Hua Hong Semiconductor Limited/ADR (HHUSF) Q1 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Hua Hong Semiconductors First Quarter 2026 Earnings Conference Call. Today's call is hosted by Dr. Peng Bai, Chairman and President, and Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Please be advised that your dial-ins are in listen-only mode. However, at the conclusion of the management presentation, there will be a question and answer session, at which time you will receive instructions on how to participate. The earnings press release and first quarter 2026 summary slides are available to download at our company's website, www.huahongrace.com. Without further ado, I would like to introduce you to Mr. Daniel Wang, Executive Vice President and Chief Financial Officer.

Good afternoon, everyone. Thank you for joining our Q1 2026 Earnings Conference. Today, we will first have Dr. Peng Bai, our Chairman and President, provide an overview of our first quarter performance. I will then take you through our financial results in detail and offer guidance for the upcoming quarter. We then open the floor for a question and answer session. With that, I turn the call over to Dr. Bai.

Dr. Thank you, Daniel. Good afternoon, everyone. Thank you for joining our earnings call. Hua Hong Summit Conductor generated revenue of U.S. $660.9 million in the first quarter of 2026, a year-on-year increase of 22.2%. Gross margin stood at 13%, a year-on-year increase of 3.8 percentage points. Both figures were in line with our guidance. Net profit attributable to shareholders of the parent company amounted to U.S. 20.9 million, marking substantial year-on-year growth despite the rapid capacity ramp up the company maintained high capacity utilization rates with strong performance across all process technology platforms MCU stand-alone flash and BCD products delivers the highest growth rates. The company's results were supported by sustained efforts in cost reduction and efficiency enhancement and by a positive demand signal that started at the beginning of the quarter and become stronger over the course of the quarter. The global semiconductor industry is undergoing accelerated transformation as AI and related applications play an increasingly central role in market dynamics. The unmistakably positive impact of AI on worldwide semiconductor market demand, persistent uncertainty in the global supply chain landscape make a more complex market picture that we are facing with Hwa Hong semiconductor remains steadfast in pursuit of its key objective of becoming a founder leader in specialty process technologies with a core strategy of continuous focusing on market needs strengthening process technology capabilities, and substantially increasing production capacity scale. In the first quarter, the ramp-up of our 12-inch capacity progressed steadily, with its revenue contribution rising to 62.7%, while our 8-inch production line maintained sound probability. Meanwhile, the proposed acquisition of Huali Micro has been accepted by the Shanghai Stock Exchange, entering the substantive review phase. The acquisition is currently progressing according to the established schedule and is expected to be completed in the second half of the year finally as a veteran of the industry i remain confident in a bright future for semiconductor industry globally and in china i'm fully committed to make king huahong semiconductor an increasingly important player in the industry and deliver sustainable value to our shareholders. Now I would like to hand the call over to our CFO, Mr. Daniel Wang, for his comments. Daniel.

