Asustek Computer Inc Regs

Hello, welcome to the ACES Q2 2025 Online Investor Conference. Today's conference will be held by ACES Tech Computer Co-CEO, A.Y. Xu, and Samson Hu, alongside CFO Nick Wu. The conference will be divided into two parts. In the first part, CFO Nick Wu will start by outlining the Q2 financial results. Next, our co-CEOs will go over the operational strategies and business outlooks. For the second part, we will be conducting a QA session. You are welcome to raise any questions you might have in the panel on the left side of the webpage. Questions will be collected and answered by our host. Let us start with the presentation from CFO, Mr. Nick Wu. All right, thank you everyone. Please turn to page five of the slide. This shows ASUS's consolidated income statement for quarter two 2025. Revenue for the quarter reached $174 billion, up 29% quarter-on-quarter and 28% year-on-year. This marks a new single-quarter high for ASUS brand revenue. the main growth drivers came from strong gains in gaming products as well as ai related products such as ai servers both delivered revenue growth exceeding 40 percent year on year The gross profit in Q2 was $21.5 billion with a gross margin of 12.4%. Operating income came in at $5.96 billion for an operating margin of 3.4%. profitability for the quarter was affected by two main factors tariffs and secondly the new taiwanese dollar exchange rate fluctuations now in response to tariff policy changes asus had reallocated supply chain and made capital investments during the quarter which we estimate reduce the operating margin of the company by about 0.5 percentage points. As for FX, in early May, the US dollar to Taiwanese dollar exchange rate experienced a sharp swing, which will have an favorable impact on product growth margins for roughly three to six months. We estimate the impact to be around one to two percentage points. So taking these tariff and FX effects into account, The reported operating margin for Q2 was 3.4%. However, we see that the underlying operation across all product lines remain positive, and the expansion is still on track, reflected in our record high quarterly revenue. And so looking ahead, we expect that tariff-related disruptions and mitigation measures will ease significantly, while the FX headwinds will likely take about another quarter to normalize, so that will be about three months. So when we exclude the tariff and FX impacts, we are confident that ASUS can maintain its original operating margin target range of 4% to 5%. As for net income after tax for quarter two, it came in at $9.8 billion with an EPS of $13.2. Turning to page 6, this summarizes the non-operating income of the company. Interest income was about $900 million, investment income $1.08 billion, FX gains totaled $1.09 billion, and dividend income roughly $2 billion, bringing total non-operating income to $5.15 billion. Turning to page 7 for the balance sheet, Overall, operating assets remained relatively stable. In Q2, the main efforts and investments of ASUS were focused on strengthening supply chain resilience. This was reflected in the optimized allocation of production sites, as well as adjustments to raw material inventories. Now given our record high quarterly revenue in quarter 2, our inventory turnover days came down to 101 days and our cash conversion cycle was about 104 days. On page 8, you can see the breakdown of major revenue segments. In quarter 2, system products accounted for 52% of revenue, open platform 46%, and IoT 2%. By region, Asia had the highest share at 55%, followed by Europe at 23%, and the Americas at 22%. The America's figures include the US, Canada, Central America, and South America. The US alone typically falls within low tens to mid tens range depending on the quarter. Moving to page 9, this is our business outlook for quarter 3. building on the record revenue base set in Q2, we expect PCU product revenue to grow a further 5-10% quarter on quarter. For components and servers, given the high baseline in Q2, we currently expect Q3 revenue to be roughly flat sequentially. Overall, we remain optimistic and confident in Asus' ability to expand on its current operational foundation. In the short term, tariffs and FX will remain key variables, but we believe that we have built a strong and resilient business capable of managing these turbulent currents. And so this includes things like innovation and leadership in product cycles, our broad and diversified product and geographic mix, as well as our now strengthened supply chain configuration. so we are confident that the given these optimizations especially with how much resource we have poured into supply chain and improvements we believe that with these optimizations we will be able to respond to these two to three months of tariffs and FX impact, and then past that, our competitiveness and our position in the market stack will only become stronger and stronger. Now we will hand it over to our two co-CEOs to share our overall business strategy and outlooks. Thank you. First, I would like to thank all our investors and members of the media for taking the time to join today's earnings call. I am co-CEO of SOSG, and I will now walk you through some of our strategies for the second half of the year. In Q2 2025, using our dual growth engine, ASUS achieved a remarkable revenue. of $474.1 billion, driven mainly by the gaming and commercial markets. Gaming products accounted for 48% of total revenue, up 40% YOY, reflecting strong demand for our flagship ROG series, as well as the launch of innovative hardware and robust community engagement. Consumer products made up 30% of