ACM Research, Inc.

Good day and thank you for standing by. Welcome to the ACM Research Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gary Dvojcak. Please go ahead.

Thank you, Operator, and good day, everyone. Thank you for joining us to discuss third quarter 2023 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There's also a supplemental slide deck posted in the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, Dr. David Long, our CFO, Mark McKechnie, and Lisa Fung, 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 on this call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized loss on short-term investments. 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, and to slide 12. With that, let me now turn the call over to David Wong, who will begin with slide three. David, go ahead.

Thanks, Gary. Hello, everyone, and welcome to ACM Research. Third quarter 2023 earning conference call. Please turn to slide three. For the third quarter, revenue was $168.6 million, up over 26% from the same quarter last year. Shipments were a record $213 million, up over 31%. Gross margin was 52.9%, and operating margin was 26%. For the first nine months, we grew revenue by 38%. This is in light of a decline in global WFE spending. We attribute our outer performance to market share gain and the penetration of new products and new customers and general healthy market for mature nodes in China. Let me touch on each of this, beginning with the mature node investment in China. China's domestic material nodes, WFE, investment remains solid. We believe due to China's goal to reduce the gap between its domestic material nodes capacity and end-market consumption of semiconductor chips. We see continued investment in 28 nanometer, 45 nanometer, and power devices for EV market. The ramp of EV production in China is a driver for capacity investment in power devices and other trading edge devices. This creates a tailwind for us, and we believe we are still in early stage of China's semiconductor capacity expansion plan, which we believe will continue to be a growth driver for us. As China intensify effort to boost its domestic semiconductor capacity capability, we believe we are well positioned to benefit and further increase our market share due to our strong market position, differential technology, and multi-product portfolio. Moving to products, please turn to slide four. Single wafer cleaning, Tahoe, and the semi-critical cleaning grow 33% in Q3 and 42% year-to-date. In the last few years, we introduced and began ramping our semi-critical product line, including AutoBench, And then last year, we introduced advanced and high-temperature SPM tools. In Q2, we introduced our supercritical CO2 drying and cleaning tool. This quarter, we introduced our ultra-CV vacuum cleaning tool to meet the flex removal requirements for chiplets and other advanced 3D packaging structures. already received a purchase order for the new tool from a major Chinese manufacturer, which we expect to deliver in the first quarter of 2024. ACM has one of the broadest Canadian product portfolio in the industry, covering nearly 90% of all Canadian process staff in both memory and logic devices applications. We believe this product portfolio will play a key role among mature nodes development in China and advanced nodes in our international effort going forward. ECP, furnace and other technology grew 4% in Q3 and 24% year to date. Growth in this category was driven primarily by ECP product cycle with some contribution from furnace. Our high temperature anneal and LPCVD furnace including silicon nitride, and poly are in production at key customers. And ALD Furnace is under evaluation on a multiple customer side. Advanced packaging, excluding ECP, but including service and spare, grew 12% in Q3 and 40% year to date. This category includes a range of packaging tools, including coder, developer, scrubber, PR stripper, and web etchers. and service spare parts. ACM is the only customer that offers both a full set of web tools and advanced plating tools. We believe that advanced packaging will become more important as the industry looks for packaging innovations such as 2.5D and 3D in the proposal and fan out to drive a higher performance for new applications such as AI and GBT. Finishing up on product, we continue to make a good progress on sales effort with our new track and PCVD platforms. We're in active discussion with our key customer and we plan to deliver more evaluation tools this year. Similar to our cleaning, plating, and product line, our track and PCVD platforms have a proprietary technology that we believe will make them winner with the major customer, both in China and outside China. I'm pleased to report good progress with our track tool evaluation at the customer side. We believe our track tool with the new proprietary architecture design will meet the requirements of a higher throughput of the next generation lithography tool. Moving on the customer, please stand to slide five. We continue to make progress on customer both inside China and internationally. In China, we believe ACM tools are now used by near all the semiconductor manufacturers. We ourselves and the service team are working to expand the deployment of each of our major product lines across our growing customer base. In addition to our current customers, we are also seeing a good number of full-funded new entrants. Our team has done a good job of getting traction for our product. with these customers. These are the new customers. This will be reflecting our shipment this year until customer acceptance at a later date. In the U.S., we announced this morning a purchase order for another product from a large U.S. manufacturer, the O2C-B backside cleaning and bevel etcher tool. This tool combines backside cleaning and bevel etch function The tool is expected to be shipped to their U.S. facility in the second quarter of 2024. And as to this customer's ongoing evaluation of two SAP's Canadian tools, we believe this demonstrates a deepening relationship, which we hope will result in demand for additional ACM tools. Furthermore, we believe this enhances ACM's brand and positions us to attract new opportunities with other major global customers. In Europe, early this year, we announced our order for our first evaluation tool, the Ultra-C75 cleaning tool from a major European-based global semiconductor manufacturer. We delivered the tool about four weeks ago, and our team have already started the installation process. To support our growth initiatives, we continue to make progress on our facility expansion in China under the regime presented in slide 6. In China, construction of Lingang production and R&D center is nearly complete and is expected to begin initial production early 2024. In Korea, as noted in the prior course, we have increased our commitment to support our objective to address the global market. We now have more than 150 employees in Korea with three facilities including sales and administration, development labs, small scale production, and a clean room to support the wafer test for customer evaluation. And we are making plans to build a new factory on the land we purchased earlier this year. We believe a strong commitment to Korea will improve our relationships with our key Korean customers. Our resource in Korea will also offer another base for supporting international customers in the US, Europe, and other parts of Asia. In the US, we released a facility in Oregon earlier this year to add to our service support and their demonstration capability for R&D and customer activity in the region. As a reminder, for 2023, we expect to spend about $75 million . This includes continued investment in our Lingang facility, remodeling for a new headquarter for ACM Shanghai, and our investment in Korea and the U.S. I will now provide our outlook for the full year 2023. Please turn to slide nine. We are updating our 2023 revenue outlook to be in a range of $520 to $540 million versus our prior range of $515 to 585 million. The range of outlook reflects, among other things, management's current assessment of the continued impact from international trade policy together with the various expected spending scenario of key customer, supply chain constraint, and the timing of acceptance for first tools on the evaluation in the field. Let me turn the call over to our CFO, Mark, who will reveal details of our third quarter results. Mark, please.