Photronics Inc (PLAB) 2025 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Photronics second-quarter fiscal 2025 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

您好，感謝您的支持。歡迎參加 Photronics 2025 財政年度第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker today, Ted Moreau, Vice President of Investor Relations. Please go ahead.

現在，我想將會議交給今天的發言人、投資者關係副總裁泰德莫羅 (Ted Moreau)。請繼續。

Thank you, operator. Good morning, everyone. Welcome to our review of Photronics' fiscal second-quarter 2025 financial results. Joining me this morning are Frank Lee, CEO; George Macricostas, Chairman; Eric Rivera, CFO; and Chris Progler, CTO. The press release we issued earlier this morning, together with the presentation material that accompanies our remarks, are available on the Investor Relations section of our website.

謝謝您，接線生。大家早安。歡迎閱讀我們對 Photronics 2025 財年第二季財務表現的回顧。今天早上與我一起出席的有執行長 Frank Lee、董事長 George Macricostas、財務長 Eric Rivera 和首席技術長 Chris Progler。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站的投資者關係部分找到。

Comments made by any participants on today's call may include forward-looking statements that include such words as anticipate, believe, estimate, expect, forecast, and in our view. These forward-looking statements are subject to various risks and uncertainties and other factors that are difficult to predict.

今天電話會議中任何參與者所發表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、預測以及我們認為等字眼。這些前瞻性陳述受到各種風險、不確定性和其他難以預測的因素的影響。

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of the presentation to conform these statements to actual results. Photronics has provided additional information in its most recent Form 10-K and other subsequent reports filed with the SEC concerning factors that could cause actual results to differ materially.

儘管我們認為前瞻性陳述中反映的預期是合理的，但我們無法保證未來的結果、活動水準、績效或成就。我們沒有義務在陳述日期之後更新任何前瞻性陳述以使這些陳述符合實際結果。Photronics 在其最新的 10-K 表格以及向美國證券交易委員會提交的其他後續報告中提供了有關可能導致實際結果發生重大差異的因素的更多資​​訊。

During the course of our discussion, we will refer to certain non-GAAP financial measures. These numbers may be useful for analysts, investors, and management to evaluate ongoing performance. A reconciliation of these metrics to GAAP financial results is provided in our presentation materials.

在討論過程中，我們將參考某些非公認會計準則財務指標。這些數字可能有助於分析師、投資者和管理層評估持續表現。我們的簡報資料中提供了這些指標與 GAAP 財務結果的對帳。

During the third quarter, we will be participating in the TD Cowen TMT Conference, the D.A. Davidson Consumer and Technology Conference, the Three Part Advisors East Coast Conference, and the Singular Research Investor Conference.

在第三季度，我們將參加 TD Cowen TMT 會議、D.A. Davidson 消費者和技術會議、Three Part Advisors 東海岸會議和 Singular Research 投資者會議。

I will now turn the call over to Frank.

現在我將電話轉給弗蘭克。

Thank you, Ted, and good morning, everyone. We achieved second-quarter sales of $211 million, which was in the middle of our guidance range. Non-GAAP diluted EPS was $0.40. We took the advantage of financial market opportunity during the quarter by spending $72 million to repurchase 3.6 million shares, which should give -- drive greater earnings leverage in the future. In our IC end market, chip designs are migrating to higher-end nodes. These nodes require more photomask per design, which generate higher ASPs per mask set.

謝謝你，泰德，大家早安。我們第二季的銷售額達到 2.11 億美元，處於我們預期範圍的中間。非公認會計準則稀釋每股收益為0.40美元。本季度，我們抓住了金融市場機遇，斥資7,200萬美元回購了360萬股股票，這將在未來帶來更大的獲利槓桿。在我們的IC終端市場，晶片設計正在遷移到更高階的節點。這些節點每個設計需要更多的光掩模，從而每個掩模組產生更高的 ASP。

In the United States, our 2025 capacity expansion plan targets this no migration opportunity. In Asia, we are also in a strong position to benefit from a market transition towards higher-end nodes as reflected in our Q2 results. We believe some of the positive no transition trends come from IC serving a growing AI ecosystem.

