(PLAB) 2022 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Photronics' Q2 Fiscal Year 2022 Earnings Conference Call. (Operator Instructions). As a reminder, this conference is being recorded, Wednesday, May 25, 2022.

美好的一天，感謝您的支持。歡迎參加 Photronics 的 2022 財年第二季度收益電話會議。 （操作員說明）。提醒一下，本次會議將於 2022 年 5 月 25 日星期三錄製。

I would now like to turn the conference over to John Jordan, Executive Vice President and CFO. You may begin.

我現在想把會議交給執行副總裁兼首席財務官約翰喬丹。你可以開始了。

Thank you, Tonia. Good morning, everyone. Welcome to our review of Photronics' fiscal 2022 second quarter results. Joining me this morning are Frank Lee, our recently appointed Chief Executive Officer; Chris Progler, our Chief Technology Officer; and Eric Rivera, our Corporate Controller and Chief Accounting Officer.

謝謝你，托尼亞。大家，早安。歡迎來到我們對 Photronics 2022 財年第二季度業績的回顧。今天早上和我一起的是我們最近任命的首席執行官弗蘭克·李（Frank Lee）；我們的首席技術官 Chris Progler；以及我們的公司財務總監兼首席會計官 Eric Rivera。

The press release we issued earlier this morning, along with the presentation material, which accompanies our remarks, are available on the Investor Relations section of our web page. Comments made by any participants on today's call may include forward-looking statements that include such words as anticipate, believe, estimate, expect, forecast, or in our view. These forward-looking statements are based upon a number of risks, uncertainties and other factors that are difficult to predict. Actual results may differ materially from those expressed or implied, and we assume no obligation to update any forward-looking information.

我們今天上午早些時候發布的新聞稿以及我們的評論隨附的演示材料可在我們網頁的投資者關係部分獲得。任何參與者在今天的電話會議上發表的評論可能包括前瞻性陳述，其中包括預期、相信、估計、預期、預測或我們認為的詞語。這些前瞻性陳述基於許多難以預測的風險、不確定性和其他因素。實際結果可能與明示或暗示的結果存在重大差異，我們不承擔更新任何前瞻性信息的義務。

At this time, I will turn the call over to Frank.

這個時候，我會把電話轉給弗蘭克。

Thank you, John, and good morning, everyone. I would like to begin this morning by stating how honored I am to be with you today as the new CEO of Photronics. Since joining the company in 2006, I have had created and our operation and strategy in Asia, including the formation of 2 joint ventures with Dai Nippon Printing Company and also the recent geographic expansion of our operations into China.

謝謝你，約翰，大家早上好。今天早上，我想先聲明我很榮幸能作為 Photronics 的新任 CEO 與您在一起。自 2006 年加入公司以來，我已經創建了我們在亞洲的運營和戰略，包括與 Dai Nippon Printing Company 成立 2 家合資企業，以及最近將我們的業務地域擴展到中國。

Turning to the financial results. We once again delivered a second -- record revenue in the second quarter, improving 8% sequentially, our strong end market demand, the further price realization across IC segment and also the continuous production ramping up of our Xiamen and Hefei operations. In addition to the top line growth, we expand our growth and operation margins. Gross margin was 36% and operational margin, 25%. The net result was EPS of $0.49. Cash generation was also strong as we end the year with $247 million in net cash, which position us to continue investing in profitable growth opportunity.

轉向財務結果。我們在第二季度再次實現了第二個創紀錄的收入，環比增長 8%，這得益於我們強勁的終端市場需求、IC 領域的進一步價格實現以及我們廈門和合肥業務的持續增產。除了收入增長外，我們還擴大了增長和運營利潤率。毛利率為 36%，營業利潤率為 25%。最終結果是每股收益為 0.49 美元。現金產生也很強勁，因為我們在年底擁有 2.47 億美元的淨現金，這使我們能夠繼續投資於可盈利的增長機會。

As CEO, I fully commit to continue our organic growth strategy, the revenue growth and margin expansion. And also we'll keep exploring additional growth initiatives. For revenue growth, the growth is achieved by winning more share in a growing market right now. We have been working closely with our customers to meet their needs in technology and capacity road map. We are building partnerships with several key customers, and we also signed many long-term purchase agreements, so-called [LTPA] with our key customers. This kind of approach serves us very well to make a critical investment, and it helps us to quickly get return on our investment. Our recent IC and FPD operation into China are a very good example of this approach. As the market leader, Photronics has become a trust partner and key suppliers of our customer in both IC and FPD.

