高塔半導體 (TSEM) 2021 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Tower Semiconductor First Quarter 2021 Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded, May 12, 2021.

女士們，先生們，謝謝你們的支持。歡迎參加 Tower Semiconductor 2021 年第一季度業績電話會議。 （操作員說明）提醒一下，本次會議正在錄製，2021 年 5 月 12 日。

Joining us today are Mr. Russell Ellwanger, Tower's CEO; and Mr. Oren Shirazi, CFO.

今天加入我們的是 Tower 的首席執行官 Russell Ellwanger 先生；首席財務官 Oren Shirazi 先生。

I would now like to turn the call over to Ms. Noit Levy, Senior Vice President of Investor Relations and Corporate Communications. Ms. Levy, please go ahead.

我現在想把電話轉給投資者關係和企業傳播高級副總裁 Noit Levy 女士。利維女士，請繼續。

Thank you, and welcome to Tower Semiconductor Financial Results Conference Call for the First Quarter of 2021. Before we begin, I would like to remind you that some statements made during this call may be forward-looking and are subject to uncertainties and risk factors that could cause actual results to be different from those currently expected. These uncertainties and risk factors are fully disclosed in our forms 20-F, F-4, F-3 and 6-K filed with the Securities and Exchange Commission as well as filings with the Israeli Securities Authority. They are also available on our website. Tower assumes no obligation to update any such forward-looking statements.

謝謝，歡迎來到 Tower Semiconductor 2021 年第一季度財務業績電話會議。在我們開始之前，我想提醒您，在本次電話會議中所做的一些陳述可能是前瞻性的，並受不確定因素和風險因素的影響可能導致實際結果與目前預期的結果不同。這些不確定性和風險因素已在我們向美國證券交易委員會提交的 20-F、F-4、F-3 和 6-K 表格以及向以色列證券管理局提交的文件中充分披露。它們也可以在我們的網站上找到。 Tower 不承擔更新任何此類前瞻性陳述的義務。

Please note that the first quarter of 2021 financial results have been prepared in accordance with U.S. GAAP. The financial tables and data in today's earnings release and in this earnings call also include certain adjusted financial information that may be considered non-GAAP financial measures under Regulation G and related reporting requirements as established with the Securities and Exchange Commission. The financial tables include a full explanation of these measures and the reconciliation of these non-GAAP measures to the GAAP financial measures.

請注意，2021 年第一季度的財務業績是根據美國公認會計原則編制的。今天的收益發布和本次收益電話會議中的財務表格和數據還包括某些調整後的財務信息，根據 G 條例和美國證券交易委員會制定的相關報告要求，這些信息可能被視為非 GAAP 財務措施。財務表格包括對這些措施的完整解釋以及這些非 GAAP 措施與 GAAP 財務措施的調節。

Now I'd like to turn the call to our CEO, Mr. Russell Ellwanger. Russell, please go ahead.

現在我想把電話轉給我們的首席執行官 Russell Ellwanger 先生。羅素，請繼續。

Thank you, Noit. Welcome, everyone. Thank you for joining our call.

謝謝你，諾伊特。歡迎大家。感謝您加入我們的電話。

We entered the year with strong customer demand and increasing forecast across all our business units and technology platforms. Our revenue for the first quarter of the year was $347 million, exceeding the midpoint of our guidance, and representing year-over-year 21% organic growth and 16% total growth.

我們進入了這一年，客戶需求強勁，我們所有業務部門和技術平台的預測都在增加。我們今年第一季度的收入為 3.47 億美元，超過我們指引的中點，同比有機增長 21%，總增長 16%。

As we stated in the previous quarter call, we expect revenue growth throughout the year and are giving a mid-range guidance for the second quarter of 2021 of $360 million, the highest quarterly revenue in the company's history. This midrange guidance represents year-over-year organic growth of 26% or 16% total growth.

正如我們在上一季度電話會議中所述，我們預計全年收入增長，並給出 2021 年第二季度 3.6 億美元的中期指導，這是公司歷史上最高的季度收入。這一中檔指導代表同比有機增長 26% 或總增長 16%。

Driven by a significant shift towards 5G-able handsets with the associated increase in 5G content and our market share gains, the first quarter realized the highest RFSOI revenue in our history, with planned further increases for the second quarter.

在向 5G 手機的重大轉變以及 5G 內容的相關增加和我們的市場份額增加的推動下，第一季度實現了我們歷史上最高的 RFSOI 收入，併計劃在第二季度進一步增加。

Our silicon germanium RF infrastructure business continues to grow in the datacom side with very strong demand for 100-gigabit per second transceivers sold primarily for hyperscale data centers, which itself is a strong growth market.

我們的矽鍺 RF 基礎設施業務在數據通信方面繼續增長，對主要用於超大規模數據中心的每秒 100Gb 收發器的需求非常強勁，這本身就是一個強勁增長的市場。

Our silicon germanium telecom-driven 10-gigabit and 25-gigabit per second transceivers used in 5G wireless infrastructure build-out was strongest during 2020, has slowed some in early 2021, with customer expectations for renewed growth later in '21 into 2022.

我們在 5G 無線基礎設施建設中使用的矽鍺電信驅動的每秒 10G 和 25G 收發器在 2020 年表現最強勁，但在 2021 年初有所放緩，客戶期望在 21 年後到 2022 年恢復增長。

Total silicon germanium demand is solid with expected year-over-year growth.

矽鍺總需求穩健，預計同比增長。

Our foundry power IC business is experiencing surging demand with strength in industrial, consumer and automotive segments. In addition to benefiting from a very favorable market cycle, we're uniquely positioned to benefit from growth in electric vehicles with well-established customer base and battery management. Additional new technologies have been developed such as the integrated, very high-voltage capacitor galvanic isolation process announced this past quarter, enabling isolated gate drivers for silicon carbide and gallium nitride automotive power stages, among others.

