ACM Research, Inc. Q3 FY2024 earnings call

Product Segments: Single wafer cleaning, Tahoe, and semi-critical cleaning grew 22% in Q3 and represent 79% of total revenue. Technical progress in SPM solutions, with Tahoe tool achieving performance breakthroughs, including average particle count of less than 6 particles at 26 nano size. Tahoe's hybrid architecture offers cost savings and environmental benefits. Progress with track and PECVD platforms, with ongoing demonstrations and evaluations. Customer: Broader demand in foundry logic, power, and memory; leading position in China cleaning, with progress in US, Europe, and Korea customers. Facility Expansion: China's Lingang production and R&D center opened, and US Oregon facility purchased for better access to major customers.

For the third quarter, revenue was $204 million. Segment performance: Single wafer cleaning, Tahoe, and semi-critical cleaning had revenue of $161.0 million, up 21.6%, representing 79% of total revenue. ECP, front-end packaging, furnace, and other technologies had revenue of $34.6 million, up 35.6%. Advanced packaging, excluding ECP, services and spares, had revenue of $8.4 million in Q3, down 21.0%, but up 2.9% year-to-date, representing 4% of revenue. Total shipments for the quarter were $261 million, up 23%. Gross margin was 51.6%.

Raised 2024 revenue outlook to $725 million to $745 million versus prior range of $695 million to $735 million. Shipment activity remains strong and expected to outpace revenue growth. Focus on market share gain, new products, and increased localization in China, with expansion to new customers in US, Korea, Taiwan, Europe, and other Asia markets. Long-term target is to generate half of revenue from outside China.

Forward-looking statements subject to risks and uncertainties described in SEC filings. Gross margin may vary due to factors like sales volume, product mix, and currency impact.

Q: Charles Shi asked about 3D NAND coverage percentage and China WFE level and US trade policy impact.

A: David Wang responded that 3D NAND coverage is in progress with engagement, China WFE market is strong with ongoing fab building, and trade policy impact is hard to predict but need to follow regulations.

Q: Mark Miller asked about gross margins and sales outside China.

A: Mark McKechnie and David Wang replied that gross margin target remains 40% to 45%, and sales outside China are expected to contribute with focus on differential products and customer evaluations.

Q: Suji Desilva asked about global customer opportunities and SPM specs.

A: David Wang discussed global opportunities for differential products like SAPS and Tahoe tool, and SPM specs including high temperature SPM tool's uptime and particle performance.

Q: Edison Lee asked about advanced packaging slowdown in China and its impact on China WFE spending.

A: David Wang stated that advanced packaging slowdown was past, with gradual takeoff in Q3/Q4 and positive outlook for Q4 and next year as foundry business picks up.