Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Second Quarter 2025 Earnings Conference Call. As a reminder, we're recording today's call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Steven Pelayo, Managing Director of the Blueshirt Group. Steven, please go ahead.

Good day, everyone. Thank you for joining us to discuss second quarter 2025 results, which we released before the U.S. market opened today. The release is available on our website as well as from our newswire services. There is also a supplemental slide deck posted in the Investors section of our website that we will reference during our prepared remarks today. 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 the 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 unrealized gain and loss on short-term investments. For our GAAP results and reconciliation 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. Also, unless otherwise noted, the following figures refer to the second quarter of 2025 and comparisons are with the second quarter of 2024. I will now turn the call over to David Wang. David?

Thanks, Steven. Hello, everyone, and welcome to ACM Research's second quarter earnings conference call. We achieved another quarter of strong results with sequential growth in both revenue and shipments, demonstrating progress in our expanding product portfolio. We experienced momentum from our STM, Tahoe, plating, and furnace tools, which are helping us broaden our addressable market and increase market share. We are also making strides with new platforms, such as track, PECVD, and panel-level packaging tools, which are key long-term growth drivers. Recently, we announced a significant upgrade to our Ultra C wb wet bench cleaning tool. This technology incorporates our patent-pending nitrogen bubbling technology, which produces large-sized bubbles with consistent bubble density and improves etching rate uniformity in 3D structures across the wafer. I'm pleased to share that we’ve received repeat orders for the new Ultra C wb wet bench tool featuring our N2 bubbling technology. We anticipate robust shipments for this tool over the next year. This technology is also compatible with our Ultra C Tahoe platform and holds substantial potential for manufacturing advanced 3D NAND, 3D DRAM, and 3D logic devices. We view this new technology as another demonstration of ACM's leadership in cleaning tools that will benefit our customers and support our growth efforts. Our nitrogen bubbling technology contributes to early breakthroughs for Tahoe and other recent launches such as our high-temperature SPM tool and panel-level packaging tool for flux cleaning and bubble etching. Collectively, these advancements reinforce ACM's leading position in wafer cleaning and strengthen our confidence in gaining share in this crucial sector. We stay committed to delivering innovative new products that empower our customers to tackle the future challenges of semiconductor manufacturing, driven by the transformation of artificial intelligence. Now, let's move on to our business results. For the second quarter of 2025, we reported revenue of $215 million, reflecting a 25% sequential increase and a 6% year-over-year rise. Shipments amounted to $206 million, a 32% sequential boost and a 2% year-over-year increase. Our gross margin reached 48.7%, surpassing our target range of 42% to 48%. We concluded the quarter with a net cash position of $206 million. In terms of product specifics, revenue from single-wafer cleaning, Tahoe, and semi-critical cleaning tools grew by 1% and accounted for 72% of total revenue. We believe our extensive cleaning portfolio positions us strongly in the market. We are continuously enhancing our SPM tool, which features ACM’s proprietary nozzle design that prevents both liquid SPM and acid mist from escaping the chamber during the SPM process. This improvement in particle performance reduces preventative maintenance needs and cleaning frequency, enhancing system uptime. We have achieved an impressive particle control with an average particle count of less than 10 at a 26-nanometer size, which we believe outperforms competitors offering sizes over 17 and 15 nanometers. In Q2, we supplied SPM and Tahoe tools to additional customers, further increasing our market share in the SPM segment. Revenue from ECP, furnace, and other technologies rose by 23%, making up 22% of total revenue. We delivered an ECP tool to a customer, including 1,500 shipped electroplating chambers. There is a strong demand for the ECP tool in advanced packaging driven by needs for both front-end and back-end plating systems. We also observe growing interest in our new Ultra ECP APP panel-level horizontal plating system as the industry transitions from wafer to panel-level packaging to support the next generation of AI chips. Our unique horizontal plating approach, which offers superior uniformity compared to vertical panel plating solutions, has garnered attention from major industry players. Our furnace products are also gaining traction, driven by strong customer interest and an expanding pipeline of