revenue, growing 5% YOY, underscoring the continued appeal of ASUS products in the mainstream market. Commercial products accounted for 22% of revenue, up 45% YOY, fueled by rapid growth in the education segment and steady demand from commercial clients for reliable and durable products. Our rapid growth in Q2 was supported by our first-mover advantage in product cycles, ensuring that ASUS leads the market with new product launches ahead of competitors. Deep user engagement has strengthened brand loyalty and repeat purchases. In commercial solutions, growth came from exceptional products and services, delivering complete solutions that include customized AI applications, and an optimized user experience and this allows us to cement our lead in the gaming and commercial statics ensuring that we can maintain sustainable growth in the long term Turning to the next page, our gaming business continues to show strong momentum, benefiting from the launch of next-gen products and the demand for upgrades. We delivered outstanding results in the first half of the year, reflecting years of deep investment in the gaming sector. To date, gaming PC revenue has grown 31% YOY, and certain products have seen growth rates as high as 50%, highlighting the sustained rise in demand for high-performance gaming solutions. Within gaming products, our most important launch in the second half of the year is the ROG Xbox Ally line, developed in partnership with Xbox. As a leader in Windows handheld gaming since the ROG Ally launched in 2023, we have continuously optimized products based on community feedback This year, ROG has again set a new direction for handhelds, officially unveiling the co-branded ROG Xbox Ally on June 8th, combining ROG's hardware expertise with Xbox content ecosystem, delivering an entirely new handheld gaming experience. Everything from operating interface, content integration, to immersive experience, the Xbox ally adopts the Xbox First screen experience, booting directly into the Xbox interface and bypassing the traditional Windows desktop. This improves navigation, streamlines shortcut keys, and reduces reliance on touch controls. The interface is also closer to the native Xbox console UI, improving familiarity and ease of use. Content integration is deeper with Game Pass Cloud, remote and local games accessible in multiple modes for quick switching and launching. Ace has also collaborated with Game Devs to optimize AI compatibility and usability. delivering a consistently smooth gaming experience. Further enhanced haptics, upgraded audio, and ergonomic design improves comfort and immersion for long play sessions. The open platform nature of the device enables a broader range of game choices built on the Windows platform and integrated with Xbox cloud streaming and direct controller pass-through. Driver optimization and shader compilation improvements significantly enhances performance and compatibility. While not all Xbox games run natively, most Game Pass titles can be played smoothly via the Xbox app, either cloud streamed or installed locally, giving players more flexible and richer options. We believe that the launch of the Xbox Allied holds major significance for the industry. For players, it breaks down device barriers, enabling seamless platform switching between PC and console, with consistent high-quality gameplay across different scenarios. For developers, it lowers the barrier to cross-platform development, expanding market reach and influence. For the industry as a whole, it reflects a shift towards platform integration, where the core of gaming moves from hardware specs to content and services. we see that the trend is the blurring of boundaries between platforms, and the competitive edge will lie in flexibly integrating and deploying cross-platform resources. With advances in cloud and high-speed connectivity, players can enjoy console-grade experiences anywhere. And in this landscape, ASUS will continue to drive the industry forward with product innovation and a complete gaming ecosystem growing alongside gamers worldwide. Next page, ROG has solidified itself as the number one gaming brand offering a complete ecosystem of hardware, software and community. Our leadership is reflected in automation across laptops, desktops, peripherals and cloud platforms. ROG is also engaged in a collaboration with virtual idol Hasunemiku to integrate her color scheme into ROG products to enhance brand reputation and community interactivity. This collab includes everything from core components to peripherals, allowing players to build a gaming experience that showcases her recognizable color scheme, increasing brand reach and cementing our brand reputation in new customer faces. The ROG Xbox Ally also allows us to demonstrate our leadership in hardware, working in tandem with the impressive Xbox content library, but that was mentioned earlier already, so we won't repeat that again. The ROG ecosystem makes use of races, key opinion leaders, interactivities to create a sense of belonging that goes beyond just selling products but also cultivates long-term brand loyalty. The ecosystem is filled by product innovation as we help to continue to expand gaming culture. This helps us cement the ROG brand and establish a long-term advantage on the market. And this leads us to the next page. Ubiquitous AI and Equitable Possibilities is the ASUS AI strategy. Internally, ASUS is also pushing for AI-based revolutions. ASUS now offers cloud computation, edge computation, local computations, and other comprehensive solutions that puts us ahead of local competitors. This is also to offer customers impressive