在美國，我們的2025年產能擴張計畫針對的是這項無移民機會。在亞洲，我們也處於有利地位，可以從市場向高端節點的轉型中獲益，這反映在我們的第二季業績上。我們相信，一些積極的無轉型趨勢來自於服務不斷發展的人工智慧生態系統的 IC。

In the FPD market, we are a technology-leading mask suppliers to the industry, including to companies that have their own captive mask operations. Condition improved during the quarter due to the seasonal timing of major smartphone and net top design release.

在 FPD 市場，我們是業界技術領先的掩模供應商，包括擁有自己的專屬掩模業務的公司。由於主要智慧型手機和網路頂級設計發布的季節性時機，本季情況有所改善。

For the first time, these consumer products were produced in large G8.6 panel size using AMOLED display technology. We are optimistic that with more emerging 8.6-related product and R&D activities, our advanced photomask technology will help us gain market share in the coming G8.6 AMOLED era.

這些消費性產品首次採用AMOLED顯示技術，生產G8.6大尺寸面板。我們樂觀地認為，隨著更多新興的8.6相關產品和研發活動的出現，我們先進的光掩模技術將幫助我們在即將到來的G8.6 AMOLED時代獲得市場份額。

With the current market dynamics, our geographic footprint is a strategic asset that differentiates Photonics position. To support our global customers, we operate 11 cleanroom production facilities, including 6 in Asia, 3 in the US, and 2 in Europe. Our manufacturing facilities located close to our customers enables our rapid response advantage and facilitate collaboration with customer.

在目前的市場動態下，我們的地理覆蓋範圍是區分光子學地位的戰略資產。為了支持我們的全球客戶，我們經營 11 個無塵室生產設施，其中 6 個在亞洲，3 個在美國，2 個在歐洲。我們的製造設施靠近客戶，這使我們能夠快速回應並促進與客戶的合作。

Our global footprint allows Photonics to capitalize on new business opportunities as the semiconductor industry diversifies its manufacturing footprint. For example, our strategic capacity and capability expansion in the US coincides with the reshoring of semiconductor production to the US. Our program is progressing as planned to support this US customer fab and design road maps and expansions.

隨著半導體產業製造足跡的多樣化，我們的全球業務使 Photonics 能夠利用新的商業機會。例如，我們在美國的戰略產能和能力擴張與半導體生產回流美國相吻合。我們的計劃正在按計劃進行，以支援這家美國客戶工廠並設計路線圖和擴展。

US tariff dynamics during the quarter increased global macroeconomic uncertainty. While tariff negotiations remain ongoing, we can leverage our diverse geographic footprint as a strategic asset and a competitive advantage. Our ability to allocate production across our geographic locations allow us to ship the majority of mask within regions or countries, mitigating potential tariff costs for our customers.

本季美國關稅動態增加了全球宏觀經濟的不確定性。雖然關稅談判仍在進行中，但我們可以利用我們多樣化的地理分佈作為策略資產和競爭優勢。我們能夠在各個地理位置分配生產，這使我們能夠在各個地區或國家內運送大部分口罩，從而減輕客戶的潛在關稅成本。

This morning, as part of our carefully considered succession plan, I have decided to retire from the CEO position after three years. I have truly enjoyed my time and I'm proud of the work we have done to move us forward. I will continue to manage the Photronics as operations until my retirement.

今天上午，作為我們經過深思熟慮的繼任計劃的一部分，我決定在擔任執行長三年後退休。我真的很享受這段時光，並為我們為推動我們前進所做的工作感到自豪。我將繼續管理 Photronics 的營運直至退休。

I will now introduce you, George Macricostas, our Chairman and newly appointed CEO.

現在我向您介紹我們的董事長兼新任命的執行長喬治·馬克里科斯塔斯 (George Macricostas)。

Thank you, Frank. On behalf of the Board and the entire company, I wish to thank you for your 20 years of dedication to Photronics, including the last 3 years as CEO. You have played a significant role in our success, particularly in our Asia expansion. And I look forward to continuing to work with you at Photronics and on the Board.

