Good day, ladies and gentlemen. Thank you for standing by and welcome to the ACM Research Fiscal Third Quarter 2024 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I'll turn the call over to Mr. Gary Dvorchak, Managing Director of The Blueshirt Group. Gary, please go ahead.

Good day, everyone. Thank you for joining us to discuss the third quarter 2024 results, which we released before the US market opened today. The release is available on our website as well as from Newswire services. There is also a supplemental slide deck posted to the Investors section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, David Wang; our CFO, Mark McKechnie; and Lisa Feng, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to slide 2. 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's filings with the Securities and Exchange Commission. 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 or loss on short-term investments. 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 13 – and refer to slide 13. Let me now turn the call over to David Wang, who will begin with slide 3. David?

Thanks, Gary. Hello everyone, and welcome to ACM Research's third quarter 2024 earnings conference call. Please turn to slide 3. For the third quarter, revenue was $204 million, up 21%. Shipments were $261 million, up 23%. Profitability was good with a gross margin of 51.6% and operating margin of 27.5%. We are ending the quarter with approximately $369 million of cash and time deposits with a positive cash flow from operations for the quarter. Revenue for the first nine months of the year was $558.6 million, up 44%. Year-to-date shipments were $709.7 million, up 56%. We believe this growth is significant, demonstrating market share gain for ACM and their contribution from a new product cycle. Now I will provide the detail on the product. Please turn to slide 4. Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning products grew 22% in Q3 and represented 79% of total revenue. ACM offers a comprehensive top-to-bottom cleaning portfolio. We estimate the global total available market, or TAM, for cleaning is close to $6 billion, and ACM products are likely used in more than 90% of all cleaning process steps in both memory and logic manufacturing. Improvements in sulfuric acid peroxide mixing, or SPM, have led to increased confidence toward our target for continued market share gain in cleaning. As a reminder, we estimate the SPM process represents about 25% of the total front-end cleaning market, but so far it has been a small contributor to our business. During the prior report, we announced technical progress in our high-temperature SPM solution. Recall that only one other major cleaning tool supplier services the high-temperature market for SPM. During our first-quarter call, I reported a technical breakthrough that could enable us to be the second player. We are now in later-stage evaluations at a number of key customers, and we are committed to becoming the second supplier in the world supporting commercial high-temperature SPM cleaning. That's not all. Today, we issued a press release marking a major performance breakthrough for Tahoe, ACM's environmental solution for the middle and low-temperature SPM segment. The Ultra C Tahoe now achieves the performance of a standalone single wafer cleaning tool on low to high-temperature SPM processes. The Tahoe platform's advanced cleaning capability has achieved an average particle count of less than 6 particles at a 26-nanometer size, meeting the stringent requirements for advanced-node manufacturing. The tool is also capable of removing YX nanoparticles for the most advanced logic memory applications, with the addition of a smaller particle filtering system. Tahoe's patented hybrid architecture is among the first in the industry to combine batch wafer processes and a single wafer cleaning chamber into the same SPM tool. The hybrid architecture delivers enhanced cleaning performance, high throughput, and process flexibility with up to a 75% reduction in chemical consumption. ACM estimates cost savings of up to $500,000 per year from sulfuric acid alone, with additional environmental and cost benefits from reduced sulfuric acid treatment and disposal. With the rise of AI to the forefront of consumer awareness, we expect to see increased public attention on the environmental impact of semiconductor chip manufacturing. We believe ACM Ultra C Tahoe is well-positioned to help customers increase production of advanced AI chips while reducing the environmental footprint. Put another way, Tahoe is beneficial for customers and advantageous for the planet. We believe Ultra C Tahoe is another example of excellence from ACM's innovation and the world-class R&D team, and demonstrates how innovation can achieve both economic and environmental goals. We also announced today that the upgraded Ultra C Tahoe is now in mass production at several high-volume customer facilities in China and is under evaluation at additional logic and memory customers. We expect to deliver more units by the end of the year. The market opportunity for Tahoe is considerable as the middle and low-temperature markets account for more than 80% of the SPM market, which is about 20% of the overall cleaning tools market. We believe ACM's cleaning portfolio, including SAPS, TEBO, Tahoe, semi-critical, along with SPM and super-critical CO2 drying, places ACM in a world-class position. We see good opportunities for continued market share gain in mainland China, and we are confident we have what it takes to secure major customers in international markets. Revenue from ACP furnace and other technology grew 36% in Q3 and represents 17% of total revenue. Momentum for our plating tools remains strong for both front-end and back-end tools. I'm pleased with the revenue performance. I also noted that shipments for the ACP furnace category grew by 67% year-to-date. Our furnace product cycle is gaining traction with other memory and analog