作為首席執行官，我完全致力於繼續我們的有機增長戰略、收入增長和利潤率擴張。我們還將繼續探索其他增長計劃。對於收入增長，增長是通過在當前不斷增長的市場中贏得更多份額來實現的。我們一直與客戶密切合作，以滿足他們在技術和產能路線圖方面的需求。我們正在與幾個主要客戶建立合作夥伴關係，我們還與我們的主要客戶簽署了許多長期採購協議，即所謂的 [LTPA]。這種方法非常適合我們進行關鍵投資，它可以幫助我們快速獲得投資回報。我們最近在中國開展的 IC 和 FPD 業務就是這種方法的一個很好的例子。作為市場領導者，Photronics 已成為我們客戶在 IC 和 FPD 領域的信任合作夥伴和主要供應商。

In addition to revenue growth, our profitability has been improving continuously. This is achieved by the very execution of 3 major key items. The product mix optimization, the effective cost management, and operational efficiency enhancement. On top of these actions, we have implemented some pricing adjust strategy based on current market supply-demand imbalance situation.

除了收入增長，我們的盈利能力也在不斷提高。這是通過執行 3 個主要關鍵項目來實現的。產品結構優化，成本管理有效，運營效率提升。在這些行動的基礎上，我們根據當前市場供需失衡的情況實施了一些價格調整策略。

My third commitment is to explode new strategies to further our growth initiatives. I'd be very involved in this process since joining Photronics. We have a very good relations with our customers, vendors and value partners throughout Asia. With the emerging trend of global supply chain restructuring include IC manufacturing localization such as [Made in USA].

我的第三個承諾是推出新的戰略來推進我們的增長計劃。自從加入 Photronics 以來，我將非常參與這個過程。我們與亞洲各地的客戶、供應商和價值合作夥伴有著非常好的關係。隨著全球供應鏈重組趨勢的出現，包括[Made in USA]等IC製造本地化。

Photronics will solidify our activities and relationships in these other agents, in other geographies. I'm very certain that with our strong existing global footprint and the successful experience in Asia, we will be far ahead with in this business, in our business.

Photronics 將鞏固我們在這些其他代理商、其他地區的活動和關係。我非常肯定，憑藉我們現有的強大全球足跡和在亞洲的成功經驗，我們將在這項業務中遙遙領先。

We have performed very well through the first half of 2022, and we are on track to have the best year in the history of the company. I'm very proud of our team. And together, we will continue to outperform beyond 2022. Thank you very much.

我們在 2022 年上半年的表現非常好，我們有望迎來公司歷史上最好的一年。我為我們的團隊感到非常自豪。一起，我們將在 2022 年之後繼續表現出色。非常感謝。

And this time, I turn the call to John.

這一次，我把電話轉給約翰。

Thank you, Frank. Good morning, again, everyone. Second quarter was another record quarter for Photronics, our fifth consecutive record quarter. Revenue improved 8% quarter-over-quarter and 28% year-over-year as demand across the board remained strong.

謝謝你，弗蘭克。再次，大家早上好。第二季度是 Photronics 的另一個創紀錄的季度，這是我們連續第五個創紀錄的季度。由於整體需求保持強勁，收入環比增長 8%，同比增長 28%。

We're executing on our growth strategy by investing in technology aligned with market drivers, and partnering with customers by establishing long-term purchase agreements that enable us to quickly and profitably ramp new tools while maintaining high utilization on existing tools. This quarter is another proof point that, that approach is working.

我們通過投資與市場驅動因素相一致的技術來執行我們的增長戰略，並通過建立長期採購協議與客戶合作，使我們能夠快速且有利地推出新工具，同時保持現有工具的高利用率。本季度是另一個證明，這種方法是有效的。

IC revenue grew 12% sequentially and 30% year-over-year on strong global demand for our photomasks. High-end demand was driven by foundries in Asia and U.S. as semiconductor content in consumer goods continues to increase with more chips in electronics, automotive, appliances and many more applications, new designs continue being released to satisfy this demand.

由於全球對我們的光掩模的強勁需求，IC 收入環比增長 12%，同比增長 30%。高端需求由亞洲和美國的代工廠推動，隨著電子、汽車、電器和更多應用中的芯片越來越多，消費品中的半導體含量不斷增加，新設計不斷推出以滿足這一需求。

Advances in communication infrastructure, such as the rollout of 5G are another catalyst in demand growth. This proliferation of chips is a driver of photomask demand and for Photronics.