謝謝你，弗蘭克。我謹代表董事會和整個公司感謝您 20 年來對 Photronics 的奉獻，包括過去 3 年擔任執行長。您在我們的成功中發揮了重要作用，特別是在我們向亞洲擴張的過程中。我期待著繼續與您在 Photronics 和董事會共事。

By way of introduction, I started my career at Photronics at an entry-level role and worked my way up to a senior leadership position, giving me a thorough understanding of the business and underlying technology. In 2000, I found our RagingWire data centers, which became a highly respected data center provider leading to its ultimate sale to NTT in 2018.

作為介紹，我在 Photronics 從一個入門級職位開始了我的職業生涯，並一路晉升到高級領導職位，這讓我對業務和底層技術有了透徹的了解。2000 年，我創立了 RagingWire 資料中心，後來它成為了一家備受尊敬的資料中心供應商，並於 2018 年最終出售給 NTT。

I've been a member of Photronics Board of Directors for approximately 20 years and earlier this year was named Executive Chairman. I look forward to driving Photronics towards the next leg of profitable growth as I focus intensely on operational execution.

我擔任 Photronics 董事會成員已有約 20 年，今年稍早被任命為執行主席。我期待著推動 Photronics 邁向下一輪獲利成長，同時我將專注於營運執行。

I will now turn the call over to Eric to review our second-quarter results and provide third-quarter guidance.

現在我將把電話轉給 Eric，讓他回顧我們的第二季業績並提供第三季的指導。

Thank you, George. Good morning, everyone. As Frank stated, our second-quarter revenue was in line with expectations at $211 million, which was essentially flat sequentially and down 3% year over year. IC revenue of $156 million declined 3% year over year. We noted a continuation of favorable design node migration trends in the quarter, which should continue in the future.

謝謝你，喬治。大家早安。正如弗蘭克所說，我們的第二季度營收符合預期，達到 2.11 億美元，與上一季基本持平，年減 3%。IC收入為1.56億美元，較去年同期下降3%。我們注意到本季設計節點遷移趨勢持續保持良好，並且這種趨勢在未來應該會持續下去。

High-end revenue increased 2% year over year, representing 30% of our IC revenue. We saw healthy foundry demand for both 22 and 28 nanometer photomask products in Asia.

高端營收年增2%，占我們IC收入的30%。我們發現亞洲對 22 奈米和 28 奈米光掩模產品的代工需求旺盛。

Our mainstream IC revenue declined 6% year over year, with the largest decline in photomask serving the oldest generation design nodes, indicating continued weakness in this segment. This reduction was partially offset by design node migration to small IC geometries within mainstream, which require higher value photomasks.

我們的主流 IC 收入年減 6%，其中服務於最老代設計節點的光掩模收入降幅最大，顯示該領域持續疲軟。這種減少被設計節點向主流小型 IC 幾何形狀的遷移所部分抵消，這需要更高價值的光掩模。

By application, revenue from memory applications declined sequentially due to the timing of projects. On the logic side, photomask sets serving mobile communications such as Wi-Fi, Bluetooth, and baseband IC were strong along with OLED driver ICs. Lower-end design nodes serving power electronics, automotive, and industrial applications remain in a weaker recovery state.

從應用角度來看，由於專案時間安排的原因，記憶體應用的收入環比下降。在邏輯方面，服務Wi-Fi、藍牙和基頻IC等行動通訊的光掩模組以及OLED驅動IC表現強勁。服務於電力電子、汽車和工業應用的低端設計節點仍處於較弱的復甦狀態。

Turning to FPD, revenue of $55 million declined 2% year over year. FPD revenue experienced a low early in the quarter before the anticipated seasonal demand uplift. Higher mobile applications and continued adoption of advanced mass technologies supporting innovative new designs were areas of strength.