Thank you Dr. Bai for your inspiring comments. Now let me walk you through a summary of our financial performance for the first quarter. I would then provide our revenue and margin outlook for Q2 2026 before opening the floor for the Q&A session. First, let us review our financial results for the first quarter. Revenue was $660.9 million, 22.2% over Q1 2025, primarily driven by increased wafer shipments and improved average selling price, and 0.2% over Q4 2025. Gross margin was 13%, 3.8 percentage points over Q1 2025, primarily driven by improved average selling price and cost reduction efforts, and a flat with Q4 2025. Operating expenses were $105.6 million, 8.8% over Q1 2025, primarily due to increased operating expenses for the new production line in Wuxi, and 18.9% lower than Q4 2025, mainly due to decreased labor costs. Other loss net was $2.4 billion, 70.5% lower than Q1 2025, primarily due to foreign exchange gains versus foreign exchange losses in Q1 2025, partially offset by decreased government subsidies, interest income, and increased finance costs. There was other income net of $34.1 million in Q4 2025, mainly due to increased finance costs and decreased government subsidies. Income tax credit was $4.7 million, primarily due to a reversal of dividend withholding tax for 2025. Net loss for the period was $17.3 million, narrowed by 66.9% compared to Q1 2025 and 7.5% compared to Q4 2025. Net profit attributable to shareholders of the parent company was $20.9 million, 458.1% over Q1 2025 and 19.9% above Q4 2025. Basic earnings per share was 1.2 cent, 1.2 cent. Annualized ROE was 1.2%. Now let's take a closer look at our Q1 2026 revenue performance. From a geographical perspective, revenue from China was $525.2 million, contributing 79.5% of total revenue and an increase of 18.7% over Q1 2025, mainly driven by increased demand for MCU, other power management IC, flash, and IGBT products. Revenue from North America was $85.7 million, an increase of 51.9% over Q1 2025, mainly driven by increased demand for other power management IC and MCU products. Revenue from other Asia was $28.2 million, an increase of 5.2% over Q1 2025, mainly driven by increased demand for MCU products, partially offset by decreased demand for superjunction product. Revenue from Europe was $21.8 million, an increase of 43.2% over Q1 2025, mainly driven by increased demand for smart car IC, IGBT, and MCU product. With respect to technology platforms. Revenue from embedded non-volatile memory was $184.6 billion, an increase of 41.7% over Q1 2025, mainly driven by increased demand for MCU and smart car ICs. Revenue from standalone non-volatile memory was $57.1 million, an increase of 33.2% over Q1 2025, mainly driven by increased demand for flash products. Revenue from power discreet was $170.9 million, an increase of 5% over Q1 2025, mainly driven by increased demand for IGBT and general MOSFET products, partially offset by decreased demand for superjunction products. Revenue from logic and the RF was $74.4 million, an increase of 11.4% over Q1 2025, mainly driven by increased demand for logic and the CIS products. Revenue from analog and power management IC was $173.9 million, an increase of 25.8% over Q1 2025, mainly driven by increased demand for other power management IC products. Now let's turn to our cash flow statement. Net cash flows generated from operating activities was $130.4 million, 159.9% over Q1 2025, mainly due to increased receipts from customers. It was 47 percent lower than Q4 2025, largely due to decreased receipts of government grants and increased payments of labor costs. Capital Cash flow expenditures were $924.9 million in Q1-2026, including $886.1 million for Huahong 12-inch business and $38.7 million for Huahong 8-inch. Other cash flow generated from investing activities was $67.9 million in Q1-2026, including $57.8 million decreased time deposits, $10 million interest income, and $100,000 receipt of disposal of equipment. Nat cash flows generated from financing activities with $638.7 million, including $649.4 million dollars proceeds from bank borrowings and the 3.3 million dollars proceeds from share option exercises partially offset by 12.1 million dollars interest payments and 1.1 million dollars lease payments and point a million dollars of bank principal repayments now let's move to the balance sheet cash and the cash equivalence was $4,867.9 million on March 31st, 2026, compared to $4,893.8 million on December 31st, 2025. Other current assets increased from $787 million on December 31st, 2025 to $894.6 billion dollars on March 31st, 2026, mainly due to increased value-add tax credit. Property, plant, and equipment was $7,105.9 million on March 31st, 2026, compared to $6,676.4 million on December 31st, 2025, primarily due to capacity expansion in the far home manufacturing. Interest-bearing bank borrowings increased from $3,190.8 million on December 31, 2025 to $3,897.2 million on March 31, 2026, primarily due to increased drawdowns of bank borrowings. Total assets increased from $14,453.8 million on December 31, 2025 to $14,947.3 million on March 31, 2026. Total liabilities increased to $5,663,000,000 on March 31, 2026 from $5,289,500,000 on December 31, 2025. Debt ratio increased to 37.9% on March 31, 2026 from 36.6% on December 31, 2025. Finally, let's take a look at our second quarter outlook for our 2026. We expect revenue to be in the range of $690 million to $700 million, with a projected gross margin of 14% to 16%. This concludes my financial remarks. We will now begin the Q&A session. Operator, please assist. Thank you. Operator?

Air participants, as a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one and one again please don't bother compadre can a roster these will take a few moments and now we're going to take our first question and it comes land of lapping huang from hua thai securities your line is open please ask a question oh uh thank you to taking my question so congratulations for the very strong result my first question is about the the impact of the memory super cycle.

So we see the further price hike of the memory last three months. So Dr. Baiso, what's your view on the ripple effect on this trend on the logic foundry investment, especially on your no flash business? Can we expect the further price hike in the memory will drive the ASP and the margin expansion in your logic foundry business in the remaining of this year? Thank you.

