Parade Techs Ltd Sp/Gdr

Welcome everyone to Parade Technologies Limited's 2025 Third Quarter Webcast Investor Conference. Investor Relations of Parade Technologies, Mr. Yeo Min Chang, will present 2025 Third Quarter Financial Results first. During the presentation, all lines will be placed on mute to prevent background noise. And after the presentation, there will be a question and answer session in English by CEO Dr. Jack Zhao, and Vice President of Finance, Mr. Guo Weiwu. And we also will remain last 15 minutes for the attendees who would like to ask questions in Chinese. Please follow the instructions given at the time if you would like to ask the question. 欢迎参加普瑞科技股份有限公司2025年第三季线上法人说明会。 今天的会议首先由投资人关系张又明先生报告普瑞公司2025年第三季财务数字。 在此报告阶段,您的电话都会处在静音状态。 报告结束后,我们会安排执行长赵杰博士 与财务副总经理吴国卫先生 以英文方式接受各位的提问。 另外,我们最后会保留15分钟 接受各位以中文方式的提问。 Now, I would like to introduce Mr. Yeo Min Chang, Investor Relations of Parade Technologies. Mr. Chang, please begin. Thanks, Jason.

Welcome everyone to Parade Technologies 2025 Q3 Webcast Investor Conference. Parade Technologies third quarter 2025 consolidated revenue was $146.14 million, and the net income was $27.4 million. It's both basic and fully dilute after-tax earnings per share were 35 cents US dollar and 35 cents US dollar respectively. This result compared to consolidated revenue, 136.25 million US dollar and the net income of 23.58 million US dollar. over $0.30 U.S. dollar and $0.30 U.S. dollar per basic and fully dilution in the year-over-year. In U.S. dollars, the third quarter revenue increased 9.47% sequentially and was up 7.26% year-over-year. The gross profit in the third quarter of 2025 was 62.11 million US dollar, an increase of 7.93% from the previous quarter and an increase of 7.91% compared to the same quarter of last year. On September 3rd, 2025, Parade introduced the availability of four new PCIe Gen 6 linear redrivers for server storage, and the high-performance AI scale-up data center covering solutions. With industry-leading linearity, the PCIe Gen6 family of redrivers provide profoundable EQ boost up to 18 dB while operating from a single supply. The PS8594, PS8598, and the PS8596 devices utilize parade-speed migration path methodology, matching the Intel PCIe 6 standard board map for easier high-speed routing and evaluation, and between PCIe retimers and parade linear re-drivers. Fully compatible with all previous PCIe specifications, the PS85-9X series is an excellent choice for motherboard, backplane, AIC, and cable applications. On September 17, 2025, Parade announced the availability of the PS8780 USB 4.0 V2 Gen 4 Thunderbolt 5 DP2.1 Auto Mode by Directional Linear Redriver for Active Cable and Notebook PC Workstation System Applications. It is pin compatible with PS8778 USB 4.0 Gen 3 Thunderbolt 4 DP2.1 Auto Mode by Directional Linear Redriver. The PS8780 supports USB 4.0 version 2 up to Gen 4x2 or 2x40 Gbps symmetric and 120 Gbps symmetric modes. Thunderbolt 5 2x41.25 Gbps and DP2.1 autumn mode USB are 2018 rates. It implements USB 4.0, USB 3.2, and DP2.1a power management, including DP2.1a advanced linear power management. Its low-power design and modern standby support greatly extend battery life for mobile devices and minimize power consumption for active cables. PS8780 comes in a very small package, ideal for cables or space-constrained designs. Based on the current business outlook, Parade is providing the following guidance for the fourth quarter of 2025. Revenue is between 123.5 to 136.5 million US dollars. Gross margin is between 42% to 46%. Operating expense is between 33 to 36 million US dollars. Dear friends of the investment world, good afternoon. Welcome to the third quarter of 2025, the online legal statement meeting. First, I will report to you the financial figures of the third quarter of 2025. The company's joint revenue in the third quarter of 2025 is $14,614,000. The final profit is $2,724,000. After the issuance, the basic and Western-style U.S. shares were 0.35 U.S. dollars, 10.45 U.S. dollars, 0.35 U.S. dollars, and 10.43 U.S. dollars. Last year, the net profit was 13,625,000 U.S. dollars, and the final profit was 23,580,000 U.S. dollars. After the