computation in a user-based mindset that satisfies the diversified needs of global enterprises. Our flexibility and low cost allows us to offer solutions like cloud AI for high performance, local AI for secure on-prem computation, and edge AI for immediate data analysis, showcases the possibilities of different AI use for different scenarios. AI can be used for scenarios like predictive maintenance, personalized recommendations, and advanced data analysis. This allows us to modify our AI solutions based on customer needs without needing to sacrifice performance or scale. ASUS is committed to hardware and software based optimizations for the latest AI solutions. allowing us to offer comprehensive solutions that lets us cement our market leading position. Not only are we pushing for enterprises to adopt AI, but we also want to cement our long-term leading position for long-term growth. Now we hand the mic over to Samson. Okay, thank you. Good afternoon. I am ACES Co-CEO, Samson Hu. I will now walk you through the performance of each business group and highlight our key strategic initiatives. Starting with Systems Business Group, quarter two, the performance was outstanding with revenue up 15% to 20% quarter on quarter. outpacing market average within this gaming PCs once again was the leader for the new wave of product upgrades as many of you know this year saw the launch of a new generation of GPUs and the combination of these new products and strong upgrade demands we are likely to see the gaming PC revenue growth of 30 to 40 percent and this also further solidifies our leadership position in the high-performance gaming segment and as mentioned earlier our PC business also made rapid progress in expanding market coverage and our customer base especially in the Asia Pacific North America and Europe regions where we have earned strong customer recognition Beyond delivering outstanding hardware performance, ASUS also leverages flexibility, speed, and robust frontline support to quickly meet the diverse needs of enterprise customers. In the AIPC segment, we continue to maintain our market-leading position. To date, we have launched a comprehensive and diversified product portfolio. And in the second half of the year, we will introduce models covering an even wider price range to accelerate AI PC adoption. Overall, ACES will continue to take a user-centric approach. evolving from a consumer PC brand into a stronger and more comprehensive industry leader that also commands a major presence in the commercial segment. Next, looking at the open platform business group, we see that for quarter two, We were able to deliver exceptional performance with revenue growing 40-50% year-on-year, showing strong momentum. In the motherboard and graphic card business, we benefited from the next-gen product launches and upgrade demand. Motherboard revenue was up 20% quarter-on-quarter, while graphics card grew an even stronger 50%. Both product lines maintained their number one global market share. For quarter two, the latest 50 series generation graduate cars accounted for over 75% of the shipping mix. This is evident in the industry-wide upgrade cycle. but also helped us deliver better gaming experiences for players. For server businesses, it was also outstanding, with revenue of 40% quarter-on-quarter. Looking ahead, our GB300 and B300 AI servers will enter mass production in late quarter 3, backed by large volume orders from multiple global CSPs. This will further expand ASUS' scale and competitiveness in the server market. Turning to the next page, for the AIoT group, Q2 revenue grew 10-15% quarter-on-quarter, driven mainly by steady shipment growth in NUCs, MiniPCs, and IoT-related products. As we continue to broaden AI applications in these fields, for example, in smart transportation, our edge servers and IoT solutions are deployed to safeguard Taiwan's longest tunnel with 24-7 intelligent monitoring and analytics. This allows us to ensure driving safety and operational efficiency in a real-world scenario. In smart healthcare, we have also achieved multiple international certifications, including Thailand FDA approval for the VivoWatch ECG app, as well as certification from the US FDA, Taiwan's Qi FDA, and EU MDR approvals for our MH series of clinical grade medical monitors. These milestones further reinforces ASUS' credibility and expertise in medical technology. Next page. Here we see that product innovation remains the most important driver of ASUS' advancement and sustained growth. In 2025, we have achieved excellent results in this area. At this year's Red Dot Design Awards, Asus stood out across multiple categories, winning a total of 41 product design awards. At the Computex in May, we also received major honors in the best choice awards. Our ROG wireless gaming mouse won both the special award for sustainable technology and best products. In addition, the ROG Strix series of monitors, the ROG detachable wireless gaming keyboard, and the ROG Zyphus gaming G14 laptops won the best products in their respective categories. All these achievements highlight ASUS' leadership in product innovation across gaming and sustainability. That includes my presentation. Thank you. Thank you to our co-CEO and CFOs. We will now begin the Q&A session. If you have a question, please submit it on the left side of your screen. We will review all the questions and respond once the collection is complete. The first question comes from Oriental Investment Advisory. The question is, how much does AIPC account for the total amount of revenue income and the revenue growth from AIPCs for this year thus far. Okay, let me take