Okay. Thank you, Li Ping. Good to hear from you. Yes, let me take your question on the no-flash situation. You're right. First of all, the memory is in short supply, starting with DRAM, and DRAM price, as you know, went up probably like 10x, then that started to split over into NAM memory. Now it started to split over a little bit into no flash as well. It's not as much spillover as I would like, but it's definitely we see the demand going up for our no flash memory that will translate into a price increases but not as significant as a DRAM or not nearly as significant as a DRAM but we should expect to be 10-15 percent price increases on the no flashes so that would be the also we with a with a tight supply we won't be able to satisfy all the demand, but we do get the benefit of higher prices.

Yeah, thank you. So my second question is that can you provide some update on the progress of your Wuxi Fab expansion? So I remember you mentioned last time is, I think, start already construction in March and moving in the October. but these days we see a very fast expansion of the most of the foundry and the memory company in the world. Do you see any delay of the equipment delivery? So have you or further and that is furthermore and today that with the U.S. president visiting China, which is a very important milestone for the U.S.-China relation. So do you think that this will help you with the equipment procurement coming in the rest of the year.

Yes. Let me update you on our Wuxi side in terms of the capacity expansion. As you know, at Wuxi side, we have two operating flaps already. The third one, as you correctly pointed out, started construction in March. so before I go to the third fab which we call 9b the second fab has been on a capacity ramp up since last year yet it's a fab 9a that capacity ramp up should complete in Q3 this year which means that we will reach the full capacity in Q3 the output there's obviously a delay in getting all the output with that full capacity but we should be getting the full output starting probably by end of this year or beginning of next year now the third fab fab 9b we kick off the construction in of this year we are doing all the facility work right now because the shell is already there for the third fab we expect the equipment start to come in in the fourth quarter of this year to to your question about the equipment procurement we do not see any impact in terms of the export control from the u.s export control on the equipment procurement for fab 9d that has not been an issue for us the president trump is in china as we speak but we certainly hope this environment is going to be further relaxed going forward but we'll see how up to this point even even uh all the press reports notwithstanding all the press reports notwithstanding over the last couple months We have not been impacted in terms of getting the equipment we need to buy and also the delivery time.

Okay, yes, it's good to see. So final question is that we see the Hua Hong group establish advanced packaging subsidiary. Also, the market is very closely watching the next generation technology like silicon photonics. So my question is that how the Hua Hong Group's advanced packaging subsidiary will coordinate with the Hua Hong, LISCO, and what's the technology you have on the silicon photonics, and what's your plan on silicon photonics thinking?

So let me take on your question one at a time. Why is the advanced packaging? Yes, there is a newly established effort on advanced packaging. That is not – it's under the Huahong Group, not part of the public company, not part of Huahong Semiconductor. Of course, we are having a lot of coordination at the Huahong Group level in terms of the technology roadmap, as well as capacity planning. So in that regard, certainly are coordinated with existing Hua Hun Group companies. Advanced packaging is basically definitely a high-growth area in the industry. and we expect the effort to substantially add some offering and also expect to add to our revenue in the future at a group level now the silicon photonics is another area that is a growing significant pretty fast especially with AI and related applications we are also looking at getting to silicon photonic area then there's a quite a bit of a planning activity that's ongoing and once something get finalized I expect that will be soon that we were were update you on the details but the old suffice to say that yes we were getting to silicon photonics since we this is a growth area is adjacent to what we already do so you should should have a lot of good synergy with what we already have and we we should expect that to be to be started pretty soon right okay thank

you thank you very much thank you now we're going to take our next question next question comes from the line of Tracy Sui from the CLSA company. Your line is open. Please ask the question.

Okay, thank you. Thank you, Dr. Bai, Daniel, and senior management for giving me this opportunity for questions. So my first question is regarding your 2Q26 revenue guidance.

Would you please guide us how much growth may come from the shipment growth and how much from the AFP increase thank you you know it's roughly it's about you know we're talking about quarter to quarter around close to five percent okay and we're pretty confident with that number it's coming in a combination of revenue ASP growth and also volume growth. Thank you.

Okay, thanks.

And just following up for the wafer price, perhaps how you will expect your wafer price trends throughout this year and which type of chips you may see maybe a higher chance to further for the price list thank you since we have a diverse portfolio of technology platform we do see the price changes price increases vary across different platforms the ones are in higher demand we'll see a higher price increases the ones that demand someone muted the way we were probably trying to stay where it is or just with a with a very minor increases the net result is that on average I do see a I do think we're going to be consistent with the industry average about 10 percent plus minus some number there here and there you have to realize the price increases it takes time to get implemented yes even you you increase the prices it's the order from that day forward that see the new prices so that you will take a some times to fully materialize all the the increases to have them fully reflected in the financial results but during the course of this year I think we're definitely will be saying about on average some will increase more like because some of the, we do this mainly based on market, it's a market driven methodology, and if you see a lot of demand we can supply, we do tends to increase the prices a little bit more. So some platform might see up to 20%, 25 even, but some are gonna be close to where they are and maybe 5%. On average, I think 10% is a reasonable assumption, or 10 to 15 by the end of this year. Somewhere there.