通信基礎設施的進步，例如 5G 的推出，是需求增長的另一個催化劑。芯片的這種擴散是光掩模需求和 Photronics 的驅動力。

As use of semiconductors continues to proliferate and demand growth continues beyond the capacity to supply it, it creates a change in pricing environment, primarily in trailing edge masks, but also in the high-end business that is helping us further expand margins. which I'll discuss in more detail later.

隨著半導體的使用繼續激增，需求增長繼續超出供應能力，這會導致定價環境發生變化，主要是在後緣掩模方面，但也在幫助我們進一步擴大利潤率的高端業務中。我稍後會更詳細地討論。

FPD was down slightly quarter-over-quarter, primarily due to a decrease in mainstream LCD. High end was slightly higher, thanks to continued strong mobile demand. Growth in displays for mobile applications offset a decline in G10.5 larger mask demand.

FPD 環比略有下降，主要是由於主流 LCD 的下降。由於持續強勁的移動需求，高端產品略高。移動應用顯示器的增長抵消了 G10.5 更大面罩需求的下降。

We expect demand to remain strong for AMOLED and LTPS displays used in mobile applications, some increase in G10.5 and continued reliable demand from mainstream LCD displays. Revenue from products shipped to China customers achieved another record quarter, improving 8% sequentially and 58% year-over-year.

我們預計移動應用中使用的 AMOLED 和 LTPS 顯示器的需求將保持強勁，G10.5 會有所增長，主流 LCD 顯示器的需求將持續穩定。發往中國客戶的產品收入再創歷史新高，環比增長 8%，同比增長 58%。

We are the clear market leader in this growing region. Our past business development and operational expansion initiatives are reaping the benefits we anticipated. Gross and operating margins improved during the second quarter, benefiting from the high leverage in our operating model and well demonstrated discipline in keeping costs low.

我們是這個不斷增長的地區的明顯市場領導者。我們過去的業務發展和運營擴展計劃正在獲得我們預期的好處。第二季度毛利率和營業利潤率有所改善，這得益於我們運營模式的高槓桿率以及在保持低成本方面的良好紀律。

Gross margin of 35.7% and operating margin of 25.5% are both well within the long-term ranges we communicated in February. We fully expect this business environment to continue well into the future.

35.7% 的毛利率和 25.5% 的營業利潤率都在我們二月份溝通的長期範圍內。我們完全預計這種商業環境將持續到未來。

We have based our investment plans and that expectation, and we anticipate that the increased margins will be sustained by the demand-supply imbalance due to limited trailing edge capacity. Our target model, which will take us into fiscal 2024, has been updated to reflect these new growth opportunities and is included in the supplemental slides posted to our website this morning.

我們基於我們的投資計劃和預期，我們預計利潤率的增加將由有限的後緣產能導致的供需失衡維持。我們將進入 2024 財年的目標模型已更新，以反映這些新的增長機會，並包含在今天上午發佈到我們網站的補充幻燈片中。

Our approach to these target models is to be realistic without being aggressive, although in retrospect, consistently improving business conditions in the photomask space and our execution have suggested that the model should be updated.

我們對這些目標模型的方法是切合實際而不是激進，儘管回想起來，光掩模領域的業務狀況不斷改善，我們的執行表明應該更新模型。

The updated target model layers in only the revenue increments anticipated from our currently planned CapEx investments and the pricing opportunities provided by continuation of the current business environment with consideration at the low end of the target that at 3 years into the strong semiconductor business cycle, the risk of a downturn is increasing.

更新後的目標模型僅包含我們當前計劃的資本支出投資預期的收入增量以及當前業務環境持續提供的定價機會，並考慮到目標的低端，即在進入強勁的半導體業務週期的 3 年，經濟下滑的風險正在增加。

Income tax provision increased due to the increased earnings and net income to noncontrolling interest increased with the strong performance of our joint ventures in China and Taiwan.

所得稅撥備增加是由於我們在中國大陸和台灣的合資企業的強勁表現導致盈利增加和非控股權益淨收入增加。

Changes in foreign exchange rates resulted in an $8 million gain in other income, equivalent to approximately $0.07 a share. As a result, diluted earnings per share were $0.49.

外匯匯率的變化導致其他收入增加了 800 萬美元，相當於每股約 0.07 美元。因此，每股攤薄收益為 0.49 美元。

We strengthened our balance sheet during the quarter with cash and equivalents increasing to $329 million, and debt decreasing to $83 million, resulting in net cash of $247 million. We generated $44 million in cash from operations and received $10 million in contributions from our JV partner for IC capacity expansion in Asia.