on this question. If we look at the AIPC share in terms of ASUS's total notebook revenue, including gaming products, then AIPCs account for around 10%. If we exclude gaming and take only non-gaming consumer notebooks as the base, AI PCs already make up over 20%. So I think that's relatively high compared to other brands. But that's from an in-house perspective. But from an external market perspective, then the AIPC performance is still very strong, with market share exceeding 25%, holding the number one position. Looking ahead, while many feel that AIPC applications have yet to scale up quickly enough, so that could affect the near-term growth momentum, there are two main drivers that would accelerate adoption. Firstly, beyond Microsoft, many third-party developers are actively rolling out AIPC applications, which will spur further growth. Second, from a CPU roadmap standpoint, New generation processors will increasingly integrate MPUs into the silicon with the computational capabilities required for AIPC workloads, and that will naturally increase AIPC penetration over time. And the next question comes from the Economic Daily News. The recent U.S. semiconductor tariffs are one of the most closely watched topics in the industry. What is ASUS's main response strategy and how are you building supply chain resilience? Okay, I think in response to that, I would say that tariffs have been a hot topic lately and have drawn a lot of attention. As of now, before the official announcement of the Section 232 tariffs, most ASUS products are still covered under the US-China tariff exemption list. The only tariffs currently in effect for us relate to certain steel and aluminum components. But since these make up only a small portion of our products, the impact is relatively limited. Of course, the situation will develop depending on how the final tariffs are structured once announced. Recently, President Trump indicated that several large companies with significant investments in the United States, such as TSNC and NVIDIA, could be made exempt. They promise to make those investments in exchange for the exemption to tariffs. And as many of you know, TSMC manufactures a large share of chips used in our components through various suppliers. So how those exemptions are calculated will matter. But again, we will need to wait until the official announcement for the Section 232 details before we can fully assess the impact. In the meantime, we will closely monitor developments. Ultimately, we cannot control that, but on the controllable side, ASUS has already been working with EMS partners in recent quarters to adjust production site allocation and invest in capacity realignment. As mentioned earlier, we have devoted a lot of resources to these adjustments to give us greater flexibility, whether it's integration, reinvestment, or our business units-based optimizations. But again, we have made all the preparations possible, and once the regulations are finalized, we will deploy the best possible mix of our prepared available solutions to maintain product competitiveness and minimize the impact of tariffs on our business. Thank you. Okay, the next question comes from Morgan Stanley and other investors. Could the company talk about the growth momentum and current state of AI server sales this year? You also mentioned the upcoming shipment of GB300-based AI servers. Could you give us more visibility and an outlook on that? Okay, I'll give you an overview. I recall that in our last earnings call, we shared that AI servers accounted for close to 10% of our first quarter server mix. Now moving into the second quarter and looking ahead to quarter three and quarter four, we are becoming increasingly optimistic. In fact, based on the results for quarter two, we already see AI servers make up over 15% of the mix, hitting the target we had set previously. And a big driver in quarter two was that we successfully began mass production and shipments of AI equipment based on the GB200 series, which made a significant contribution to quarter two. As we head into quarter three, in addition to ongoing GB200 shipments, By the end of the quarter, we will also begin shipping AI servers based on the GB300 chipset. And that gives us strong visibility and a lot of confidence for quarter three. And we expect that the AI server share will remain at or even exceed the mid-tense percentage. Looking ahead to quarter four, we believe the momentum will continue. Beyond the rollout of new products, we have also been expanding our customer base. In addition to existing core CSP and NCP customers in the Asia-Pacific region, we have also made major inroads with several large CSPs in Europe and in the US. So whether from a product or a customer perspective, we see strong growth potential for Q3 and Q4. And in short, our AI server share for the totality of Acer server revenue should stay at around 15% or higher. And that result is more or less in line with what we previously shared. Thank you. Okay, the next question is from Morgan Stanley and other investors. The question is about how we should interpret the impact of tariffs and exchange rates based on Q2 financials. So let me clarify. In Q2 this year, in response to tariff changes, ASUS increased capital investment in our production sites and shifted most of our U.S.