issuance, the basic and Western-style U.S. shares were is US$0.30, which is about NT$9.57, which is about US$0.30, which is about NT$9.47. In 2025, the third quarter's joint revenue increased by 9.47% compared to the previous quarter, and increased by 7.26% compared to the same period last year. In terms of operating profit, the third quarter's operating profit is US$6,211,000, It increased by 7.93% compared to last season, and increased by 7.19% compared to the same period last year. On September 3, 2025, Puppey announced the launch of four new PCIe Gen 6 linear intermediaries, dedicated service devices, storage, and high-efficiency AI expansion data center line-up solutions. With the leading linearity of the industry, This series of PCIe Gen 6 mid-range devices provides up to 18dB of programmable uniformity, and only requires single power supply to operate. Among them, PS8594, PS8598, and PS8596 adopt a general speed transfer path program, and are matched with Intel PCIe 6 standard angle configuration, making high-speed wireless design easier. It can be used to compare and evaluate the PCIe recharging device and the common linear mid-range device. The PS859M series is completely compatible with all the previous versions of the PCIe specifications. It is suitable for mainboard, backboard, AIC, and high-speed transmission cables. On September 17, 2025, The company announced that the PS8780USB4 Ver.2 Gen.4 Thunderbolt 5 DP2.1 Ultramold dual-channel cable will be officially released. This product and the PS8780USB4 Gen.3 Thunderbolt 4 DP2.1 Ultramode dual-channel mid-range device uses the same design. PS8780 supports USB4 version 2 up to Gen4x2 or 2x40 Gbps asymmetric mode and 120 Gbps asymmetric mode. At the same time, it also integrates 3.5 2x 41.2 25 Gbps and DP 2.1 Ultramode USB-R20 connection speed. The product built-in USB 4, USB 3.2 and DP 2.1a power management functions, including DP 2.1a advanced connection power management technology, Its low-emission design and new standby support function not only can greatly extend the battery life of the operating device, but can also effectively reduce the power consumption of the active line. In addition, the PS8780 uses a super-small-sized sealant, which is very suitable for the design area where line or space are limited. Due to the current look at the business in the fourth quarter of 2025, 我们预期合并营收为美金123.5到136.5百万元 合并毛利率为42%到46%之间 合并营业费用为美金33到36百万元 It is my presentation for the 2025 Q3 financial results Now, I transfer to CEO, Dr. Jason, to answer your questions. Jason, you may begin.

Yes, thank you, Yeoming. And ladies and gentlemen, we will now begin the English question and answer session. If you wish to ask the question, please press star key and number one on your telephone keypad, and you will enter the queue. And after you are announced, please ask your question. Should you wish to cancel your question, you may press start key and number two. Thank you. Now please press start one on your keypad if you would like to ask the question. Thank you. First one will have L1 HSBC for questions. Go ahead, please.

Hi, can you hear me? Yes. Hi, Jack and Youmin. This is L from HSBC, and thank you for taking my questions. So my first question is, I'm curious about the product mix in third quarter and the outlook for the next quarter. Thank you.

In the Q3 2025, the display pool or those T-count related, we call it DP product, was about 40%. Our high-speed product, we call it PS product, was a little below the 50%. And our TC or our soft driver product line was lower than 10%. And our TT or stand-alone touch product was lower than 5%. And in the coming quarter, this Q4 quarter, we don't see percentage or variation that much. product line probably more or less in the percentage in the similar situation. Only one may have a higher percentage will be the TTE because we start to shipping or deploy our TTE device, which we consider as in the category of TTE segment. And I think we already introduced to the investment community, we have integrated the TCOM source driver and touch together, we call it a TT device. And those devices were mass production in the Q4 and well belong to the TT category.