談到FPD，營收為5500萬美元，年減2%。在預期的季節性需求上升之前，FPD 收入在本季度初處於低點。更高的行動應用和持續採用支持創新新設計的先進大眾技術是其優勢領域。

Geographically, revenue was led by our IC joint ventures in China and Taiwan, where business remained healthy as customers rely on Photronics' scale and product mix to support expansion of their product offerings. Revenue from the US declined sequentially due to lower end design node weakness and the timing of customer advanced node projects.

從地理上看，收入主要來自我們在中國大陸和台灣的 IC 合資企業，由於客戶依賴 Photronics 的規模和產品組合來支持其產品供應的擴展，這些合資企業的業務保持健康。由於低端設計節點的疲軟以及客戶先進節點專案的時間安排，美國收入環比下降。

We reported gross margin of 37% in line with our quarterly average over the past three years and well above historical levels as elevated operational controls drove greater-than-expected leverage across our infrastructure. We recently performed an analysis of the impact of tariffs on our supply chain, and based on current expectations, we have determined that these costs will have a negligible impact to our financial results.

我們報告的毛利率為 37%，與過去三年的季度平均水平一致，遠高於歷史水平，因為加強的營運控制推動了我們基礎設施的槓桿率高於預期。我們最近對關稅對我們供應鏈的影響進行了分析，根據目前的預期，我們確定這些成本對我們的財務表現的影響可以忽略不計。

Operating margin of 26% in Q2 was above our guidance range and improved 180 basis points sequentially. Diluted GAAP EPS attributable to Photronics shareholders was $0.15 per share. After removing the impact of foreign exchange, fully diluted non-GAAP EPS attributable to Photronics shareholders was $0.40 a share. Our overall profitability reflects a greater contribution from our joint ventures in China and Taiwan.

第二季的營業利益率為 26%，高於我們的預期範圍，較上季提高 180 個基點。歸屬於 Photronics 股東的稀釋 GAAP EPS 為每股 0.15 美元。剔除外匯影響後，Photronics 股東應佔完全稀釋非 GAAP 每股盈餘為 0.40 美元。我們的整體獲利能力反映了我們在中國和台灣的合資企業的更大貢獻。

During the second quarter, we generated $31 million in operating cash flow, which represented 15% of total revenue. CapEx was $61 million in the quarter, which included our planned expansion in the US. We remain on track to spend $200 million in CapEx in fiscal 2025 on a combination of capacity, capability, and end-of-life tool initiatives.

第二季度，我們產生了 3,100 萬美元的營運現金流，佔總收入的 15%。本季的資本支出為 6,100 萬美元，其中包括我們計劃在美國進行的擴張。我們仍計劃在 2025 財年投入 2 億美元的資本支出，用於產能、能力和報廢工具計畫。

Based on current investment plans, we estimate that our CapEx in fiscal 2026 will normalize from elevated fiscal 2025 levels. Total cash and short-term investments at the end of the quarter was $558 million.

根據目前的投資計劃，我們估計 2026 財年的資本支出將在 2025 財年較高水準的基礎上恢復正常。本季末的現金和短期投資總額為 5.58 億美元。

We have three elements to our capital allocation strategy, including organic growth, strategic investments, or returning cash to shareholders. During the quarter, we spent $70 to opportunistically repurchase 3.6 million shares and now have $23 million remaining under our existing repurchase authorization. This is a significant endorsement of our confidence and the long-term health of Photronics, and we will remain strategic with respect to future share repurchases.

我們的資本配置策略有三個要素，包括有機成長、策略投資或向股東返還現金。在本季度，我們花了 70 美元機會性地回購了 360 萬股，目前我們現有的回購授權還剩餘 2,300 萬美元。這是對我們的信心和Photronics長期健康的重大認可，我們將在未來的股票回購方面保持策略性。

Before providing guidance, I'll remind you that demand for our products is inherently uneven and difficult to predict with limited visibility and typical backlog of one to three weeks. In addition, ASPs for high-end assets are high, meaning a relatively low number of high-end orders can have a significant impact on our quarterly revenue and earnings. Additionally, and as we have highlighted previously, our business is influenced by IC and display design activity, and to a lesser degree, by wafer and panel capacity dynamics.

