慧榮科技 (SIMO) 2011 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the first-quarter 2011 Silicon Motion Technology Corporation's earnings conference call.

My name is Lacy and I'll be your coordinator for today.

At this time, all participants are in listen-only mode.

Later, we will facilitate a question-and-answer session towards the end of the presentation.

(Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

This presentation contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 as amended, and the Section 21E of the Security Exchange Act of 1934 as amended.

Such forward-looking statements include without limitation statements regarding trends in the multimedia consumer electronics industry and future growth projections or expectation in such markets and our future results of operations, financial conditions and business prospects.

Although such statements are based on our own information and information from undue -- from other reliable sources, you should place no undue reliance on them.

These statements involve risks and uncertainties, and actual market trends or actual results of the operations, financial conditions, business prospects may differ materially from those expressed or implied in these forward-looking statements, a variety of reasons.

Potential risks and uncertainties include but are not limited to continued competitive pressure in the semiconductor industry and the effect of such pressure on prices, unpredictable changes in technology, and consumer demand for multimedia consumer electronics, the state of the -- the state of any change in our relationship with our major customers of Taiwan.

For additional discussion of these risks and uncertainties and other risk factors, please see the documents filed from time to time with the Securities and Exchange Commission.

We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.

And now I would like to turn the presentation over to your host for today's call, Mr.

Jason Tsai, Director of Investor Relations and Strategy.

Please proceed.

Thank you Lacy.

Good morning everyone.

Welcome to the Silicon Motion first-quarter 2011 financial results conference call and webcast.

I'm Jason Tsai.

I'm the Director of IR and Strategy.

With me here is Wallace Kou, our President and CEO, and Riyadh Lai, our Chief Financial Officer.

The agenda for today is as follows.

Wallace will start with a review of some of our recent business developments.

Riyadh will then discuss our first quarter financial results and provide our outlook.

We'll then conclude with Q-and-A.

Before we get started, I'd like to remind you of our Safe Harbor policy which was read at the start of this call.

For a comprehensive overview of the risks involved in investing in our securities, please refer to our filings with the US SEC.

For more details on our financial results, please refer to our press release which was filed on Form 6K after the close of the market yesterday.

The webcast will be available for replay at our website www.siliconmotion.com for a limited time.

To enhance investor's understanding of our ongoing economic performance, we discuss non-GAAP information during this call.

We use non-GAAP financial measures internally to evaluate and manage our operations.

We have therefore chosen to provide this information to enable you to perform comparisons of our operating results in a manner similar to how we analyze our own operating results.

The reconciliation of GAAP to non-GAAP financial data can be found in our earnings release issued yesterday.

We ask that you review it in conjunction with this call.

With that, I'd like to turn the call over to Wallace.

Thank you Jason.

And thanks to everyone for joining us on the first quarter earning call.

I'm excited to speak to all of you again and to report another stellar quarter.

I'm also delighted with the improvement in our overall business condition and opportunities that lie ahead in 2011.

The strategies in R&D investment that we began making 12 to 24 months ago are now delivering results in terms of significant technology achievements, better interaction, design wins and revenue.

I'm convinced that our strategies in investment will help strengthen our business and drive longer term incremental growth opportunity for Silicon Motion.

I'm also convinced that we are now better positioned than at any other time in the past few years to capitalize on new market opportunity to deliver long-term growth.

Let me first share some first quarter financial highlights.

Revenue increased 8% sequentially, which was seasonally strong and has even been better than our expectations.

But both our mobile storage and mobile communication product lines delivered solid performance.

Our first-quarter revenue is our fifth consecutive quarter of growth since the global economy downturn.

And as you may have noticed, it's 67% higher than the same period last year.

Gross margin improved in the first quarter to 46% from 45% in the fourth quarter.

EPS remained unchanged at $0.18.

Riyadh will discuss our financial results in greater detail later on the call.

Before I speak specifically of our business, let me very briefly highlight why we believe the NAND flash industry continued to be favorable to us.

Last year NAND flash supply growth from geometry migration and TLC transition showed big growth, over 70%, and gave us important tailwind in our year of recovery.

We believe this year the growth could be even stronger because in addition to geometry migration and TLC transition, three new 12-inch NAND flash fabs will come online in Singapore, Korea, and Japan.