customers. Overall, we now anticipate having 17 furnace customers by the end of this year, up from nine at the end of last year. We expect a contribution to revenue from the furnace to accelerate in 2025. Revenue from advanced packaging, which excludes ECP but includes service and spares, declined by 21% for Q3 and increased by 3% year-to-date, representing 4% of revenue. This category includes a range of packaging tools, including coder, developer, scrubber, PR stripper, and web etchers, as well as service and spare parts. We are exploring new products and technologies to participate in the next generation of advanced packaging. We believe ACM is one of the only companies that offers a full suite of web tools, cover plating tools, and polishing tools for advanced packaging. Year-to-date growth of advanced packaging was low. We attribute this to slower growth for China-based packaging firms who are more exposed to broader market trends. We also note that this category does not include our ECP tool for advanced packaging. In early September, we announced purchase orders for four wafer-level packaging tools from US customers and US R&D centers. These tools are scheduled for delivery in the first half of 2025. We are very optimistic about our fan-out panel-level packaging tools. We have recently announced three panel-level packaging tools, including a vacuum flux cleaning tool for chiplets, the horizontal plating tool, and the bevel edge tool. These three new panel tools present a strong offering by ACM to address the advanced panel-level packaging market. We have been developing this technology for years, and I believe the market is now coming to us. Our technology is applicable to high-temperature or high-density packaging. This is especially relevant to AI packaging of GPUs with high-density, high-bandwidth memory, HBM. We see a significant global opportunity as several major American leaders are choosing panel packaging solutions for their AI chips. To finish up on the product updates, we are making good progress with our track and the PECVD platforms. Both of these products feature innovation, a differentiated platform design, and allow for process flexibility and high throughput. We have a solid list of ongoing demonstrations and evaluations for both track and PECVD. We anticipate further progress for both PECVD and track over the next year, with revenue likely to emerge in late 2025 and increasing contributions in 2026 and beyond. Moving on to our customers, please turn to slide 7. In Q3, we saw broader demand for foundry logic, power, and memory. A full 10% of our customers for the period represented 63% of revenue. In China, we have a leading position in cleaning and target additional market share gains. We believe we have become a world-class multi-product company with competitive products in the market for plating and have a solid evaluation pipeline for track and PECVD. In the US, we're continuing to make steady progress. I already mentioned the order for four WFE tools scheduled for delivery in 2025. Additionally, activity with our major US customer continues to progress. Both of our SAPS tools have already achieved supplier qualification, and we have moved into the production qualification process. The backside of the bevel edge tool will be in the later stages of supplier qualification by the end of this year. In Europe, we are also in the later stages of qualifying the Ultra C SAPS 5 cleaning tool, which we delivered to a major global semiconductor manufacturer in Q3 of 2023. In Korea, we remain engaged with customers for a range of tools. To support this goal, we have made progress on our facility expansion in China and other regions. Please turn to slide 8. In China, on October 20th, our subsidiary, ACM Shanghai, hosted an opening ceremony for the Lingang production and R&D center that gathered employees, customers, suppliers, and local officials. Our first of two modern manufacturing floors, including a state-of-the-art automation system, is now in initial operation. During the third quarter, we also moved into the new ACM Shanghai headquarters. The facility is located in the Shanghai high-tech Zhangjiang Science Park, and offers a great work environment for our engineering team. In the US, on October 1st, we completed the purchase of our new Oregon facility, which includes a 5,200 square feet cleanroom. We plan to move in early next year. We plan to deliver several tools in 2025 to provide easy access for major customers for advanced tool evaluation. ACM is building a strong footprint in the US, including our own cleanroom, R&D lab, and a growing service team. We see this as a great opportunity to participate in the market growth of the US semiconductor sector. I will now provide our outlook. Please turn to slide 10. We have raised our 2024 revenue outlook to be in the range of $725 million to $745 million versus the prior range of $695 million to $735 million. At the midpoint, our revised outlook represents a 32% year-over-year growth compared to 28% previously. Shipment activity remains strong, and we continue to expect that the full-year shipment growth rate will outpace the revenue growth rate. Our visibility for the remainder of the year is largely driven by our current order book and the qualification and acceptance of previously shipped evaluation tools for a range of customers. From our perspective, we believe WFE spending in mainland China will remain at a high level as the country continues its goal to match production capacity with end-market consumption. We continue to focus on market share gain, new products, and increased localization to drive our growth objectives in the Chinese market. Furthermore, we are expanding our business to new customers in the US, Korea, Taiwan, Europe, and other Asian markets. Our long-term target is to generate half of our revenue from outside of China. Now let me turn the call over to our CFO, Mark, who will review the details of our third-quarter results.