Yeah, thank you. It's very clear. I have a follow-up question regarding, since we have the T-Con for the Standard Plus client, so I'm just curious if there's any opportunity to provide a chip solution to this Standard Plus client going forward. Thank you.

Yeah, we are designing the T-Con type of advanced T-Con product for Standard Plus customer. And as we're talking now, And we continue receiving more so-called I4Q, I4I for many products, including high-speed type of product as well. So we are pretty busy to working with the customer to provide more device and more technology and more opportunity, more the... valuation of a product, yeah.

Okay, thank you. I have no further questions. Okay, back to the queue.

Thank you. Next one, Daniel Yim, Morgan Stanley. Go ahead, please.

Hello. Good afternoon, Jack and Yomi. Thanks for taking my question. So my first question will be regarding your near-term outlook. For your 4-2, based on your guidance, on US dollar basis, you are looking at revenue to be down around 10% quarter to quarter. So if I look at a number comparing to last year, that also means your year-over-year is in decline. So I'm wondering what's the major driver for the 4Q, relatively, the weakness. Is it from, do you see any segment or any particular clients, like a standard class or standard client, driving the weakness, or just the overall industry inventory digestion? Yeah, so the first question is maybe regarding the very short-term, your guidance. Thank you.

Okay, thank you for the question, but I wasn't sure that the year-over-year Q4 compared with the last year will be declined. And so that's the first thing I would like to correct. Yeah, based on the guidance, it's not necessary. It will be declined, okay? And the Q4, the PC and notebook compared to Q3, there are two factors. One is seasonality. It's kind of reduced in the Q4 versus Q3. The second one, I think we start to see from September, we start to see the weakness on demand from the DHL. And we thought it could be likely that previous customer might have more inventory due to the tariff or in the previous quarters. Now they are doing the inventory control, inventory correction. That's the two factor we think is happening in the Q4. Other than that, I don't see any pattern or any design loss or something else, okay.

Got it. Thank you, Jack. So again, Jack, you always have, I think, every time you can give us some view beyond just one quarter. So this time, I want to consult your opinion again. Looking beyond the 2.25, let's say 1Q, 2.26, do you think this time the customer will start to restock? again in 1Q26, or is it still too long for you to comment on this? Just want to consult your opinion.

I'm not sure how would I answer this question. I would think that we read many research reports as you do, and in general, 2026, the notebook PC continue well growth but in the lower single-digit percentage as we read. However, for our own product, we continue to see our strengths on the USB 4.0 Retimer. For two factors, one is a new platform will start to shipping. Another is a notebook adoption more USB 4.0 with Thomas, instead of two-pole, may have a three-pole, or those kind of situations. And we have our TTED device, as I openly just said, and it has huge wide-array adoption.

So the 2026, for parade,

we may continue growth, and relative to the small growth, the PCN noble shipment in unit, we probably growth will be higher than that.

I see. Thank you. It's very clear. Yeah, for me, the second question will be regarding some of your potential new business opportunities. So since we have all, I think we have PCIe, we have USB4, we also have some, can provide some of the legacy CELTA interface. And all of these are ready to become proven with our Foundry partner. So I'm just wondering, Jack, can you give us some idea, is there any new... new 10 we can try to address. Now we are still mainly in the notebook, but how about desktop? Is there any new opportunities and how should we think about the 10 and also the ramp-up timing?

