's good news for us as well. And then for mainstream, I think we always expressed some concern that there could be some softening in the back half of the year. That's something we always kind of anticipated, and we are seeing certainly the materialization of this and then we're taking that into account in our forecast for the full year.

Advanced Logic 預計將在今年下半年溫和復蘇，這對我們來說是個好消息。我們還在今年下半年看到了一些有趣的節點轉變，這對我們來說也是個好消息。然後對於主流市場，我認為我們總是對今年下半年可能會出現一些疲軟表示擔憂。這是我們一直期待的事情，我們確實看到了這一點的實現，然後我們在全年的預測中考慮到了這一點。

Bertrand, I really want to ask a more long-term question combining SCEM and APS. We did hear from one of your key members very recently in your investor event earlier in -- actually in July, that some of the future opportunities would include advanced packaging. I thought advanced packaging wasn't really a major focus for Entegris in the past, but it's interesting to see advanced packaging being one of the growth opportunities your team is seeing over a longer period of time. Can you help us understand why the change? And especially in advanced packaging, a lot of the complexity may not be as -- it may not be as complex as in the wafer fab space. Why do you see a major opportunity there? And just help us understand what your teams are seeing today?

Bertrand，我真的想問一個結合 SCEM 和 APS 的更長期的問題。我們確實在最近早些時候（實際上是在 7 月）的投資者活動中從您的一位關鍵成員那裡聽說，未來的一些機會將包括先進封裝。我認為先進封裝過去並不是 Entegris 真正關注的重點，但有趣的是，看到先進封裝成為您的團隊在較長一段時間內看到的增長機會之一。您能幫助我們理解為什麼要進行更改嗎？尤其是在先進封裝領域，很多複雜性可能不像晶圓廠那麼複雜。為什麼您認為那裡存在重大機遇？請幫助我們了解您的團隊今天看到了什麼？

Yes. So you're right that there are a number of road maps in the industry that, in the past, traditionally did not require the advanced solutions that we are developing. It's true for advanced packaging. It was true also for DRAM. The good news is that all of those road maps are becoming much more demanding. In advanced packaging, I think we expect a much greater degree of precision of automation, a degree of cleanliness required in their processes. We also believe there will be more polishing step required with the bonding of the wafers. And all that will open up opportunities for our AMH products in terms of wafer carriers, slurries and pads for the polishing applications, and very likely also opportunities for our filtration and cleaning product line. So that's something that we are very focused on today. And again, to expand that, I would say that a similar view in terms of the DRAM road map, again, typically, Entegris content per wafer on a DRAM chip is way less than 3D NAND or Logic. But this is changing.

是的。所以你是對的，行業中有許多路線圖，在過去，傳統上不需要我們正在開發的先進解決方案。對於先進封裝來說確實如此。對於 DRAM 來說也是如此。好消息是所有這些路線圖的要求都變得越來越高。在先進包裝中，我認為我們期望更高程度的自動化精度，以及其工藝所需的一定程度的清潔度。我們還相信晶圓的粘合將需要更多的拋光步驟。所有這些都將為我們的 AMH 產品在晶圓載體、拋光應用的漿料和墊方面帶來機會，也很可能為我們的過濾和清潔產品線帶來機會。這就是我們今天非常關注的事情。再說一次，為了擴展這一點，我想說，在 DRAM 路線圖方面也有類似的觀點，通常，DRAM 芯片上每個晶圓的 Entegris 內容遠少於 3D NAND 或 Logic。但這種情況正在改變。

In the case of DRAM, we are seeing a push for more [miniaturization]. We are seeing a push for 3D architectures on the backside of the chip, all of which will create opportunities for our microcontamination solution set. Will require a new precursor for the new films and highly-selective etching chemistries will also be required for the upcoming DRAM architecture. So if you look across the Board in the semi-conductor industry, we are increasingly excited about the various road maps, and we believe there will be many opportunities for us to continue to increase the Entegris content per wafer.

就 DRAM 而言，我們看到了進一步[小型化]的推動力。我們看到芯片背面 3D 架構的發展，所有這些都將為我們的微污染解決方案集創造機會。新薄膜需要新的前體，即將推出的 DRAM 架構也需要高選擇性蝕刻化學物質。因此，如果你縱觀半導體行業，我們對各種路線圖越來越感到興奮，我們相信我們將有很多機會繼續增加每片晶圓的 Entegris 含量。

Our next question comes from Kieran De Brun with Mizuho.

