Earnings Call: Q3 2018

Oct 30, 2018

Welcome everyone to Chroma's 2018 third quarter earnings conference call. All lines have been placed on mute to prevent background noise. After the presentation, there will be a question and answer session. Please follow the instructions given at that time if you would like to ask the question. For your information, the webcast replay will be available within an hour after the conference is finished. Please visit www.chroma.com.tw/investor/index under the investor relations section. Now, I would like to introduce the CFO, Paul Yin. Mr. Yin, you may begin. Thank you, Jason. This is Paul Yin. I'm the CFO of Chroma ATE, and welcome to the third quarter of 2018 financial release conference. Here with me is Jennifer Jian, who is our Director of IR. This meeting, we are going to conduct mainly in English, but for the financial highlights and also the operational highlights, I will be doing that in Mandarin first, and then repeat it in English afterwards. Then after this session, it will be the Q&A. For the Q&A, basically, if you ask in Mandarin, then I will reply in Mandarin. And of course, if you conduct in English, then we will be replying in English. Thanks for your time. 先从 financial highlight 部分来开始。那我想首先要谢谢大家今天抽时间来参加致茂电子 2018 年第三季的 financial release。那么基本上，我们从 financial 的部分来看，在 2018 年的前九个月，就合并的营收来看的话，我们达到了 13 亿的数字。那这个部分，如果跟去年来比，是 34% 的成长。那从 testing equipment 的这个部分来看的话，从合并的观点来看，我们达到了大概 73 亿这样的数字，那威光 roughly 大概是 39 亿，这个是在营收的部分。那么从 Chroma's parent only，母公司的 self-revenue 来看的话，那第三 Q 是 19 亿的新台币。那如果前九个月的加总来看的话，大概是 58 亿这样的数字，如果跟去年同期来比，大概是 2% 的滑落。那从第一季来看，逐季我们今年看起来就不是一个 traditional，就是一个传统的一个季节性的分布，从第一季到第三季，因为就我们传统的季节性分布，应该是第二、第三季是在高点。那么今年如果你从整体的数字来看，看起来四季的数字，我们每一季都有达到 19 亿，所以这样子的数字来看的话，大概第一季算是高，那么在第四季我们也预期大概也会有这样子的高点的数字出来。所以这个是今年从季节性分布来看，跟去年不一样的地方。那么从毛利的这个部分来看的话，就合并毛利率来看，我们达到了 44%，跟上两季的数字差不多。那么 parent 在 test and measurement 这个部分，我们的毛利率是 52%，那么不管 52% 或 44%，就目前来看大概是符合我们的期望。那么就前九个月的获利来看的话，我们前九个月的合并获利大概是 TWD 21 亿，这个部分如果跟去年同期来比，是 24% 的成长，EPS 达到超过 5 块，达到 5.06。那这个部分大概是我们前三季，如果从历史记录来看的话，就前三季 accumulation 来看的话，是三季合并的高点，我们在这个部分算是创了历史新高。那么从 financial 的观点来看的话，从合并的观点，我们还是 net cash。那但如果是从母公司来看的话，我们的 net debt to equity roughly 大概是 7%，最主要的原因是我们在第三季的时候，我们配了大笔的现金的股利，金额大概是 18.5 亿，所以这样子会造成我们现金的流出比较大一点。那么在 ROE 的部分大概是 20%，ROA 是 12%，大概也是符合我们的预期。那我们接下来让 Jennifer 用英文来跟大家来做一个解释。 Okay, good afternoon. I will repeat our CFO statements in English. Regarding our financial highlights, the first nine months consolidated sales were TWD 13 billion, 34% growth. Consolidated testing equipment business were TWD 7.3 billion, and MAS was TWD 3.9 billion. Chroma parent sales revenue in third quarter is TWD 1.9 billion, and first nine months reach about TWD 5.8 billion, and decline about 2% year-on-year. For the first three quarters' patterns, apparently this year we will not enjoy the traditional seasonality