Ultra Clean Holdings, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Ultra Clean Technology Q2 2024 Earnings Call and Webcast. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for operator assistance at any time. This call is being recorded on Thursday, July 25, 2024. And I would now like to turn the conference over to Rhonda Bernetto, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us. With me today are Jim Schollhammer, Chief Executive Officer, and Sherry Savage, Chief Financial Officer. Jim will begin with some prepared remarks about the business, and Sherry will follow with the financial review, and then we'll open up the call for questions. Today's call contains forward-looking statements that are subject to risks and uncertainties. For more information, please refer to the risk factors section in our SEC filings. All forward-looking statements are based on estimates, projections, and assumptions as of today, and we assume no obligation to update them after this call. Discussion of our financial results will be presented on a non-GAAP basis. A reconciliation of GAAP to non-GAAP can be found in today's press release posted on our website. And with that, I'll turn the call over to Jim. Jim?

Hello, everyone, and thank you for joining our call this afternoon. I will start with a high level summary of our financial and operating results for the second quarter, then share some thoughts on the broader industry trends we are seeing. I'll close by highlighting another important award before turning the call over to Sherry for a more inclusive financial review before opening the call up for questions. We continue to perform well in 2024 with second quarter revenue and earnings at the high end of our guided range. We saw strength in both products and services across all geographies, and in particular, elevated equipment spending within the domestic China market and customers supplying high bandwidth memory and equipment supporting advanced packaging for AI applications. Over the past several years, we have expanded and diversified our content, broadening the applications and platforms where we participate. providing us with a unique competitive edge to engage in all stages of industry growth, from fast construction through equipment build-out and supporting the installed base. Our broad engagement in the semiconductor ecosystem and our technical and operational capability has enabled us to participate in some of the early AI hotspots that are front-running the next wave of AI innovation. AI servers and AI-enabled devices are experiencing elevated demand, leading to increased investment support and capacity expansion. This surge requires high-performance chips for data center training and other leading-edge chips, creating a cycle where AI computing requirements drive semiconductor content growth, spurring further industry investment throughout the whole ecosystem. We believe AI will be the most significant technological breakthrough of our era, with some of the world's most advanced chips at its core. UCT is uniquely positioned to capitalize on this technology migration by driving earlier, deeper, and broader collaboration with our customers as they move towards high-volume production, particularly at the leading edge. Other metrics pointing to an industry recovery that we are tracking closely include further rebalancing of inventories, increased shipments of high-performance computing chips, favorable memory pricing adjustments, elevated data center demand, and a meaningful increase in installed wafer capacity. The order and speed at which these segments rally will be uneven for the supply chain. We are seeing signs of momentum now that indicate a recovery could start later this year instead of early 2025. Our internal marketing intelligence is aligned with the industry belief that wafer fab equipment sales should grow by at least mid-teens next year, driven by increasing demand for leading edge technology, the introduction of new device architectures, and increased capacity expansion purchases, all of which support UCT supports in one manner or another. Our expanded suite of offerings and global footprint position us well to, again, outperform the markets in the next upturn. Our site optimization strategy, including automation and other efficiencies, is on track. Part of that plan, to shift some production to lower cost regions, remains a priority. And it's worth noting that revenue from our Malaysia facility has doubled from the fourth quarter. as we focus on qualifications and ramping that flagship site in advance of the ramp. The investments we have made in capacity expansion and operational efficiency support our customers' innovation roadmap and manufacturing of their next-generation technologies. Lastly, I am very happy to announce that, in addition to the Intel and Texas Instrument Awards of Excellence we received last quarter, We were the proud recipients of the Outstanding Partner Award from PioTech China last month. We started our operations in China 20 years ago and have grown to over 700 dedicated employees who continue to drive our success today. We are honored by this recognition and are thankful for PioTech's continued confidence in us. As our list of accomplishments continue to grow, I want to thank all our employees around the world who are executing at a very high level to ensure we are meeting current demand and preparing for the next upcycle. Our ability to persevere has been instrumental in driving customer success and maintaining our position as a leading manufacturer in the industry. In summary, we are capitalizing on some early inflection points in what will be a significant transformation of our industry. We are performing at a very high level to meet current demand, while prudently investing to secure future share gains. We are ready to meet major increases in demand throughout the next ramp with the available capacity, operational excellence, and quality products and services to ensure our customers' success. And with that, I'll turn the call over to Sherry for our financial review. Sherry?