evaluations and engagements. There is a solid demand across various applications, including high-temperature neo, particularly our high-temperature neo furnace version at 1,250 degrees Celsius, along with LPCVD oxidation and ALD. We believe ACM's distinct design positions us to capture significant market share. Revenue from advanced packaging, excluding ECP but including service and spare parts, increased by 20%, accounting for 6% of revenue. We are making encouraging progress with our new track and PECVD platforms. Our proprietary PECVD platform, featuring three trucks per chamber, provides flexibility for various processes with the same hardware. We are optimistic about our positioning and plan to deliver more beta tools to a select group of customers this year, with revenue contributions expected in 2026 and beyond. For the Track platform, we are in the final development phase of our 300 wafer per hour in-line KrF tool, anticipating beta tool delivery to a key customer in the current quarter. To summarize our product roadmap, we expect incremental contributions from Tahoe SPM and furnace tools in 2025, with growth driven by panel-level packaging, Track, and PECVD tools in 2026 and beyond. Our first-half results reveal solid execution across our product portfolio. We remain optimistic about the year and our long-term prospects in China, leading us to increase our long-term revenue target for Mainland China to $2.5 billion, up from the previous target of $1.5 billion. This adjustment is based on two main considerations. First, we now anticipate a long-term China WFE market size of $40 billion, compared to our earlier estimate of $30 billion, based on updated third-party global market forecasts and our analysis of the China semiconductor industry. Second, we have revised our market share targets for various product groups. Our market share target for both cleaning and plating has been raised to 60%, up from 55%, reflecting our current evaluation of customer traction and confidence in gaining share with new products. However, for furnace, PECVD, and Track, we are maintaining our targets at 15% and 10%, respectively, aiming for better results but needing more time in the market before any formal adjustments. We are keeping our revenue target for the rest of the world at $1.5 billion. We believe that ACM's focus on differentiated, world-class products, combined with our global sales and service team, will yield successful results with our international customers. As an example, we plan to deliver several tools to the U.S. in the third quarter, maintaining active engagement with our major U.S. customer as we continue to evaluate a variety of cleaning process steps towards achieving production orders. In conclusion, we have increased our long-term revenue target to $4 billion, up from the previous target of $3 billion. Now I will provide an update on ACM Shanghai's proposed capital raise in China. ACM Shanghai recently received approval from the CSRC to proceed with its proposed follow-on offering on the stock market to raise up to USD 620 million by selling less than 10% of the total shares. The capital raising is intended to help accelerate our updated revenue target and add to the long-term foundation to support our effort to scale our product to major global customers. As the majority shareholder, we view the proposed transaction as an important step in strengthening our position in the China market, and it demonstrates the long-term value of our ownership stakes. Next, let me provide an update on our production facility. First is Lingang. Our state-of-the-art Lingang production and R&D center is nearly completed. The site including 2 production buildings with the first now in production and the second available for future expansion. Each of the 2 production buildings can support up to $1.5 billion of annual production capacity combined. We believe we can eventually support $3 billion of production at Lingang from the 2 manufactured buildings. Next, our Oregon facility. We purchased a 40,000 square feet facility last year. We made good progress during the second quarter, and we have begun upgrades on our customer demo R&D lab. We believe this will help our effort with the customer in the region as we will let them test wafer locally on ACM tool. We also are moving forward with a plan to add production capacity to the Oregon facility. We target the middle of 2026 for the demo lab and production to commercial operations. Our investment in Lingang and Oregon are key enablers of our growth strategy, expanding our capacity, strengthening customer support and preparing us to scale globally. Now I will provide our outlook for the full year 2025. We are maintaining our 2025 revenue outlook in the range of $850 million to $950 million. This implies 15% year-over-year growth at the midpoint. In close, our focus remains on delivering differentiated, enabling technology that solve our global customers' most critical process challenges. Now let me turn the call over to our CFO, Mark, who will review the details of our second-quarter results. Mark, please?