Got it. Yes, thank you, Dr. Bai. And can I please also have a follow-up question on Fab 9B? Would you mind remind us how much is our capex plan and how much is the designed capacity? and any updated timeline in terms of the CapEx investment and also the Ramp Hub and what may be the process mode and the type of chips platform. Thank you.

I think that Fab9b, the overall project, I think we're going to be putting down CapEx-wise about 60 billion maybe right around there it will be 60 we actually originally said 69 we were trying to at least six six six billion not 60 for 66 billion okay like take off one zero there so already we think is six point something but we will try to control it to be about six billion overall investment that will be spent this year and next pretty much and it will start to equipment started coming towards the end of this year so we are talking about it will start to produce output in 2027 probably going to take a year and a half to two years to get all the capacity in place to get all so you're talking about you in 2028 that that might be or be at be at a full capacity so that's the rough schedule i'm giving you and what might be uh the post note or type of chips and the color that you may able to share thank you focus on specialty technologies we see the it will be a range of nodes but the bulk will be 40 nanometer so 40 nanometer plus minus something sure thank you dr. bye and thank you Daniel that's all for me and I will go back to the queue thank you thank you thank you now we're going to our next question and the next question comes line of uh xiang wang from citics your line is open

please ask the question okay thank you for taking my question this is from city securities um my first question is about uh uh i'm wondering how was the demand change in analog and the power applications over the past quarters and uh um is there any further plan for the wafer price to increase on q2 and uh have there been any price increasing the materials such as silicon wafers thank you the analog area our main product is the power management ics we do see strong

demand there that's the mostly related to a a AI and AI related build out like the server boxes they need a lot of power management chips and that's some partially offset by some of the consumer weakness because of the DRAM increases the console we do see a memory price increases has a small depressing effect on consumer segment overall is a positive story for us because we obviously have products in both AI related field as well as consumer on On average, AI-related stronger demand overwhelms, at least more than compensate for the small weaknesses in consumer. So in that regard, I think the analog, the PMIC area is a good example where you have one part of the market going strong, another part is a little bit muted but overall still a positive in demand increasing story for us so we yes we were you will see price increases in this particular platform a reasonable price in term of the supply chain and because of the probably mostly because of the wall and some of the disruption that it causes we do see some particular material raw material the prices it's not across the board and across the board is it's not a very significant factor yet but there's a few item that prices to go up quite high and we're managing that and those are manageable and we don't expect i do not expect mostly because of oil in Middle East. In particular, the oil related or gas oil related products and some of the items, the prices spike. And in aggregate it doesn't have an average impact much. All right?

Okay, got it. Thank you. And my second question is about does our company have any plan or investments on the compound semiconductor, such as gallium arsenide or silicon carbide, or even on Indian phosphide? That's my second question.

Well, thank you for asking. The answer is yes. We have started efforts in ganim nitride. We already have TD activity going on, so we were getting to ganim nitride, and as well as silicon carbide, the compound semiconductor, those two that complement our silicon-based power devices that we have decided to get into. The way we get into It might be a little bit different, I guess, silicon carbide, we might have a joint venture with some existing, joint venture in terms of the capital management. When Ganyam Nitri seek a partner, when we get into the volume manufacturing phase, so that part is still being kind of planned or is not finalized. But the answer to your question, yes, yes, we were getting to the gallium nitride. We are getting to the gallium nitride and silicon carbide effort because we have a large silicon-based power device capacity. We also have a large base of customer. And they are also asking us to get into the compound so that the compound cement factor to complement our existing silicon-based power devices. Indian phosphine, no, we're not.

I'm sorry. Sorry. Go on.

I can't hear you. My apologies. Please continue.

We don't hear anybody speaking online. Next.

Yes, of course.

Okay, that's all my questions. Very clear.

Thank you, Jian. Dear participants, as a reminder, if you wish to ask a question, please press star 1 on your telephone keypad. And now we're going to take our next question. And the question comes to the line of Timothy Wang from Oriental Asset Management. Your line is open. Please ask your question.

