Photronics Inc (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.

您好，感謝您的支持。歡迎參加Photronics 2022財年第二季財報電話會議。 （操作員指令）。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.

現在，我想將會議交給執行副總裁兼財務長約翰喬丹 (John Jordan)。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，托妮亞。大家早安。歡迎閱讀我們對Photronics 2022財年第二季業績的回顧。今天早上與我一起出席的還有我們新任命的執行長 Frank Lee； Chris Progler，我們的技術長；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.

我們今天早上發布的新聞稿以及伴隨我們發言的演示材料可在我們網頁的投資者關係部分找到。今天電話會議中任何參與者的評論都可能包括前瞻性陳述，其中包括預期、相信、估計、預期、預測或我們認為等字眼。這些前瞻性陳述是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有重大差異，我們不承擔更新任何前瞻性資訊的義務。

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

現在，我將把電話轉給弗蘭克。

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，大家早安。今天上午，首先我想說，作為Photronics新任首席執行官，我很榮幸今天能和大家在一起。自 2006 年加入公司以來，我一直致力於創建我們在亞洲的營運和策略，包括與大日本印刷公司組成兩家合資企業，以及最近將我們的業務擴展到中國。

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.

談到財務結果。我們在第二季度再次創下了歷史新高，收入比上一季度增長了 8%，這得益於我們強勁的終端市場需求、整個 IC 部門價格的進一步實現以及我們廈門和合肥業務的持續產量提升。除了營業收入成長之外，我們還擴大了成長和營運利潤率。毛利率為36%，營業利益率為25%。淨結果是每股收益 0.49 美元。現金產生能力也十分強勁，年底我們的淨現金為 2.47 億美元，這使我們能夠繼續投資於有利可圖的成長機會。

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，我全力致力於繼續我們的有機成長策略、收入成長和利潤率擴大。我們也將繼續探索其他成長計劃。對於收入成長而言，成長是透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]。這種方法非常有助於我們進行關鍵投資，並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IC和FPD領域客戶信賴的合作夥伴和關鍵供應商。

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.

除了收入成長之外，我們的獲利能力也在不斷提高。這是透過執行 3 個主要關鍵項目來實現的。優化產品結構，有效管理成本，提升營運效率。在此基礎上，我們也根據目前市場供需失衡狀況，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].

我的第三個承諾是探索新策略以進一步促進我們的成長計劃。自從加入Photronics以來，我一直積極參與這個過程。我們與整個亞洲的客戶、供應商和價值合作夥伴都保持著良好的關係。隨著全球供應鏈重組的趨勢日益明顯，包括IC製造本地化，例如「美國製造」。

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的全球影響力和在亞洲的成功經驗，我們將在我們的業務中遙遙領先。

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出色，預計將實現公司歷史上最好的一年。我為我們的團隊感到非常自豪。我們將共同努力，在 2022 年以後繼續取得優異成績。

And this time, I turn the call to John.

這次，我把電話轉給了約翰。

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。大家早安。第二季度對Photronics來說又是一個創紀錄的季度，這是我們連續第五個季度創下紀錄。由於全面需求保持強勁，營收季增 8%，年增 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.

我們正在執行我們的成長策略，投資符合市場驅動力的技術，並透過建立長期採購協議與客戶合作，使我們能夠快速且有利可圖地推出新工具，同時保持現有工具的高利用率。本季再次證明該方法是有效的。

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需求強勁，IC 收入環比增長 12%，年增 30%。隨著消費品中的半導體含量不斷增加，電子、汽車、家電和更多應用中的晶片越來越多，新的設計不斷發布以滿足這種需求，推動了高端需求。

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.

5G的推出等通訊基礎設施的進步是另一個需求成長的催化劑。晶片的激增是光掩模需求和Photronics發展的驅動力。

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.