在提供指導之前，我要提醒您，我們產品的需求本質上是不均衡的，並且難以預測，因為可見性有限，並且通常積壓時間為一到三週。此外，高端資產的平均銷售價格較高，這意味著相對較少的高端訂單會對我們的季度收入和收益產生重大影響。此外，正如我們之前所強調的那樣，我們的業務受到 IC 和顯示器設計活動的影響，並且在較小程度上受到晶圓和麵板產能動態的影響。

Given market conditions and tariff uncertainty, we remain cautious about the near-term demand environment. We expect third-quarter revenue to be in the range of $200 million and $208 million. Based on those revenue expectations and our current operating model, we estimate non-GAAP earnings per share for the third quarter to be in the range of $0.35 to $0.41 per diluted share. This equates to an operating margin between 20% and 22%.

鑑於市場狀況和關稅的不確定性，我們對近期的需求環境保持謹慎。我們預計第三季的營收將在 2 億美元至 2.08 億美元之間。根據這些收入預期和我們目前的營運模式，我們估計第三季非公認會計準則每股收益將在每股 0.35 美元至 0.41 美元之間。這相當於營業利益率在 20% 到 22% 之間。

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

我現在將電話轉給接線員來回答您的問題。

(Operator Instructions) Tom Diffely, D.A. Davidson & Company.

（操作員指示）Tom Diffely，D.A. Davidson＆Company。

Yeah, so good morning. Thank you for taking my questions. So first, maybe some -- a little more color on the mainstream business, you said there's continued softness there. I'm curious what you're seeing in kind of the overall supply, demand of mainstream mask-making capacity today and how that has impacted the margins, and maybe perhaps how that influence your capital spending plan this year.

是的，早安。感謝您回答我的問題。首先，也許對主流業務有更多的了解，您說那裡的業務持續疲軟。我很好奇，您目前看到的主流掩模製造產能的整體供應和需求情況如何，這對利潤率有何影響，以及這對您今年的資本支出計劃有何影響。

Okay. Thank you, Tom. The mainstream market, as we highlighted in the previous calls, remains -- still remains weak, mainly because a lot of our edge fab customers still have a very low wafer fab utilization. And I think this trend is something related to the industry, especially in the power, industrial, and consumer parts of the business. So I think in the long run, we will still put more focus to build our capacity and capability in the high end and also in the high end of the mainstream.

好的。謝謝你，湯姆。正如我們在先前的電話會議中所強調的那樣，主流市場仍然疲軟，主要是因為我們的許多邊緣晶圓廠客戶的晶圓廠利用率仍然很低。我認為這種趨勢與產業有關，特別是與電力、工業和消費者業務相關。因此我認為從長遠來看，我們仍將更加重視在高端以及主流高端領域的能力建構。

Chris, you want to add some comments?

克里斯，你想添加一些評論嗎？

Yeah, thanks, Frank. I can say, Tom, we have talked quite a bit about end-of-life tools impacting kind of organic supply of masks to the mainstream. We definitely saw that, but that cycle is starting to move forward and many companies are replacing those end-of-life tools with new equipment. There has been, because of that, a fair amount of capacity also added to the network globally for mainstream masks.

是的，謝謝，弗蘭克。我可以說，湯姆，我們已經討論了很多關於報廢工具對主流口罩有機供應的影響。我們確實看到了這一點，但這個循環正在開始向前發展，許多公司正在用新設備取代那些報廢的工具。因此，全球主流口罩的運輸網絡也增加了相當多的容量。

I don't think it's an oversupply situation, but the muted demand Frank talked about and lower utilizations and wafer fabs combined with some capacity increases that were driven by end-of-life tool turnovers has made a somewhat a little bit unfavorable supply, demand balance. But it's not a long -- we don't think that's a long-term issue. It's just a point in the evolution of the mainstream mask supply.