我們的下一個問題來自 Mizuho 的 Kieran De Brun。

Just to start off, maybe on SCEM. Can we talk about the mix that you've been seeing, like how we should be thinking about margins going forward? If there's any color on how you think about exiting the year as some of these kind of mixed headwinds seem to lap or abate as we get into the end of the year, that would be helpful.

剛開始，也許是 SCEM。我們能否談談您所看到的混合情況，例如我們應該如何考慮未來的利潤率？如果您對如何退出這一年有任何看法，因為隨著我們進入年底，這些混合的逆風似乎會消失或減弱，那將會有所幫助。

Yes. So when it comes to SCEM, I remember that we've been very clear now for several years that this is an area where we see a lot of opportunities. I mean, back to the comment I was making in the context of DRAM, 3D NAND or even advanced packaging, I think that, that's the time to really enable the new materials and chemistries that will support the ambitious road maps of our customers. So we want to be investing, and that's why the bottom line performance of the SCEM is very modest this year, around 10%. We expect some very modest recovery in the back half of the year, but really, the recovery will come with the adoption of the new materials that we're developing, and we need those materials to reach high volume. If you go back to the Analyst Day last year, you will notice that SCEM was expected to be the lower -- I mean, the -- yes, the lower margin business of all the four divisions. And that is a function of the level of investment we intend to make there. But remember, in terms of the external reporting with the combination of APS and SCEM, we intend to have a three segment reporting starting Q3.

是的。因此，說到 SCEM，我記得幾年來我們一直非常清楚，這是一個我們看到很多機會的領域。我的意思是，回到我在DRAM、3D NAND 甚至先進封裝方面所做的評論，我認為，現在是真正啟用新材料和化學物質的時候了，這些新材料和化學物質將支持我們客戶雄心勃勃的路線圖。所以我們想要進行投資，這就是為什麼 SCEM 今年的底線表現非常溫和，約為 10%。我們預計今年下半年會出現一些非常溫和的複蘇，但實際上，復甦將隨著我們正在開發的新材料的採用而到來，而且我們需要這些材料達到高產量。如果你回顧一下去年的分析師日，你會注意到 SCEM 預計將是所有四個部門中利潤率較低的業務。這取決於我們打算在那裡進行的投資水平。但請記住，就 APS 和 SCEM 相結合的外部報告而言，我們打算從第三季度開始進行三部分報告。

Okay. That's very helpful. And then maybe just on the combination of SCEM and APS. I think back in the Investor Day, APS was growing at like a 200 to 400 basis point above market, whereas SCEM is in kind of the broader range of like 300 to 600 basis points. When we factor in revenue synergies and the integration of CCMP, how do you think about that combined segment? Should we be thinking about in that kind of 300 to 600 basis point range going forward? Or is there probably going to be a little bit of a lower growth rate versus the broader market when we think about the combination of both businesses? And if so, is the ambition to get it back up to kind of that 300 to 600 basis points?

好的。這非常有幫助。然後也許只是 SCEM 和 APS 的結合。我記得在投資者日，APS 的增長速度比市場高 200 到 400 個基點，而 SCEM 的增長范圍更廣泛，大約 300 到 600 個基點。當我們考慮收入協同效應和 CCMP 的整合時，您如何看待合併後的細分市場？我們是否應該考慮在 300 至 600 個基點範圍內繼續前進？或者，當我們考慮這兩項業務的合併時，與大盤相比，增長率是否可能會稍低一些？如果是這樣，是否有雄心勃勃地將其恢復到 300 至 600 個基點？

Yes. So we have a high degree of conviction in the power of this combination and the ability to really develop very unique end-to-end solutions for customers. And that's going to translate into superior growth longer term, right? And so we will reset those expectations. We are thinking about having potentially an Analyst Day in the first half of next year. And that's going to be an opportunity for us to actually reset some of those expectations in terms of top line growth potential and bottom line potential for each of the three divisions.