Hello, Dr. Fai. Hello, Daniel. He's from Oriental Asset Management. My name is Timothy Wang. My first question would be, I would like to confirm whether we are acquiring 7 nanometers or below to our portfolio through the acquisition of Hualimicro, as some news reports suggest. Thank you. This is my first question.

Sorry, did you get that question?

Well, you know, can you repeat that question again, or you have not?

I would like to confirm whether we are acquiring 7 nanometer or below to our portfolio through the acquisition of Hualimicro, as some reports suggested. Thank you.

Well, a couple of things. One is our Q1 results does not include Huali Micro. That's still outside the Huahong Summit contractor because it has now completed the acquisition. Second, Huali Micro, we're acquiring, what are we acquiring from for Huali Micro is basically what do we call Fab-5 asset and the Fab-5 asset and business those are based on 55 nanometer and 40 nanometer IC products that's what we're calling yes I actually I didn't I didn't believe such reports so thank you for your clarification and my second part of my question is I would like Would you mind giving up some color on the explosion of CPO, silicon photonics, optics?

How would these trends benefit us?

I think right now, from a technical standpoint of view, a lot of high-compute platforms, the interconnect become a bottleneck therefore people are looking for ways to speed up the interconnect silicon photonics is one way now there are some detail there that depend on the disc whether you're talking about the stack to stack like a box-to-box communication the or some chip to chip so you actually to require slightly different silicon photonic technology. But that's the area that would require silicon photonics type of product. This is consistent with now AI is driving a lot of the market growth. So if you believe in that thesis, that AI is going to drive a lot of a growth then you would believe that you you would say that there's going to be going to be more demand for silicon products silicon photonics related products because the AI obviously the other system level is a high compute so that's that's the and from from home standpoint of view we we our technology although silicon photonic is a new technology for us but it's not it's also a Jason technology for us it's not too different too far away from we already doing why are they doing a lot of CIS, which require BCD, not BCD, BIS, require a lot of the backside processing area. So there is quite a bit of synergy from technology standpoint of view. So that's why we think it's a good area for us to get into, because there is going to be market demand, and it's also play into kind of our strengths or our adjacent area of thank you thank you very much and congratulations for all the progress thank you thank you now we're going to take our next question and the question comes line of Zhang Kui from Orion securities your line is open please ask a question.

Hi, Dr. Bai and Mr. Wang. My first question is about the memory price. How do you see the memory price in the next few quarters?

The price is a sensitive topic. In the end, the price will be set by supply demand balance as long as the we continue to have a supply then we have a little bit of opportunity to inch up the prices we absolutely will stop price increases supply demand balance is reached at this point in starting this year we start to see tightness of the supply and we continue to see that so we are going through one round of price increases we have gone through one round of prices increases that's not fully reflected in it will take a little bit of time to to see how it's impacting the order and how is it impacting the overall market but we will be watching that and then decide whether the balance is reached or if it's not reached we may inch up a little bit more and be frank and open about this one but if the supply demand is more or less at a good balance we're probably going to pause or going to stop increasing prices As I said, for the year, we expect, on average, as I said earlier, 10%, maybe if we were lucky, it would be 15%, 10 to 15%. And memory is one of the platforms that increases probably will be above the average.

Okay. Thank you, Dr. Bai. My second question is about the AI server opportunity. As we know, we already are making some analog for some AI server. And also we can see power discrete, the usage are also increasing in AI server.

So from our point, how do we see the opportunity for us? maybe just now you also mentioned like silicon photonics or maybe combine all this together how do we see the opportunity the power devices overall marketing actually your cry is actually increasing because of the all the AI boxes need power devices plus some of the new like robotics or the industrial demand is also increasing the power demand for power devices so the issue there probably is not so much overall market demand we do see that part is reasonably healthy the power devices you know the the issue is probably the The supply also increases quite fast, especially the Kanban semiconductor. Like I said earlier, silicon carbide started to contribute significant portion to power devices, so that here you have a situation where the supply-demand balance is now off. therefore for us to win business we have to be it's a competitive market you say you have to compete with with with our competitors now we do have a good silicon-based power device technology we have left in the area I think the part that we need to do more is to get the compound semiconductor as part of offering that's why earlier i said we are getting into silicon carbon and the gallium nitride the compound semiconductor so that we can first provide a more complete solution to our customers and also give our customers more choices more flexibility in terms of coming up with a optimal combination of the power devices to support increasing demand so that's the situation I see silicon photonics a different story that is we're starting from scratch that is a nation a new new development that is getting more and more important I think is that we don't have a silicon for the Alex offering right now so for us anything we get there will be a net addition to our to our business okay thank you talk bye thank you now we're going to take our next question and the question comes line of Charlie Chan for Morgan Stanley your line is open please ask a question hi dr. bye and Daniel since we're taking my question so I

actually have a two question one is about your PM PM IC capacity expansion I'm I'm not sure if it's the right understanding, but could it be like a BCD process? Do you think you can extend the capacity even so strong and also customers are willing to pay higher price? And if they cannot get a capacity from your fab, where they can go to get sufficient supply?