我不認為這是一個供應過剩的情況，但弗蘭克談到的需求低迷、晶圓廠利用率較低，再加上報廢工具週轉率導致的產能增加，造成了供需平衡略微不利的情況。但這不是一個長期問題——我們不認為這是一個長期問題。這只是主流口罩供應演變的一個點。

So, Chris, are you seeing more of the weakness in Asia right now? And does that have anything to do with some of these kind of start-up photomask companies there? And then maybe to follow up on that, in the US, you're still seeing a migration. It sounds like the mainstream to higher-end mainstream. And I guess that is the driver of your increased capital spending this year?

那麼，克里斯，您現在是否看到亞洲的更多疲軟跡象？這與那裡的一些新興光掩模公司有什麼關係嗎？然後也許可以進一步說，在美國，你仍然會看到移民現象。這聽起來像是主流到高端的主流。我猜這是您今年增加資本支出的動力？

Yeah, so on the first question, not necessarily confined to Asia. The weakness in mainstream on the wafer side is pretty broad-based. Europe may be the strongest example of it because their wafer supply is very much changed to automotive and industrial micro controllers and things like that so. So that's pretty weak for mainstream in general.

是的，關於第一個問題，不一定只限於亞洲。晶圓方面主流市場的疲軟是相當普遍的。歐洲可能是最有力的例子，因為他們的晶圓供應已大量轉向汽車和工業微控制器等產品。所以這對主流來說整體來說相當弱。

So it's not necessarily confined to Asia or new upstarts in China. It's pretty broad-based, though, the weakness in mainstream. And if you look at the projections for fab utilization and supply for the customers, strong recoveries are not really projected until later in 2026. So there's a fair amount of supply sloshing around still for mainstream applications in the industry.

因此，它不一定局限於亞洲或中國的新興企業。然而，主流的弱點相當普遍。如果你看對晶圓廠利用率和客戶供應的預測，你會發現強勁復甦其實要到 2026 年下半年才會出現。因此，對於產業內的主流應用來說，仍有相當數量的供應。

As far as our projects in the US, so that's correct. We had a marginal amount of capacity, but also node migration to, let's say, the higher end of the mainstream applications was one of our strategic goals for those investments. And we do think that's a growing part of the market in the US. So that's what we're targeting there.

就我們在美國的項目而言，這是正確的。我們的容量有限，但將節點遷移到主流應用程式的高端也是我們進行這些投資的策略目標之一。我們確實認為這是美國市場中一個正在成長的部分。這就是我們的目標。

Great, thanks. And then just looking at the earnings on a year-over-year basis, is the largest impact year over year on roughly the same amount of revenue, just the margins of the -- or pricing in the mainstream world or would you say there's other factors in there as well?

太好了，謝謝。然後，僅從同比收益來看，同比收益的最大影響是否大致相同，僅僅是利潤率——或者主流世界的定價，或者您認為其中還有其他因素？

Hi, Tom. This is Eric here. So with respect to pricing, I mean, we're trying to -- as we discussed previously, we are focusing on product mix. There is a bit of pressure on pricing overall, but we are building that with product mix, and we're trying to focus on the higher end of mainstream and node migration as Chris just mentioned a few seconds ago.

你好，湯姆。我是埃里克。因此，就定價而言，我的意思是，我們正在嘗試 - 正如我們之前討論的那樣，我們專注於產品組合。總體而言，定價方面存在一些壓力，但我們正在透過產品組合來建立這種壓力，我們正試圖專注於主流和節點遷移的高端，正如克里斯幾秒鐘前提到的那樣。

Okay, And then, George, looking forward to work -- go ahead.

好的，然後，喬治，期待工作 - 繼續。

I'm sorry. In addition to what Eric just commented, Photronics, we do have several long-term agreements with many of our main customers. So this long-term agreement not only guarantee the order from the customer, but also provide us a stable pricing.

對不起。除了 Eric 剛才評論的 Photronics 之外，我們確實與許多主要客戶簽訂了多項長期協議。因此，這項長期協議不僅保證了客戶的訂單，而且還為我們提供了穩定的價格。

Yeah, and, Tom, maybe I can make one more comment on the mainstream because we don't want it to sound like it's all glue. There's another -- there's a positive trend we're seeing also with some of the regionalization of the high-end chip makers, foundries, and things like that. We're starting to look a little more seriously at outsourcing of the lower-end layers of the advanced mask set.