是的。因此，我們對這種組合的力量以及真正為客戶開發非常獨特的端到端解決方案的能力充滿信心。從長遠來看，這將轉化為卓越的增長，對吧？因此，我們將重新設定這些期望。我們正在考慮在明年上半年舉辦分析師日。這將是我們真正重新調整三個部門的頂線增長潛力和底線潛力方面的一些預期的機會。

Our next question comes from Aleksey Yefremov with KeyBanc Capital Markets.

我們的下一個問題來自 KeyBanc Capital Markets 的 Aleksey Yefremov。

This is Ryan on for Aleksey. I guess the first question I would have is starting in MC -- you guys flagged headwinds from lower production in 2Q. First off, wondering if you guys might be able to quantify that for us? And then secondly, just what are your expectations on potential headwinds from the same thing in the back half?

這是阿列克西的瑞安。我想我要問的第一個問題是從 MC 開始——你們標記了第二季度產量下降帶來的不利因素。首先，想知道你們是否能夠為我們量化這一點？其次，您對後半段同樣的事情可能帶來的潛在阻力有何期望？

Yes. I mean -- I think those supply chain constraints have been easing. That's the point I was trying to make. There are some modest lingering supply chain constraints, but it's really not very material. So we expect -- I mean, of course, year-to-date, microcontamination has been the shining star of our portfolio. It's it's up 2% year-to-date. In particular, our liquid filtration platform has been growing very nicely. We delivered a record quarter actually in Q2 this year in spite of the industry conditions that you are well aware of. So again, it's just a validation of the growing importance of those filters when it comes to yield optimization when it comes to chip long-term reliability. And we expect, again, this business to continue to do very well in the back half of the year.

是的。我的意思是——我認為這些供應鏈限制已經緩解。這就是我想要表達的觀點。供應鏈存在一些適度的、揮之不去的限制，但實際上並不是很重要。所以我們預計——我的意思是，當然，今年迄今為止，微污染一直是我們產品組合中的閃亮之星。今年迄今已上漲 2%。特別是我們的液體過濾平台發展得非常好。儘管您很清楚行業狀況，但我們實際上在今年第二季度實現了創紀錄的季度業績。再次強調，這只是驗證了這些濾波器在良率優化和芯片長期可靠性方面日益增長的重要性。我們再次預計這項業務將在今年下半年繼續表現出色。

Great. Very helpful. And then just secondly, just looking at kind of like what the implied EBITDA is for 4Q, it looks like there's a fairly strong step up 3Q to 4Q. So just wondering if you could talk about some of the drivers there?

偉大的。很有幫助。其次，看看第四季度隱含的 EBITDA，看起來第三季度到第四季度有相當強勁的增長。所以想知道您是否可以談談那裡的一些司機？

Yes. So as we think about moving into 4Q, I mean, a lot of it is going to be mix as we've seen so far -- we have seen some strength in our unit-driven businesses like MC, which does have a good mix impact with that business. And then we do have the -- on the CapEx side, the businesses tied more to the fab construction. So that will be a big piece of it. Secondly, we are going to continue to focus on cost control. So it's really critical as we balance throughout the year, to balance cost controls against investment. So as we think about that balancing, that is what we're focused on. We did hold our guidance for the full year and hold our guidance on the EBITDA margin. So that is another piece of the puzzle that we're balancing.

是的。因此，當我們考慮進入第四季度時，我的意思是，正如我們迄今為止所看到的那樣，很多內容都將是混合的——我們已經看到了像MC 這樣的單位驅動業務的一些優勢，它確實有很好的組合對該業務的影響。然後我們確實有——在資本支出方面，業務更多地與晶圓廠建設聯繫在一起。所以這將是其中的很大一部分。其次，我們將繼續注重成本控制。因此，在我們全年進行平衡時，平衡成本控制和投資非常重要。因此，當我們考慮平衡時，這就是我們關注的重點。我們確實維持了全年的指導方針，並維持了 EBITDA 利潤率的指導方針。這是我們正在平衡的另一個難題。

Our next question comes from Timothy Arcuri with UBS.

我們的下一個問題來自瑞銀集團的蒂莫西·阿庫裡。

Can you talk about the puts and the takes on the model with these different moving parts? I mean obviously, we're going to lose EC, you lose some revenue, but obviously helps margins. You have the termination of the Element Solutions deal. You get some cash but you have to kind of rebuild that channel for these plating chemistries. That might not be a factor because you did use your existing channels. So I'm just kind of wondering if -- like maybe you could take December and you could sort of rightsized the base for us, what it looks like sort of on a pro forma basis as you enter 2024?