pattern, which is the peak season in the second and third quarters. Instead, we will probably enjoy the peak season in the first and fourth quarter. This is all based on the customer's shipment schedules. Regarding gross margin, consolidated gross margin is 44%, similar to the last two quarters, has not much changed. Parent company testing equipment business gross margin is 52%. Both are very much in line with our expectations. First nine months, the net income reached about TWD 2.1 billion, increased by 24%, with EPS of TWD 5.06. For the first three quarters' results, this actually hits the historical record high. For our balance sheet, consolidated in the net cash position, due to the MAS collections and the parent's net debt to equity around 7%, mainly because the large payout in the cash dividends in the third quarter. Regarding the ROE and also ROA, ROE has reached about 20% and ROA is 12%. Now we will move on to operation highlights regarding our products. Okay. Operation highlights. We still expect the testing instruments will present a stable and steady growth compared to last year the whole year, mainly come from the EV market demand. For the semiconductor sector and the photonics testing solutions, we have seen the VCSEL sales and other photonic testers start to accelerate and drive this kind of momentum, able to drive continue to next year. The market is mostly come from the U.S. The IT market sentiment start to a bit weaker, starting from the third quarter, especially the ATE systems. This year, overall total semiconductor testing solution probably will be slightly lower than last year's. Turnkey solutions, because this year we totally not have any solar cell contribution. Turnkey solutions this year, almost 100% actually contributed by EV battery cell factors. We think the overall turnkey solution this year will be similar to last year's. Overall, we expect the testing equipment business will be doing similar as last year sales levels. Regarding to MAS, I think we're still able to deliver what we guide in the second quarter, which is double as last year total sales. Overall, in 2018, we said that net income was still able to present a decent growth compared to last year 2017. Now we open it up to Jimmy. Thank you, Jennifer. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for any of today's speakers, please press zero one on your telephone keypad and you will enter the queue. After you are announced, please ask your question. If you find that your question has been answered before it is your turn to speak, please press zero two to cancel the question. Now please press zero one in order to ask the question. Thank you. Our first question is coming from Patrick Ching from Nomura. Go ahead, please. Hi. Good afternoon, Paul and Jennifer. May I ask, compared to when you reported second quarter