我們在本季度加強了資產負債表，現金和等價物增加到 3.29 億美元，債務減少到 8300 萬美元，淨現金為 2.47 億美元。我們從運營中獲得了 4400 萬美元的現金，並從我們的合資夥伴那裡獲得了 1000 萬美元的捐款，用於亞洲集成電路產能擴張。

CapEx in Q2 was $16 million, and we received a little over $1 million in government subsidies for investments in China. This brings our total CapEx for the year, net of subsidies, to $33 million.

第二季度的資本支出為 1600 萬美元，我們在中國的投資獲得了略高於 100 萬美元的政府補貼。這使我們今年的總資本支出（扣除補貼）達到 3300 萬美元。

We still expect CapEx of $100 million in 2022 as we increase our mainstream IC capacity and increase the size of our facility in Taiwan. Before I provide guidance, I'll remind you that our visibility is always limited as our backlog is typically only 1 to 3 weeks. And demand for some of our products is inherently uneven and difficult to predict.

隨著我們增加主流 IC 產能並擴大我們在台灣的工廠規模，我們仍預計 2022 年的資本支出為 1 億美元。在我提供指導之前，我會提醒您，我們的知名度總是有限的，因為我們的積壓通常只有 1 到 3 週。對我們某些產品的需求本質上是不平衡的，難以預測。

Additionally, the ASPs for high-end mask sets are high. And as this segment of the business grows a relatively low number of high-end orders can have a significant impact on our quarterly revenue and earnings.

此外，高端掩模組的 ASP 也很高。隨著這部分業務的增長，相對較少的高端訂單可能對我們的季度收入和收益產生重大影響。

Given those caveats, we expect third quarter revenue to be in the range of $205 million to $215 million, driven by a continuation of favorable end market demand trends across both IC and FPD. Based on those revenue expectations and our current operating model, we estimate adjusted earnings per share for the third quarter to be in the range of $0.45 to $0.55 per diluted share.

鑑於這些警告，我們預計第三季度的收入將在 2.05 億美元至 2.15 億美元之間，這得益於 IC 和 FPD 的終端市場需求趨勢持續良好。根據這些收入預期和我們目前的運營模式，我們估計第三季度調整後的每股收益將在每股攤薄收益 0.45 美元至 0.55 美元之間。

As Frank said, we're on track to deliver the best year in the company's history with strong end-market demand, strategic capacity expansions, higher profitability and a strong balance sheet to support further growth initiatives.

正如弗蘭克所說，憑藉強勁的終端市場需求、戰略性產能擴張、更高的盈利能力和強大的資產負債表，我們有望實現公司歷史上最好的一年，以支持進一步的增長計劃。

Business conditions and execution by our team across the organization brought us within the ranges of our previous target model and support new projections. Achievement of that new target model will continue to create and deliver more value for our shareholders.

我們整個組織的團隊的業務條件和執行使我們處於先前目標模型的範圍內，並支持新的預測。新目標模式的實現將繼續為我們的股東創造和提供更多價值。

I'll now turn the call over to the operator for your questions.

我現在將把電話轉給接線員詢問您的問題。

(Operator Instructions) And our first question comes from Patrick Ho of Stifel.

（操作員說明）我們的第一個問題來自 Stifel 的 Patrick Ho。

And Frank, first off, it's good to hear your voice, and congratulations on the job, and best of luck going forward. Maybe a first question on the demand environment.

弗蘭克，首先，很高興聽到你的聲音，祝賀你的工作，祝你好運。也許是關於需求環境的第一個問題。

Obviously, that looks very healthy moving forward in both mainstream and high-end ICs. Are any of the recent Chinese market volatility changing your outlook at least in the near term in terms of potential pullbacks in that region then? Or are you still seeing continued strong demand in the IC market in China?

顯然，無論是在主流 IC 還是高端 IC 中，這看起來都非常健康。就該地區的潛在回調而言，最近中國市場的任何波動是否至少在短期內改變了您的前景？還是您仍然看到中國 IC 市場的持續強勁需求？

Thank you, Patrick. The Shanghai City lockdown initially has slow down all the business activities in China, especially in the Shanghai area. So we do see some new product tape-out slowdown initially.

謝謝你，帕特里克。上海城市的封鎖最初減緩了中國的所有商業活動，特別是在上海地區。因此，我們最初確實看到了一些新產品的流片放緩。

However, the situation has been gradually recover. And recently, we see the new order, new tape-outs start to come in. So I think there's an impact. However, it's short and it should be fully recovered already.

