Win Semiconductors Corp

Good afternoon from Taiwan. Welcome to Winsani's second quarter 2024 earnings conference call. I'm Alex Lee, your host for today. I'm also the CEO at QIC. Participating in today's call will be Mr. Steve Chen, Winsani General Manager of Corporate Administration, and Mr. Joe Chen, Spokesman and Associate Vice President of Finance. Before we start, we would like to remind everyone that today's discussion will condemn forward-looking statements that are subject to significant risks and uncertainties. Please refer to safe harbor notice that appears on the presentation. Additionally, The financial results for second quarter 2024 and the presentation have been posted on the company website and the MOPS for your reference. By the way, the format for today's earnings call will be as follows. First, Steve will provide a key message of a WinSense operation and a future outlook. So after that, Joe will go through WinSense financial results for the second quarter and first half of 2024. Finally, in the Q&A session, Steve and Joe will jointly answer questions from investors. And now, I would love to turn the call over to Mr. Steve Chan for the key message of a win-win operation in the future outlook. Thank you, Steve.

Thank you, Alex, and welcome, everyone. Our consolidated revenue was $4.96 billion, up 12% quarter-on-quarter and up 26% year-on-year, which was in line with our previous expectations. Our gross margin was affected by the decline in the share price of a listed Chinese customers held by our consolidated subsidiaries in the second quarter. However, our capacity utilization rate increased from 55% in the previous quarter to 65% and the product mix was better than expected. Our gross margin increased from 22.4% in the previous quarter to 27.2% and operating margin also increased from 4.1% in the previous quarter to 10.1%. Net profit attributable to the parent company for the second quarter was 485 million NT dollars with an EPS of only 1.14 dollars. Looking at the revenue change for each product in the second quarter, Wi-Fi once again delivered the most significant quarter-on-quarter revenue growth. In addition to the increasing penetration of Wi-Fi 6E and 7, we have also seen older pooling momentum of Wi-Fi PA for the new smartphone launch in the second half of this year. Infrastructure revenue in the second quarter exceeds our previous expectations, with a double-digit quarter-on-quarter growth. We will continue to monitor the end demand of 5G infrastructure and the change of the inventory level in the second half of the year. For cellular PAs, prior demand from Android smartphones Customer in the second quarter was slightly lower than in previous quarters. The inventory for the new IOA is down in the second quarter. Second half of this year has started. As a result, the salary revenue in the second quarter is period. Mile quarter on quarter growth and year on year growth exceeding 50%. which was the highest among all product categories. This indicates that the industry has had its true and the inventory level for the smartphone has much healthier than last year. Lastly, Apico was the only product with a quarter-on-quarter revenue decline in the second quarter, primarily due to the product transition for the smartphone. As we focus on the massive data stream brought by AI, investing significant resources in optical sensing and data-centered data transmission, AI is also quietly impacting the future of the smartphone. During our latest conference call, we emphasized the importance of the high-end smartphone to win training and were pleased to see the return of the momentum. for a high-end smartphone. Recently, multiple major smartphone brands expressed that the smartphone equipped with the AI feature will be the mid- to long-term trend, and they look forward to the long-wait replacement demand in coming years, with high-end smartphones being the first benefit. This is consistent with our view. To me, the huge data transition Transmission Demand of the Future, we have not only developed the technology of the Wi-Fi 6E87 and the mass-produced reverse product, but also introduced the industry's most powerful 7th generation HPC technology. This year's process is designed for high-performance, high-end smartphones and is under-qualification process by several customers. Although the near-term and the market demand remain uncertain considering the agro-physical and of the China economic sector, we will continue to focus on our customer-first-foundry business model and with going investment in RMZ to maintain our long-term leadership. For the Chinese smartphone market, the inventory adjustment came to an end by end of the second quarter of 2023 and the customer-reviewed inventory pulled in for the fourth consecutive quarter since second half of 2023. Entirely the third quarter of 2024, we expect a demand from the Chinese customer will temporarily slow down, while iOS smartphones will enter a stronger season for the inventory preparation as scheduled. As a result, for the third quarter of 2024, we expect revenue to decline by high single digits quarter-on-quarter, which was large at around the mid-20 levels. Overall, for the whole year of 2024, we still expect revenue to be increased from last year. Thank you.

Thank you Steve. Over to Joe.