The realm of these new fabs should continue well into next year, driving some of the long-term big growth for the industry.

The migration to next generation 20-nanometer flash this year is driving demand for more advanced controllers with cutting-edge technologies, some of which are proprietary and unique to Silicon Motion.

In terms of the NAND flash demand, we continue to see strong demand for external memory cards and embedded memory for smartphones and other mobile devices.

In the first quarter, our mobile storage business increased 6% sequentially, driven by our increasing OEM business and strong bundled card business, which more than offset typical first quarter seasonal slowdown.

Our OEM sales which target NAND flash makers, tier 1 device maker, and other with strong [flash] sourcing, marketing and technological capability are increasingly more significant part of our mobile storage business.

In the first quarter, OEM sales grew 25% sequentially, accounting for 40% of our mobile storage sales, up from under 20% of mobile storage sales a year ago.

By the end of the year, we expect half our sales to come from OEMs.

As the controller technologies become more complex, we are seeing an increasing trend from flash maker and other OEM to outsource their controller requirement, and we believe we are well-positioned as their preferred flash controller partners.

We believe OEM sales provide our business with better revenue visibility and reduce volatility, and that furthermore these are customers who emphasize quality solutions.

In the first quarter, our card controller sales grew by solid 11% sequentially because of continued high card bundle rate for Android and other smartphones, as well as robust overall global handset unit shipments.

Our bundled card controller business continued to grow in the first quarters, increasing by 24% sequentially, and account for roughly 50% of our SD card controller sales.

Flash controller technology continued to be a critical part of the value that we bring to our customers.

As a flash maker migrate their MLC and TLC products from 30-nano to 20-nano geometry, customers of 20-nanometer flash must transition to a more advanced card controller to manage to increase flash quickness caused by semiconductor physics.

As we have said before, our technology is forward-compatible.

Controller technology that we have previously developed supports 30-nanometer TLC, is essentially the same cost technology for managing 20-nanometer MLC.

We also need to more -- to do more to help our customer better manage their flash of choice.

We have developed a suite of unique and proprietary technology which include configurable ECC engine.

That provide our customer with much better time to market, adapting dynamic [recharge] technology that improve flash endurance and data integrity.

And the new generation of predictive and auto-correction ECC algorithm for managing even quicker upcoming next-generation flash that can now be managed with current ECC algorithm.

By bringing more value to our customer, this quarter we are able to increase our blended controller ASP 2% sequentially, and 10% compared with a year ago.

Flash makers are also still rebalancing their mix of MLC and TLC flash production.

While TLC flash is more cost effective and ideally suit for cards and USB flash drives.

MLC flash supported product range application such as embedded memory and SSD due to its higher reliability and endurance.

In the first quarter, our TLC controller sales increased by 15% sequentially, and now account for nearly 30% of our total controller revenue, up from about 25% last quarter.

The TLC flash quality improved with each successive generation and the pair with more advanced controllers, we expect to see more application utility in the future and continue to believe that TLC could become the dominant architecture for NAND flash.

This quarter our SSD and embedded business slowed due to lumpy order happenings relating to our core product for industrial PC and networking equipment, fault tolerance applications.

Let me stress that this lumpiness is temporary and are already rebounding.

During this quarter, we broadened our embedded design wins, and our design win pipeline now include eMMC, eUSB flash drive and ESD solution for smartphone, set-top box and other consumer electronics.

We are working closely with our OEM customer to develop and expand our embedded and SSD program and remain on track and anticipate these new solutions, including our many eMMC programs to begin ramping in the coming quarters and deliver significant growth in 2012.

Our full year 2011, we expect our SSD embedded product to deliver superior revenue growth for Silicon Motion.

I will now discuss our mobile communication business.

Our mobile communication business outperformed in the first quarter, and we scaled our CDMA, EV-DO transceiver business and ramp our new LTE transceiver sales.

These products' leverage are unique in world-class handset RF capability.

Cell phones (inaudible) product more than offset weaker mobile TV sales, helped by seasonal weakness and program delay.

And our overall mobile communication product line grew by 20% sequentially.

As you may have seen in our press release yesterday, we have been developing for Samsung, a series of LTE transceivers and started shipping this solution last year.

Samsung LTE handset using our LTE transceiver already selling at leading US carrier like Verizon and MetroPCS.