不過，情況已經逐漸恢復。最近，我們看到了新訂單，新的流片開始出現。所以我認為這是有影響的。但是，它很短，應該已經完全恢復了。

Great. That's helpful. And maybe as a follow-up question for John. Obviously, the operating leverage was excellent this quarter as well as is a nice pleasant surprise to see the new target model. I guess what gives you confidence because you were looking at some new target model metrics of over 40% gross margins, 30% operating margins, numbers we've never seen from the photomask industry as a whole.

偉大的。這很有幫助。也許作為約翰的後續問題。顯然，本季度的經營槓桿非常好，看到新的目標模型也是一個驚喜。我猜是什麼讓您有信心，因為您正在查看一些新的目標模型指標，這些指標超過 40% 的毛利率、30% 的營業利潤率，這是我們在整個光掩模行業從未見過的數字。

Is it more the pricing aspect? Or is it the demand and just the revenue growth that's driving this improved margin leverage?

更多的是定價方面嗎？或者是需求和收入增長推動了利潤率的提高？

Good question, Patrick, and essentially yes to all of the above. So the -- I call it the business environment, but it provides us a lot of opportunity for pricing that we haven't -- we've never had before.

好問題，帕特里克，基本上對以上所有內容都是肯定的。所以 - 我稱之為商業環境，但它為我們提供了很多我們沒有的定價機會 - 我們以前從未有過。

And we've got -- as Frank mentioned, we have long-term purchase agreements with many customers, some of which we've kind of renegotiated and there are others coming up for renewal, some are 1 year, some are longer than 1 year.

而且我們已經 - 正如弗蘭克所說，我們與許多客戶簽訂了長期購買協議，其中一些我們已經重新談判，還有一些即將續訂，有些是 1 年，有些超過 1年。

And as they come up for renewal, the prices -- the opportunity is still there to continue the price increases. So a lot of our locations are at capacity. So we're -- the operating leverage is outstanding from those locations and then the opportunities created by the business environment to improve pricing, we expect to continue well into the future.

當他們提出更新時，價格 - 仍然存在繼續價格上漲的機會。因此，我們的許多地點都處於滿負荷狀態。所以我們 - 這些地點的運營槓桿非常出色，然後是商業環境創造的提高定價的機會，我們預計未來會繼續保持良好狀態。

And I think you've read the same things that we've read and most of what you read supports that assumption.

而且我認為您閱讀的內容與我們閱讀的內容相同，並且您閱讀的大部分內容都支持該假設。

And our next question comes from Hans Chung of D.A. Davidson.

我們的下一個問題來自 D.A. 的 Hans Chung。戴維森。

Congratulations on strong results. So first question, just -- can you elaborate more the pricing adjustment during the quarter, like where -- is it across the board? Or what kind of magnitude? And then where are we now in terms of the pricing? How much room can we further to increase, going forward?

祝賀你取得了不錯的成績。所以第一個問題，只是 - 你能否詳細說明本季度的定價調整，比如在哪裡 - 它是全面的嗎？或者什麼樣的量級？那麼我們現在在定價方面在哪裡？未來我們可以進一步增加多少空間？

Hans, nice to meet you, and thanks very much for the question. So we don't generally talk about the specific amounts of pricing adjustments because it's really competitive information.

漢斯，很高興認識你，非常感謝你的提問。所以我們一般不會談論具體的定價調整量，因為它是真正具有競爭力的信息。

But we've been able to increase prices in the mainstream primarily because there's such limited capacity. And the mainstream demand is expanding so ubiquitously just because of the use of nonleading edge chips in everything we do.

但我們之所以能夠提高主流產品的價格，主要是因為容量有限。僅僅因為我們所做的一切都使用了非領先的芯片，主流需求正在無處不在地擴大。

But we've also had opportunity to increase our high-end pricing as well for similar reasons and because of our technology leadership. So without talking about specific amounts or percentages, the environment is there and we're able to take advantage of it, and we expect it to continue going forward. I hope -- did that answer the question?

但由於類似的原因和我們的技術領先地位，我們也有機會提高我們的高端定價。因此，在不討論具體數量或百分比的情況下，環境就在那裡，我們能夠利用它，我們希望它繼續向前發展。我希望——這是否回答了問題？

Yes. Yes. Yes, that helps. And then I guess the follow-up is, so as we move to our new target model, right, and with further higher margins, and that will be also assuming further the price increase over time.