您能談談模型中這些不同的移動部件的放置和接受嗎？我的意思是，很明顯，我們將失去電子商務，你會失去一些收入，但顯然有助於利潤率。您已終止 Element Solutions 交易。你得到了一些現金，但你必須為這些電鍍化學物質重建通道。這可能不是一個因素，因為您確實使用了現有的渠道。所以我只是想知道，也許你可以以 12 月為例，你可以為我們調整基礎規模，進入 2024 年時，在預計的基礎上會是什麼樣子？

Yes. So Tim, I probably can take the lead here. Just to probably say that it's -- there are a lot of moving pieces to your point, and it would be probably more confusing than helpful to really try to unpack everything. I will only cite a couple of factors, though. One is the termination of the distribution agreement with (inaudible), for instance, we'll have actually a pretty significant detrimental impact on gross margin in Q3 and potentially Q4. The reason being that while we collected the proceeds, we still need to serve existing customers, but we'll do that at 0 margin until all of the customer transitions are completed. And that's going to have an impact of about 0.5 point of gross margin roughly.

是的。所以蒂姆，我可能可以帶頭。只是可能會說，對於你的觀點，有很多移動的部分，真正嘗試解開所有內容可能會更加令人困惑，而不是有幫助。不過，我只會引用幾個因素。一是終止與（聽不清）的分銷協議，例如，我們實際上會對第三季度和可能的第四季度的毛利率產生相當大的不利影響。原因是，雖然我們收到了收益，但我們仍然需要為現有客戶提供服務，但我們將以 0 利潤來做到這一點，直到所有客戶轉換完成。這將對毛利率產生大約 0.5 個百分點的影響。

So again, I think there are a lot of puts and takes. The takeaway for you is really that indeed, once all of those divestitures are completed, the financial profile of the company will be different and will be more attractive. And that's one of the reasons why we think that we have to do an Analyst Day sometime in the first half of next year to actually show you what Entegris looks like once all of those divestitures are completed and talk about the long-term potential of the platform. And that's not something we're going to be doing on the call today.

再說一次，我認為有很多的調整和調整。對您來說，確實如此，一旦所有這些資產剝離完成，公司的財務狀況將有所不同，並且將更具吸引力。這就是為什麼我們認為我們必須在明年上半年的某個時候舉辦分析師日活動，以實際向您展示 Entegris 在所有這些剝離完成後的樣子，並討論該公司的長期潛力。平台。這不是我們今天在電話會議上要做的事情。

Okay. Yes, I get that there's a lot of moving parts. So there was a question before on China. I guess my question, I mean, certainly, they are making huge investments. They're making big investments in chemistries and things that they ultimately hope will displace companies like you. But sort of how do you handicap and there was a question sort of generally about the risk -- but how do you isolate what your portion of revenue is going into the domestic China chipmakers? So I know that as you report it, it's roughly 15% of revenue, but that's not just domestic China chipmakers. How do you sort of handicap and ring-fence. What is going into the domestic China guys?

好的。是的，我知道有很多活動部件。所以之前有一個關於中國的問題。我想我的問題是，我的意思是，他們當然正在進行巨額投資。他們正在化學製品和其他領域進行大量投資，他們最終希望這些投資能夠取代像你們這樣的公司。但是，你如何限制風險，並且存在一個關於風險的普遍問題——但你如何隔離你的收入部分流向中國國內芯片製造商呢？所以我知道，正如你所報告的那樣，這大約佔收入的 15%，但這不僅僅是中國國內的芯片製造商。你如何看待障礙和圍欄。中國國內的小伙子現在怎麼樣了？

Yes. So what we've said, it's about 2/3 would be domestic, I mean, high level, and that's something that we'll obviously, given the current regulations, we are paying very, very close attention to. And we are engaging with individual customers, asking them to represent to us that they are operating their fabs within the permissible technology node. And that's something that we're going to continue to operate for very, very precisely. So I'm not sure exactly what is behind your question, Tim. Maybe you can help me. But...