earnings, across the business lines, which business lines do you think are tracking ahead of your expectations and which are tracking behind? What are your initial thoughts for the growth prospect to different product lines into 2019? Just a rough idea would be okay. Thank you. Hi, Patrick. You mean the overall for this year? Overall, I mean, the net change in the past three months, in which areas do you see more slowdown, and which area do you think are the order? You mean for the whole year? Third quarter. I mean, after you reported 2Q. Well, we won't only see the ATE system start to get weaker from third quarter. This year we didn't enjoy the seasonal pattern. It's just because the customers' shipments, and also that's why we don't have a third quarter as a peak season. I think it would be better we explain the whole year basis. The whole year is, I think, semiconductor, the ATE system start to get weak from third quarter. We're seeing a move on to fourth quarter, ATE system will be back to very, very low base as we have before in previous years. The VCSEL starts to pick up quite and turnkey solution, beginning of the year, we expect at least we'll have some contribution from solar as we had in the past many, many years. This year, due to the new policies, we almost got nothing in the end from the solar cell business, which is a policy compact. If you will talk about the carry forward momentum to next year, we will particularly highlight the photonics. I want to give some guidance regarding to our photonics business. Our photonics business, we cover quite a full range of products, not only limited to VCSEL, also some parts of communications. The second, here you will probably see more order or delivery shipment will mostly go to U.S. markets based on our current order on hand, because our current order on hand carry forward to next year, it already exists the first quarter we booked. This does not include Android team or TOF projectors. Okay? Just basic structured light orders. Last things we would like to highlight is our Android business. I mean photonics business in Android team. Honestly, the order for the sales we booked this year, it doubled of last year regarding to Android team, photonics tester selling. Yeah. Last business is still as we guide, it's not much to change compared to second quarter. If I may ask a very quick follow-up. When you reported last quarter, I think you mentioned something about the photonics being flat year-over-year based on the first six months traction. What you said is that you expect the fourth quarter momentum to accelerate very significantly. For full year, you still expect this part of the business to show steady growth. Sure. Yes. Well, I'm not so sure because the order is starting from fourth quarter and totally carry forward to next year. Sometimes customers give