我們的代工功率 IC 業務在工業、消費和汽車領域的實力正經歷著需求的激增。除了受益於非常有利的市場週期外，我們還處於獨特的位置，可以從擁有完善的客戶群和電池管理的電動汽車的增長中受益。還開發了其他新技術，例如上個季度宣布的集成超高壓電容器電流隔離工藝，可為碳化矽和氮化鎵汽車功率級等提供隔離式柵極驅動器。

Our power discrete business is rebounding, with forecasted growth over the coming quarters expected to fully utilize the dedicated discrete capacity at our manufacturing facilities.

我們的功率分立業務正在反彈，預計未來幾個季度的增長將充分利用我們製造工廠的專用分立產能。

Our image sensor business is realizing significant growth throughout the year, driven by both market growth and market share growth in industrial sensors with full recovery of the medical dental markets and incremental new business in 300-millimeter large sensor medical. We expect record yearly revenues in imaging.

我們的圖像傳感器業務全年實現顯著增長，主要受工業傳感器市場增長和市場份額增長的推動，醫療牙科市場的全面復甦以及300毫米大傳感器醫療新業務的增量。我們預計成像領域的年收入將創紀錄。

First quarter 2021 utilization levels were as follows: Migdal Haemek, Israel Fab 1, our 6-inch in factory, was at 70% utilization. As of today, we've seen increased level of utilization to 80%.

2021 年第一季度的利用率水平如下：Migdal Haemek，以色列 Fab 1，我們的 6 英寸工廠，利用率為 70%。截至今天，我們已經看到利用率水平提高到 80%。

Fab 2 was at 80%, presently at 85%.

Fab 2 為 80%，目前為 85%。

Newport Beach, California Fab 3 was at 75% utilization as we continue to adjust for increased silicon germanium mix.

加利福尼亞州紐波特比奇 Fab 3 的利用率為 75%，因為我們繼續針對增加的矽鍺混合進行調整。

Our San Antonio Factory Fab 9 was at about 70% utilization.

我們聖安東尼奧工廠 Fab 9 的利用率約為 70%。

Looking at our TPSCo fabs in Japan, utilization for the 8-inch foundry business was at about 70% rate, being non photo bottleneck limited, which is being addressed in the capacity expansion plan we announced this past quarter.

看看我們在日本的 TPSCo 晶圓廠，8 英寸晶圓代工業務的利用率約為 70%，不受光瓶頸限制，我們在上個季度宣布的產能擴張計劃中正在解決這一問題。

Our 12-inch foundry business was at about 90% rate, similar level to the previous quarter, but with number of layers being increased following the 2020 capacity expansion.

我們的 12 英寸晶圓代工業務增長率約為 90%，與上一季度的水平相似，但隨著 2020 年產能擴張，層數有所增加。

To summarize, with a strong first quarter as a base, we are thrilled with the business and operational capabilities, enabling a second quarter midrange guidance to be a company-record revenue. Our comprehensive foundry platforms are replete with advanced analog technology differentiation, which is the source of our customer partnerships with the analog industry leaders. We're excited with the prospect of continued leadership expansion throughout the year.

總而言之，以強勁的第一季度為基礎，我們對業務和運營能力感到興奮，使第二季度的中檔指導成為公司創紀錄的收入。我們全面的代工平台充滿了先進的模擬技術差異化，這是我們與模擬行業領導者建立客戶合作夥伴關係的源泉。我們對全年繼續擴大領導層的前景感到興奮。

With that, I'd like to turn the call over to our CFO, Oren Shirazi. Oren, please.

有了這個，我想把電話轉給我們的首席財務官 Oren Shirazi。奧倫，請。

Hello, everyone. We released our first quarter 2021 results today, demonstrating a remarkable 16% year-over-year revenue increase, resulting in 98% operating profit increase and 66% net profit increase; and provided a mid-range revenue guidance of $360 million for the second quarter of 2021, which is an all-time record revenue for the company.

大家好。我們今天發布了 2021 年第一季度業績，收入同比增長 16%，營業利潤增長 98%，淨利潤增長 66%；並為 2021 年第二季度提供了 3.6 億美元的中等收入指導，這是公司的歷史收入記錄。

In addition, to address our customers' demand exceeding our capacity and to increase our revenue in the mid and long term, we executed our previously announced capacity expansion plan for our 8-inch and 12-inch fabs and issued $150 million purchase orders for manufacturing equipment and facilities, which would result in capacity increase commencing in the second half of this year, targeting full qualification during the first quarter next year.

此外，為了解決客戶的需求超出我們的產能並增加我們中長期的收入，我們執行了我們之前宣布的 8 英寸和 12 英寸晶圓廠的產能擴張計劃，並發出了 1.5 億美元的製造採購訂單設備和設施，這將導致從今年下半年開始增加產能，目標是在明年第一季度全面獲得資格。

I will now move to our first quarter P&L highlights and then discuss our balance sheet and cash flow financial statements.

我現在將轉到我們第一季度的損益亮點，然後討論我們的資產負債表和現金流量財務報表。

Revenue for the first quarter of 2021 was $347 million, $47 million higher year-over-year, reflecting 16% year-over-year revenue increase.

2021 年第一季度收入為 3.47 億美元，同比增加 4700 萬美元，收入同比增長 16%。

Looking at our organic revenue, which is defined as total revenue excluding revenue from Nuvoton in Japan, previously Panasonic Semiconductor, and revenue from Maxim in our San Antonio fab, revenue in the first quarter of 2021 reflects 21% year-over-year increase.

看看我們的有機收入，即總收入，不包括來自日本 Nuvoton（以前是松下半導體）的收入和來自我們聖安東尼奧工廠的 Maxim 的收入，2021 年第一季度的收入同比增長 21%。

Gross and operating profit for the first quarter of 2021 were $70 million and $32 million, respectively. This gross profit is $17 million higher or 33% higher year-over-year. And this operating profit is $16 million higher or 98% higher year-over-year.

2021 年第一季度的毛利潤和營業利潤分別為 7000 萬美元和 3200 萬美元。該毛利潤同比增長 1700 萬美元或 33%。這一營業利潤比去年同期高出 1600 萬美元或高出 98%。

Net profit for the first quarter of 2021 was $28 million or $0.26 basic and diluted earnings per share. This net profit is $11 million higher or 66% higher year-over-year.