Yeah, the power management product, it does use BCD technology platform. That's the technology platform we're talking about, BCD. That's number one. Number two, we are expanding the BCD capacity. That is already one of the highest capacity platforms we already have. But we are expanding, as we speak, in both Wuxi as well as maybe in Huali Micro that we are about to acquire. So we will get higher capacity because we are now meeting the customer needs. Third, you are correct, the PCD area is a competitive marketplace. There are many players there, but we have been one of the biggest players in China, and partly because we think we have a good technology advantage. And we also have some very valuable strategic customers that work with us. So we think we can increase the capacity and still be able to get a good price on them. So that's why we are doing capacity expansion. And this is also an area that we are focusing on in terms of technology development to try to get to the next generation faster so that we keep that technology edge.

Dr. Bai, and my second part of this question is, for example, UNC, Vanguard, if I may code. But it seems like their first, I think 1Q that grows single digits 2Q, like high single digits Q on Q. So I'm not sure, after your capacity expansion, do you feel like you can win back some customers, no matter consumer side or those non-China customers, no matter U.S. customers or Taiwan customers, back to your set for PMIC production?

The PIMIC business has been, has grown in Q1. If we had more capacity, we probably could have done better. So as our new capacity come online, we do think that we can keep growing that part of business. already have from U.S. and Europe for that matter, because for European customers they have this in China for China strategy that we do benefit and the U.S. company mostly because of their business is growing very fast so they need more supply so in that sense that we think the BCD area or PMIC area it is one area that is benefiting from the AI and AI related growth and also all the other like the car also need a PMIC and the robotics overall the only end mark From an end market standpoint, the only place we see some weaknesses is in the consumer segment. I would do see that. So the hope is that the area that's been growing, keep on growing, like AI and robotics and the cars, auto, and the consumer maybe will come back because they can't keep on pushing out the new model forever. so they have to also get so that's the overall picture I see thanks and my second question is some clarification your comments so but I think you're fab 9 right as you just described is more like 40 nanometer if that the case why why there's a or you were referring to your your but the Hali's a fab 8 so can you clarify restriction I was not talking about Hali I was talking about just we are correct well I also said we have not be impacted in term of the by the export control in term of the equipment we really need to buy when I

say you for the restriction is more relaxed in general we will get more choices is always good to have more choice so that I might be able to have a little bit more optimal combination of the tools it's not a if we can oh I see I know it's kind of nice so so nice to have so so even is a status quo it doesn't change your extension for a favorite night is that right way to think about this and and lastly but lastly I think and show a new new business right I think for global AI semi supply chain I think there are lots of realty component for example interposer bridge die silicon capacitors a PIC you have any demand on for those I think the previous question was about CPU-related, but I wanted to ask about all those 0.5D packaging-related components, no meter silicon capacitor, interposer, bridge die, or PIC. Do you have any demand for those?

Good question. We do see demand for high-density capacitors, so we are having an effort there to do the capacitors deep trench or those high density high density capacitors so that it looks like it's it's being there for for a while now that we should start to see some revenue coming the in term of the the other one say you can ask the question oh you interposer interposer interposer is also something that we are very open to it. I think that we are exploring some options there. That's still in the early stages. That's probably going to go with when we have our advanced packaging coming online. The interposer will also become a significant part of the overall packaging effort.

Thank you. Ladies and gentlemen, that's all time we have for questions. I will now hand back to Mr. Daniel Wang for closing remarks.

Well, you know, thank you very much for joining us today. I mean, you guys had a lot of wonderful questions. All these questions were, were, has been very, very helpful. And we look forward to speaking with you again and perhaps seeing you in the next quarter. Thank you very much, Dr. Tugabai.

Thank you.

This concludes today's conference call. Thank you for participating. Menel, all disconnect. Have a nice day.