Thank you. It has been our strategy for about a few years and I think I had a talk before We call it ASIC-like opportunity. What that means, ASIC-like, is we work with the customer. Customer define a chip spec for their own application. We use our high-speed IP and others to design a chip according to their specification. And we own the product, we own and sell to that specific customers. And that has been our strategy because, as you realize, we have many high-speed services and so on and so forth, and it has been proven in the marketplace. Those are pretty good value for many customers. So we do... have multiple applications with multiple tier one customers. And so, yeah, for a lot of engineering resources, particularly in 2026, a high percentage of our engineering resources will work on those products and work on those opportunities. And typically those that demand a much higher speed for different category of applications. So I think that's our new strategy. And so far we feel it work out pretty well because those end customer are tier one and business are sort of visibility are much better, but the chip are much bigger. So those are the thing is a new opportunity. And we think in next few years might become our, big segment for our business. And that strategy has been developed or developing for few years because we have to proven our high-speed, the 30s or IOs and the high-speed IPs in the dips of micron, for example, 12 nanometer, six nanometer, so on and so forth. So we spend, A couple, I mean, one or more to test out those, the proven those IPs. And now we're doing real product with real opportunity with a few of customers. And we think we may be able to do more. And that's where we are. And our engineering team, a large percentage of engineering team next year will focus on those opportunities.

Got it. Thanks, Jack. So if I may follow up, from your point of view, this kind of ASIC-like business, do you think you are targeting a very similar gross margin profile versus the corporate average now? Or since you are putting more engineering resource, then you require higher So just wondering what will be your strategy on how do you think about the profitability target for ASIC-like businesses?

If you look at it, what do we do with standard price customer? And it's a very similar model on the business side, right? And they put us back there with design chip. So we have been doing this arguably for more than 10 years or almost 15 years, but it was just for the standard class customers. And now we just expand, but expand a different category of customer and the more towards using the high speed. And in fact, the multiple company are interested. In terms of the growth margin, we should, yeah, There's not much change, at least from the world we view and from the business engagement. Yeah, I don't see any difference or any margin. If we change, it would be better.

I see. Very clear. Thanks, Jeff. I'll be back in the queue.

Thank you. Next one, Carol Hu, UBS. Go ahead, please.

Hi, thanks for taking my question. My first question is regarding to PC market development. VIA and Intel has announced closer collaboration in September. Wonder if there will be any potential impact on Parade's business and product development? That will be my first question. Thank you.

Which announced? Could you repeat again, Mr. First Portion?

to NVIDIA and Intel's collaboration.

Oh, okay, okay. I would think the NVIDIA-Intel collaboration are good, right? Because I thought, I don't know the detail Intel make at NVLink and also the software side. That's what I think that will make Intel in the data center a lot more powerful. This thing seems, we look at a positive because the market would demand more high-speed device and ultra-high-speed device, and those are positive for the parade in general, but those are indirect. I don't see any direct relationship there.

Got it. Got it. Thank you. So my second question will be regarding your latest development in auto business. I wonder if you could share with us more about this business opportunity. Thank you.

We're doing quite, I think, 2025 versus 2024. Our revenue in the automotive growth is significantly higher. I would look at it. On the revenue side, there is a very high percentage there, mainly associated with the EV guard in the US and also some of them in Germany and in China. We'll continue designing with this particular customer, our high-speed converter for display. and our so-called displayable hub for the infotainment and USB box for the automotive. And as well, those connect to our display solution. And we just got it first ever, the EDP-based, TT device for automotive, and the customer actually get very excited. So we expect the 2026, the automotive will grow further. And yeah, those are the, but automotive is, the revenue come up slowly, but pretty steady. So we're looking forward to more automotive revenue creation there.

Got it. Thank you very much. I'll get back to the queue. Thank you.

Thank you. Thank you. Next one, Vivian Young, Numera. Go ahead, please.

Hi, Jack and Yeoming. Can you hear me?

Yeah, good.

So just follow up on the auto business. Can you tell us like how much of auto is like the percentage of your revenue currently? And do you have any target for longer term?