2021 年第一季度的淨利潤為 2800 萬美元或每股基本和稀釋收益 0.26 美元。這一淨利潤同比增長 1100 萬美元或 66%。

Looking at the balance sheet, we demonstrated again a strong and stable financial position. A few points to note: Short-term and long-term debt in the balance sheet decreased from $390 million as of December 31, 2020, to $343 million as of March 31, 2021, mostly due to $29 million debt repayment made during this quarter, primarily comprised of scheduled principal payment on account of bond Series G.

從資產負債表來看，我們再次展示了強大而穩定的財務狀況。需要注意的幾點：資產負債表中的短期和長期債務從 2020 年 12 月 31 日的 3.9 億美元減少到 2021 年 3 月 31 日的 3.43 億美元，主要是由於本季度償還了 2900 萬美元的債務，主要包括 G 系列債券的預定本金支付。

In relation to our debt and corporate rating in May 2021, Standard & Poor's Maalot, an Israeli rating company that is fully owned by S&P Global Rating, completed its annual rating review of -- for the company and affirmed a corporate credit rating and bond Series G credit rating of AA- including a stable horizon.

關於我們 2021 年 5 月的債務和企業評級，標普全球評級全資擁有的以色列評級公司標準普爾 Maalot 完成了對該公司的年度評級審查，並確認了企業信用評級和債券系列AA- 的 G 信用評級，包括穩定的視野。

Shareholders' equity reached a record of $1.48 billion.

股東權益達到創紀錄的 14.8 億美元。

Deferred revenue and customers' advances balance under current liabilities and long-term liabilities in the balance sheet have increased by $10.8 million and $8.5 million, respectively, reflecting enhanced receipts from customers that have to receive more capacity to address their exceeding demand.

資產負債表中流動負債和長期負債項下的遞延收入和客戶預付款餘額分別增加了 1,080 萬美元和 850 萬美元，反映出來自客戶的收入增加，這些客戶必須獲得更多能力來滿足其超額需求。

Current asset ratio, defined as current assets divided by short-term liabilities, is strong at a value of 4x.

流動資產比率（定義為流動資產除以短期負債）高達 4 倍。

Our cap table consists of 108 million outstanding ordinary shares and an additional 2 million ESOP-related shares, resulting in a fully diluted share count of 110 million.

我們的上限表包括 1.08 億股已發行普通股和另外 200 萬股 ESOP 相關股份，因此完全攤薄後的股份數量為 1.1 億股。

And the last note on our cash flow report. In the first quarter of 2021, cash flow generated from operations was $87 million. Investments in fixed assets, mainly for manufacturing equipment was $49 million net. And we repaid $29 million of our debt during the first quarter of 2021.

以及我們現金流量報告的最後一個註釋。 2021 年第一季度，運營產生的現金流為 8700 萬美元。主要用於製造設備的固定資產投資淨額為 4900 萬美元。我們在 2021 年第一季度償還了 2900 萬美元的債務。

And now I wish to turn the call back to the operator.

現在我想把電話轉回給接線員。

(Operator Instructions) The first question is from Rajvindra Gill of Needham & Company.

（操作員說明）第一個問題來自 Needham & Company 的 Rajvindra Gill。

Yes, and congratulations on the good results. Question, Russell, on the utilization rate. Thank you for kind of providing that breakdown. Just wondering, given the surge in demand that you're seeing across the different end markets, I was just wondering why these utilization rates wouldn't be closer to kind of 100%. If you could provide any color there.

是的，祝賀你取得了好成績。拉塞爾，關於利用率的問題。感謝您提供這種細分。只是想知道，鑑於您在不同終端市場看到的需求激增，我只是想知道為什麼這些利用率不會接近 100%。如果你能在那裡提供任何顏色。

And then, Oren, in terms of the gross margin kind of trajectory as we go throughout the year, I know in the past you had mentioned that the normal kind of 50% fall-through on the gross profit might occur later on in the year because you're increasing CapEx related to the capacity that could affect the margins. So just wanted to get a sense of how to think about the margin, the gross profit fall-through as we progress throughout the year, as the revenue continues to grow sequentially.

然後，Oren，就我們全年的毛利率軌跡而言，我知道你過去曾提到過，毛利率正常的 50% 下降可能會在今年晚些時候發生因為您正在增加與可能影響利潤率的能力相關的資本支出。所以只是想了解如何考慮利潤率，隨著我們全年的進展，毛利潤下降，因為收入繼續連續增長。

Yes, Raj. Good question on the utilization, I'm actually glad that you asked it. I had thought we had established this, but maybe apparently not well enough.

是的，拉吉。關於利用率的好問題，我真的很高興你提出這個問題。我原以為我們已經建立了這一點，但可能顯然還不夠好。

Our target utilization is 85%. We do not take overrides. For us, a factory could really never run at 100%. Cycle times would almost go infinitely long. So our target is 85%. We can run up to 90% for periods of time. But we do not take a factor against it. For example, at Tower, it's impossible for us to ever talk about higher than 100% utilization. So we really look at it as total photo layers that can possibly be run, and then we have a target number that allows us to have good cycle times, which is the 85%. Again, for short periods, one can always get a little bit higher and be upwards of 88% or 90%. But for our models, the 90% would never be sustainable. So the utilization rates are actually not bad compared to what our target is, and the target is 85%. Oren?

我們的目標利用率是 85%。我們不接受覆蓋。對我們來說，工廠真的不可能100%開工。週期時間幾乎無限長。所以我們的目標是85%。我們可以在一段時間內運行高達 90%。但我們不反對它。例如，在 Tower，我們不可能談論高於 100% 的利用率。所以我們真的把它看作是可能運行的總照片層，然後我們有一個目標數字，可以讓我們有很好的周期時間，也就是 85%。同樣，在短期內，總是可以稍微高一點，達到 88% 或 90% 以上。但對於我們的模型，90% 永遠不會持續。所以利用率實際上與我們的目標相比還不錯，目標是 85%。奧倫？

Yes. Thank you for the question. Yes, indeed, what we mentioned in February release still holds in terms of the margin, and I'll repeat that. So what we said is that surely from the ramp-up that we see now, we expect a record all-time revenue for Q2. We expect to enjoy a lot, increased ramp in margins from the second half of this year. And what we mentioned last time that Q1, Q2 margin fall-through, like you define it, will be less than the model because, I mean, still, the margins will grow in dollars. But in terms of percentage, will be a little bit lower because Q1 and Q2, we are first facing increased amount of headcount and some spare parts. Headcount in order to hire the employees that we need to support that ramp, technicians and others and operators, to qualify them. And also spare parts and maintenance in order to qualify the new machines that arrive. So of course, once they will come into play in full steam, like was mentioned before, during H2 and, for sure, in full force in Q1, until that time that we will enjoy the full upside revenue, fall-through for Q1, as you see, it's pretty much a reasonable increase compared to Q4. So we still have some more costs that are not yet attributed to more revenues because those more revenues, you'll see them later in the year. And you already see that in our Q2 guidance.

