ACM Research(ACMR) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $204 million, an increase of 21% year-over-year [7][36] - Year-to-date revenue for the first nine months was$ 558.6 million, up 44% [8] - Gross margin for Q3 was 51.6%, slightly down from 52.9% in the previous year, but still above the long-term target of 40% to 45% [37] - Operating income increased to $56.1 million, compared to$ 43.8 million in the prior year [39] - Net income attributable to ACM Research was $42.4 million, up from$ 37.6 million [40] Business Line Data and Key Metrics Changes - Revenue from single wafer cleaning, Tahoe, and semi-critical cleaning products grew 22% in Q3, representing 79% of total revenue [9][36] - Revenue from ACP furnace and other technologies increased by 36% in Q3, accounting for 17% of total revenue [19][36] - Revenue from advanced packaging declined by 21% in Q3 but was up 3% year-to-date, representing 4% of total revenue [21][36] Market Data and Key Metrics Changes - The global total available market (TAM) for cleaning is estimated to be close to $6 billion, with ACM products covering over 90% of all cleaning process steps in memory and logic manufacturing [9] - The middle and low temperature SPM market represents over 80% of the SPM market, indicating a significant opportunity for ACM's Tahoe product [17] Company Strategy and Development Direction - ACM aims to expand its market share in China while also increasing its presence in international markets, targeting to generate half of its revenue from outside China in the long term [34] - The company is focused on innovation, with the Ultra C Tahoe product positioned to meet the environmental demands of semiconductor manufacturing while enhancing production capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued high demand for wafer fabrication equipment (WFE) in China, driven by ongoing investments in memory and logic manufacturing [34][49] - The company raised its 2024 revenue outlook to a range of$ 725 million to $745 million, reflecting strong shipment activity [32] Other Important Information - Cash and cash equivalents at the end of Q3 were approximately$ 369 million, with positive cash flow from operations of $11.9 million for the quarter [41] - The company is expanding its facilities in both China and the US to support growth and customer engagement [31] Q&A Session Summary Question: Coverage of 3D NAND applications - Management indicated that while ACM covers almost 90% of typical process cleaning, they are still qualifying some processes for 3D NAND applications [44][46] Question: Future of WFE spending in China - Management expects WFE spending in China to remain strong, with potential for slight fluctuations but overall positive growth anticipated [48][49] Question: Gross margin expectations - Management confirmed that while gross margins are expected to return to the target range of 40% to 45%, they remain confident in maintaining healthy margins due to product mix and backlog [52][53] Question: Sales outside of China - Management indicated that they expect to see growth in sales outside of China, particularly as they engage with global customers and expand their product offerings [54][56] Question: Advanced packaging market trends - Management noted that while the advanced packaging market in China has slowed, they anticipate a gradual recovery and increased spending in the coming quarters [67]