I don't know exactly, but at this moment, it's still kind of single digit. And it will grow more meaningful in the next few years, which means over 10% type of thing. So, yeah, we are still taking all the opportunities and design with customers. The only thing is the auto guy. Qualification... typically take a longer time than the PC and notebook. But we do have a pipeline in place for our solutions.

Okay, and my second question is regarding I think you provide a same gross margin range. Just wondering, do you see any impact from rising offset cost and also for the OPEX range? to be $1 million higher. Can you provide more details on that?

The old set of price increase still remain manageable. Only thing is a more few impact was those some of the packaging related to the gold, and the gold increased quite significantly. On the other side, the general, the foundry wafer prices are dropping, or at least not increased. So net-net, the operation cost we did not expect much of operation costs increase. And that's the current view. And of course, we have to looking forward for the 2026 and we try to see anything. And I understand what you more refer to as the BGA substrate shortage. And we use BGA substrate, but we don't use that many. Many of our product is QFM-based. So that's the, I try to explain. Also the CSP-based, basically. You don't have a package.

Okay, thank you. I'll back to the Q. Thank you.

Next question, Lucas Luke. KGI, go ahead, please.

Hi, Jack and Yong, can you hear me? Yeah. Okay, so the fourth quarter is like shaping up to be a year-end low season. How do you preliminary view next year's first quarter? Will it still be a low season? And in which quarter do you expect the next round of customers pulling and inventory restocking?

I only can comment based on the seasonality. I think that's what we observed. I think Q1 probably still is okay. Q2 is slightly higher, but Q3 is much stronger. Q4 is a little bit lower, and those kind of see the narrative but overall 2026 we are our modeling and is based on the overall unit growth of notebook is within the low percentage globally so however we pay more attention to our own growth on the strength of our current product line, new product, and the new introduction device. So we understand the market, the demand in terms of unit, it's on the lower percentage, but we have to, in that environment, we have to still grow based on our new technology and new device. And also the new direction as the other Analysts ask, because we have a new system to do, we'll start to gain some momentum as time to go. Of course, the longer time we'll gain much bigger as we can see.

Very clear. And do you share now a ranking of current pricing pressure across your product lines, and which one faces the greatest pressure and which are relatively lighter?

Certainly the panel solution, the traditional panel solution, which is source driver plus T-call, are most... price pressed and the many China startup and come out of those source driver device right those are the as we talk many times to us we effectively have the solution which we do integrate the driver, source driver, T-Con, and Touch. And after many years of hard working and development, and those devices are into the production, and we are very, very busy to bring in many models for many OEMs. So next year, on that segment, we will have a massive deployment with the good revenue associated with those. And those devices are new, and the competitor has not come in. So those are the areas we are in, and they include the TD device, the integrated TCAR, and the source driver. And we, on those, cutting through the area, source driver plus TKI and the very traditional, the architecture, yeah, those price, price pressure are high. We probably still participate, those, the lowest segment, but it's less compared with many years ago.

Got it. Very clear. And I will have some follow-up questions for the Standard Plus customer, especially on its high-speed interface product side. What can we see this customer's high-speed interface products growing, moving into next year? Is there any new products or new opportunities we are having?

So we have, as I pointed out previously, we have a main discussion going on, or ISQ going on, to do the device on the high-speed side. But those devices are pretty big. Development takes at least a year to do it. And also, I said, Our engineering team next year, high percentage engineering team will work on basic like opportunities.

Okay. And my last question. focus more on the data center cabling ACC that you mentioned your plans around this segment. As we entered this quarter, are there any new developments you can share with us and your outlook and thoughts on next year's maybe shipment volume and revenue contribution for this business?

Yeah, and certainly it is new to Parade, but I since we acquired S7 last year. But we continue marketing or shipping the ACC solution to end customer. Those for the cable tool, I think that's three meter cables for the data center. And we are developed and qualified both for majority for the 224 gigabit per second, the ACC solutions. And we're also participating bidding for those ACC cable. And, and, but we are still learning. We're still new, right? So those are the, those are the, those are the new business for us. And, and, and, and, We do put up quite many resources on the Silicon Germany side for those cabling opportunities. And because the data center now, investment, as you know, is going crazy. And you may get more inquiry, more people looking for the solutions. So it's activity is pretty high. But I have to acknowledge it's the new business for us.