Thank you, David. Good day, everyone. Please turn to slide 11. Unless stated otherwise, I'll refer to non-GAAP financial measures, which exclude stock-based compensation and unrealized gain/loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures refer to the third quarter of 2024 comparisons or to the third quarter of 2023. I'll now provide financial highlights. Revenue was $204.0 million, up 21%. Revenue for single-wafer cleaning, Tahoe, and semi-critical cleaning was $161.0 million, up 21.6%. Revenue for ECP, front-end packaging, furnace, and other technologies was $34.6 million, up 35.6%. Revenue for advanced packaging, excluding ECP, services, and spares, was $8.4 million for the third quarter, down 21.0%. However, for the first nine months of the year, it grew by 2.9%. Total shipments for the quarter were $261 million, up 23%. Gross margin was 51.6% versus 52.9%. This exceeded our long-term gross margin target of 40% to 45%. For the full year, we expect our gross margins to be above the high end of the range. This is due to year-to-date gross margins of about 50% and our expectation for gross margin in the upper end of our 40% to 45% target range for Q4. We continue to expect gross margin to vary from period to period due to a variety of factors such as sales volume, product mix, and currency impact. Operating expenses were $49.2 million, up from $45.3 million. R&D was $24.5 million versus $22.7 million. Sales and marketing was $13.2 million versus $14.3 million. G&A was $11.6 million versus $8.4 million. For 2024, the full year, we plan for R&D in the 12% to 13% range, sales and marketing in the 7% to 8% range, and G&A in the 5% to 6% range. Operating income was $56.1 million versus $43.8 million. Operating margin was 27.5% versus 26.0%. Realized gain from the sale of short-term investments was $0.2 million versus $0.7 million. Recall that unrealized gains are not included in non-GAAP earnings. Income tax expense was $4 million versus $0.7 million. For the full year, we now plan for an effective tax rate on non-GAAP pre-tax income in the 12% to 14% range. Net income attributable to ACM Research was $42.4 million versus $37.6 million. Net income diluted share was $0.63 versus $0.57. Our non-GAAP net income excluded $11.9 million or $0.18 per share in stock-based compensation expense. Stock-based compensation expense declined sequentially in Q3 due to the accelerated amortization for the ACM Shanghai stock option grants. We expect SBC to decline again in the fourth quarter. I will now review the selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash, and time deposits ended the third quarter at $369.1 million versus $366.8 million at the end of the last quarter. Inventory net was $628.7 million versus $602.9 million at the end of the last quarter. This included raw materials and work in process of $329.8 million and finished goods inventory of $298.9 million. Finished goods inventory mainly includes first tools under evaluation at our customers, as well as finished goods at ACM facilities. Cash flow from operations was $11.9 million for the third quarter and $63.9 million for the first nine months of the year. Capital expenditures were $33.4 million for the third quarter and $73 million for the first nine months of the year. For the full year 2024, we expect to spend about $100 million on capital expenditures. That concludes our prepared remarks. Let's open the call for any questions that you may have. Operator, please go ahead.

Our first question comes from Charles Shi of Needham & Company.