-bound capacity to Southeast Asia. This was a relatively significant one-off capital expense, amounting to roughly 0.5% of Q2 revenue. But on the currency side, we saw substantial NT dollar to US dollar volatility in early May, which affected both revenue and gross margin. The impact will be recognized across quarter two and quarter three. We estimate that it will reduce gross margin and operating margin by about one to two percentage points over that period. That said, ASUS has a diversified revenue base with meaningful contributions from Europe, China, Southeast Asia and other regions. So from a long-term perspective, we expect it will take about two quarters to fully absorb the effects of the NT dollar sharp appreciation. By Q4, the operational noise from both tariff and exchange rate swings should be significantly reduced. So in terms of Q2 financials, with tariffs impacting 0.5% and FX chips taking off 1-2%, our operating margin now comes in at 3.4 percent once operation normalizes we are confident that we will be able to reach our target operating margin of four to five percent again okay the next question is from merrill lynch asking about the company's view on the overall pc market from the first half to the second half of 2025, and whether tariffs and front-loading could increase uncertainty for demand in the second half or quarter four. Okay, so let me put it this way. It is quite clear that in the first half of this year, With tariffs on the horizon, not just ACES but many companies have engaged in similar front-loading. Based on our internal assessment along with supplier data and analysis, we believe the shipment splits between the first and second halves of the year will likely be in the range of 55 to 45 or 52 to 48 spread. So in other words, shipments in the second half will probably be slightly lower. That said, as you can see from our quarter three forecast, we still expect quarterly revenue to grow sequentially, quarter on quarter. We have been working hard to sustain growth by focusing on higher end products, including premium gaming models, in addition we also have a new xbox li product line that will officially launch between late quarter three to early quarter four which should also contribute incremental revenue so while the first half and second half splits will shift Mainly due to tariff related front loading, we are still aiming for revenue growth in the second half. Once the uncertainties surrounding the Section 232 tariffs are unveiled, we believe that market uncertainty would also ease up and we'll make the necessary adjustments then accordingly. Okay, the next question is from the Commercial Times. Could the CEO elaborate on what investments and efforts have been made to strengthen supply chain resilience? For products shipped to the U.S. market, how is production capacity allocated? And recently, there's been talk about building local server production capacity in the US. Could you share the mass production timeline for that? Okay, as mentioned in previous briefings, I like to layout our overall supply chain like this. For both motherboards and PCs, and We are expanding production bases in Southeast Asia beyond China, so this will include sites in Thailand, Vietnam, and Indonesia. And at this point, over 90% of our production for these products have already been sold. distributed to these new regions. As for servers, this is again as we shared before, we completed the setup for our US production and assembly lines by the end of Q4 last year. So that part is already up and running. Thank you. The next question comes from DigiTimes. What is ASUS's acceptable tariff threshold? And if tariffs rise to a very high percentage, what plans do you have for products sold in the U.S.? ? So let me address that. I know that everyone is very concerned about tariffs. First, there is an important premise to keep in mind. Tariffs apply to everyone. So unless ASUS receives a different treatment from our competitors within the industry space, the impact on all brands would be essentially the same. Right now, key details are still unclear. For example, the exact rates under Section 232 for semiconductors have not been finalized, and how the tariffs will be applied is still also uncertain. If chips produced by TSMC or NVIDIA are exempt, that could spell a significant difference for us, since a lot of their components account for a large share of our product's value. How such exemptions would be calculated is another question entirely. Given these uncertainties, which are beyond our control, our focus is on what we can control. This includes diversifying our production footprint to reduce potential tariff impacts. If after the rules are finalized and the tariffs for different production locations are confirmed, we find that the total costs elevation is still beyond what we can absorb then we would inevitably need to pass some of that cost on either to consumers or to distribution channels but how much of that can be passed on depends on relative bargaining positions we have with suppliers and distributors which is another matter altogether so at this point we can't give a precise number Only that we are preparing as best as we can for these uncertainties. And if those preparations are enough, we may have to pass the cost along to consumers. That's our current plan. Thank you. Thank you. The next question is from Fubon Life Insurance. Could you share ASOS's views on server growth margins? Is it the case that due to the high unit pricing of servers, that is dragging down both server margins and the company's overall gross margin? Okay, I can take that question. I think what we're facing right now is an industry-wide challenge. AI servers are a segment that cannot be ignored, but we also cannot deny that within the AI server ecosystem, the GPU vendor captures the lion's share of the gross margin. This is something everyone in the industry has to deal with. So as AI servers drive revenue growth, the pressure on