Sure, very helpful. I'll be back at the queue. Thank you.

Thank you. Next one, Michael Shi.

Hi, management team. Can you hear me? Yeah, I hear you well. Oh, thanks. And because there are many investors and also analysts asking about the next year's outlook, I just want to follow up about, is there any huge product mis-change in the next year, or it just will continue to sustain this year? speed interface. And source driver will maintain this kind of programming.

As I point out, in the opening, the first question, you expect next year, the high speed product, PS product, the percentage will continue going up.

Okay, cool.

And your TT, which we assign TTD, which is TCON, source driver and touch integrator to that category. So you will see the TT category next year will increase. So if you are 100% of that, you will know that the TC area, that source driver will continue to reduce. And that changed your integrated solution, right? You don't have many to stand alone anymore. So as that same concept, your DPT call, also number of us were reduced because your huge amount, you go to the TTD and the area, because your one device represent three devices there. So that's what I tried to point out. The UIC obvious PS1 increase.

Okay, got it. Thank you.

Thank you. Next one, Mike Young, Bank of America. Go ahead, please.

Hello, Jack and Yoming. Can you hear me? Yeah. Okay, thank you for taking my question and congratulations on the new product launch. So I have a follow-up on the data center and server side. Is there any target share regarding to the revenue contribution in terms of the percentage or other? That's my first.

On the data center side, we are continuing shipping our ACS for the data center. We engage with the customer with PCIe Gen 6 redriver opportunities. Also engage similar opportunity into the data center with our retirement that we had before. And those are continue there. Probably it's more the newer opportunity is on the ACC cable side. So I think it's a second PCIe Gen 6.

Got it. Thank you, Jack. And my next follow-up will be on the, I think some other person also asked about the NVIDIA and Intel collaboration previously. So I think it's not just on the data center side, but also on the PC side that for the Intel-powered device, we can also have the GPU coming from NVIDIA. Yeah, so I think following that, just want to change, or is there any kind of forecast that you could imagine in the next few years? Because I think this will also kind of having some impact on your USB-related business. Yeah, thanks for adding colors.

At least I don't see the coming year or year after on the U.S. before. And as I had said, the U.S. before retirement, next year will continue to grow in terms of percentage. The real driver is that there's a one new platform will go to the market and that has been delayed, but it will go to the market. And on that platform, the USB for retirement using our solution. And also those notebook has multiple, two or three are typical to use the USB for retirement. And the year after we have a new opportunity and a big, the, the outside, the, the PC notebook guy adopt our USB for retirement. And that will be start to in the late 2026 or then the 2027 is a huge number of shipment to come. So for us, USB for the timer for 2026, 2027, and the number will continue to grow. And I think after the 2027, that will be USB for V2. And we have that device in our lab for a while already. And we are engaged with the tier one system customer for those solutions. Beyond the 2027, it's the USB4 V.2, or 80 gigabit per second solutions. And as we said many times, we're not just doing USB4. We're doing USB4, which means we will have USB4 hub, host controller, so as the MUX, DEMUX, So we are serving all the way to the monitor, to everywhere. That's where we are lining up our resource. And those are the standalone, those are the sort of we provide device. It's already in our, either introduced to the customer or going to introduce to the customer. So I don't really see the Intel, those things will really impact our USB4. I don't see those.

Got it. Thank you very much, Jack, for the call.

Yeah, I think it's fair to say, if you go ask the customer, on today's USB4, retirement, many of OEM customers will tell you, yeah, the device is probably better than the Intel. If Intel allows to design, all the OEs will jump.

Got it. That's very clear. Thank you again, Jack. Yeah, I'll go back to the Q&A.