Samsung was the first handset vendor to begin commercial shipment of LTE handset, and we are proud that they chose Silicon Motion to partner with for Samsung Craft handset.

Samsung was also the first handset vendor to ship an LTE Android smartphone, the Samsung Indulge.

And again, we are pleased that Silicon Motion was chosen transceiver partner for this handset.

More recently, Samsung introduced their first LTE Android smartphone for Verizon, the Samsung Charge, again using Silicon Motion LTE transceiver.

We are very excited to be partners with Samsung with an exciting new generation of mobile handsets, and are proud of our mobile communication team for delivering world-class transceiver solution for the new market opportunity.

We have already shipped over half million LTE transceivers and are confident our LTE product will be an important 2011 growth driver.

Overall, I'm very excited about the strong start for 2011 and the growth opportunity that lay ahead for us for this year and beyond.

We are delivering solution that lead the market.

We are taking market share in the latest generation of flash products.

And we are expanding our Droid phone market by introducing new products such as our LTE transceivers and developing new and innovative solution such as our embedded controller products.

I'm confident that we have the right foundation and are targeting the right markets and customers to continue the strong growth objective that we have set for ourselves.

I will now turn the call over to Riyadh to discuss our financial results.

Thank you, Wallace.

First, I will outline our financial results for the first quarter.

And then I will provide our second quarter and update our first year (sic) 2011 guidance.

As Wallace had mentioned, this quarter we increased our revenue 8% sequentially and 67% compared to the same period a year ago, and delivered $43.4 million in revenue.

In the first quarter, mobile storage mix was 72% of sales, down slightly from 73% in the fourth quarter.

Our mobile communications business increased to account for 19% of our revenue mix in the first quarter, compared to 17% in the fourth quarter.

Multimedia declined to 7% in this quarter from 8% of sales in the fourth quarter.

Let me recap the performance of our three key product lines.

Both NAND flash supply and demand from OEMs were strong in the first quarter and our mobile storage business continued to benefit with our overall storage revenue increasing by 6% sequentially.

Our card control revenue grew 11% sequentially.

Our USB flash drive controller revenue declined by less than a percentage sequentially.

Our SSD plus embedded controller revenue increased a little under 5% sequentially.

Let me also provide two other mobile storage metrics.

TLC revenue increased by over 15% sequentially and increased to nearly 30% of our total controller sales.

OEM sales increased by 25%, to approximately 40% of our total controller sales.

Our mobile communications business increased 20% sequentially, primarily because of the ramp of our new LTE transceivers and the continuing growth of our CDMA, EV-DO transceiver business.

Our multimedia SoC revenues decreased 2% because of seasonal weakness, relating primarily to our embedded graphics processor sales.

Our corporate gross margin increased 1.1 percentage points to 46.2% from 45.1% in the previous quarter as the mix of high-margin mobile storage products increased in the first quarter.

In the first quarter, our operating expense increased $2.2 million to $13.4 million, largely because of two factors.

Our fourth-quarter operating expense was understated by $1.2 million due to reversals of over-accrued expenses and we had higher product testing expenses this quarter.

Operating margin decreased to 17.2% in Q4 to 15.5% this quarter as higher operating expenses more than offset benefits from higher revenue and gross margins.

Diluted EPS of $0.18 in the first quarter was unchanged as compared to the fourth quarter.

Overall, we are very pleased with our P&L performance this quarter.

I will now move to our balance sheet and cash flow.

In the first quarter, our cash balance increased from $54.8 million in Q4 to $57.6 million this quarter.

Inventory days were largely unchanged at 96 days compared to 95 days in the fourth quarter.

DSO increased slightly from 56 days in the fourth quarter to 58 days this quarter.

Payable days decreased from 62 days in the fourth quarter to 58 days in the first quarter.

In the first quarter, our cash balance increased by $2.8 million.

In terms of primary sources of cash, we generated net income -- net earnings of $5.8 million and an increase in [AT fund] at $7.2 million.

In terms of primary uses of cash, an increase in AR consumed $1.1 million, an increase in inventory consumed $1.6 million.

We invested $1.1 million in testing equipment and design tools and placed an $8.6 million deposit with our foundry to secure favorable terms.

Without this deposit, net cash generated would have been $11.4 million this quarter.

I will now move on to our guidance.