Yes. Thanks, David. Good day, everybody. Please turn to Slide 11. Unless I note otherwise, I'll refer to non-GAAP financial measures, which exclude stock-based compensation, unrealized gain/loss on short-term investments. A 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 second quarter of 2025 and comparisons are with the second quarter of 2024. I'll now provide the financial highlights. Revenue was $215.4 million, up 6.4%. Total shipments were $206 million versus $202 million in Q2 '24 and $157 million in Q1 of 2025. Strong sequential rebound in Q2 shipments led to a return of positive year-over-year shipment growth for the quarter. Gross margin was 48.7% versus 48.2%. This exceeded our long-term business model target range of 42% to 48%. We expect gross margin to vary from period to period due to a variety of factors, including sales volume, product mix, and currency impacts. Operating expenses were $63.4 million, up 38.8%. R&D was 14.5% of sales. Sales and marketing was 9.3% of sales and G&A was 5.6% of sales. For 2025, we now plan for R&D in the 14% to 16% range. This is an increase versus last quarter's plan due to ACM's continued focus on proprietary R&D programs. We plan for sales and marketing in the 8% range and G&A in the 5% to 6% range. Operating income was $41.5 million, down 20.2%. Operating margin was 19.3% versus 25.6%. Income tax expense was $1.9 million versus $9.3 million. For 2025, we expect our effective tax rate in the 10% range. Net income attributable to ACM Research was $36.8 million versus $37.5 million. Net income per diluted share was $0.54 versus $0.55. Our non-GAAP net income excluded $9.8 million in stock-based compensation expense for the second quarter. I will now review selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash, and time deposits were $483.9 million at quarter end versus $498.4 million at the end of the first quarter. Net cash, which excludes short-term and long-term debt was $205.8 million versus $271.0 million at the end of the first quarter. Total inventory net was $648.3 million versus $609.6 million at the end of the first quarter. Raw materials were $285.6 million, up $45.7 million quarter-on-quarter. We made strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in progress was $60.7 million, down $10.2 million quarter-on-quarter. Finished goods inventory was $302 million, up $2.2 million quarter-on-quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites, along with finished goods located at ACM facilities. Cash flow used by operations for the first half of 2025 was $39.6 million versus $51.9 million cash flow provided by operations in the year ago period. Capital expenditures were $32.2 million for the first half of 2025 versus $39.7 million in the year ago period. For the full year 2025, we expect to spend about $70 million in capital expenditures. That includes our prepared remarks. Now let's open the call for any questions that you may have. Operator, please go ahead.

Your first question comes from the line of Charles Shi with Needham & Company.

First question on shipment. I noticed that the shipment was up, but only slightly on a year-on-year basis. I recall you mentioned that the full year '25 shipment should grow, maybe not necessarily faster than revenue this year, but it should grow. However, it seems that in the second half of the year, you have a considerable amount of catch-up to do for shipment to be flat compared to last year's level. Is that still the right target for thinking about shipment, or might the full year number actually decline a little bit on a year-to-year basis?

Our 2024 shipment was very strong, with over 63% of the increased rate compared to 2023. We also have many new products contributing to this year's shipments. I expect the second half of the year to be much stronger than the first half. We anticipate continued growth for 2025, and that growth is still achievable.

Got it. So compared to 90 days ago, how do you see the growth in shipments for this year? Do you expect it to be stronger, flat, or weaker than you initially thought? Any insights you can share? The reason I ask is that your U.S. peers who have reported ahead of you are seeing positive results from China, particularly in the second half of the year. Are you experiencing similar trends?

Yes. I should say our Q3 is very strong, right? We see the Q4, and there's still some slot fill in. And so I still see the very good and outlook for Q4. So I was compelled like you said 90 days ago, we see that the market situation can improve.

Got it. Lastly, I think, Mark, you mentioned some strategic purchase you made over the last quarter. I think the news flow did suggest that the U.S. may be working on something regarding export control at the subsystem level. I'm curious about the ACM assessment on supply chain risks, particularly concerning potential new export controls and how the company has prepared to mitigate that risk. Any thoughts on that front would be great.

Yes, David, would you like to start, or should I go ahead? Please feel free to proceed.

And obviously, now we are doing a multi-source of the components, right? And we're definitely looking for the new components and suppliers in other countries than the U.S. And also, we have also looking for the local supplier in Mainland China. And I want to say there is a certain challenging, however, and I think we can overcome that with the multi-source alternative source supplier for our key components in the tool. So Mark, do you want to add on that?

