ACM Research, Inc.

Good day and thank you for standing by. Welcome to the ACM Research First Quarter 2024 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 the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded I would now like to hand the conference over to speakers today. Steve Paleo, Managing Director of the Blue Shirt Group. Please go ahead.

Good day, everyone. Thank you for joining us to discuss first quarter 2024 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 is also a supplemental slide deck posted on the investor section of our website that we will reference during our prepared remarks. On the call with me today, our CEO, Dr. David Wong, our CFO, Mark McKechnie, and Lisa Fang, our 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 filings with the SEC. 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 gain-and-loss short-term investment. 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. Let me turn the call over to David Wong, who will begin with slide 3. David?

Thanks, Stephen. Hello, everyone, and welcome to ACM Research. the first quarter 2024 earning conference call. Please turn to slide three. I'm pleased with our results. A solid start to the year for the first quarter. Revenue was $252.2 million, upper 105%. Profitability was good, with a gross margin of 52.5% and operating margin of 26.2%. And we ended the quarter with just over $288 million of cash and time deposit. Shipping for the first quarter was $245 million, upper 175%. As expected, first quarter shipment was higher due to delivery of finished goods that were not shipped in the fourth quarter of last year. And we also had an exclusion from our production team during the Lunar New Year holiday period. I will now provide a detail on product. Please turn to slide four. Revenue from a single wafer cleaning, Tahoe, and a semi-critical cleaning product grew 199% in Q1, and it represented 72% of the total revenue. ACM offers what we believe is the industry's most comprehensive cleaning portfolio. We support near 90% of all cleaning process steps for memory and logic devices. At the high end, we believe our flagship steps, Tahoe and the Tebow single wafer cleaning products, deliver a technical feature not available from any of our competitors. At the low end, Our semi-critical tool, including AutoBench, have driven incremental growth for our cleaning category over the past two years. We have recently made progress in SPM market, which we believe was resulting in sheer gain and growth in our cleaning business starting this year. Let me provide more detail. SPM stands for sulfuric acid. peroxide mixing. These steps are normally used to clean wafer after photoresistor removal process and post-CMP cleaning. We estimate the total available market for the TEM for SPM tool is 25 to 30 percent of the total front-end cleaning market. Today, SPM has been a small contribution to our business. our SPM tools, including Tahoe low-temperature single-wafer SPM, and now our high-temperature single-wafer SPM tool. Here now, we believe there has been only one major supplier of high-temperature single-wafer SPM tools. Our engineering team has recently made greater technical progress with our high-temperature tool, and we believe HCM can now participate. as an alternative supplier. This is especially important as we believe our customers generally prefer one-stop shop for all their SPM cleaning steps. With the high-temperature SPM tool, we believe ACM now has a full product line to meet our customer requirements. Additionally, Tahoe has been qualified for production by multiple customers and is beginning a ramping phase with a substantial number of order planned for delivery in 2024. Enhancements have been made to its performance, allowing the tool to match particle removal efficiency comparable to the single vapor process, while reducing sulfuric usage by 50 to 70%. We now expect a meaningful ramp of SPM tools this year as we begin volume delivery across the number of key customers. Finishing up on cleaning, we also expect our Bible Etcher cleaning tool to contribute meaningful revenue in 2024. And we are on track to complete evaluation of a supercritical CO2 dry cleaning tool this year for revenue in 2025. Revenue from ECT, furnace, and other technology declined 3% in Q1 and represent 70% of total revenue. As I mentioned last quarter, we hit an important milestone for this category in 2023 with more than $100 million in revenue. The year-over-year revenue decline is primarily due to quarterly fluctuations. In fact, we shipped 3x more ECT tool in Q1 2024 versus same period last year, and we expect the revenue growth for this category for the full year. As noted in a prior course, we believe the furnace product cycle is perhaps a year and so behind ECD. We have a brand broader footprint of customer activities with more than a handful of first tools currently under evaluation and multiple customers. We are optimistic This will result in qualification and follow-on order in the coming quarters. Revenue from advanced packaging, which excludes AP, but including service spell pass, grow 33.2% in Q1 and represent 11% of the total revenue. This category including a range of packaging tools, such as the coder, developer, scrubber, PR sweeper, and web etchers. and also service and spare parts. And we continue to explore new products and technology to participate in the next generation of advanced packaging. We believe ACM is one of the only companies that offer a full set of wet tools, copper polishing tools, and copper plating tools for advanced packaging. In Q1, we deliver an ultra-CV vacuum cleaning tool to a major customer to meet the flux removal requirements for chip labs and other advanced 3D packaging structures. Today, we also introduce the drain wafer cleaning tool. This tool is designed for post-debounding wafer cleaning that enables nearly 100% recycled solvent and filtration. We have successfully completed the installation and the qualification of first tool with a key customer. Finish upon and product, we are making good progress with our track and the PCVD platform. We believe our proprietary technology provision both tool for success for mainland China and also global customers. We are engaged with multiple customers that we expect substantial growth, progress in product development. and evaluation this year with revenue in 2025 and a deal. Now move on to our customer, please turn to slide seven. In China, we believe we have a leading position in cleaning. We have become a multiple product company with a competitive product in the market for plating and furnace. And we have a solid evaluation pipeline for track and PCVD. Our sales and service team are now dreaming deeper adoption of our product across our customer base. Our growth is also being driven by new entrants. On the international front, we plan to deliver ultra-CB backside cleaning and a bevel edge tool in the second quarter of 2024 to a large U.S. manufacturer that qualifies as the first SAP cleaning tool for revenue last year. This demonstrates a deepening relationship, which we believe can lead to production orders across multiple product lines. Moreover, ACM's brand and reputation are gaining recognition among other US chip makers with new engagement and potential opportunity to penetrate their global manufacturing site. We recently hired additional seasonal marketing and sales professionals who established the relationship with the key U.S. semiconductor players. In Europe, we installed our first core evaluation tool, the Ultra-C Step 5 cleaning tool, at a major global semiconductor manufacturer in the fourth quarter last year. The initial feedback has been positive, and we are optimistic that the volume production order is possible by the middle of the year. Korea, we see opportunity with SK Hynix, high bandwidth memory HBM product. We see potential gain with our CEPPS cleaning tool for high aspirational vehicle as well as ultra-ECP for TSV applications. To support Glock, we made a progress in our facility expanding in China and other regions. Please listen to slide eight. In China, construction of our production on the center is nearly complete. We expect the initial production later this year. In Korea, we are making progress with the key customer. We believe a strong commitment to Korea can improve our relationship with the key Korean customers. Our resource in Korea can also provide another basis for supporting international customer in the US, Europe, and other parts of Asia. We recently hire a new leader to run our Korea operation, DG King. He is a long time veteran of SK Hynix. We are optimistic his experience and relationship will help for adoption of technology and accelerator of business in the region. We continue to invest in our Oregon site to add to our service support and the demonstration capability for R&D and customer activity in the US and Europe. I will now provide our outlook. Please turn to slide nine. We believe WFE spending in China will remain solid as the country continues on its goal to match its production capacity with end market consumption. We are focused on gaining market share in China new product introduction, and expanding our business to new customer in the USA, Korea, Europe, and other Asia markets. We are reaffirming our 2024 revenue outlook to be in the range of 650 to 725 million. This implies 23 year-over-year growth at the middle point. We expect our full year revenue growth for 2024 to outpace both the China and global WFE growth rate. Now, let me turn the call over to our CFO, Mark, who will reveal detail of our first quarter results. Mark, please.