是的。是的。是的，這有幫助。然後我想後續行動是，所以當我們轉向我們的新目標模型時，正確的，並且利潤率更高，這也將假設隨著時間的推移價格會進一步上漲。

And just to get a sense that to what degree that the -- in terms of pricing, we might start to see that our customer may start to consider, turn to the captive, the options. I know this might be not the economy at this moment, but just trying to get a sense like how far are we to there? I mean if we can see our target amount of that 40% margin.

並且只是為了了解 - 在定價方面，我們可能會開始看到我們的客戶可能會開始考慮，轉向俘虜，選擇。我知道這可能不是目前的經濟，但只是想了解我們離那裡有多遠？我的意思是，如果我們能看到 40% 利潤的目標金額。

Yes. Right now, the capacity issue, we believe will last into next year, at least. The main reason, of course, is the long lead time of the equipment. Same as wafer fab equipment, our photomask equipment to -- deliver time has become very, very long.

是的。目前，產能問題，我們相信至少會持續到明年。主要原因當然是設備的交貨時間長。與晶圓廠設備一樣，我們的光掩模設備交付時間變得非常非常長。

So the demand increased a lot. However, on the side, it will take time to provide some capacity to the customer -- to the market. So we believe the price increase, there's a very high possibility it will continue into next year.

所以需求增加了很多。然而，另一方面，向客戶提供一些容量——向市場提供一些容量需要時間。所以我們認為價格上漲，很有可能會持續到明年。

Okay. Okay. And then...

好的。好的。接著...

I might also kind of supplement that with a comment about the captives photomask business as well with the amount of investment and resources required for the leading-edge chips these days, the captives are reluctant to invest in mainstream capacity, and they are also -- we understand they're also inclined to start outsourcing more of that mainstream demand, the mainstream photomask business. So -- we're looking -- we haven't incorporated any of that into our model, but we fully expect that to also be an upside to the model.

我還可以補充一下，關於俘虜光掩模業務以及這些天前沿芯片所需的投資和資源數量，俘虜不願投資主流產能，而且他們也是——我們知道他們也傾向於開始外包更多的主流需求，即主流光掩模業務。所以 - 我們正在尋找 - 我們沒有將任何這些納入我們的模型，但我們完全希望這也是模型的一個優勢。

Got it. Got it. That's helpful. And then last question, just regarding your capacity we continue to expand our capacity. So what would be the capacity run rate in terms of revenue by the end of this year? And then I guess just assuming, I say by end of this year, what will be the decreased level in capacity to market demand exiting that -- this year?

知道了。知道了。這很有幫助。最後一個問題，就您的能力而言，我們將繼續擴大我們的能力。那麼到今年年底，以收入計的產能運行率是多少？然後我猜只是假設，我說到今年年底，今年退出市場需求的產能下降水平會是多少？

Okay. So the -- our guidance for next quarter and one can assume -- we don't give full year guidance, so we'll have to draw an assumption about fourth quarter. And into next year is based on the additions to capacity that we've already incorporated into our CapEx budget for this year.

好的。所以——我們對下一季度的指導可以假設——我們沒有給出全年的指導，所以我們必須對第四季度做出假設。明年是基於我們已經納入今年資本支出預算的新增產能。

So as those tools, those new tools, come online, we've incorporated the revenue -- the incremental revenue from those tools into our guidance expectation and into our target model. So what we have forecast is essentially capacity, to the extent we have it and continue increasing it.

因此，隨著這些工具，那些新工具上線，我們已經將收入——這些工具的增量收入納入我們的指導預期和我們的目標模型。因此，我們所預測的本質上是容量，就我們擁有它並繼續增加它而言。

There are some locations that are not operating at capacity, and that's based on the geographic demand profile. But for most of our locations, their operating capacity, that capacity will expand as we add those this year, point tools in mainstream and then next year, high-end tools.

有些位置沒有滿負荷運行，這是基於地理需求概況。但是對於我們的大多數地點，他們的運營能力，隨著我們今年增加這些，主流的點工具，然後是明年的高端工具，這種能力將會擴大。

I might want to point out, as that I mentioned it in my comments, but our long-term model target model is based only on the CapEx that's in this year's budget and some of which will be delivered in next year, but there is no CapEx -- additional CapEx that we would plan for next year in addition to what's already ordered from this year or 2024.

我可能想指出，正如我在評論中提到的那樣，但我們的長期模型目標模型僅基於今年預算中的資本支出，其中一些將在明年交付，但沒有資本支出——除了今年或 2024 年已經訂購的內容外，我們將計劃明年的額外資本支出。

So one can expect the capacity to increase for those CapEx additions. But again, those are not incorporated into our target model.