you a big order. They don't limit to just one quarter. It's carry forward to next few quarters. Regarding the photonics order visibility, I think we can see even up to the second quarter next year. It's very hard for us to give you exactly. Regarding photonics, I think depends on how much we'll be able to book in the fourth quarter. Our guidance has not changed. This year, photonics orders delivered will probably not bigger than last year, even we have acquired a decent order on hand. Okay. Got you. That is very clear. Thank you very much. As a reminder, please press 01 on your keypad if you would like to ask the question. Thank you. The next question is coming from Skye Chen from CLSA. Please ask your question. 你好，我就直接用中文问。刚刚有讲说第四季可能是个今年的 peak，那意思是说第四季的营收会高过第二季，是这个意思吗？谢谢。第四季的数字，我们的意思是说在今年可能就不会有一个 seasonality。各位可以看到，如果今年第一季跟去年第一季来比的话，今年第一季是明显的高过去年第一季。那当然去年因为是一个标准的 seasonality，所以在第三季的时候会比较高。所以我们现在的意思是说，我们今年在第四季，我们看到的数字，因为你看前三季，其实我都是平稳的在中高点，所以我们会认为我们第四季的数字大概会跟这个差不多。意思是说第四季的数字跟过去三季平均的季营收差不多，是这个意思吗？因为今年第二季特别高，然后一季跟三季大概都在3点多个billion，但第二季比较高，5点多个billion。所以意思是说第四季大概就是这三季的一个平均营收，是这个意思吗？如果你提的是 consolidated，我们就认为第四季大概就是我们的 peak。对我讲的是 consolidated。第四季就是我们的 peak。Yeah. 那所以意思是说第四季的营收会高过第二季的5.6个billion，是这个意思。那不然呢？不会。对不对？我们不会有明确的数字。我知道，那你的意思就是第四—— 我的意思就是 peak 了嘛。好，对。所以意思就是第四季的整个公司 consolidated 营收是整年最高的一季，对不对？就整年最高的一季嘛。意思就是 peak。好，谢谢。 We are now in question and answer session. Please press 01 on your telephone keypad if you would like to ask a question. Thank you. The next question is coming from William Chang from JP Morgan. Go ahead, please. Paul 跟 Jason 你好，我有个问题想请问一下，如果我把 consolidated base 减掉 MAS，然后再减掉 Chroma 新材料的话，然后我会看到第三季，这两个去掉的 year on year growth 是负 18%。那跟过去两年来，把这两个 basic 减掉之后的正成长比，好像有一个比较大的滑落。然后我不晓得是不是可以稍微 comment 一下，就是说可能过去两三年以来看到一个 core business year on year 的 decline，是一个比较大的 decline 的幅度，不晓得这里面主要的 components 是什么，然后我们接下来看到第四季的话，扣掉 MAS 跟扣掉 Chroma 新材料的话，这个 core business 应该是会恢复成正成长吗？然后第二个问题是有关 2019 年，因为 MAS 今年的成长非常非常快，double，就像公司说的，但不晓得明年我们可不可以看到 MAS 这边的贡献怎么样？你可以再重复一下你的第一个问题，是把什么东西扣掉？我把 MAS 跟致茂新材料扣掉的話，就等於是基本上是有點像是看 core business 的感覺。你说 overseas 的部分吗？就是把 overseas 也加进去。为什么？ Taiwan 跟 overseas 都加进去的话。如果你只是问第三季来说的话，没有一定的pattern耶。你如果一定要year on year比较的话，那确实是因为我们在order delivery schedule上面是不同。 Mm-hmm. 对啊，因为母公司是有 decided pattern 的。或者 Willy，我们如果从另外一个方向来看，你追每一季的这个数字，当然它是一个指标，但是如果你去看前三季的这个加总的话，其实我们整个 overseas 的 affiliate，它的 contribution，从今年前三季跟去年前三季来比，它是 15% 的成长。所以基本上，无论是每一个欧美日的市场，或者是东南亚的市场，亚洲其他的地方，他们的贡献其实并不一定像我们这样会有一个 seasonality pattern。所以这个数字我们还是从全年的数字来看，可能会比较来得准确。好，没问题。然后有关 MAS 这边的—— 可以麻烦您再重复一次这个问题。有關威光19年的看法。 19年吗？目前还在谨慎地观察。就是说对中国大陆的这个部分，我想我们非常地谨慎。目前看起来，我们大概到明年的第一季、第二季，我们还是会有delivery。你不知道要给一个，比如说，跟今年的—— 我要到明年初才能跟你们整个2019年的budget怎样。这个guidance大概会在明年初我们才会成立。但是我们今年目前的 order 确实有 carry forward 跨到明年。了解。然后请问一下在semiconductor这边，刚刚有提到说三季度这边有个比较大的下滑，可以请问一下三季度如果单semiconductor的testing的话，大概是下滑了多少呢？单三季度。对，因为我记得之前上半年是 double digit 的成长的话。