I don't worry that much at all.

Okay.

That's very helpful.

Thank you, Jack. Thank you. Next one, Jamie Yeh, KGI. Go ahead, please.

Hi, Jack. Can you hear me?

Yes, there you were.

Thank you. For the product, I know that you don't have phone products yet, but I'm wondering if we are going to see foldable because it's a larger panel, right? So if we are going to see that you can potentially penetrate into foldable devices. Sure.

I don't want to comment on those things. Certainly, I don't know more than you do. The only thing I know, we serve for multiple FQ for econ devices and a very busy onion. As I explained before, those businesses, it looks like the ASIC-like business. They define the spec we implement with our IPs. So, yeah, we are very busy on those fronts. But I don't know if it's foldable or not foldable. I don't want to comment on those.

Okay, I see. And for the ethnic revenue stats, I think it takes time to cook. But if we can have some color stats in next year or to 27, 28, how much do you expect to grow in terms of percentage of revenue?

If I were the... If you could like a strategy, carry out successfully, as we said, we put a huge resource into. The 2027, 2028, the growths were quite much higher than our previous years. Just because those projects are big and we invest significantly. So yeah, those are, Those project-based.

I see. So I think in previous years, you probably grew like 20%, 30% at most. So if we implement that strategy well, then we can grow higher than 30%.

I don't want to comment. Don't give a number. I think it's a little bit far away. I don't want to. Yeah.

That's okay. It will be high.

Very high. We spent last year and a lot of time this year to develop the eyepiece for high speed in the deep. The FinFET is a micron technology device. So we are to make a product for tier one customers. And that strategy at this moment will work quite well. So we got multiple opportunities and I would think we're very busy to do this.

Yeah, that's good. How many, can we know that, how many customers, 201 customers that you are working with?

Multiple customers. I know, multiple. I can see. Okay. Put it this way, if I would like to, if I would have a resource, I could take more. I'm kind of, yeah. We're limiting our resources. we kind of, yeah, just hold on now. We cannot take more of those opportunities.

Okay. So my last question is when do you think that I think maybe in three months or six months that when is the milestone that we can check with you that if you implement that?

I think you half year six, the Nine months later, so we'll have a much better visibility.

Yeah, yeah. We'll have a much better visibility. Six months. Yeah, I don't know. Yeah.

But our strategy is to communicate with the investment community that we need to use, really realize our IP value. Mm-hmm. Also realize our IP value, you have two ways to do it. One is you do standalone product. Yeah. And as we did it many. And one is you're using your piece, go do some big trips and market yourself. And that works reasonably well at this moment.

I see. Okay, great. Thank you, Jack. I don't have questions.

Thank you. Next one, Bruce Lou, Goldman Sachs. Go ahead, please.

Hi, can you hear me? Yes. Okay, I want to follow up with the ASIC business as well. I mean, can you tell us the business model you did with your customer? Is that different with... You know, other companies, when they talk about ASIC business, they have certain collaboration with the customer, i.e. customer provides an IP or design some kind of chip.

That's what I try to distinguish with ASIC, right? Typical, when we say ASIC, the concept was your customer provide you ITO code. Customer design the chip. you just implement the maker product, right?

We more like what we did or have been formed with our standard products, which means they only give you a spec and work together to form the product.

Many is based on our own IP. We don't license for anybody anything, right? So we implement this. We sell marketing that product, sell to their customer for very specific, very clear that their needs. So it's,

I mean, Jack, from our perspective, we have so many different kind of companies, right? From Broadcom, Avago, their ASIC profitability is very different with, you know, MediaTek, LCHIP, or Marvell, right? So, I mean, it's different value proposition. So, what I'm trying to say is, your ASIC, you would deliver at least better than your corporate average margin or higher than your corporate average margin, you know.

Yeah, sort of. I don't see the margin, just answer, it will be better than the previous, the question was whether it will implement, impact our margin. No, it will be getting better.