是的。感謝你的提問。是的，確實，我們在 2 月份發布的內容中提到的利潤率仍然有效，我將重複這一點。所以我們所說的是，從我們現在看到的增長來看，我們預計第二季度的收入將創下歷史新高。我們預計從今年下半年開始，利潤率將大幅增加。我們上次提到的 Q1、Q2 利潤率下降，就像你定義的那樣，將低於模型，因為我的意思是，利潤率仍然會以美元計算增長。但就百分比而言，會略低一些，因為第一季度和第二季度，我們首先面臨增加的員工人數和一些備件。為了僱用我們需要的員工來支持該坡道，技術人員和其他人員以及操作員，以僱用員工，以使他們合格。還有備件和維護，以使到達的新機器合格。因此，當然，一旦它們全面發揮作用，就像之前提到的那樣，在 H2 期間，並且肯定會在 Q1 中全面發揮作用，直到那時我們將享受全部的上行收入，即 Q1 的失敗，如您所見，與第四季度相比，這是相當合理的增長。因此，我們還有一些成本尚未歸因於更多收入，因為這些收入更多，您將在今年晚些時候看到它們。您已經在我們的第二季度指南中看到了這一點。

So basically, Q1, Q2 will show growth in the dollar margin, in the dollar profit, but not as the 50% incremental model. But from Q3, we should see the full fruits of that.

所以基本上，第一季度、第二季度將顯示美元利潤率和美元利潤的增長，但不會像 50% 的增量模型那樣。但從第三季度開始，我們應該看到它的全部成果。

Okay. Very good. That's helpful. And just for my follow-up, Russell, given the severe capacity constraints that the industry is experiencing, particularly on mature legacy nodes, wondering -- and concerns that the supply constraints are going to continue into next year. Wondering how you're looking at the overall cycle from your vantage point, how you're kind of managing capacity. Any thoughts on the broader cycle would be helpful.

好的。很好。這很有幫助。就我的後續行動而言，拉塞爾，考慮到該行業正在經歷嚴重的產能限制，特別是在成熟的遺留節點上，我想知道 - 以及對供應限制將持續到明年的擔憂。想知道你是如何從你的角度看待整個週期的，你是如何管理能力的。任何關於更廣泛週期的想法都會有所幫助。

So clearly, I am not a market analyst. But we deal with looking at customer demand, customer forecast and we typically only invest in CapEx and capacity expansion when we have customers very committed to be using the expansion. There's obviously nothing worse than increasing capacity than having it sit idle, then the revenue margin fall through that Oren talks about doesn't occur. So we're very confident that the $150 million that we're investing for capital expansion will be fully utilized as the capacity comes online. Some of it is really off of commitments that customers have made to use the capacity. And some of it is just off of very strong relationship and a belief in forecast and the trust that they will hold to the forecast that they're giving.

很明顯，我不是市場分析師。但我們處理的是客戶需求、客戶預測，我們通常只在客戶非常承諾使用擴展時才投資於資本支出和產能擴展。顯然，沒有什麼比增加容量更糟糕的了，而不是讓它閒置，然後 Oren 談到的收入利潤率下降就不會發生。因此，我們非常有信心，我們為資本擴張投資的 1.5 億美元將在產能上線時得到充分利用。其中一些實際上是客戶對使用容量所做的承諾。其中一些只是出於非常牢固的關係和對預測的信念以及他們將堅持他們給出的預測的信任。

But I would say that at present, we're very confident that all of what we're buying and increasing will certainly be fully utilized in 2022. Certainly, it's maybe a little bit hard. But we're very committed and confident of the demand cycle that we have continuing.

但我要說的是，目前我們非常有信心，我們正在購買和增加的所有東西都將在 2022 年得到充分利用。當然，這可能有點困難。但我們對我們持續的需求週期非常堅定和有信心。

As I stated, in many areas, our growth is certainly outpacing the industry growth. So a favorable cycle is good for everybody. The old expression when the tide goes up, all ships go up, that's very, very true. But the fact that we're outpacing, I think our guidance for growth Q2 over Q1 against others that have guided already is probably on the very high end for quarter-over-quarter growth. And we really expect growth throughout the year.

正如我所說，在許多領域，我們的增長肯定超過了行業增長。所以一個有利的周期對每個人都有好處。潮水上漲時所有船隻都上漲的古老說法，這是非常非常正確的。但事實上我們正在超越，我認為我們對第二季度增長的指導相對於已經指導的其他人可能處於季度環比增長的非常高端。我們確實預計全年都會增長。

So the fact of having market share increases, which I think is pretty obvious that we're having, outpaces cyclicality and shows demand increases.

因此，市場份額增加的事實（我認為這很明顯）超過了周期性並表明需求增加。

The next question is from Richard Shannon of Craig-Hallum.

下一個問題來自 Craig-Hallum 的 Richard Shannon。

Well, great. Russell, Oren, your last comments about showing share gains. I suspect that was a broad statement, but let me ask it specific to RFSOI. You said you had a record quarter in the first quarter and are growing here. To what degree are you seeing the results here this year coming from share gains versus market growth? Obviously, 5G is a very good market here. But to what degree does share gains also add to it?