Maybe the first question, I think I heard you talking about the wet clean product portfolio you have right now covers 90% of the overall worldwide wet clean market, which includes all kinds of devices. But I want to ask specifically on 3D NAND, what's that coverage percentage number look like? Are you able to cover 100% of all the 3D NAND applications?

Very good question. Well, actually, as I said, our typical process cleaning will cover almost 90%. At this moment, I want to say, is the only single wafer for sulfuric acid. We're not fully in the market yet. So, basically, the rest of the tool – and we are either in R&D with the customer or putting it in production, right? And this includes all this sulfuric acid related to the 3D NAND and also high-temperature SPM process and other related processes. So we're pretty fully engaged regarding this 3D NAND wet process cleaning.

So, basically, there's still some gaps, but you're engaged. This comment would apply to 3D NAND as well.

Yeah, I should say probably by the end of this year, we should be qualifying all the processes and including – we already put in production existing processes, right? So we've made a lot of progress.

The second question I have, I think you said China WFE, you think it will remain at a high level next year, but this is a two-part question. So number one, in terms of the change from this year's level, you will remain at – this year's already at a pretty high level, right? But I want to understand, when you say remain at a high level, are you expecting it to be flat to up or what's the expected range here? That's one part. But the other part of the question, obviously, with the US election that happened a couple of days ago, obviously, it's pretty uncertain at this point where the trade policy of the new US administration can go. But does that comment include any of the potential new impact of any of the new tightening or are you assuming the international export control rules remain the same as of today?

Okay, let's address the first question, right? I should say, over the last four years, you can see the China WFE market growing quite steadily, and I would say probably for the next few years, we still have strong demand in the Chinese market. Why? There’s still a lot of memory and also logic and foundry, the IGBT market, which are still building processes for fabs. So, relating to next year, it's hard to give you a number. We're thinking something maybe a little bit lower, maybe a little bit higher. It's really difficult to predict at this moment. However, I want to say we're still optimistic about growth in the Chinese market. This is only one day, right? It's challenging to predict. We're continually monitoring and following the rules of all countries and all regulations that come out, whether new or changing. We are going to need your support for all production ramping efforts with our global customers.

Our next question comes from the line of Mark Miller of The Benchmark Company.

Congratulations, another strong quarter. I'm just wondering, you've been consistently posting gross margins above your target range for this year. It sounds like you're expecting the margins to come back down to the high end of the range in December quarter. Regarding your backlog, are we going to go back to your target range in 2025 for gross margins?

David, let me take that if you don't mind. I think you did – yeah, Q3, another good quarter. Year to date, just above 50%. It really has to do with our product mix, and we have achieved a lot of differentiation and done well on that front. Foreign exchange has helped. But longer term, and we're not going to provide guidance, obviously, for next year, but our general longer-term target remains 40% to 45%. The mix can change, given a broad product line. Regarding our backlog, the margins for that are pretty good. They're healthy. So, we'll leave it at that, Mark. I think we are maintaining our 40% to 45% target.

You announced the orders from a US customer for delivery in the first half of next year. Any thoughts on where we can expect your sales outside of China? Is that going to be significantly increasing next year?

I think our business outside of China is obviously a corporate focus. We believe that we have really scaled up our business in mainland China. The model is to scale it up near some of these larger customers; these activities have been ongoing. This is where the spending has been and then expand that into the global markets. We're planning for good growth in China alone next year. For the international markets, it really depends on our customers and their evaluation statuses to see where they are with their projects. We have a few demonstrations in later stages; a lot of focus from the company. I think the clean room in Oregon is a good commitment. However, when we provide our 2025 outlook range early next year, we'll likely include some contributions, but right now we don’t want to specify exactly how much. We do expect some contribution next year from non-China markets. Anything to add, David?

Actually, I do see some customers obviously interested in our cleaning and other technologies. We see significant potential, especially with our SAPS and megasonic solutions, as well as this Tahoe tool, which can reduce sulfuric acid usage by up to 75%. So we are optimistic about the opportunity for our differentiated products entering the global market, and we expect those differentiated products will accelerate their reach to customers outside of China.