Yes, Charlie, that's a great question. We consider this frequently. Our balance sheet remains strong, and our shipment forecasts are positive. Therefore, we felt it was appropriate to increase our strategic inventory of key components. We may even expand this further in the third quarter.

Yes. Just a quick follow-up regarding the strategic purchase. Is it primarily to prepare for higher demand in the upcoming quarters, or is it more about mitigating supply chain risks, particularly concerning some components you are currently sourcing from the U.S.? Which aspect is it more aligned with for you?

Yes, as of January 1, you can’t get parts from the U.S. So these are likely strategic purchases from other regions. I won’t specify how much of it is to mitigate risk or based on our forecast, but it’s a combination of both.

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

I had a question about long-term borrowings. They're up significantly over the last 6 months. I'm just wondering, what's going on there?

Yes, I can hit on that a bit, and then we got Lisa here in the background. But long-term borrowing, we did step things up a bit. There's controls over how we can use some of our capital from the China capital raise and what have you. Of course, we have that coming along. So we did step up our long-term borrowing a bit here in the first half of the year. Lisa, did you want to add something?

Yes. In addition to that, the interest rate for deposits is much higher than borrowing in China. So we're trying to use that kind of leverage to maximize the returns.

Good opportunity to kind of take the lower interest rate down. Yes. Next question please operator.

The next question comes from Suji Desilva with ROTH Capital.

Congratulations on the progress. Can you discuss the customer traction outside of China and what milestones we should be looking for in terms of the customer base across different regions of the world?

Yes, we are consistently collaborating with a key customer in Korea and another in the U.S. It will take a bit more time, but we are closely working with this customer to assess our unique cleaning technology and our Masonic cleaning, and the results are looking very promising. Additionally, we're making progress with the Korean customer concerning their copper plating product. We're also seeking new customers in both the U.S. and Taiwan. Notably, our panel level packaging tool has generated significant interest from customers in Taiwan. With our ongoing innovative technology, we plan to expand our sales revenue outside of China. We're in the process of establishing our R&D center and manufacturing in Oregon, which will facilitate our cleaning and copper plating demonstrations for customers outside China. This manufacturing setup in Oregon will strengthen our position and help mitigate any tariff-related impacts. We believe that building our R&D and manufacturing centers in China, Korea, and the U.S. will enhance our standing in the global market. We are fully confident in our new differentiated products. Additionally, there is a growing demand for AI chip technology, which is currently unmatched in the market. These requirements for innovation are placing ACM's products in a favorable position. We are confident that our continuous innovation will allow us to gain traction with key customers in cleaning, copper plating, and panel applications, along with other new products we plan to introduce. We are optimistic about our engagement in the global market, as customers worldwide seek the best technology. We recently announced our N2 bubbling technology, which generates large, uniformly distributed bubbles across the entire wafer, setting a new standard. We believe this will drive innovation for 3D NAND, 3D DRAM, and potentially 3D logic in the future, underscoring the significance of our innovative technology. Mark, do you have anything to add?

Yes. No, David, that's a good answer. I mean we're working really hard with our big U.S. customers. We've got some additional tools that are going to different organizations here in Q3 to the U.S. So our team is pretty active in Oregon. We're pretty focused on getting our demo room up and running and being ready to produce tools in the U.S.

The next question comes from Edison Lee with Jefferies.

Can I maybe ask you 2 questions. Number one is for the 2Q growth at the revenue level is 6%, which is actually below the growth rate that you are guiding for the full year. So what was actually driving that slower growth in the second quarter? And then for 3Q, you said that the outlook is very strong. Can you share the growth drivers coming from logic, memory, power and advanced packaging. So which areas actually you are seeing the strongest growth and which area you are seeing the slowest growth?

Yes. I mean revenue can be lumpy, right? And we're still expecting 15% middle point growth for the year. And also, you're asking the Q3 driving force, I want to say, still our cleaning and copper plating is still the major driving there. And also certain product, customer requests for shipping turned to Q2, Q3, right? I want to say, over the year, we still have a whole year, we're expecting growth better than the Q2.

Right. So in China, can you talk about the growth that you're seeing from memory versus logic?