其实我们的statement最主要是想highlight第四季，ATE的下滑会比较多一点，所以全年来说，半导体overall sales会影响。我们的business其实很难单靠一个quarter，因为如果你compare第三季的话，第三季pixel是最多的。Hello？所以刚刚说pixel在第三季会是最多的，但是刚刚不是提到说我们carry over的order已经到了明年的第二季了吗？对，但是我的意思是说，你现在问我三季，其实它没有什么特别的理由，它只是从，比如说我们ATE交完以后，现在visibility，ATE的机台visibility for fourth quarter就是比较低。所以我们其实在guidance里面写到，这其实是循环的，从第三季底开始。这个 ATE 是指 Semi Testing 的 ATE 吗？那是IC tester。IC tester来说的话，我们最主要有两种机台，ATE机台跟SLT机台。ATE机台基本上它的test跟机台是一样的，但是我们主打low frequency部分，也就是中国的市场。对，所以我刚刚的问题就是说，如果你看 Semi Testing，包括 ATE 的机台跟 SLT 的机台的话，如果就第三季来看的话，它的下滑有多少？ [Foreign language] Our overall sales may be below our expectations, because IC testers market start to get weaker from third quarter. 好，没问题。没问题了，谢谢。谢谢。 The next one is from the line from Citi. Go ahead, please. 嗨，Paul 跟 Jennifer 你们好。我有一个很简单的问题，就这个土地的取得，18.5 亿，是不是公司在未来的 road map 呢？这个我们要怎么去运用这样子的一个新的土地，或者是一个产能的扩张？对于我们长线的投资者来讲的话，这边有没有一些愿景可以跟大家分享？这是我第一个问题，谢谢。土地开发不是我们的专长，但是我想大家如果长期追踪我们，大概都知道我们在机场捷运线A7站的附近有一个A7产业专区的开发。那这个部分其实主要是为了我们现在正在龟山这个地址的总部，目前我们其实已经fully occupied，所以我们在寻找我们下一个总部。所以这一块大概预期在2019年底或2020年就会落成、搬迁，这一块是我们目前土地的使用。那剩余的台专区里面的这些土地的开发，我想基本上如果从长期持有的观点来看的话，那就是看这个部分的土地它未来可能的增值吧，大概是这样。了解。那我们再看trade war对于仪器产业的影响，其实我想越来越多人讨论，在中国的tech可能会slow down，然后移到像东南亚、印度，或者是美国，甚至于台湾，不知道Paul对于这个趋势有什么comment，对你们公司的影响是什么？因为印度的这些工厂都是我们的潜在客户，或者是已经是你的客户。是，这个部分谢谢。这个部分其实是大哉问，中美贸易的两支大象在打架，目前到底状况会怎样，大家都有一点混沌不明。如果就您刚才的问题来问，从我们仪器产业来看的话，确实没有错。如果说产业链从中国大陆要移出来，不管回到欧美日，只要是我们的客户，那绝对是跑不掉的。但是问题就是说，即便不是我们的客户，那也给了我们一个新的机会可以去penetrate，我想这个是绝对好的。即便是在中国大陆境内的这些产业，目前也会因为中美贸易战的关系，碰到关税的增提，让成本上升，我们就会有另外一个penetration的机会，我想这个也算是一个plus。天下面完全都是plus的事情，你也会看到说中国大陆的这些产业会因为中美贸易战的关系，会slow down它的investment，尤其是CapEx spending，所以这一块大概就是一个负面的因素。那假如年年来讲的话，你觉得在您年度来讲，是两个 plus 的 benefit 比较多，还是 slow down 中国的 impact 比较多。这个部分我可能目前也没办法comment，主要还是说，其实目前还有2,500亿的另外一个关税惩罚等在11、12月，到底会不会继续往这么严格的这种方向去执行，现在大家都不知道。尤其在明年，2019年，我们目前还正在prepare我们的budget，所以针对2019年，我想我们还是留在下次大家见面的时候再来谈这件事情。明白。我有一个小follow up，因为刚刚你们在call的时候有提到说，看到US market有一些订单进来，也有提到说像photonics的订单也进来，那我们就很自然联想到，是不是你们在US market和photonics这边已经有很明显的斩获啊？不好意思，Arthur 吴主席这边电话稍微断线，我们请稍候他们一下。抱歉，谢谢。 Hello? Hello? Arthur? 嗨。声太小了，我们刚刚不小心按错了，可以再 repeat 一遍的。对，我的意思是说，因为刚刚你们有提到说US market这边，你们期待US market会成长，然后也期待pixel market会成长，那我们是不是可以link这两个东西，就是说现在US的pixel的demand对你们来讲是蛮强的，那这个会是今年第四季度到明年的一个成长动力。 photonics 部分明年确实是我们一个主要的成长动能，这个是基于我们现在的 order on hand，deliver 的 base 确实是以美国为重。刚刚在我们 highline 里面提—— 对不起，你继续。今年来说的话，我觉得我们在 Android 这边的 exposure 也有变多。因为我们产品种类其实蛮大的，不是单纯只是 fiber 或者是 optical inspection for pixel，其实涵盖了蛮多的 photonics 相关的检测设备，包含 burn-in、characteristic。所以其实我们这边的 demand 目前看起来是有逐渐往上趋势。好，谢谢，没有问题。 OK. Now please press 01 on your keypad if you would like to ask the question. Thank you. Next we have Douglas Hou from Capital Investment for questions. Go ahead, please. Paul 跟 Jennifer 你好，我想再厘清一下你们刚刚第四季的数字，因为从你们全年母公司这边来看的话，你们刚刚说母公司全年来看的话，量测自动化这边应该是小成长，半导体测试这边是衰退，然后 turnkey 是持平。