I would add, Mark, just that the activity is quite promising. I know we're all looking for orders, but we are engaging heavily with our team in the US, Europe, and other areas. So, we're actively pursuing a number of opportunities with other customers that we haven't discussed here.

Our next question comes from Suji Desilva of ROTH Capital.

Congratulations on the progress here. Maybe following up on Mark's question, the global customers that you expect to contribute in 2025, what geography do you think is the nearer-term opportunity across Europe, US, Korea, and Taiwan?

Yeah, it's challenging to give you that precisely right now. Obviously, we see opportunities in the US as we have a full suite of advanced packaging tools. In regard to this year, we're shipping in the first half of next year. We continue to see that opportunity. We already have three tools with one of the key logic customers in their evaluation of the product across different process steps. We also see other interest in Asia. So we'll be engaging with those customers. Next year, we expect continued momentum as we work with the large clients outside of China to penetrate our differentiated products into the production lines. Many of our tools are offered to the market aiming to improve yield and provide significant asset savings while also offering excellent particle removal performance. Thus, we see as our differentiated products receive more attention in the market.

On the high-temperature SPM solutions, it sounds like you have a technical advantage there. What are the specific specs that you can bring to compete with the incumbents? Is it throughput or efficiency? Any detail would be helpful.

Actually, let me put it this way. Our SPM product has two variations, right? One is the high-temperature SPM single wafer tool, which operates at 170 degrees or higher, addressing significant asset concerns. This tool has achieved breakthroughs that enable us to tightly control chemical exposure outside the chamber, thus enhancing the cleaning environment. With our cleaning chamber, we minimize downtime spent on cleaning the chamber itself, leading to better uptime and superior particle performance. The second product is the Tahoe tool, targeting lower and middle-level temperatures of SPM. This tool has been our flagship, combining batch and single wafer processing. Its performance breakthrough this year is characterized by excellent particle removal efficiency; as I mentioned, at just 6 particles on average at a 26-nanometer scale. This performance is equivalent to the capability of a single wafer processing system. We are continually improving the filtering system, which enables this tool to be applied for particle removal addressing advanced nodes in memory and DRAM, as well as logic applications. We observe that both tools are well-received in China, as well as in global markets; clients are recognizing the benefits of our sulfuric acid process and its environmental protections.

Our next question comes from the line of Edison Lee of Jefferies.

Congratulations on the great results in Q3. I just have a quick question because you did mention that the advanced packaging market in China is slowing down. Can you help us understand whether that should be a leading indicator for financing spending in China? Should we be concerned about financing spending in China as a result of the slowdown in advanced packaging?

I want to emphasize that, looking at last year and the first half of this year, things were fairly slow. However, we are starting to see a gradual uptick Q3 and Q4. We have received new orders. If we examine the foundry business, it is also beginning to pick up. I remain positive about the WFE spending in advanced packaging as we look ahead into Q4 and next year. That being said, I am referring to past performance; our revenue presented over the last four months was steady and stable thus far.

Do you think that the Chinese packaging companies are implementing different strategies compared to the past? Are they transitioning to HBM or are they moving into more advanced packaging that requires different equipment? What changes are occurring there?

Indeed, the companies vary substantially, and certain firms are transitioning to higher-density packaging solutions. We are also observing companies moving towards panel-level packaging. Thus, there is noteworthy activity and progress in the realm of advanced packaging technology and process development.

Seeing no more questions in the queue, let me turn the call back to David Wang for closing remarks.

Okay. Thank you, operator, and thank you all for participating in today's call and for your support. Before we close, Gary is going to mention our upcoming investor relations event. Gary, please.

Thanks, David. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On November 19th, we will present at Craig-Hallum Capital's 15th Annual Alpha Select Conference in New York. On November 20th, we will present at the ROTH 13th Annual Technology Conference, also in New York. On December 4th, we'll present at the UBS Global Technology and AI Conference in Scottsdale, Arizona. Finally, on December 17th, we'll present at the 13th Annual New York City Summit in New York. Attendance at the conferences is by invitation only. For interested investors, please contact your respective sales representative to register and schedule one-on-one meetings with the management team. This concludes our call. You may all now disconnect. Have a good day.