好吧，太好了。 Russell、Oren，你關於顯示股票收益的最後評論。我懷疑這是一個寬泛的陳述，但讓我問一下具體到 RFSOI 的問題。你說你在第一季度有一個創紀錄的季度並且在這裡增長。您認為今年的結果在多大程度上來自份額增長與市場增長？顯然，5G在這裡是一個非常好的市場。但股票收益在多大程度上也增加了它？

It's a little bit hard for me to quantify that. I'm quite convinced that there are share gains though, because if you look at the guidances of some major mobile players, they are flat to down Q1 to Q2, and we're stating that we're going up Q1 to Q2. So that is strongly attributed to share gain.

我有點難以量化。不過，我非常相信市場份額會有所增長，因為如果你看看一些主要移動廠商的指導，它們在第一季度到第二季度持平到下降，而我們說我們將在第一季度到第二季度上升。因此，這在很大程度上歸因於股票收益。

Now why does that become a little bit difficult for me to quantify? Some of the growth is obviously attributed to the movement from 3G or 4G into 5G, that if you're going from 4G to 5G, you're looking to 30% to 40% increase in content. From 3G to 5G, it's higher. So the revenue growth that we see is attributed to both, it's share gain as new customers gain share and it's content increase. So it's very hard for me to quantify from one quarter to the next.

現在為什麼這對我來說變得有點難以量化？一些增長顯然歸因於從 3G 或 4G 到 5G 的轉變，如果你從 4G 到 5G，你希望內容增加 30% 到 40%。從3G到5G，更高了。因此，我們看到的收入增長歸因於兩者，隨著新客戶獲得份額和內容增加，份額增加。所以我很難從一個季度到下一個季度進行量化。

But I'm quite confident that we're gaining share because some of the customers that we're dealing with are having very, very big revenue growth, which is bigger than the market growth itself, the overall market growth. So the -- but there is a content increase as well on the shift to 5G. And the amount of 5G that's being used presently is substantially higher. I think it went from somewhere, what, about -- from what analysts say, from 250 million units of 5G in 2020 to this year at expected 500 million units plus/minus. So that convolutes the statement.

但我非常有信心我們正在獲得份額，因為我們正在處理的一些客戶的收入增長非常非常大，這比市場增長本身，整體市場增長還要大。所以——但是在向 5G 的轉變中內容也有所增加。目前正在使用的 5G 數量要高得多。我認為它從某個地方，什麼，大約 - 從分析師所說的，從 2020 年的 2.5 億台 5G 到今年預計的 5 億台正/負。所以這使陳述令人費解。

But I would certainly say that the customers that we're growing with are either gaining share themselves or growing in 5G.

但我肯定會說，與我們一起成長的客戶要么自己獲得份額，要么在 5G 中成長。

Okay. And Russell, to my question on the last conference call, you answered you thought your share in RFSOI was somewhere in the 20s. Where do you think that can go? I mean, is this something where you think you get into the 30s over the next couple of years? Any way you'd either qualify or quantify that answer would be great.

好的。拉塞爾，對於我在上次電話會議上提出的問題，你回答說你認為你在 RFSOI 中的份額在 20 多歲左右。你認為它可以去哪裡？我的意思是，這是你認為你在未來幾年進入 30 年代的事情嗎？您以任何方式限定或量化該答案都會很棒。

Our expectation is well into that, we're in the 30s. I don't know that I would be able to quantify that as I'm not necessarily giving a long-term forecast. But if I were to look at the demand that's being placed in the customer growth expectations, certainly, I think the 30s is very realistic.

我們的期望很好，我們在 30 年代。我不知道我能否對此進行量化，因為我不一定會給出長期預測。但是，如果我要看一下客戶增長預期中的需求，當然，我認為 30 年代是非常現實的。

Okay. That's helpful. One last question for me, I'll jump out the line here. We've seen some pricing of raw materials, whether they are substrates or other things that are going up here. When asked in the past here about the tightness you've seen from a capacity point of view, you said you wouldn't necessarily -- you wouldn't generally raise prices here. But are you seeing raw material prices rising to you? And are you able to pass those along to your customers in any manner?

好的。這很有幫助。最後一個問題，我會跳到這裡。我們已經看到了一些原材料的定價，無論是基板還是其他正在上漲的東西。當過去在這裡被問及你從產能的角度看到的緊張情況時，你說你不一定——你通常不會在這裡提高價格。但是您看到原材料價格上漲了嗎？你能以任何方式將這些傳遞給你的客戶嗎？

Everybody has price increases from time to time. We're not seeing any substantial increase in raw materials. Certainly, there is increased cost in some infrastructure, power is going up. But the point of ASP increases, we are -- we have with -- almost across the board, we have ASP increases ourselves. And some of the ASP increases really deals with just very strong customer relationships. And they're understanding that to increase capacity, we have to make sure that there's an ROI on it. So we have a good cooperation with customers. And I think that the Q3, Q4 will see higher ASPs. I don't think, I know we will, from the base of customers that we're serving.

每個人都會不時漲價。我們沒有看到原材料有任何實質性的增加。當然，一些基礎設施的成本增加了，功率也在上升。但是 ASP 增加的點，我們 - 我們已經 - 幾乎全面，我們自己的 ASP 增加了。一些 ASP 的增長確實與非常牢固的客戶關係有關。他們明白要增加容量，我們必須確保它有投資回報率。所以我們與客戶有良好的合作。而且我認為第三季度、第四季度的平均售價會更高。我不認為，我知道我們會，從我們服務的客戶群來看。

The next question is from Mark Lipacis of Jefferies.

下一個問題來自 Jefferies 的 Mark Lipacis。

Great. I had a few. The first one on the -- there was an increase in the financing and other expense line item in the income statement. Can you just review what was the driver of that? And how should we think about modeling that line item going forward?

偉大的。我有幾個。第一個 - 損益表中的融資和其他費用項目有所增加。你能回顧一下這是什麼驅動因素嗎？我們應該如何考慮對該行項目進行建模？

Thank you, Mark, for the question. Yes, you shouldn't model it going forward. It was a onetime nonrecurring item which was mostly attributed to a journal entry associated with the yen denominated asset that was impacted in Q1 by a movement of the Japanese yen against the dollar that moved by coincidence between December 31 and March 31 from 102 to 110. There is no cash flow impact of that and there was no economic exposure related to that. Hence, we didn't do any hedging for that because this is just a GAAP balance sheet item, that the changes of it impacting the P&L, but there is no cash flow or economic exposure here. So basically, this is not expected to recur because we made changes during Q2 already to this JPY asset that the terms of this JPY asset that will result in that there will be no finance income even in the P&L for what was. So it should be actually no.