As Wallace had discussed, we are of to a strong start this year.

We are executing our strategies well and feel more confident, and have better visibility that we will more likely deliver stronger full-year results.

In order to deliver our stronger full-year results, we will need to continue executing our strategy of increasing our OEM business which includes much of our SSD and embedded products to mitigate parts of our business that are more exposed to volatile NAND flash supply demand dynamics.

While we're taking up our full year revenue target, we're taking it up prudently.

With potential tightness in NAND flash supply later this year caused by a strong demand for NAND flash from smartphones and tablets versus more limited industry capacity growth and combining that potential supply tightness with weak retail demand for cards and USB flash drives in many important markets around the world, we believe we should be reasonably circumspective about our plans for the balance of the year.

Also, we are reviving our full-year 2011 operating expense guidance today.

In order to invest further in our growing OEM business and SSD plus embedded products, we plan to add up to 50 new headcount, and this will result in higher expenses.

As a note, we had 594 employees at the end of Q1.

Our operating expense will also be higher because of continued strength of the NT dollar and Korean won.

Our 2010 operating expenses would have been roughly 10% higher if the NT dollar and Korean won were at today's rates.

I will first provide Q2 guidance and then I'll revise full-year 2011 guidance.

First our guidance targets for Q2.

We expect second quarter revenue to be flat to up 10% sequentially.

We expect second-quarter gross margin to be within the 46% to 48% range.

We are targeting operating expense to be in the range of $13 million to $15 million.

Stock-based compensation expense should be roughly $2 million to $2.5 million and acquisition charges should be approximately $0.6 million.

Our target tax -- model tax rate remains 15%.

Now, our updated guidance for full year 2011.

We expect full-year 2011 revenue to increase 30% to 40%.

We expect full-year 2011 gross margin to be within the 46% to 48% range.

We are targeting operating expense for full year in 2011 to be in the range of $55 million to $58 million.

Stock-based compensation expense should be roughly $8 million to $10 million and acquisition charges should be approximately $2.4 million for full year 2011.

Our target model tax rate remains 15% for full year 2011.

We will now open the call for your questions.

Thank you.

(Operator Instructions) Daniel Amir with Lazard Capital Market.

Thanks a lot.

Thank you for taking my call and congratulations on a good quarter.

A couple questions here.

First of all, Wallace, in your prepared remarks you were talking about that you expect stronger bit growth in 2011 off of 2010 due to the ramps of new fabs and migration of 20-nanometer.

But then Riyadh, in his commentary on the guidance, basically said that you're talking about potential tightness in NAND and maybe weak retail demand in the second half and therefore you're a little more conservative.

So can you talk a little bit what -- it looks like those views are a little different than each other and how do you really handicap that in terms of your annual revenue growth?

And I have a couple follow-up questions.

Thanks.

So first of all, I think we did not counter each other.

We see a strong demand for OEM customers who has a much better sourcing, better pricing from the NAND -- from the NAND makers.

But we also see weaker demand from module maker after Japan earthquake.

And module maker, they are more sensitive for the price of the NAND, and we see the retail channel demand is a little soft lately.

So I think we believe we see the strong increase not only in customer base, but also we like to see the growing from module makers.

Although we try to be conservative because of the module maker demand is slow, but with the increase from OEM customer, we have a very positive signs of our whole year sale revenue.

What type of visibility do you actually have in the OEM business?

I mean, you're pretty confident that it's going to increase nicely here for the rest of the year.

So is it fair to say that you have very good visibility all the way into Q3, Q4 in this business?

I mean, how should we look at it?

It's very unlikely OEM customer can see through the Q3, Q4.

Normally, OEM give you normally six months rolling forecast.

So you have much better visibility and reduce the risk regarding their forecast.

So far we see the OEM customer (inaudible) from US, Japan, Korea and [elsewhere].

Okay.

And then one follow-up question and then I'll go back into the queue.

On the transceiver business here with LTE and what's going on with Samsung, what is really the market opportunity here?

I mean, can you help us get an idea what potential here does this product have?

Do you have other design wins in the pipeline?

Is it largely focused on Samsung?

How should we try and quantify this, because this is pretty meaningful part of your business now?

The LTE RF were being co-developed with Samsung in 2008.

It is a very strategic business for us.