I would say that we sell to both memory and logic customers. In terms of which is growing faster, I don't have a specific number at the moment. I want to emphasize that both are growing, and in the long run, memory still appears very strong, particularly with 3D NAND and the DRAM business. Additionally, there is ongoing investment in logic, with new fabs being built for both mature and advanced nodes. Looking ahead to the next few years, I believe those markets will remain solid.

Your next question comes from Matt Cook with Pro Tanto.

Can you hear me, okay?

Yes.

Good. Great. So I just wanted to ask, ACM Shanghai reported its results about 60 minutes ago. Now I know that there are different accounting standards, but their numbers look a lot better than yours. Like the difference is bigger than we're kind of used to. So revenue was $270 million compared to $215 million for ACMR and adjusted net income was $62 million compared to about $37 million that you just reported. So Mark, could you just help understand like what's caused the difference? I know there are different recognitions on revenue and timing. That's the first question, like why the results are so much better there? And if there could be some kind of like if that could swing the other way in Q3? And then the second question is, are shipment numbers different for ACM Shanghai? And if so, what are they in dollars? That would be great.

Yes, David, I'll address that and you can add if you'd like. In reverse order, the shipments are the same for both and are measured identically. The difference lies in revenue recognition. Under China GAAP, the organization in China recognizes revenue upon installation, whereas under U.S. GAAP, we recognize revenue on repeat shipments or upon acceptance of the first tool shipments. It's simply a timing difference in the revenue recognition standards. This quarter saw a larger impact than in the past, likely due to some of the larger shipments we made last year, which took longer for installations in Shanghai. We won’t provide guidance on how this might change in the second half of the year for Q3 and Q4 or give any specific details on that.

Yes. I want to add on that, you look at the long run, the 2 numbers should be matching, right? But looking at the quarterly base, you get sometimes U.S. is higher, sometimes Shanghai is higher. So that's, as Mark mentioned, different recognition of the revenue. So I want to say, overall, like you said, the Shanghai number looks good. But that's on a quarterly base, right? I want to say a whole year, I mean, over long run, this number is very matching.

Matt, I want to highlight an important point regarding U.S. GAAP on the R&D side, where we do not capitalize any costs, meaning everything is expensed. There is some capitalization of R&D, but I am not sure if they disclose the exact mix. The main difference lies in the operating expenses. Additionally, regarding ACMR and our global operations, we have costs associated with being a public company, as well as our sales and marketing efforts, which are further incremental expenses.

Helpful.

Thanks, Matt.

Thank you.

Operator, could you please move on to the next question? It seems we have lost contact with the operator. Charles, do you have a live connection? I believe Charles Shi is available for the Q&A session.

Your next question comes from the line of Charles Shi with Needham & Company.

Can you hear me?

Yes, Charles, I can hear you.

Yes, I feel obligated to ask a question about the long-term target. I think it's important update. But I have a really question on the Mainland China portion of the long-term projection there. I think one key change versus your prior target was the Mainland China WFE market size. You kind of raised it from $30 billion to $40 billion. It does match with where China WFE numbers were trending over the last couple of years. Last year, I believe it's slightly above $40 billion. This year, maybe around $40 billion. But I think my question is, would there be any concern, I mean, by the team, maybe you are a little bit extrapolating the peak China WFE number there from the last year's peak run rate level into the future? Or what's the confidence on China WFE maintaining at this $40 billion level over the long-term?