馬克，謝謝你的提問。是的，您不應該對其進行建模。這是一個一次性的非經常性項目，主要歸因於與日元計價資產相關的日記賬分錄，該資產在第一季度受到日元兌美元匯率變動的影響，該匯率在 12 月 31 日至 3 月 31 日期間巧合地從 102 升至 110。沒有現金流影響，也沒有與此相關的經濟風險。因此，我們沒有對此進行任何對沖，因為這只是一個 GAAP 資產負債表項目，它的變化會影響損益表，但這裡沒有現金流或經濟風險。所以基本上，這不會再次發生，因為我們在第二季度已經對該日元資產進行了更改，該日元資產的條款將導致即使在損益表中也沒有財務收入。所以實際上應該不是。

Got you, Oren. That's very helpful. That's very helpful. And the second question I had, Russell, maybe for you. Some semiconductor device makers are talking about getting longer lead time orders from their customers, which is, I think, often normal at this part of the cycle. But some are talking about again, making those orders noncancelable. How do you think about this idea of having noncancelable orders on your books? And maybe if you could put that in the context of your earlier comment that you don't like to add capacity unless your customers are committed. What is that -- could you maybe describe what does that mean that they're committed? Because I understand adding capacity can take a long time. And that suggests that there's a longer visibility into those orders for that capacity that's going to get built in the future. And then I have one last follow-up after that.

明白了，奧倫。這很有幫助。這很有幫助。我的第二個問題，羅素，也許是給你的。一些半導體設備製造商正在談論從他們的客戶那裡獲得更長交貨期的訂單，我認為這在周期的這個階段通常是正常的。但有些人又在談論，使這些訂單不可取消。您如何看待在您的賬簿上添加不可取消訂單的想法？也許如果你可以把它放在你之前評論的上下文中，你不喜歡增加容量，除非你的客戶承諾。那是什麼——您能否描述一下他們承諾的意思是什麼？因為我知道增加容量可能需要很長時間。這表明對於未來將要建立的容量的訂單有更長的可見性。之後我進行了最後一次跟進。

Mark, so actually -- it's Oren. Actually, in all our terms with our customers, it's a noncancelable PO, meaning they cannot can sell the purchase orders even today. It's already that way for years. And it was very rare occasions that customers really ask to cancel and very rare. They do have a right some time in some of the -- for some of the customers for some of the purchase order to ask to hold a certain wafer, a certain wafer that are in the line to hold it for a few days, not more than usually 30 days or 90 days and then continue the work. But to cancel a PO or to cancel a commitment, this is not even an option that is given. And it's acceptable for us, at least with our customers, and history shows, I mean, I'm here 22 years in different functions, and so maybe less than a handful of request, not request -- less than a handful of cases where we agreed to, like you say, cancel a PO or something like that. I mean, it does not happen.

馬克，實際上——是奧倫。實際上，在我們與客戶的所有條款中，這是一個不可取消的 PO，這意味著他們即使在今天也不能出售採購訂單。多年來一直如此。客戶真正要求取消的情況非常罕見，而且非常罕見。他們確實有一些時間 - 對於一些採購訂單的一些客戶要求保留某個晶圓，某個晶圓在生產線上保留幾天，而不是更多比通常 30 天或 90 天，然後繼續工作。但是要取消 PO 或取消承諾，這甚至不是一個選項。這對我們來說是可以接受的，至少對我們的客戶來說是這樣，歷史表明，我的意思是，我在不同的職能部門工作了 22 年，所以可能少於少數請求，而不是請求——少於少數情況就像你說的，我們同意取消採購訂單或類似的東西。我的意思是，這不會發生。

And as far as long-term commitments, there are several mechanisms that we have used and continue to use on long-term commitments. One is prepayment that only goes back against a certain amount of wafers over certain periods of time. Others are contracts that ensure a minimal amount of what the customer must buy and a maximum amount of what we must supply. And then it comes a third part, and that's really just our trust with certain customers on their word of what they're going to be buying and that they will buy those amounts.

就長期承諾而言，我們已經使用並將繼續使用多種機制來實現長期承諾。一種是預付款，僅在特定時間段內針對一定數量的晶圓進行支付。其他合同確保客戶必須購買最少數量的商品，而我們必須提供最多數量的商品。然後是第三部分，這實際上只是我們對某些客戶對他們將要購買的東西以及他們將購買這些數量的承諾的信任。

Got you. That's very helpful. And then last question, if I may. I understand that you're adding capacity in your higher-margin products. For the existing capacity that you had, is there like an ability to shift that to higher-margin products? And can you, Russell, just describe what -- you talked about potentially getting higher prices. Can you just describe how the pricing process works? Is this something that happens annually and if you happen to catch it, the timing on an up cycle then you're in an advantaged position over -- or if you're in a down cycle, you're talking about pricing and you're -- it kind of sets you up for a different scenario -- profitability scenario for the next 12 months? Can you just review how that process works? And then that's all I had.

明白了這很有幫助。然後是最後一個問題，如果可以的話。我了解到您正在增加利潤率較高的產品的產能。對於您擁有的現有產能，是否有能力將其轉移到利潤率更高的產品？拉塞爾，你能不能描述一下——你談到了可能獲得更高的價格。你能描述一下定價過程是如何運作的嗎？這是每年都會發生的事情嗎？如果你碰巧抓住了它，在上升週期的時機，那麼你就處於優勢地位——或者如果你處於下降週期，你就在談論定價，你重新 - 這有點讓你為不同的場景做好準備 - 未來 12 個月的盈利場景？你能回顧一下這個過程是如何運作的嗎？然後這就是我的全部。

So I can talk about our philosophy and how we work it. And we have a certain run rate with any given customer with a pricing that we've given them. For those run-rates, we don't increase prices. When there's a request from customers for increasing the run-rate, independent of the platform, and there's a competition for that incremental capacity, we'll agree with customers for a raised price in order to give incremental increase.