所以这样简单地扣掉一下，你们威光自动化第四季的数字是要做到跟第二季一样，所以你们整个 consolidated 第四季才有可能是全年的 peak 啊。我想对第四季的数字的部分，我们还是维持no comment。我们对第四季的expectation，大概就是因为今年四季看起来都在中高点，所以如果要做到这种中高点的数字，我想您的加法应该是，如果照这样加看。那样子其实全年的威光自动化的营收应该也会 more than double，因为去年做 TWD 25 亿。我们对威光的guide就是guide到double，我们觉得这样我们就还蛮满意了。那想再请教一下，因为现在中美贸易战的关系，所以他们中国那边很多那些 payment 现在是不是都会有一些 delay 的状况呢？我也很难回答这样子很overall的这种问题。我想在中国大陆经营事业也不是一天两天，所以针对大陆地区的collection，我们有我们自己一套严谨的做法。目前我们也并没有看到什么真正大量delay的状况。不过中国大陆的收款本来就可能不是学问，而是艺术。好，谢谢。那我没有问题了，谢谢。谢谢。 The next question is coming from Steve Wang, Yuanta Research. Go ahead please. Hi，Paul、Jennifer 你们好。想请教一下，我们就全年的观点，我们稍微想把它弄清楚一点。我们在核心的 test management，然后 turnkey，然后 semiconductor，然后 new material 跟 MAS 这五大产品线里面，2018 对 2017 年也没有哪一个 sector 是你觉得会衰退的。除了 MAS 你们一定会 double。那有没有哪个 segment 是你觉得会表现比 2017 年还要差的？ Hi Steve, [Foreign language] semiconductors may below our expectations. OK。其他的其实没有太大的改变。其他没有太大改变。就是turnkey solution，您刚刚好像有提到说跟去年会差不多嘛。所以你这种guidance，其实实话也是差不多。我觉得I need to highlight，我们基本上没有办法给很precise的一个numbers的guidance，especially我们没有出财测，所以我还是觉得说大家可以做一下consideration，因为其实我们已经给还蛮明确的guidance了。 OK，您这样讲就清楚了。 Right. 对，这样讲我就非常清楚了。然后第二个就是刚刚您提到photonics，一开始的时候我没有听得非常的清楚，比如说photonics，譬如说2017年你们是大概roughly一个低点，那2018年我们现在也是朝这个目标在走呢？还是说我们有比这个目标更高？这部分我们刚刚已经解释过了，我们是在手订单，但是客人给的在手订单是从第四季carry forward到明年。那目前这个数字order on hand来说话，是远超过于我们现在前三季所交的数字，Photonics的部分。第四季收到的订单的数字远超过前三季。我们第三季所赚的，对，所以这个数字不可能在第四季全部交得完。 OK。所以我们一定carry forward到明年。那你今年到底会不会超过去年？那要看我第四季能交，我交多少。因为several key components for Photonics，有些东西的lead time比较久。 Mm-hmm. 再加上我们必须要配合客人厂区equipment moving的时间。因为非常busy，所以我们只是跟客人讲，这是我们现在在手订单。另外一部分，我们其实有讲说我们Photonics部分并不是只限于probe或optical inspection，还包含其他的相关检测设备。第三来说的话，我们在Android这边的exposure，其实在总金额上面来说的话，是超过去年大概两倍。那我们其实今年的整个Photonics的sales，年底的话，如果我们接到这个数字来说话，其实在Android的weight的上面其实是不少，已经来到两位数。 OK。所以我们这只是给投资人的方向，但是在详细的数字，我们没有办法给 close。好，那我们这样子来请教。我们也同时看到 US market 很 strong，在 photonics 的这部分，刚刚一开始你也有提到说 visibility 已经到明年第三季。第二季。第二季。 [Foreign language] order on hand deliver. 到第二季。包含其他的东西，这还没有 wrap up。你们刚刚提到的这个是 for US market 吗？ [Foreign language], shipment [Foreign language] goes to U.S. mainly. 那这个US也有Android的吗？还是non-Android？你提到Android也很强，特别提到这题，visibility到你们的second quarter，这个是non-Android。这两个是两件事情。 OK。这个order on hand来说话，mainly to US。那Android里面上升，这个也是另外一个fact。那我们highlight原因是因为今年18年的总Android的contribution已经是去年两倍。 OK。我们是给一个guidance，告诉投资人我们的driver，看到photonics driver，但是不限于只是A或是non-A。 Q4 receive 的一个 order carry over to second quarter next year，这件事情指的就是 US market。那到 Android 这边，对明年我们有没有一个也很 clear 的一个 visibility？我们明年年初会 guidance。但是我们已经告诉你，现在看起来 Android 对我们的 weight 也是逐渐上升。那我想请教一下，在Android的部分，我们目前看到，如果说这种volume是大的，大概还是maybe是smartphone的一个application，你提到是Android。那我们现在看到比较多的design是在front camera还是back camera呢？目前是 front。 [Foreign language] Android [Foreign language] front. 如果投资人一定要用2018年12月31号的cutting point来说话，我只能说我们在Android的经验虽然上升，但还没有进入production line。如果进production line，这就是这个order is not included。没有在营收五项的guidance里面。