是的，湯姆，也許我可以對主流再發表一點評論，因為我們不想讓它聽起來像全是膠水。另外，我們也看到一些正面的趨勢，即一些高階晶片製造商、代工廠等的區域化。我們開始更認真地考慮外包先進掩模組的低端層。

So for example, this might be a 5 nanometer node and there's lots of mainstream mask layers in that. Regionalization of fabs is starting to open up some opportunities in mainstream demand for those applications as well. So that's kind of a positive side for the demand.

例如，這可能是 5 奈米節點，其中有許多主流掩模層。晶圓廠的區域化也開始為這些應用的主流需求帶來一些機會。所以這對需求來說是一個正面的方面。

Okay, great, and I appreciate all the extra color there. And, George, look forward to working with you. I worked with your dad for many, many years and always a good experience. Could you give us a hand as to what your first focus will be on? Is it a cost structure? Is it driving revenue? Is it saving costs? What in particular do you think you'll be focused on first?

好的，太好了，我很欣賞那裡所有的額外顏色。喬治，期待與您合作。我和你父親一起工作了很多年，這段經歷一直很愉快。您能否告訴我們您首先關注的重點是什麼？這是一個成本結構嗎？它能帶來收入嗎？是不是節省了成本？您認為您首先會特別關注什麼？

Probably all of the above with Frank. Frank has been leading the organization for the last 3 years and obviously has more than 20 years with the company. So I'm looking forward to working with Frank to learn more about Asia. That's not an area that I have a tremendous experience and I know more about US and Europe and the business overall. So I'm going to be working with Frank going forward to do more of an orderly type of a transition discipline by discipline. So this is not a wholesale change. It's more of an evolution.

弗蘭克可能就是上述所有人。弗蘭克在過去 3 年一直領導該組織，顯然他在該公司工作了 20 多年。所以我期待與弗蘭克合作，進一步了解亞洲。我在這方面的經驗並不豐富，我更了解美國、歐洲以及整個產業。因此，我將與弗蘭克一起繼續努力，逐步實現有序的學科過渡。所以這並不是徹底的改變。這更像是一種進化。

So I would say, right now, my focus has been more on the back-of-house administrative type matters and governance, et cetera, HR, legal, finance, and now, segueing into more Frank's responsibilities. But definitely, we are cost-conscious and want to drive market share. So I think it's both levers. It's cost reduction containment growing revenue by growing market share. Because as we know, the market is finite. So we can't necessarily create demand, so we're going to have to go and gain market share.

所以我想說，現在，我的重點更放在後台行政事務和治理等方面，人力資源、法律、財務，現在則轉向弗蘭克的更多職責。但毫無疑問，我們非常注重成本，並希望提高市場佔有率。所以我認為這是兩個因素。透過增加市場佔有率來降低成本並增加收入。因為我們知道，市場是有限的。因此，我們不一定能創造需求，所以我們必須去爭取市場佔有率。

Appreciate that. And, Frank, it's been a pleasure working with you the last three years as CEO and a decade plus as the Head of Asia before that.

非常感謝。弗蘭克，過去三年我擔任首席執行官，之前十多年我擔任亞洲區總裁，我很榮幸能與您共事。

Well, thank you, everybody. I appreciate your ability to answer my questions today, and talk to you soon.

好的，謝謝大家。我很感謝您今天能夠回答我的問題，並很快與您交談。

Gowshi Sri, Singular Research.

Gowshi Sri，Singular Research。

Good morning, guys. Can you hear me?

大家早安。你聽得到我嗎？

Yes, we can.

是的，我們可以。

Okay. George, congratulations on your new role. Could you share kind of your priorities with regards to US capacity expansion versus balancing our regionalization efforts with ongoing growth in Asia?