所以我可以談談我們的理念以及我們如何工作。我們對任何給定的客戶都有一定的運行率，我們給他們定價。對於這些運行率，我們不會提高價格。當客戶要求獨立於平台提高運行率，並且存在對增量容量的競爭時，我們將與客戶同意提高價格以提供增量。

Obviously, if you see revenue going up, as it is this year and as we forecast it to continue through the year, there's incremental capacity that's being used, and that incremental capacity is really at a premium.

顯然，如果你看到收入在增加，就像今年一樣，而且我們預測它會持續到今年，就會有增量產能被使用，而增量產能確實非常寶貴。

Other customers, just in order to ensure capacity over time, will agree to higher prices. That's good for them because margin dollars are margin dollars. To maximize margin percent and reduce margin dollars by not being able to get increased capacity doesn't make sense. I mean, it's the dollars that you're dealing with. And it's from both sides. It's the same with us.

其他客戶，只是為了隨著時間的推移確保產能，會同意更高的價格。這對他們有好處，因為保證金美元就是保證金美元。通過無法獲得增加的容量來最大化利潤百分比和減少利潤美元是沒有意義的。我的意思是，你要處理的是美元。它來自雙方。我們也一樣。

So it works in both ways. Hopefully, that answered your question.

所以它以兩種方式起作用。希望這回答了您的問題。

The next question is from Cody Acree of Benchmark.

下一個問題來自 Benchmark 的 Cody Acree。

Just a couple of quick ones. The lead times, Russell, are you -- have you seen any extension in your lead times, delivery lead times?

只是幾個快速的。交貨時間，Russell，你有沒有看到交貨時間、交貨時間有任何延長？

Certainly, if you were to look at the middle of 2020, when everything was really down for a variety of reasons, cycle time when you're at very low utilization is phenomenal. If you -- that's what you're talking about, I think, is our cycle time, right?

當然，如果你看看 2020 年年中，由於各種原因，一切都真的很糟糕，當你處於非常低的利用率時，週期時間是驚人的。如果你 - 這就是你所說的，我想，是我們的周期時間，對嗎？

Yes, it is. Yes, it is.

是的。是的。

So yes, our cycle times have extended a bit. That's normal as you're going up in utilization. I don't think that we're out of the ballpark on cycle times, but the higher the utilization is, the higher cycle times become.

所以是的，我們的周期時間延長了一點。這很正常，因為您的利用率正在上升。我不認為我們在周期時間上超出了範圍，但利用率越高，週期時間就越長。

Very good. I guess as you look at the capacity that's coming on, maybe for Oren, the expense of the capacity or the carrying cost of the capacity to your cost of goods sold. I would think that as that production capacity goes into revenue, it starts to generate revenue that, that's when you would transfer the costs into your income statement into cost of goods sold. And therefore, as it starts generating revenue, you're starting to see those margins decline or margin pressure. But Oren, it sounds like are you accounting for that, the carrying cost of the additional capacity differently?

很好。我想當你看到正在發生的容量時，也許對 Oren 來說，容量的費用或容量的持有成本與你的銷售成本有關。我認為，隨著生產能力轉化為收入，它開始產生收入，那時你會將成本轉移到損益表中，轉為銷售商品成本。因此，當它開始產生收入時，您會開始看到這些利潤率下降或利潤率壓力。但是 Oren，聽起來你是否在考慮額外容量的持有成本？

No. That's true what you're saying, but you have to know that when you have additional cost, for example -- let's take example. In Q1, we had to hire more people in order to train them, operator technicians in order for them to be ready for the Q3, Q4 increased capacity, right? So when you hire those people and you pay them payroll in Q1, unfortunately for me as a CFO, I need to pay that payroll. So when you pay the payroll, you cannot capitalize it to the cost of the project or to the cost of the capital, and you cannot carry it forward and not recognize it in the P&L at the time you pay the payroll. It's not a capitalized item.

不，你說的是真的，但是你必須知道，當你有額外的成本時，例如——讓我們舉個例子。在第一季度，我們不得不僱傭更多的人來培訓他們，操作員技術人員，以便他們為第三季度、第四季度增加的產能做好準備，對吧？因此，當你僱用這些人並在第一季度向他們支付工資時，不幸的是，作為首席財務官，我需要支付這筆工資。因此，當您支付工資單時，您不能將其資本化為項目成本或資本成本，並且您不能結轉它並且在支付工資單時不在損益表中確認它。它不是大寫項目。

Same for spare parts. We need to buy more spare parts just in order to qualify the new machines. You cannot capitalize it to the cost of the machine according to GAAP.

備件也一樣。我們需要購買更多備件才能使新機器合格。根據 GAAP，您不能將其資本化為機器成本。

So actually, what happens is before you start to enjoy those revenue, those increased revenue, you already suffered from the extra cost.

所以實際上，在你開始享受這些收入之前，那些增加的收入，你已經承受了額外的成本。

I see. I see. And Russell, lastly, on your discussion of share gains, everybody is scrambling right now for supply, almost regardless of where you are in the food chain. I know in the past, historically, you've kind of had a policy that you were not the second source. You were not kind of a buffer supply of your products to your customers for any given designs. Is that still the case? Or have customers been coming to you to help to fill the gap they might be getting from others? And if that's the case, how sticky do you think that share gain may be?

我懂了。我懂了。拉塞爾，最後，關於你對份額收益的討論，現在每個人都在爭搶供應，幾乎不管你在食物鏈中的哪個位置。我知道過去，從歷史上看，你有一種政策，你不是第二個來源。對於任何給定的設計，您都不是向客戶提供產品的緩衝供應。現在還是這樣嗎？還是客戶來找你幫助填補他們可能從其他人那裡得到的空白？如果是這樣的話，你認為股票收益的粘性有多大？

It's a very good question. Certainly, there's opportunities that we've been given because people have been put on allocation. However, before we would accept that, it's off of committed and guaranteed capacity usage from the people. So they would be committing to X amount of wafers per month over periods of time. So that's the first part of it.