所以，虽然我们—— 我们一次统一在年初回答。 OK，我可以这样子来解释。我们Android的revenue contribution，18年已经是17年的两倍，但是我们现在看到更多Android的design会在明年turn to revenue。这样子我的理解是不是对的？你可以再说一次吗？因为我刚刚，你问题有没有？没有啊。2018年Android的contribution是2017年的两倍。 [Foreign language] Android [Foreign language] once comes one. [Foreign language] [Foreign language] Android application [Foreign language] [Foreign language] combination of fiber communication plus pixel, smartphone [Foreign language]. Mm-hmm. 因为我们本来就是做 laser 起家。 Right. 那我们没有办法跟着Android这边直接告诉你，可以cut多少是fiber communication，然后多少是pixel。因为对我们来说都是photonic testers。当然。不过您刚刚也有提到说 Android 的 front camera 的 design 还没有 turn to revenue 嘛。 [Foreign language] turn to revenue, [Foreign language] mass production. 完全理解。今年交货的，只要是Android阵营它使用的，其实都已经是我的营收。 Right. 但是这些其实都是 less purpose，今年有进到 mass production。因为我刚刚已经讲，Android 今年对我的贡献是去年的 double，所以代表说早就已经 turn into sales。 OK。它的 weight 不低。所以就是说它的终端还没有 enter mass production。那我们可以这样说，如果到了 mass production 之后，这个 order 的 sustainability 会持续吗？因为我们现在 apparently 给他们用的是 maybe is for R&D 的 stage，那到 mass production 的时候，是不是还会再 pull in 一次呢？我们卖给客人的东西都是完全按照，laser 这种东西是一定要定制的。 Right. 所以不是我们 deliver 给他试用。 OK。完全是客人要準備上台前所使用的。 OK，了解。这样清楚。 Right. 好，谢谢。谢谢。 The next question is coming from Jeff O'Connor from Macquarie. Go ahead, please. Yeah. Hi, Paul and Jennifer. A few questions from me. First, I guess, MAS revenue is very strong in 2018. I guess, one of the biggest questions I get from investors is, it's such a large number this year. Is there any type of guidance you can give for next year, whether there's a chance it grows, whether the chance is down a lot, any kind of general guidance on that number for next year? Well, Jeff, for MAS, I think it's a typical kind of project base, and I think what we expected is the delivery of this project. For this year, will be extended to at least for the first one or two quarters of 2019. For the new orders in 2019, probably we have to wait for the 2019 guidelines come up in the next meeting. Okay, great. Then, I'm sorry. Please。 Please. Yeah. Okay. The next question is, Jennifer, you mentioned that test and measurement is weak in fourth quarter. When you said that, were you talking about semiconductor testers? No, I didn't say test and measurement is weak in third or fourth quarter. I mean ATE system. ATE system is under semiconductors. Regarding the semiconductors product sectors, we have two major products. One is related to IC, the other one is related to photonics. IC related factors start to get weaker from end of the third quarter, and I think the trend will continue in the fourth quarter. Okay. To clarify, you said overall semiconductor testers should be flattish year-on-year. No, I think it will be slightly more than last year. It should be more. It should be lower than our expectation because of IC factors. Okay. photonics is picking up. Okay. Also