Okay. Charles, obviously, year-over-year can be kind of changing, right, maybe 5%, 10% up and down. And I want to say our long-term revenue is not for next year, right? It's like a 5-year or time line, we talk about or beyond. So we believe that year, China WFE market will be $40 billion. That's what we talk about a long run of the goal. And you look at the expanding in China of either memory or the logic or including IGBT, there's a lot of demand here. So that's our confidence. We believe that the market, $40 billion, you look at the 5 years down the road should be the number. Of course, the global market growth, too. So $40 billion, we think is a reasonable target we put there. And second one, I want to see that is we do have also a new product coming and we through last 3, 4 years, R&D, our furnace PECVD and Track, including our latest panel level packaging tool getting into the market and start to generate revenue this year and also next year. Second, I want to mention that is we just get approval, right, from CSRC, and we have second fund raising more than $600 million. Those fund raising that will help ACM to accelerating the target R&D. And so that will be another big factor. And third one I would mention that is ACM has been really in China market insist all the differentiation, innovative technology to the market. And so I believe Chinese customer still like the best technology with IP protection. So that really put ACM in a very unique position. And at this moment, we have not found any local Chinese company can copy our IP, infringe our IP. So we have a very confident ACM can maintain our differential product margin. And also, as I said, customer locally we design the best technology, which is we are providing a differentiated solution. So we are much better than those people provide the similar product. And since I said, we're providing differentiation. That's what's solving the future needs for the customer. So with all 3 automation, we are very confident. That's why we're raising this China market from $1.5 billion to $2.5 billion.

The next question comes from the line of Jimmy Hang with JPMorgan.

Can you hear me?

Yes, please.

So I want to ask about whether you have any source of visibility into 2026. And actually, can you also share about your estimates on the China WFE for '25 and '26, either absolute numbers or Y-o-Y comparison?

Yes, considering 2025, different reports yield varying results. Gartner's projections are relatively lower, while another source shows significantly more favorable outcomes. When looking at 2025 and 2026, it's still challenging to predict, perhaps a fluctuation of around 10%. However, we believe the Chinese market is still robust and has already captured about 30% to 35% of the global market. With our innovative technology and upcoming products, even if the revenue or WFE spending in China remains static, we anticipate growth and high growth. Our new PECVD product is attracting several customers who are starting evaluations this year. Additionally, our new 300 WFE wafer per hour KrF line is scheduled for shipment in Q3, alongside our advancements in panel-level packaging and a high-temperature annealing process that significantly reduces annealing time for IGBT and other critical applications. We're confident that these new products will drive our growth even amid a flat WFE market in China. We focus on offering differentiated products in the Chinese market, which allows us to protect our intellectual property and maintain our profit margins while providing the best options to our customers. Chinese customers prioritize performance over price, which strengthens our position as our superior products yield better results compared to similar offerings in the market. This differentiation is a significant advantage for us.

Yes, I would like to add a few points regarding that. We won't provide guidance for 2026 until early next year. However, you've likely noticed that our operating expenses were quite robust this year compared to our revenue. Even with the midpoint estimates, we're still increasing our operating expenses this year. A significant reason for this is our investment in market opportunities. As David noted, we have numerous new R&D projects underway, and we are also increasing our spending on sales and marketing. This expenditure clearly reflects our anticipation of substantial growth in the future.

Yes. I want to add that compared to the leading competitors, their R&D spending is between 10% and 12%. We, on the other hand, will invest between 14% and 16%, demonstrating our significant commitment to R&D. Additionally, we are launching new products at a faster pace and have a higher product introduction rate compared to the top global companies. This is why our spending is greater. Our investments in R&D, as well as in sales and marketing, are essential for supporting our growth over the next five years. We believe that this operational spending is crucial for our long-term success.

Yes. Also want to ask about the cleaning equipment market share target to get to 50% in the long run in China. Do you think in that case, what will be the split of the remaining 40% share between other Chinese peers and international suppliers? Yes. 50% market share in China.

It's difficult to determine who ranks second and third, but we are currently number one in China. Our product portfolio effectively covers about 95% of the cleaning process steps, making us one of the most comprehensive providers globally, even compared to the three major competitors in the international market. Our products are highly differentiated, featuring advanced tools and non-damaging technology, alongside our recently announced N2 bubbling design, which creates uniformly large bubbles. We are not only expanding our product range but also innovating beyond the offerings of top-tier companies, particularly in regards to our SPM, which features a new proprietary nozzle design that minimizes liquid splash and mist within the chamber, enhancing performance with small particles. Currently, we are achieving an average of around 5 nanometers, and we expect to surpass 50 and 70 nanometers with improvements in the chamber environment. As we continue to expand in the Chinese market, we remain confident in our strong IP portfolio both locally and globally, ensuring that our tools are difficult to replicate. We are excited to further roll out our different product tests in the Chinese market, knowing that the demand for cleaning technology is growing, particularly in AI chip manufacturing. This cleaning process is becoming increasingly complex for various technologies, including 3D NAND and DRAM. We have the necessary product technology for these challenges. Moreover, we are developing additional differentiated products for panel-level applications, with plans to announce new offerings by the end of the year. We're eager to advance in this market, especially as chip sizes continue to increase. We are investing significantly in this area.