這是一個很好的問題。當然，我們得到了一些機會，因為人們被分配了。然而，在我們接受之前，它已經脫離了人們承諾和保證的容量使用。因此，他們將在一段時間內每月承諾 X 數量的晶圓。這就是它的第一部分。

But the bulk of what we're growing is existing customers that are growing in their markets. And hence, the share gain deals there. In the case of power management, we're really gaining a lot of new opportunities. Some of it's taking away customers from other suppliers for platforms that are superior. Some of it really was initiated because of customers that are now looking for other suppliers not for an over -- in our case, not that we would use it as an overflow supply, but it would be platforms that would be qualified and be used with us for their needs.

但我們正在增長的大部分是在他們的市場中增長的現有客戶。因此，那裡的股票收益交易。在電源管理方面，我們確實獲得了很多新機會。其中一些正在從其他供應商那裡搶走優質平台的客戶。其中一些確實是因為客戶現在正在尋找其他供應商而不是結束 - 在我們的例子中，不是我們將其用作溢出供應，而是將是合格的平台並與我們滿足他們的需求。

The very fact of being analog, it's not so easy to just be an overflow supply. The more specialized the device outputs are, the more difficult it is to just go to supplier B for 10% overflow, because the qualification to their customers of analog parts, it's quite extensive. So the -- it's not really something that's done. It could be done with the mixed-signal part. It could be done that's really much more digital or with pure digital parts or parts that have huge digital content. But it's very difficult for a customer to use us for overflow with the type of products that we supply. Once they're qualified, they're really -- whatever SKUs are being sold are pretty much our SKUs, no matter what.

作為模擬的事實，僅僅作為一個溢出供應並不是那麼容易。設備輸出越專業，越難去供應商 B 獲得 10% 的溢流，因為他們對模擬部件客戶的資質相當廣泛。所以 - 這並不是真正完成的事情。這可以通過混合信號部分來完成。可以做到真正更加數字化或使用純數字部分或具有大量數字內容的部分。但是客戶很難使用我們提供的產品類型。一旦他們合格，他們就真的 - 無論出售的 SKU 幾乎都是我們的 SKU，無論如何。

Great. Russell, and then lastly, just any of this with your customers of wanting to guarantee capacity or at least make commitments to wafer demand, has there been any contribution of capital to -- for guaranteed capacity?

偉大的。 Russell，最後，關於想要保證產能或至少對晶圓需求做出承諾的客戶，是否有任何資本貢獻 - 保證產能？

Yes.

是的。

Any color?

任何顏色？

I'm sorry, please?

對不起，好嗎？

Any color?

任何顏色？

I think you can see it on the financial statement. Oren?

我想你可以在財務報表上看到它。奧倫？

Yes. If you look at the balance sheet, you'll see actually -- and by the way, I mentioned it in my script, in my prepared remarks, that we have $10 million and $8 million increase in the line called in the balance sheet deferred revenues and customer prepayment, which is -- and like I mentioned, customers that ask for additional capacity. So they paid upfront, which is not revenue, and this is why it's in the balance sheet and not in the P&L.

是的。如果你看一下資產負債表，你會發現實際上 - 順便說一下，我在我的腳本中提到過，在我準備好的發言稿中，我們在資產負債表中稱為遞延的行中增加了 1000 萬美元和 800 萬美元收入和客戶預付款，就像我提到的那樣，客戶需要額外的容量。所以他們預付款，這不是收入，這就是為什麼它在資產負債表而不是損益表中。

Mr. Ellwanger, would you like to make your concluding statement?

Ellwanger 先生，您要作總結髮言嗎？

Certainly. Thank you. Once again, I really do thank all of you for your participation and interest in Tower. We're very excited about where we're at, extremely thrilled with the opportunities in front of us and expect to have a very good ride this year and next year and are very happy to have you along with us for the ride.

當然。謝謝你。再次感謝大家對 Tower 的參與和興趣。我們對我們所處的位置感到非常興奮，對我們面前的機會感到非常興奮，並希望今年和明年有一個非常好的旅程，並且很高興有你和我們一起騎行。

We are very welcoming to further interactions in many, many ways. We have multiple upcoming events. We'll host one-on-one meetings at the following conferences. On May 17, we have the 18th Annual Needham Virtual Technology Media Conference. On May 21, we're attending the Oppenheimer Israeli Annual Virtual Conference. On June 2, we're at the 18th Annual Craig-Hallum Institutional Investor Conference. And on June 8, we're at the Needham & Company's Fifth Annual Automotive Technology Day. So certainly, we would encourage all and any to sign up for those conferences and participate in the one-on-one sessions or three-on-one, five-on-one, whatever they turn out to be, sometimes 10-on-one, twenty-on-one. But seriously, we encourage your attendance there. But not just that, we're very open to having discussions at any time about what we're doing, how the market is moving and our position within it.

我們非常歡迎以多種方式進行進一步的互動。我們有多個即將舉行的活動。我們將在以下會議中舉辦一對一的會議。 5 月 17 日，我們舉辦了第 18 屆年度李約瑟虛擬技術媒體大會。 5 月 21 日，我們將參加奧本海默以色列年度虛擬會議。 6 月 2 日，我們將參加第 18 屆年度 Craig-Hallum 機構投資者大會。 6 月 8 日，我們迎來了 Needham & Company 的第五屆年度汽車技術日。所以當然，我們會鼓勵所有人和任何人報名參加這些會議並參加一對一會議或三對一，五對一，無論結果如何，有時是 10 對 -一、二十對一。但說真的，我們鼓勵您參加那裡。但不僅如此，我們非常願意隨時討論我們在做什麼、市場如何發展以及我們在其中的地位。

So just in closing, we're looking forward to a very good year and very happy to share the results and rewards with you. Thank you very, very much.

因此，就在最後，我們期待著美好的一年，並非常高興與您分享成果和回報。非常非常感謝你。

Thank you. This concludes the Tower Semiconductor first 2021 results conference call. Thank you for your participation. You may go ahead and disconnect.

謝謝你。 Tower Semiconductor 2021 年第一次業績電話會議到此結束。感謝您的參與。您可以繼續並斷開連接。