因此，人們可以預期這些資本支出增加的能力會增加。但同樣，這些都沒有納入我們的目標模型。

Our next question comes from Gus Richard of Northland.

我們的下一個問題來自 Northland 的 Gus Richard。

Great quarter. Could you just give a little color on the sequential increase in revenue? Was that mostly price or was there some volume component to that?

很棒的季度。您能否對收入的連續增長稍作說明？這主要是價格還是有一些數量成分？

It was both. Mostly price, but some volume.

兩者都是。主要是價格，但有些數量。

Okay. And then in terms of the long-term purchase agreements, is that still primarily FPD or is it starting to spread out into the IC business?

好的。然後就長期採購協議而言，還是主要還是 FPD 還是開始向 IC 業務擴展？

Actually it start with IC because we do have this kind of agreement with certain key foundry customers for several years. But right now, we are expanding the customer base to sign the contract. So at this moment, it covers both IC and FPD customers.

實際上它是從 IC 開始的，因為我們確實與某些主要代工客戶有幾年的這種協議。但現在，我們正在擴大客戶群以簽訂合同。所以目前，它涵蓋了 IC 和 FPD 客戶。

Okay. Got it. And just roughly, how much of your revenue is under long-term purchase agreements?

好的。知道了。粗略地說，根據長期購買協議，您的收入有多少？

Yes. We don't really report that number, Gus. It's a pretty substantial amount, especially in Asia.

是的。 Gus，我們並沒有真正報告這個數字。這是一個相當可觀的數額，尤其是在亞洲。

Okay. Got it. And then I think this is the first time I've heard you mention high-end pricing improving. Is that correct? And is it beginning -- the price increases in the high-end beginning to catch up with mature -- or can you talk about those 2 segments of IC and sort of how they're behaving?

好的。知道了。然後我想這是我第一次聽到你提到高端定價的提高。那是對的嗎？它是開始 - 高端的價格上漲開始趕上成熟 - 或者你能談談這兩個 IC 部分以及它們的行為方式嗎？

Yes. The price increase actually started last year in the mainstream market. However, the capacity shortage situation start to migrate into high-end IC area also. So in this year, we started a negotiation with the key high-end IC customer and the new price start effective -- become effective in -- at the beginning of Q2.

是的。漲價實際上始於去年主流市場。然而，產能短缺的局面也開始向高端IC領域轉移。所以在今年，我們開始與關鍵的高端 IC 客戶進行談判，新的價格開始生效——在第二季度開始生效。

I understand. That's very helpful. And then in terms of capacity utilization in IC mature versus mainstream, are you basically both of those running flat out now? Or do you have incremental capacity in the mainstream?

我明白。這很有幫助。然後在IC成熟與主流的產能利用率方面，你們現在基本上都跑完了嗎？還是您在主流中有增量容量？

We are building the incremental capacity step by step. However, as I mentioned, the tool lead time is becoming an issue. So the capacity incremental has to be done quarter-by-quarter, but not at the same time.

我們正在逐步建立增量容量。然而，正如我所提到的，工具交付時間正在成為一個問題。因此，容量增量必須按季度進行，但不能同時進行。

I see. And then last one for me. In terms of the foundry outsourcing, I'm sure they're busy with the EUV masks. Sort of are they outsourcing 14-nanometers and above? So where is the breakpoint on what they outsource and sort of how do they think about what they put out into the merchant market?

我懂了。然後給我最後一個。在代工外包方面，我敢肯定他們正忙於 EUV 掩模。他們是在外包 14 納米及以上的嗎？那麼，他們外包什麼的斷點在哪裡？他們如何看待他們投入商業市場的東西？

The amount of outsourcing from captive has increased year by year. And with the growing demand in the high-end the captive are also short of mainstream and middle-end capacity. And we do have customer talked about some kind of long-term outsourcing agreement. So we are in a process talking to customers about this kind of outsourcing strategy.

自保外包的數量逐年增加。而隨著高端需求的不斷增長，自保也缺乏主流和中端產能。我們確實有客戶談到了某種長期外包協議。因此，我們正在與客戶討論這種外包策略。

And keep in mind, Gus, the outsourcing by the foundries is not limited to mainstream. There's also -- we also do high-end work for foundries.

Gus 請記住，代工廠的外包不僅限於主流。還有——我們也為鑄造廠做高端工作。

Right. What I was trying to get at is are they -- I think you're capable of 14-nanometers and I'm wondering is there outsourcing up to that level?