好的。喬治，祝賀你擔任新職務。您能否分享一下在美國產能擴張與平衡我們的區域化努力和亞洲持續成長的優先事項？

Well, there's definitely going to be -- it appears, anyway, there'll be opportunities here in the US with TSMC and others and reshoring. And obviously, the geopolitical issues are driving that thought process and creating action by our customer base that we're going to have to react to. So I would say we're going to evaluate the opportunities and deploy capital as we see fit.

嗯，肯定會有的——無論如何，看起來，在美國，台積電和其他公司將有機會回流。顯然，地緣政治問題正在推動這個思考過程，並促使我們的客戶群採取行動，我們必須對此做出反應。所以我想說，我們將評估機會並根據我們認為合適的方式部署資本。

I think we may have mentioned that we're expanding our US capacity as it is. So we're going to continue to monitor that and invest appropriately. We also have, of course, end-of-life tools that we have to spend CapEx on, but also on pure capability on the high end as well.

我想我們可能已經提到過，我們正在擴大美國的產能。因此我們將繼續監控並進行適當投資。當然，我們也有一些壽命終止的工具，我們必須花費資本支出，但也要花費高端的純能力。

Okay. Given that your top line was just around the midpoint guidance, and you're forecasting a sequential decline, you talked a little bit about the efforts that you need to take to maybe address the weaker demand -- or are these just customers delaying orders due to economic concerns? And what is that -- what would it take to kind of lift it H2?

好的。鑑於您的營收僅處於中點指導附近，並且您預測會出現連續下降，您談到了為應對需求疲軟需要採取的一些措施 - 或者這些只是客戶由於經濟問題而推遲訂單？那是什麼——需要什麼才能將其提升至 H2？

Hello, Gowshi, this is Eric here. So I think you hit the nail on the head. So we are seeing customers feeling the uncertainty that's reflected in the market, right? So the current tariff environment is creating that uncertainty. So that is the reason for our cautious outlook for the rest of the year.

你好，Gowshi，我是 Eric。所以我認為你說到了點子上。所以我們看到客戶感受到了市場所反映的不確定性，對嗎？因此，當前的關稅環境正在造成這種不確定性。這就是我們對今年剩餘時間持謹慎態度的原因。

Okay. And just my last question before, given that you guys repurchased $72 million even during kind of weaker earnings, how do you prioritize -- are you looking to authorize any expansion of the buyback program if conditions remain challenging?

好的。我之前的最後一個問題是，考慮到你們在盈利較弱的情況下仍回購了 7200 萬美元，你們會如何安排優先順序——如果情況仍然充滿挑戰，你們是否會授權擴大回購計劃？

Well, we have $23 million remaining under our existing authorization, and we'll continue to be opportunistic with that remaining authorization that we have. And in terms of looking forward to increasing that authorization, share repurchase are part of our capital allocation strategy. In doing so, we need to compare against other investment opportunities that could yield a favorable return to Photronics to ensure long-term continued growth. So with all those considered, we keep our eyes open, and we'll act appropriately at the appropriate time.

嗯，我們現有的授權還剩下 2,300 萬美元，我們將繼續利用剩餘的授權。就增加授權而言，股票回購是我們資本配置策略的一部分。在這樣做時，我們需要與其他可以為 Photronics 帶來有利回報的投資機會進行比較，以確保長期持續成長。因此，考慮到所有這些因素，我們會保持警惕，並在適當的時候採取適當的行動。

Thank you, guys, for taking my questions.

謝謝你們回答我的問題。

Thank you. And I'm currently showing no further questions at this time. I'd like to turn the call back over to Ted Moreau for closing remarks.

謝謝。目前我沒有其他問題。我想將電話轉回給泰德·莫羅，請他做最後發言。

Thank you, Shannon. And thank you, everybody, for joining us today. We really appreciate your interest in Photronics. And we will be available throughout the quarter to speak with all investors. Have a great day.

謝謝你，香農。感謝大家今天的參與。我們非常感謝您對 Photronics 的關注。整個季度我們都會與所有投資者進行交流。祝你有美好的一天。

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

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。