隨著半導體的使用不斷增加，需求成長超出了供應能力，這導致了定價環境的變化，主要是在後緣掩模領域，但也發生在高端業務領域，這有助於我們進一步擴大利潤率。我稍後會詳細討論。

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，主要由於主流 LCD 的下降。由於行動需求持續強勁，高端產品略有上漲。行動應用顯示器的成長抵消了G10.5較大掩模需求的下降。

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，行動應用中使用的 AMOLED 和 LTPS 顯示器的需求將保持強勁，G10.5 的需求將增加，主流 LCD 顯示器的需求也將持續穩定。面向中國客戶的產品出貨收入再創季度新高，季增 8%，年增 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.

我們是這一成長地區明顯的市場領導者。我們過去的業務發展和營運擴展舉措正在獲得我們預期的收益。由於我們營運模式中的高槓桿率以及在維持低成本方面表現出的良好紀律，第二季的毛利率和營業利潤率有所改善。

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% 的營業利潤率均在我們二月傳達的長期範圍內。我們完全相信這種商業環境將在未來持續下去。

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.

我們根據這一預期制定了投資計劃，並預計利潤率的成長將透過有限的後緣產能導致的供需不平衡來維持。我們的目標模型將帶領我們進入 2024 財年，該模型已更新以反映這些新的成長機會，並包含在今天早上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態度是實事求是，但不激進，儘管回想起來，光掩模領域的業務狀況不斷改善以及我們的執行情況表明該模型應該更新。

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考慮了我們目前計劃的資本支出投資預期帶來的收入增量，以及當前商業環境持續提供的定價機會，並考慮到目標低端的強勁半導體商業週期 3 年後，經濟衰退的風險正在增加。

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.

由於獲利增加，所得稅撥備也隨之增加；此外，由於我們在中國和台灣的合資企業的強勁表現，非控制權益的淨收入也隨之增加。

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.

外匯匯率變動導致其他收入增加 800 萬美元，相當於每股約 0.07 美元。結果每股攤薄收益為 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.

我們在本季加強了資產負債表，現金和等價物增加至 3.29 億美元，債務減少至 8,300 萬美元，淨現金為 2.47 億美元。我們從營運中產生了 4,400 萬美元的現金，並從合資夥伴那裡獲得了 1000 萬美元的投入，用於擴大我們在亞洲的 IC 產能。

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.

第二季的資本支出為 1,600 萬美元，我們在中國的投資獲得了 100 多萬美元的政府補貼。這樣，我們今年的總資本支出（扣除補貼）就達到 3,300 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.

隨著我們主流 IC 產能的增加和台灣工廠規模的擴大，我們仍預計 2022 年的資本支出將達到 1 億美元。在我提供指導之前，我要提醒您，我們的可見性始終是有限的，因為我們的積壓通常只有 1 到 3 週。而我們某些產品的需求本質上是不均衡的，而且很難預測。

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，高階遮罩版的平均售價也很高。隨著這部分業務的成長，相對較少的高端訂單可能會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.

考慮到這些因素，我們預計第三季營收將在 2.05 億美元至 2.15 億美元之間，這得益於 IC 和 FPD 終端市場需求趨勢持續向好。根據這些收入預期和我們目前的營運模式，我們預計第三季調整後每股收益將在 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，我們有望創造公司歷史上最好的一年，擁有強勁的終端市場需求、策略產能擴張、更高的獲利能力和強勁的資產負債表來支持進一步的成長計畫。

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.

我們整個組織的業務狀況和團隊的執行使我們達到了先前的目標模型的範圍並支持新的預測。這個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來回答您的問題。

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

(操作員指示) 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，我很高興聽到你的聲音，祝賀你得到這份工作，並祝你未來好運。也許這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，無論在主流積體電路還是高端積體電路中，這看起來都非常健康。那麼，就中國市場近期可能出現的回檔而言，近期的中國市場波動是否會改變您的觀點，至少在短期內？或者您仍然看到中國積體電路市場持續強勁的需求？

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，派崔克。上海市的封鎖最初減緩了中國所有商業活動，尤其是上海地區。因此我們確實最初看到一些新產品的流片速度放緩。

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.