是的。所以我們已經說過，大約 2/3 是國內的，我的意思是，高水平，顯然，考慮到現行法規，我們正在非常非常密切地關注這一點。我們正在與個人客戶接觸，要求他們向我們表明他們正在允許的技術節點內運營他們的工廠。這就是我們將繼續非常非常精確地開展工作的目標。所以我不確定你的問題背後到底是什麼，蒂姆。也許你可以幫助我。但...

I guess, Bertrand, I asked because it does appear likely that there's going to be some push to restrict even lagging edge nodes. I don't know what they're going to do. But certainly, there's -- where there's smoke, there's typically fire. So I'm just wondering how you could get nicked in that. So I'm just kind of trying to make sense what's going to the domestic China companies, which -- most of which would be lagging edge because of the current restrictions.

我想，伯特蘭，我問這個問題是因為看起來確實可能會採取一些措施來限制甚至落後的邊緣節點。我不知道他們要做什麼。但當然，有煙的地方通常就會發生火災。所以我只是想知道你怎麼會受到傷害。因此，我只是想了解中國國內公司的處境，由於當前的限制，這些公司中的大多數將處於落後地位。

Yes. I mean, I can only talk to you about the existing restrictions. I will not speculate on a new wave of spot controls or any other measure. I mean that's -- I don't have any unique knowledge and I won't speculate on that. We'll talk about it if there is anything specific that is enacted.

是的。我的意思是，我只能和你談談現有的限制。我不會猜測新一波的現場控製或任何其他措施。我的意思是——我沒有任何獨特的知識，我不會對此進行推測。如果有任何具體的頒布，我們將討論它。

Our next question comes from Mike Harrison with Seaport Research Partners.

我們的下一個問題來自海港研究合作夥伴的邁克·哈里森。

Can you hear me okay?

你能聽到我說話嗎？

Yes.

是的。

I was hoping that maybe you could talk a little bit about the mix that you're seeing within the Planarization business. You said that volumes sequentially were lower across most product lines, but I know you called out that SiC opportunity, which I believe is small today but growing nicely. Just curious, are you expecting to see a faster recovery within some of the more advanced slurries as you look at the second half and into 2024?

我希望您能談談您在平面化業務中看到的混合情況。您說大多數產品線的銷量連續下降，但我知道您提到了 SiC 機會，我認為目前這個機會很小，但增長良好。只是好奇，當您展望下半年和 2024 年時，您是否期望看到一些更先進的漿料出現更快的複蘇？

Yes. So I would say that -- when I look at the APS results, they are mostly in line with our expectations, especially given the very depressed environment that we've experienced in memory. The bright spot has been and we expect it to continue to be the SiC application, both for slurries and pads. That part of the business has been growing year-on-year, growing sequentially, and we expect that to continue to be the case in the back half of the year. But we also expect to turn a corner in silicon applications. And I would expect overall EPS to have a better second half than the performance we saw in the first half.

是的。所以我想說，當我查看 APS 結果時，它們基本上符合我們的預期，特別是考慮到我們在記憶中經歷過的非常沮喪的環境。亮點一直是，並且我們預計它將繼續是 SiC 應用，無論是用於漿料還是墊。這部分業務一直在逐年增長、環比增長，我們預計下半年仍將如此。但我們也期望矽應用領域能夠迎來轉機。我預計下半年的整體每股收益將比上半年的表現更好。

All right. And then just in terms of the CapEx reduction in your outlook for this year, can you give us any sense of what's being delayed? I assume that's not any delay in the ramp-up of Taiwan. But is any of that related to the work that you're doing in Colorado Springs?

好的。然後就您對今年的資本支出減少的展望而言，您能否告訴我們什麼被推遲了？我認為台灣的崛起並沒有任何延遲。但這與您在科羅拉多斯普林斯所做的工作有關嗎？

Yes. We remain very focused on the growth in Taiwan and Colorado Springs. So it's nothing specific to that timing. It was a general delay. And also, as we said, we're looking at the market environment, having less CapEx is going to benefit us from a cash standpoint and ties very well to the market environment as well as our goals to continue to pay down debt.

是的。我們仍然非常關注台灣和科羅拉多斯普林斯的增長。所以這個時間沒有什麼特別的。這是一次普遍的延誤。而且，正如我們所說，我們正在關注市場環境，從現金角度來看，減少資本支出將使我們受益，並且與市場環境以及我們繼續償還債務的目標密切相關。

Our next question comes from Chris Kapsch with Loop Capital Markets.