I cannot comment how big potential growth for us, but we believe we have quite a large design pipeline, with Samsung mobile phone as well as other tablet device.

So we believe LTE transceiver naturally this [coupled] version of this SoC RF can bring significant revenue for us in 2011 and to 2012.

Okay, great.

Thanks a lot.

Anthony Stoss with Craig-Hallum.

Can you refine or talk a little more in detail on where you're at on the embedded handset opportunity, the testing stage, et cetera, et cetera?

Love to hear about that.

Thanks.

We are assembling our eMMC controller to date.

As you know, the embedded solution majority belong to flash maker who has the most cost-effectiveness.

And major tier 1 handset maker only a PO to flash makers.

So we have to work closely with some of the flash maker who could produce the solution.

But the qualification process is very long.

Embedded solution is much more complicated in card or USB devices.

And we work very closely with top-tier flash maker to finish qualification and deliver customer for their qualification.

And we believe we should see the -- small ramp on Q3 and visible ramp in Q4 and much bigger ramp in 2012.

Great, thanks.

And then one last question, number of 10% customers if you could.

We consistently have one big customer and occasionally have a second 10% class customer.

Our largest customer consistently is Samsung.

So Samsung was the only 10% for the March quarter?

March quarter we have Samsung and a module maker.

Okay.

Thanks guys.

Mike Crawford with B.

Riley & Company.

Please proceed.

Thank you.

On the FCI business, one thing we didn't hear too much about is the mobile tuner aspect of that business.

Is that taking a backseat to the transceiver development or are you just more excited about the -- what you're doing with -- on the LTE side with Samsung?

Our mobile TV business is certainly lumpy, and we got hit with another lumpy quarter in Q1.

Our mobile TV revenue were down quite sharply.

And a key reason is seasonal factors in Korea as well as some handset program that were delayed to the next quarter.

Longer term, we're still quite convinced that we're going to get good growth out of this business, but the takeoff is becoming a little slower.

At the same time, we can't wait forever and so we have a lot of other important strategic initiatives that take advantage of our world-class RF capabilities.

Then this of course includes our LTE initiatives with Samsung.

In this quarter, in fact we got -- the importance of LTE more than offset the weakness that we saw in the mobile TV side.

So our view from mobile TV tuner SoC are still very positive although I think after Japan earthquake we need to readjust [ICBT] shipment due to the Japan situation.

However, I think the China CMMB as well as ICBT to Brazil will continue growth.

And because in Korea region, due to specific customer their market share shrink, but we see there will be a rebound in second quarter.

So I think we are still very proud about mobile TV tuner in the SoC business.

Okay, thank you.

And then regarding TLC NAND flash, so it's my understanding that first of all Apple Store has not used any TLC NAND in its product.

Is that your belief as well or --

I personally believe so, yes.

And that the ramp of the TLC production is one thing that's driven some of the remarkable growth in your storage business.

So now that that has been produced for a while, are you seeing some of your follow-on competitors like Skymedia or someone else catching up with a viable controller solutions to handle that type of product?

Let me rephrase that one more time.

As we state, TLC NAND primarily being used for card and USB device, MLC primarily used for SAP and in verifications.

For -- in verifications because it required better and longer endurance and data integrity.

So MLCs are more suitable for verification.

For TLC, all commercial application today using TLC, I would say majority using TLC.

We believe through the 20-nanometer, upcoming 1x nanometer processor technology, you'll require [deep-end] class of technology from controller to manage this type of NAND.

So you improve the quickness and improve the endurance.

Customer is looking for the solution for the card, not the NAND itself.

So with the controller together, we can deliver much suitable solution to the consumer, to the customer.

We (inaudible) NAND you mentioned for the controller, our newly coming controller.

But we're seeing today the composition is less than before.

Okay, thank you.

and then final question relates to some of the drivers of the business.

So it's nice to see the ASPs are up on makeshift towards more advanced controllers.

Did you give a total units shipped or some other directional information on units that I just missed?

In terms of total units for our corporation, we shipped a 133 million units in Q1, which is 5% sequential increase.

In terms of storage units, mobile storage units, we no longer provide that number.

But our mobile storage units increased 4% sequentially and we got a 4% ASP increase this quarter.

Thanks, Riyadh.

(Operator Instructions) Raji Gill with Needham & Company.

Yes, thanks, and congrats on really good results.