但目前情況已逐漸恢復。最近，我們看到新的訂單和新的流片開始湧入。不過，時間還短，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。或許這是對約翰的一個後續問題。顯然，本季的營業槓桿非常出色，新的目標模式也令人感到驚訝。我想是什麼讓你有信心，因為你正在看一些新的目標模型指標，即超過 40% 的毛利率、30% 的營業利潤率，這些數字我們從未在整個光掩模行業中見過。

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

更多的是定價方面的問題嗎？還是需求和營收成長推動了利潤率槓桿的提升？

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.

派崔克，你問得好，基本上以上所有問題的答案都是肯定的。所以，我稱之為商業環境，但它為我們提供了許多以前從未有過的定價機會。

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.

正如弗蘭克所提到的，我們與許多客戶簽訂了長期採購協議，其中一些我們已經重新談判，還有一些即將續簽，有些協議期限為 1 年，有些協議期限超過 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.

隨著它們的更新，價格——仍然有機會繼續上漲。因此，我們的許多營業點都已滿員。因此，這些地點的營運槓桿非常出色，而且商業環境為改善定價創造了機會，我們預計這種機會將在未來持續下去。

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

我認為您讀到的內容與我們讀到的相同，並且您所讀到的大部分內容都支持這一假設。

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

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?

恭喜您取得優異的成績。所以第一個問題是——您能否詳細說明本季的價格調整情況，例如——它是全面的嗎？或者說是什麼樣的量級？那麼，就定價而言，我們現在處於什麼位置？未來我們還有多少成長空間？

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，很高興見到你，非常感謝你提出這個問題。因此，我們通常不會談論價格調整的具體金額，因為這確實是競爭資訊。

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.

但我們能夠提高主流產品的價格，主要是因為產能有限。而主流需求之所以如此普遍地擴大，就是因為我們所做的每件事都使用非前沿晶片。

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?

但出於類似的原因以及我們的技術領先地位，我們也有機會提高高端產品的定價。因此，不必談論具體的數量或百分比，環境就在那裡，我們能夠利用它，並且我們預計它會繼續向前發展。我希望——這回答了這個問題嗎？

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。然後我想後續的情況是，當我們轉向新的目標模型時，利潤率會進一步提高，這也將假設價格隨著時間的推移而進一步上漲。

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.

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開始考慮、轉向俘虜、選擇。我知道這可能不是目前的經濟狀況，但我只是想了解我們離那個目標還有多遠？我的意思是，如果我們能夠看到 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，我們認為產能問題至少會持續到明年。主要原因當然是設備的交付週期較長。與晶圓廠設備一樣，我們的光掩模設備的交付時間也變得非常非常長。

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.

因此需求大幅增加。然而，另一方面，向客戶、提供市場一些產能還需要時間。因此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。進而...

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.

我可能還會補充一點關於自營光掩模業務的評論，考慮到如今尖端晶片所需的投資和資源量，自營光掩模業務不願意投資主流產能，而且我們了解他們也傾向於開始外包更多主流需求，即主流光掩模業務。所以 - 我們正在研究 - 我們還沒有將其中任何一項納入我們的模型，但我們完全預計這也會為模型帶來好處。

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，關於您的產能，我們將繼續擴大我們的產能。那麼到今年年底，以收入計算的產能運行率是多少？然後我想只是假設，到今年年底，今年的市場需求產能下降幅度會是多少？

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。因此，我們對下一季度的指導以及可以假設的是我們不會提供全年指導，因此我們必須對第四季度做出假設。而明年的產能成長則是基於我們已納入今年資本支出預算的產能增加。

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（這些新工具）上線，我們將這些工具帶來的增量收入納入我們的指導預期和目標模型中。因此，我們的預測基本上是產能，就我們現有的產能而言，並且會繼續增加產能。

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.

根據地理需求狀況，有些地方並未滿載運轉。但對於我們大多數工廠而言，它們的運作能力將會擴大，因為我們今年將增加主流指向性工具，明年還會增加高端工具。

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，正如我在我的評論中提到的那樣，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 年已經訂購的資本支出之外，我們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，我們可以預期，隨著資本支出的增加，產能將會提高。但同樣，這些並未納入我們的目標模型。

Our next question comes from Gus Richard of Northland.

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?