testing instruments and ATE has been seeing pretty stable growth throughout the year, every quarter. How is that in fourth quarter, and then how is the EV versus the non-EV in that segment? It's very hard for us to do this kind of breakdown, the reason why we can present a kind of substantial growth is because the EV market demand. You know, the EV market, we are not enjoying the number of the cars delivered in the market. We actually enjoy the people's demand for high power testing. High power means the high ASP and high addressable dollar markets. That's why the total sales growth. Okay. Lastly, I know you mentioned this a couple times in Chinese, I just want to clarify this in English. You said. Sure. fourth quarter consolidated sales should be the peak for the year. We can't comment the numbers. Yeah. Okay. Otherwise, tomorrow we will have to do material filing. Okay, understood. It sounds like the ATS should be okay for fourth quarter Q1Q turnkey is okay Q a few? I think the key point here is we just want to highlight this year we don't have the normal, it's not like peak in the second and third quarter. Instead, we have like a peak in first and fourth quarter. That's all. OK, great. Thank you. Thank you. Thank you. Next we'll have Narsi Chang from J.P. Morgan for questions. Go ahead, please. Paul，还有Jennifer，你好，我是Narsi。我想问两个问题，第一个是你们在presentation第24页有列出来一个CIS IC TOF application，可不可以稍微解释一下这一部分，因为这一部分好像是公司的新的业务，那以这个timeline看起来，它写在2H18，意思是说已经开始出货了吗？还是这样的东西已经开始introduce，那大概公司现在订单的进度是怎么样，然后可不可以期待在18年或19年看到一些出货呢？这是我第一个问题。谢谢。我觉得这个部分，各位可能要很清楚，Chroma的产品并不是说我从实验室研发出来，马上就可以有产品销售，或者说就有数字出来。我想这个部分，它就是CMOS image sensor这样子的一个application，那它到底是不是能够立即产生非常大的营收，我现在也不好说。3380这个产品本身，它确实是我们一个未来销售在一个生产发展这部分的一个未来的方向。所以针对这一块，我想我现在没有办法回答您说它到底会占我的营收多少，主要还是要看未来市场的需求。可不可以这样请问，公司是基于什么样的一个，看到什么样的机会会想要发展这样的产品呢？我想在这边讨论这个。你是想问TOF吗？他写 CIS IC TOF，那这个应该是 image sensor 的部分吧。对，它是 image sensor 的部分，确实没有错。所以跟公司过往从pixel testing这些东西又是一个不一样的application吧，对吗？它是有关联性的，因为CMOS image sensor本来就是我们其中一个application，以前像OmniVision，它就是在以前的年度也曾经对我们贡献过非常多的营收的一个大客户，所以这一块本来也是我们的application之一，所以也没有什么好奇怪的。了解，了解。那我第二个问题比较clear cut，想问一下，刚刚有提到说4Q有些order 4Q就开始出货，然后会carry forward到2019年，出货给美国这些市场，想请问一下这些东西最主要还是structured light，还是也有一些TOF的东西呢？ Hi，Narsi。目前这个部分确实是structured light。然后TOF还没有wrap up。 OK。没有在里面。好，OK。好，谢谢。 There are currently no questions at this point. We now hand it over to CFO Paul Yin for closing remarks. Mr. Ying, please proceed. Thank you, Jason。谢谢各位今天参加我们这一个financial release的时间。各位可以看到前三季，我们其实从营收一直到获利，我们大概都有了不错的表现，我们会持续努力，然后在2018年希望能够再创一个成长的高点。谢谢大家今天的参加。Thank you, everyone. Thanks. Thank you. Thank you. Thank you, ladies and gentlemen, we thank you for your participation in Chroma's conference. There will be a webcast replay within an hour. Please visit www.chroma.com.tw/investor/index under the investor relations section. You may now disconnect. Goodbye.