我們的下一個問題來自 Loop Capital Markets 的 Chris Kapsch。

So my questions were focused on the APS or the slurry business. You just provided some color there. But I'm curious if you could just characterize if there's been any change in the competitive landscape for slurries generally, given the memory end market weakness? And then more specifically, just curious how the tungsten slurry business is doing, maybe as gauged by content per wafer when looking at those advanced more complex 3D NAND architectures. And also, how is the advanced oxide slurry business doing given what I believe is an advantage proprietary position there?

所以我的問題集中在 APS 或漿料業務上。你只是在那裡提供了一些顏色。但我很好奇，考慮到內存終端市場的疲軟，您能否描述一下漿料的競爭格局是否發生了任何變化？更具體地說，只是好奇鎢漿業務的表現如何，也許可以通過查看那些先進的更複雜的 3D NAND 架構時每片晶圓的含量來衡量。此外，鑑於我認為先進氧化物漿料業務的優勢專有地位，其表現如何？

Yes. So look, I mean, I would say that right now, the competitive position has not changed all that much, right? And then so we are not losing any share, we're not gaining any share that would impact the short-term results. I would tell you that there are a number of new design wins that we've been able to get awarded that are very interesting and very exciting, especially around advanced dielectrics. And that actually is both in logic and memory. So what -- that's one of the reasons I answered the question the way I did to a previous question about, can we legitimately expect EPS to grow at a growth rate similar to SCEM in the years to come? I would say, it's a fair expectation, and that goes back to the commitment we made to unlock positive revenue synergies as we learn to better optimize and co-optimize our solutions across the platform. As I said, customers are very receptive to this possibility and hypothesis, and we're working very, very hard to actually unlock the full potential of the platform, and that's going to translate into growth, both in slurries and a number of ancillary products.

是的。所以看，我的意思是，我想說，現在，競爭地位並沒有發生太大變化，對嗎？因此，我們不會失去任何份額，也不會獲得任何會影響短期業績的份額。我想告訴你，我們已經獲得了許多新的設計成果，這些設計非常有趣且令人興奮，特別是在先進電介質方面。這實際上是在邏輯和記憶中。那又怎樣——這就是我回答這個問題的原因之一，就像我回答之前的問題一樣，我們可以合理地預期 EPS 在未來幾年以類似於 SCEM 的增長率增長嗎？我想說，這是一個公平的期望，這可以追溯到我們做出的承諾，即在我們學習更好地優化和共同優化整個平台的解決方案時，釋放積極的收入協同效應。正如我所說，客戶非常容易接受這種可能性和假設，我們正在非常非常努力地真正釋放該平台的全部潛力，這將轉化為漿料和許多輔助產品的增長。

Got it. That's -- helpful. Just as one follow-up. I'm just inferring from your answer there that the content per wafer per dye, if you will, and advanced memory is increasing, but it sounds like it's maybe more driven by oxide polishing versus tungsten. Any comment there? Or maybe it's both in terms of visibility around -- perhaps it's...

知道了。這很有幫助。就像一個後續行動一樣。我只是從你的回答中推斷，如果你願意的話，每個晶圓每種染料的含量以及先進的內存正在增加，但聽起來它可能更多地是由氧化物拋光而不是鎢驅動的。有什麼意見嗎？或者也許這既是因為周圍的可見性——也許是……

I'm not sure I want to go -- I'm not sure I'm going to go into that level of specificity in these calls. But I think across the Board, we're making some good progress.

我不確定我是否想去——我不確定我是否會在這些電話會議中討論具體程度。但我認為，從整體上看，我們正在取得一些良好的進展。

And we have reached our allotted time for our question-and-answer session. I will now turn the floor back over to Bill Seymour for some closing remarks.

我們已經達到了問答環節的指定時間。現在我將把發言權交還給比爾·西摩，他將發表一些結束語。

Thank you, everyone, for joining today. Please follow up with me if you have any questions. Have a great day, and you can now disconnect.

謝謝大家今天的加入。如果您有任何疑問，請關注我。祝您有美好的一天，您現在可以斷開連接了。

Thank you. This concludes today's Entegris Second Quarter 2023 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.

謝謝。今天的 Entegris 2023 年第二季度收益電話會議到此結束。此時請斷開您的線路，祝您有美好的一天。