正確的。我想知道的是他們——我認為你有能力生產 14 納米，我想知道有沒有達到那個水平的外包？

Yes. 14...

是的。 14...

Is there any plans internally to be capable of doing like a 10-nanometer mask set? Or -- I think that's -- or now -- or certain layers?

內部是否有任何計劃能夠像 10 納米掩模組那樣做？或者——我認為那是——或者現在——或者某些層次？

Chris, I want to -- Chris, you want that?

克里斯，我想要—— 克里斯，你想要嗎？

Yes, I can make a comment. Got you. 14 logic is pretty healthy outsourcing among the foundry captives and the IBM. So that node is pretty well placed into commercial mass making. I would say that 7, 8-nanometer node, just starting to look like qualifications will initiate. So maybe some started last year. some will continue this year. And we have capability for those nodes as well.

是的，我可以發表評論。得到你。 14 logic 在代工廠俘虜和 IBM 中是相當健康的外包。因此，該節點非常適合商業大規模生產。我會說 7、8 納米節點，剛剛開始看起來像資格將啟動。所以也許有些是從去年開始的。一些將在今年繼續。我們也有這些節點的能力。

Can you do the EUV masks blanks -- masks as well or just the other layers?

你能做 EUV 掩膜空白——掩膜以及其他層嗎？

We have an EUV process. We -- since 2017, we've had a joint development agreement with IBM in New York. So we build all of their EUV masks. That's admittedly kind of a pilot line, but if they go through full device demonstration, full yield down to kind of 28-nanometer pitch, which is 5-nanometer node class mask, so -- we have a solid, I would say, front-end EUV capability in Photronics.

我們有一個 EUV 工藝。我們——自 2017 年以來，我們與紐約的 IBM 簽訂了聯合開發協議。所以我們製造了他們所有的 EUV 掩模。誠然，這是一條試驗線，但如果他們通過完整的設備演示，完全產量下降到 28 納米間距，這是 5 納米節點級掩模，所以 - 我們有一個堅實的，我想說，前面- 光電器件中的末端 EUV 能力。

And we're delivering those masks, not in huge numbers, but in higher and higher units every month. As far as an EUV really transitions to commercial mask-making at large, I think that's still a couple of years away.

而且我們每個月都在提供這些口罩，數量不多，但數量越來越多。就 EUV 真正過渡到商業掩模製造而言，我認為這還需要幾年的時間。

We're seeing kind of the Tier 2 people now put in EUV tools. By Tier 2, I mean, the second adopters are putting in single unit EUV systems. So it's starting to become a little more pervasive, but it's still fairly narrowly confined to a small number of designs.

我們正在看到現在使用 EUV 工具的 2 級人員。我的意思是第 2 層，第二個採用者正在安裝單單元 EUV 系統。所以它開始變得更加普遍，但它仍然相當狹窄地局限於少數設計。

And of course, the large -- the big 3, everybody knows, TSMC, Samsung and Intel, for EUV, they're still building most all of their mask internally. So I think we'll get there. We watch the market closely and we evolve our capability, thanks to the IBM partnership. But I think probably at least 3 years out before the EUV goes full commercial.

當然，大家都知道，台積電、三星和英特爾這三大巨頭，對於 EUV，他們仍然在內部製造大部分面具。所以我想我們會到達那裡。由於與 IBM 的合作，我們密切關注市場並發展我們的能力。但我認為在 EUV 全面商業化之前可能至少需要 3 年時間。

That makes complete sense. Thanks so much.

這是完全有道理的。非常感謝。

Ladies and gentlemen, there are no further questions at this time. I would now like to turn the call over to Frank Lee for closing comments.

女士們，先生們，目前沒有其他問題。我現在想將電話轉給弗蘭克·李（Frank Lee）以發表結束評論。

Thank you. Thank you for joining this morning. Photronics is in a great position, and we are continuing to move forward, and we will achieve our long-term goals. I'm very confident that Photronics employee across the world will continue to exceed expectations by delivering quality products and outstanding service helping us to achieve our long-term target.

謝謝你。感謝您今天早上的加入。 Photronics 處於有利地位，我們正在繼續前進，我們將實現我們的長期目標。我非常有信心，全球各地的 Photronics 員工將繼續通過提供優質的產品和出色的服務來超越預期，幫助我們實現長期目標。

I'm looking forward to meeting and speaking with many of you in the near future. Having a great day, and thank you very much.

我期待在不久的將來與你們中的許多人會面和交談。有一個美好的一天，非常感謝你。

Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation and ask that you please disconnect your line.

女士們，先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開您的線路。