How much better?

I don't want to comment on this. Yeah, until you see it. Because the issue is that Your assumption now versus when you, the product deliver, there are multiple years there, right? So the cost structure are very different.

Yeah, but you get paid by what you do, right? If you only do like, you know, service or you only do like, you know, a place and route, if you do the complete... No, no, no. The range can be from 15% to 70%.

Our value is not just price loss.

Our value is... I understand, but the value from my view is that from Broadcom, Broadcom is 70%, 80%.

It can be very different. Of course, Broadcom has its own way to... Yeah, because of the size, right? I wonder if we can do 70%, 80%. we will be at least better than our current carbon margin. Okay, so I hope I answered your question, but those are the new strategy, new direction, and as I explained a few times, the way I tried to value our high speed, I need to make it more valuable and create more revenue. To me, it's more important to create a large-size revenue to grow.

Yes, thank you, Jeff.

In the interest of time, we'll now begin the next question and answer session. 中文提问时间现在开始。 如果您需要提问,在您的题上按米字键以及数字1。 When we read out your name, please begin to ask questions. If you need to cancel your questions, please press the name button and the number 2. Thank you. Cathay Securities, Raymond Guo, please ask a question.

Hi, Jack. Hello, everyone. Thank you for accepting my question. I have two questions. The first is, first of all, in terms of the data center, we can see that the data center is built It has led to a lot of short-term data transmission needs.

Now, the mainstream... It's like some... It's like some... There are so many solutions. I'd like to ask... We have... Jolly Driver. How big is the TEN in this market? And how do we... How do we make our future faster?

我的第一个问题是在PC方面。 那我想问的是说, 如果未来PC可能会因为CPU它的源不够, 那可能就会有更多一些客制化高速传输界面IC的需求。 那或者是说如果从成本的角度出发, 那我想问的是说, 未来如果我们看PC市场, 那有没有机会从现在的CPU大厂, 那它可能会外报一些,

We are very busy to use S7's current device to engage with ACC cable the customer.

We are also shifting the ACC device to cable. I think we may have to estimate the entire market share. We may have to take time to understand the entire ACC market. The data center is getting weaker and weaker.

The data center is getting weaker and weaker.

The pedal side is very hot. Customers will feel hot. This will also cause cable life. We are more optimistic about the Redriver on these high speeds. We now have 112 and 224. 那我们继续会develop这些东西。 那我们当然也interested to study 这些optical这个related的, 因为Silicon Germany还integrate 去做这些cape optical的这些solution。 那我们有study这些东西, 我们去searching for这些,

. . . . .

. cover the entire high-speed related market opportunity. Then the second question is that the CPU integration may be less. In fact, we have already seen that the integration has been reduced. 那它们需要USB Hub去实现一些功能。 那是我们的USB Hub designed to quite many noble platforms. 那这些继续,因为对假如CPU是Fox算力的, 这样的情形它一定会去reduce, communication port to have more opportunity to let other devices participate. These are all positive sides, but after all, the whole PC or workstation or zone level speed will be higher and higher. Customers will care more and more about these performance, including Gen 5, Gen 6, will I don't think There are these concepts, that is, as long as the PC interface increases by one times, your calculation power may increase by ten times. And the computation power will increase by ten times. So, a lot of it is very much focused on high speed. That's it.

Jack, I can quickly follow up. For example, let's go back to the example of Intel. These are all imagination.

This possibility will exist, right? But I don't think we should do this now. Or because of its cost, we can't let it do these things, right? Then you say that in the server, this NVIDIA or something like that is completely possible. Because this is a performance-driven thing.

Okay, thank you, Jack. Thank you.

好的,谢谢。 谢谢各位的提问。 目前没有其他的问题,我们将结束今天的会议。 非常感谢你与BREAKD股份二年第三季线上会。 今天的会议将到此结束,您现在可以离线了。

Okay, thank you everybody.

Thank you. Thank you.