Yes, I have one last question. Can you elaborate on your progress in Taiwan and Southeast Asia, particularly regarding the PLP testing? It seems the industry believes that mass production of Taiwan foundry FOPLP might be delayed until 2029 or even 2030. The development timeline for testing and manufacturing appears to be longer than anticipated. What are your thoughts on the timeline for mass production of FOPLP or collaborations with the panel makers to complete the final stages, especially concerning the advanced process?

Sure. We believe that panel level packaging is ready for large AI chip packaging. The effective area increased by more than 60% when using a 310x310 panel versus a circular design. This represents a significant advantage for customers, particularly for larger chips. With the move towards 310x310, we anticipate a shift to larger panel sizes soon, which we view as a strategic step supported by our customers in Taiwan. Regarding the ACM, we have a solid product for this application, already introducing low-pressure and bubble cleaning to the market. Additionally, our horizontal and rotational electroplating offer solutions for panel level packaging. Historically, 200-millimeter packaging was vertical, but transitioning to 300-millimeter wafers has shifted that to horizontal. We likely stand as the only provider of this horizontal solution due to our proprietary IP design. This March, we received a technical award from 3D IC InCites USA, affirming our position in horizontal plating and enhancing our competitive edge in the future AI PLP market. Recently, we achieved horizontal plating uniformity of less than 5%, and we aim for less than 3% next. This will help us ensure equal performance in panel square plating versus circular designs. The timeline for 2029 will depend on technological advancements and customer ability to address ongoing challenges, which could either expedite or delay progress. The market is driven by the combination of two manufacturing technologies. Our copper plating will certainly accelerate the process, which is a major factor for companies transitioning from 300-millimeter wafers to panel level. We are optimistic that our technology will support customers in streamlining their production lines, and we are actively engaging with customers in Taiwan.

Your next question comes from Yang Li May with UBS.

Can you hear me?

Yes, please.

Just one quick one. It seems like your Q2 year-over-year growth in for the Asia is still underperforming other like China peers. Any reason the hike probably due to different customer exposure?

David, I believe the question was about the growth of ACM Shanghai's revenue or EBITDA compared to some of the peers in China, specifically asking for the reason behind the difference.

Between China and within the U.S. with our team and other peers?

WFE versus China peers.

Okay. I didn't see the other results come out in China peer. Obviously, looking at the Shanghai, our revenue growth still looks good, right? And so I want to say we're confident. And also this year, as I said, we'll come to the moment of multiproduct and the revenue will not much contribute this year. But with the next year, we see our furnace PECVD, Track start contribution, right? And also, we have a new product with cleaning and continue expanding copper plating. So I want to say we still have a very good confidence and also outlook for 2026. And this year, and well Q3 very busy and in Q4, we have a couple of slot open, but we think it will be also fill that soon. So in general, we still have good confidence, we have good growth still this year.

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

Okay. Thanks, operator, and thank you for all the participants on today's call and for your support. Before we close, Steven is going to mention our upcoming Investor Relations events. Steven, please.

Thanks, David. Before we conclude, I just want to give everyone a quick reminder, our upcoming investor conferences on October 21, we're going to present at the Sixth Annual Needham Virtual Semiconductor and SemiCap One-on-One Conference. On August 25, we will present at the Jefferies Semiconductor IT Hardware and Communications Technology Summit at the Four Seasons Hotel in Chicago. On September 3, we'll present at the Benchmark 2025 TMT Conference in New York City. On October 7, we'll present at the 17th Annual CEO Summit in Phoenix, Arizona. Attendance at these conferences are by invitation only. For interested investors, please contact your respective sales representatives to register and schedule one-on-one meetings with the management team. This concludes the call, and you may now disconnect. Take care.

Thank you.