gross margins is a reality we must manage. That said, even under these conditions, as ACES expands its AI server business, We are also looking to other components such as power supplies, thermal solutions and structural parts to create margin. These are parts where scaling up will help us achieve cost reductions through economies of scale and that can offset some of the margin pressure. But I think I can also take a step back and give you a broader perspective. As we mentioned earlier, AI servers account for at most around 15% to 20% of revenue. And looking ahead to Q4 and into the next year, we expect it to remain in that range. But it's also important to keep in mind that within the total ASUS overall revenue mix, our gaming product lines are actually extremely relevant. Gaming now accounts for 48%, which is nearly half of our total revenue, and gross margins in the gaming segment is actually very healthy. so as our growth momentum in gaming remains solid and both gaming laptops and gaming graphics cards are seeing year-on-year growths of over 30 to 40 percent in the past quarter so we believe that this is a good sign in the long term Over the long term, this means that even as servers take up a larger share of revenue, the simultaneous growth of our gaming business will continue to support healthy overall growth margins and keep our operating margin in the more comfortable 4-5% level. Thank you. Okay, and now we have a question from the Economic Daily News. Given the setup of your overseas spaces, what is the company's capital expenditure this year and do you have plans for any large-scale capital spending going forward? So let me address that. From quarter one through quarter two this year, we have continued to invest in and transition our overseas production bases. By quarter two, most of this work was essentially complete. Looking ahead, we do not currently anticipate any large or heavy capital spending requirements. So overall, based on our earlier reports, the impact of capital expenditure on Q2 expense and profit ratio is roughly 0.5% of revenue, with a small portion of the spending having occurred in Q1 this year. So that's my response. Thank you. Okay, and the next question comes from Sinopac Bank, asking whether the company has further plans for AI agents in laptops or PCs. Okay, let me go into this a bit. I'm not sure if you noticed that at this year's Computex, Asus launched the GX10. This is a product built based on NVIDIA's great Blackwell GPU architecture. It is an extremely compact box, but delivers supercomputing-like performance, with processing power reaching 1,000 TOPS. So despite its small size, it is actually incredibly powerful, and it is designed primarily for edge AI applications, whether for research institutions, enterprises, or a wide range of edge computing scenarios. We have high expectations for this product and plan to begin shipments in Q3. Okay, we have reviewed the questions submitted through the online platform, and we believe we have addressed the main ones, so we'll now hand the time over to our two co-CEOs for their conclusions. Thank you. First, I'd like to thank everyone for your attention to ASUS. I know that tariffs and exchange rates remain core issues of great concern, and these are indeed external factors we have to deal with in running our business. But as we have said many times before, these are not things we can control on our own. What we can do is to prepare as best we can for any potential volatility. Since the second half of last year, when it became that Mr. Trump might be elected again, we have been making extensive preparations. These efforts will become part of our competitive advantage going forward. ACES will continue to closely monitor developments and do everything within our power to protect the interests of our shareholders. Thank you. While tariffs and exchange rates do create headwinds for our industry, as mentioned earlier, ASUS can effectively mitigate these impacts through product innovation, diversified market presence, and flexible configuration of our supply chain and production bases. This gives us greater resilience in operations. I would also like to reiterate that Asus has two major growth drivers. The first being gaming related products, where we plan to build on our leadership to expand further. And the second is AI, where we have already established a comprehensive presence over the past few years. This includes high growth AI servers, the AI workstation we just mentioned as well as commercial AI PCs and IoT products and all of these AI hardware and software solutions will continue to drive growth for ASUS in the coming years and going into the second half of this year I think the market is overall conservative however Despite that, ASUS will continue to actively make use of our growth opportunities things like our next gen GPUs driving growth for gaming products, gaming laptops, gaming PCs and this year we're also going into the upgrade cycle for commercial PCs and educational Chromebooks are all opportunities we plan on tapping into and another thing as we mentioned is that large CSPs and tier 2 and tier 3 CSPs are all making investments so the demand for AI remains very strong and these are all things that These are all growth opportunities we can tap into for the second half of this year. So even though in the short term, tariffs and FX rates are going to be factors that we need to watch out for, but as the AI-PC paradigm shift continues to happen, we believe that we can make use of these opportunities to increase our mind share and product share. Thank you all. And this concludes our earnings call. Thank you.