Just your -- the issue on the OEM business model, the shift in that business model, I find very interesting to avoid supply-demand issues in NAND flash.

May we talk a little bit about the execution on that strategy?

What are going to be some of the metrics that we should follow?

What are going to be some of the challenges?

Any more additional detail on that shift in business model?

First of all, we have been looking to engage direct business with the flash maker.

And it's our goal.

We tried to work with -- closely with the flash maker as the enabler for the NAND business.

Second is to have direct business as their OEM controller provider.

Second is, we target all the major OEM with a brand.

We have a channel recognition; who also have their OEM channel and they have a sourcing capability and marketing capability.

So I think we are very, very close to achieve our goals and we are increasing our market share because our OEMs increased their market share.

And you had mentioned that there's potential tight capacity in NAND flash in the second half although there are -- you mentioned that there are new fabs that are coming online in Singapore, Korea and the like.

Can you maybe describe the impact of Japan at all with the rollout of NAND flash?

Clearly your sales are correlated to increased flash capacity with increased flash controller sales and it's the exact opposite.

So any thoughts on flash availability in the second half would be helpful.

I think it will be very difficult to predict second half the demand and supply.

It really is up to Samsung, Sandisk, Toshiba to make the quote.

In terms of the Japan situation, we don't think there are any -- there -- any significant material changes to NAND flash supply as a result of the earthquake.

Now, naturally a lot of our customers are perhaps more raising their sale; better be safe than sorry, so managing their supply chain more rigorously than in the past.

But overall, we don't think the earthquake has any significant material impact to overall supply of our industry.

But yes, to the other question about supply demand, how that impacts our second half of the year, there's going to be more supply coming online through the new fabs, geometry migration, TLC transition, all that.

But at the same time, demand is also escalating.

Demand for NAND flash escalating with the ramp of smartphones and tablets.

And that's -- we believe is going to take up much or, if not more than the incremental capacity that's coming online.

Very good.

Thank you.

Betsy Van Hees with Wedbush.

Thank you so much for taking my question and congratulations on a fantastic quarter.

I had a question.

Wallace, can we go back to the comments that you made about the change in your business model and the visibility?

If I recall in the past, when you've ended a quarter you've had very little backlog and most of your business has been turned.

And I was wondering if you could talk a little bit more in detail as to what's changed and if you could give us some metrics on some of the facts?

So for example, in Q3 what type of backlogs your (inaudible) in Q4 and Q1, so you can help us as we look forward?

Thank you so much.

As we mentioned, OEM customers is turn around of 40% of our NAND business in Q1 compared with 25% of Q4 last year.

So as the OEM business give us better visibility regarding the forecast.

That's how we had much higher confidence regarding the program where it go and one major project we win.

In the past, because module maker account more than 70% of our storage business, so it depends on the supply of a NAND and the pricing of NAND.

So sometimes visibility was very small.

Now, I think we have a much better visibility because OEM has been increased, a major program increase.

And that gave confidence to give the guidance for the 2011.

Thanks Wallace, that was very helpful.

And then I also had a follow-up question on the embedded solutions.

So what's the compelling technology difference allowing you to be able to penetrate this market?

Thank you.

I would say there are a couple key items for embedded solutions today.

One is random IOPS performance.

It's how you can improve random read/write performance with a cost-effective solution.

That become a key for 20-nanometer NAND solutions.

Second is how you can reliable to overcome the unexpected power-down or power glitch because to rebuild the FAT link table, it takes time.

How you can build very efficiently, effectively without losing data, that also become the key for embedded application.

There is many different (inaudible) to guarantee the (inaudible) data.

And now there's safety and security.

So there is lot of technology behind it to make a embedded solution.

Thank you very much, Wallace, and once again congratulations on a great quarter.

And at this time as there are no further questions in queue, I would like to turn the call over to Wallace Kou, President and CEO for closing remarks.

I would like to thank all of you for joining us today and you're continuing interest in Silicon Motion.

In May, we'll be presenting at the Jefferies conference in New York and the B.

Riley conference in Santa Monica, and in June, in the Craig-Hallum conference in Minneapolis, and UBS conference in Taipei.

Thank you and goodbye for now.

Thank you for your participation in today's conference.

This concludes your presentation and you may now disconnect.

Good day everyone.