ACM Research, Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the ACM Research Second Quarter 2022 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Gary Dvorak, Managing Director of the Blue Shirt Group. Mr. Dvorak, you may begin.

Thanks, Carmen, and good morning, everyone. Thank you for joining us on today's call to discuss second quarter 2022 results. We released results before the U.S. market opened today. The release is available on our website as well as through Newswire Services. There's also a supplemental slide deck posted to the investor portion of our website that we'll reference during our prepared remarks. On the call with me today are our CEO, Dr. David Long, our CFO, Mark McKechnie, and Lisa Fong, the CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide two. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain of the financial results that we provide in this call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized gain or loss in trading securities. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR section of our website. With that, let me now turn the call over to David Wong, who will begin with slide three. David?

Thanks, Gary. Good afternoon, everyone. and work on the ACM research second quarter 2022 earning conference call. Please turn to slide three. Our second quarter results represent a solid recovery following the Shanghai COVID restriction this spring. We deliver strong revenue and profitability as our facility returned to normal operations. As we had expected on the Q1 call, the restriction turned out to be temporary. The China Star facility was reopened on the closed loop production process in later April. As of July 1st, operations in Shanghai were largely back to normal. I want to sincerely thank our employees, business partners, and the customers for their dedication as we navigated the COVID pandemic. Let me share some financial highlights for the quarter. Revenue of 104 million was up 94%. Revenue include the shipment of tools in the second quarter that could not be delivered in the first quarter due to the later March restriction in Shanghai. A strong product cycle from ECT and incremental business from new customers also contribute to their growth. Shipments were $112 million compared to $82 million last year. Gross margin was 42.4% within our normal range of 40 to 45%. Operating margin was 21.1%. We ended the quarter with $469 million of cash, equivalent end-time deposit. For the first half of the year, revenue grew by 50%. cleaning tools grow 27%, while ECP tools grow 490%, and contributed 20% of the sales. Demand from our top China customer remains strong. We believe many of our customers are in the early to middle stage of multi-year expansion plans, and we see good growth of opportunity for the next several years. We had a growth share of China market with our Canadian tools based on our technology, good execution, and new products. We had incremental revenue contributions for ECP product cycle for both front end and back end, and with multiple customers. We are gaining market share in China with both ECP and advanced packaging products. Over time, we target 50% of market share in plating in China and 25% share globally. We target a similar trajectory for our furnace product cycle in the coming years, and we are building a longer-term opportunity with the introduction of two new product categories which are on track for later this year. I will now highlight a few recent announcements. On April 21st, we announced that our 18-chamber 300mm Ultra C6 single wafer tool was qualified for mass production by a mainstream memory chip manufacturer in China. This tool provides 30% more throughput than our 12-chamber tool, but with a similar full printer and is an important tool to support higher volume production line and one of our key memory customers. We expect the 18-chamber cleaning platform to play an important role with this customer and others for 3D net and DREP. On July 12, we introduced a new post-CMP cleaning tool for silicon and silicon carbide wafer substrate manufacturing. This tool expands our cleaning product portfolio by serving as a cleaning step following chemical mechanical polishing CMP is used in manufacturing high-quality substrates. I will now provide some highlights of major customer initiatives. I will start with the U.S. We recently delivered two Ultra-C SAPS-5 12-chamber continuing tools to the fab of a major U.S. semiconductor manufacturer. This is a great achievement for ACM, a testament to our technology and our North American sales and marketing operations. We deliver the first tool in June, which our customer is evaluating based on its unique technology feature. We also deliver a second SAPS5 tool in the middle of July. Our target is to qualify both tools and put them into production by the end of the year. We have staffed a full-size service team in the US and we now have a visiting team of engineering from Shanghai to support installation and evaluation. We believe a success here could lead to follow-up orders with this customer at several sites and perhaps lead to interest from other major customers in US and Europe. Next, we remain engaged at China-based facility of three larger international semiconductor manufacturers. The first is a global IDM with a China-based packaging facility. We delivered the first ultra-CPR wet stripping system in Q4 2021, followed by a second tour in Q1, and we received additional order for delivery later this year. We're hopeful that a success with our first product could lead to a broader adoption other WLP product at this important customer the second is a regional Asia based semiconductor player with a China based fab we deliver ultra ECP map development the tool in q1 and the customer has began his evaluation with our service and process team and the third is a major global semiconductor manufacturer with China fab we deliver ultra and we are moving forward with evaluation. Looking into second half of the year, demand for our tool is strong and we have good visibility through year end and we are starting to receive orders for the first half of next year. We expect solid growth in 2022 and beyond from our core cleaning products. The ramp of our ECB tools, and increased shipment of our furnace products. We are committed to gaining additional share in the 8 billion market addressed by our current products. We have two important new product extensions. In cleaning, we have a supercritical CO2 dry tool, and in furnace, we have ARD. Both are on track to be delivered in the second half of this year. Furthermore, we are on track to double our addressable market opportunity with upcoming introduction of two new product category also in the second half of this year. Now let's discuss our capacity expansion plans. We continue to add capacity to our transit facility. We moved our past inventory to our third building which freed up additional 5,000 square meter as our second building for final assembly. We remain committed to grow our production capacity to 625 million this year, and our Lingdong construction project is on track. We plan to complete the first production building in the beginning of 2023, with initial production to start by middle year. We are also planning R&D center in Wuxi and Beijing to support several key customers. and we are considering a more meaningful investment with a potential production facility in South Korea. We currently have about 100 R&D engineers and supporting staff together with a production facility. A larger presence in South Korea with a meaningful production capacity will establish a local full printer near two major players and provide our global customer with a secondary production center to ensure continuity. Before I provide outlook, I'm pleased with the progress with our new auditor. On May 19, we appointed PCLB compliant auditor Amanino as our independent public accounting firm for our first year 2022 audit. On June 30, this was ratified by our shareholders. Following our 2022 annual auditing and finding of 10K, we expect to be removed from the list published by the SEC pursuant to the U.S. holding foreign company accountable actor. I will now provide our outlook. We have a strong order through year end. Due to a tight supply chain environment, we are keeping our outlook unchanged in the range of 365 to 405 million. The range of outlook considered among other factors, continued expansion of production and shipping operation in Shanghai, the absence of unexpected interruption of a supply chain, and continued demand by our customers. Now, let me turn the call over to Mark, who will review detail on first quarter results. Second quarter results. Mark, please.