非常棒的一個季度。能否稍微介紹一下收入的連續成長？這主要是價格因素嗎，還是也有一些數量因素？

It was both. Mostly price, but some volume.

兩者都是。主要是價格，但也有一些數量。

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。那麼就長期採購協議而言，它仍然主要是 FPD 還是開始擴展到 IC 業務？

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.

實際上它始於 IC，因為我們多年來確實與某些關鍵代工客戶達成了這種協議。但目前，我們正在擴大客戶群以簽訂合約。所以目前，它同時涵蓋了 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。大概來說，你們的收入有多少是來自長期採購協議？

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

是的。我們實際上並沒有報告這個數字，格斯。這是一個相當可觀的金額，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。我想這是我第一次聽到您提到高端價格上漲。那正確嗎？並且它是否已經開始 — — 高端產品的價格上漲開始趕上成熟 — — 或者您能否談談 IC 的這兩個部分以及它們的表現如何？

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。事實上，主流市場去年就開始漲價了。不過，產能短缺的局面也開始蔓延至高端IC領域。因此，今年我們開始與關鍵的高端 IC 客戶進行談判，新的價格將在第二季初生效。

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。這非常有幫助。那麼，就 IC 成熟市場與主流市場的產能利用率而言，你們現在基本上都在全力運作嗎？或者您在主流中擁有增量容量嗎？

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，工具交付時間正成為一個問題。因此，產能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。對我來說這是最後一個。在代工外包方面，我相信他們正忙於 EUV 掩模。他們是否將14奈米以上技術外包了？那麼，他們外包的分界點在哪裡？

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.

自營外包量逐年增加。而隨著高端需求的不斷成長，自備公司的主流和中階產能也出現短缺。我們確實與客戶談論過某種長期外包協議。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.

請記住，Gus，代工廠的外包不僅限於主流。此外，我們也為鑄造廠提供高端工作。

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——我認為你們有能力達到 14 奈米，我想知道是否有達到該水平的外包？

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?

內部有沒有計畫能夠生產出像10奈米掩模版那樣的產品？或 — — 我認為那是 — — 或現在 — — 或某些層？

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。明白了。 14 邏輯在代工廠和 IBM 之間的外包相當健康。因此該節點非常適合商業化批量生產。我想說，7、8奈米節點剛開始看起來像是資格的開始。因此可能有些是從去年就開始的。有些今年還會繼續。我們也有能力處理這些節點。

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

您能製作 EUV 掩模空白嗎——掩模也可以，還是只製作其他層？

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 製程。自 2017 年以來，我們就與紐約的 IBM 簽訂了聯合開發協議。因此我們製造了他們所有的 EUV 掩模版。無可否認，這是一種試驗生產線，但如果它們經過完整的設備演示，完全產量可以達到 28 奈米間距，也就是 5 奈米節點級掩模，所以，我想說，我們在 Photronics 擁有強大的前端 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.

我們運送口罩的數量雖然不多，但每個月的運送量越來越大。就 EUV 真正過渡到商業掩模製造而言，我認為還需要幾年的時間。

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.

我們看到 Tier 2 人員現在正在使用 EUV 工具。我所說的 Tier 2 是指第二個採用者正在採用單元 EUV 系統。因此，它開始變得更加普遍，但仍然局限於少數設計。

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，眾所周知的三大巨頭，台積電、三星和英特爾，對於 ​​EUV，他們大部分的光罩仍然在內部生產。所以我認為我們會到達那裡。感謝與 IBM 的合作，我們密切關注市場並不斷提升我們的能力。但我認為 EUV 全面商業化可能至少還需要 3 年。

That makes complete sense. Thanks so much.

這完全是有道理的。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，現在沒有其他問題了。現在，我想將電話轉給 Frank Lee 進行最後評論。

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。感謝您今天上午的參與。 Photronics目前處於有利地位，我們正在繼續前進，並將實現我們的長期目標。我非常有信心，Photronics 全球員工將繼續超越預期，提供優質的產品和卓越的服務，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見面並交談。祝您有愉快的一天，非常感謝。

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線路。