Earnings Call: Q4 2025

Mar 13, 2026

Slides

This is Helen from Daiwa. It's our honor to host AVC's fourth quarter 2025 earnings results call. The management already online, including Eric, Matthew, and Bill. The company will do the briefing first. Then do some remarks for fourth quarter 2025 results. Then we can go for Q&A. If you have any questions, please type your question in the text box. We will answer the question list on our end first. Matthew, now over to you. Okay. Right. Thanks, Helen. Good afternoon, everyone. It's a great time to be talking about AVC, the future of computing, and about the fundamental role that thermal and mechanical solutions play in making that future possible. 2025 was a tremendous year for AVC. We didn't just grow, we solidified our position as the essential partner for the world's most innovative technology companies. We're proud to report that our revenue has grown to over TWD 139 billion last year. This remarkable growth is not by chance. It's driven by our strength in our AI server delivery capabilities. 2025 can be described as the inaugural year of liquid cooling. Through close collaboration with our customers, suppliers, and the entire supply chain, we have been able to produce liquid cooling solutions for the AI sector at scale and with high reliability. We are deeply grateful to all participants in the supply chain. It is because of this pioneer collaboration that we are able to achieve this result that we are proudly sharing today. The most significant growth we saw last year was in our liquid cooling-related components. We don't see it as just a trend. It is the future. As the total design power of the TDP of components continues its rise, AVC is continuing to innovate and deliver the next generation of thermal solutions for cutting-edge tech giants. Here's the key difference with AVC. We are not just only developing solutions for the GPU. We are a total thermal and mechanical solutions provider. We develop liquid cooling solutions for also the CPU, the networking switches, ports, power delivery boards, and all other components that make up any server, any car, any robot, any device at all. Even from last year, we are seeing more and more components in the AI rack make that transition to liquid cooling solution. We expect this to be a trend going forward. AVC's microchannel cold plate has established itself as the leading liquid cooling solution for state-of-the-art AI applications throughout 2025. We're committed to continuous development, exploring new liquid cooling applications, and to drive the future advancement of AI technology. We're leveraging the unique strengths of our entire history. We have the most complete portfolio of thermal products in the world for the IT rack, from heat pipes to vapor chambers to cold plates and chassis. No other company has the same product breadth. This is why we are able to provide the best system-level design for thermal. We have the solution, the expertise, the experience. Looking into 2026, the trajectory is clear. AI will still be driving most of our growth. We are looking out for three areas: our core business expansion, the rise of ASIC, and AI in China. Looking at our core business expansion firstly, our partnership with leading GPU players remains foundational. We are honored to continue to be their reference designer for thermal solutions. We are already deep in discussion for solutions in 2027 and are committed to working closely with them to ensure their next-generation platforms can deliver their full potential. Secondly, on top of that, our new mobile phone vapor chamber is expected to grow also greatly as this essential technology is adopted across more models to keep pace with increasing AI workloads on edge devices. However, the major new growth vector is our ASIC exposure, particularly our USA ASIC exposure. We have made significant inroads with the world's leading custom silicon providers. We expect this to be the main driver for AVC's growth starting in the second half of 2026. Custom AI chips demand custom thermal solutions. That's where AVC's full portfolio and customization capabilities shine. Real quality is more than design. It's the feeling of a new blade, again and again and again. GilletteLabs, our best razor ever, with up to 30 smooth shaves per blade that last up to 50% longer than Gillette Fusion. Gillette, the best a man can get. What are you thinking about over there? Bit of an existential crisis. Now, let's talk about the AI revolution in China. We continue to see strong demand for China's own AI and related solutions. In China, AVC is much more than a regular supplier. We are the main design partners for the country's biggest Cloud Service Providers. We are also seeing a transition for China AI into liquid cooling. As they make this transition, we continue committed to design the system architecture together with them and to provide our expertise and service. This partnership is more than just about the incredibly high demand. It shows a deep strategic relationship. Now let's look at our presence in China. We have five major sites across China, totaling over 500,000 sq m of factory space. This is more than just property. It's a huge manufacturing advantage. It gives us the best supply chain stability and the ability to customize technology locally within the industry. In a global market where speed is the most important factor, our large-scale deep expertise means that as China's AI infrastructure gets bigger and uses more power, AVC continues to be best fitted to provide the most suitable cooling solutions for them. Looking at our new technology and what we're excited about in 2026. We're constantly pushing the boundaries of physics and engineering. On top of having already worked on solutions like microchannel lid and emerging cooling previously, in 2026, you will see AVC continually pushing for many new technologies, including impingement jet cooling using new thermal interface materials, further optimization of single-phase liquid cooling and two-phase liquid cooling. When we're designing a thermal solution for our end customer, not only are we thinking about TDP, thermal design power, we also have to consider thermal resistance, hotspots, form factor and weight, manufacturability, and serviceability. Many of the technologies that we are working on are still work in progress, and we'll be sharing more when we can. We're working hard on our new technologies and products. We're excited to see how they can be incorporated into our customers' most ambitious projects going forward. To share a little bit more on two-phase liquid cooling, and we have a nice video to show here. As you can see in this video, the liquid is flowing in from the left. It's boiling on the cold plate and turning into a gas-liquid mixture coming out on the right. With two-phase liquid cooling technology, our solutions are exhibiting strong competitive advantages. This is best illustrated by looking at it from several angles. Number 1, thermal performance. The current thermal resistance of two-phase liquid cooling solutions that we're able to deploy are 15% better than single-phase solutions. We're not yet at its limit. We're going to continue to work on this. Next, the flow advantage. Two-phase is significantly more effective as a thermal solution and therefore only requires a third of the liquid flow compared to a single-phase system, leading to higher energy efficiency and more reliable system-level integration from that angle. When we look at market traction, we are currently in co-development with multiple end customers to ensure that our solutions precisely align with the evolving market demand. We're excited to see what comes next from our collaborations. Finally, our current R&D focus. Our current focus has moved to long-term reliability testing and a system-level stability testing, as well as the investigation into optimization of other auxiliary components like the QD, which still needs to be customized to be fit for use in two-phase solutions and deployments. Beyond 2026, the future is even hotter. AI demand is not peaking. It is actually accelerating. Our CSPs are still revving up their CapEx spending for data center build-outs. As we move for AI and progress through the different stages of AI, from perception to generative to agents, and then in the future, physical AI, this transition will allow AVC to access entirely new components and form factors as more devices are built to interact with reality. The areas that we are already deeply involved include autonomous vehicles, humanoid robotics, and low Earth orbit satellites. Machines that used to be considered thermally unchallenging are also getting hotter. In the future, AI will have to run on the edge to deliver the necessary low latency, which means a thermal challenge everywhere. AVC is ready. We are well-diversified across all technology and geopolitical segments. We continue to work closely with our partners in U.S.A., also in China, ensuring that all our customers have access to the best thermal solutions globally. Why is AVC always customers' number one choice? Well, thermal solutions are a very special type of component. What matters isn't only who has the solution with the highest TDP. When we're designing a thermal solution with our customer, we're thinking about three critical areas: the product, the manufacturing, and the supply. AVC is proud to be number one in all three of these areas. This is why we are the default and preferred choice. Firstly, let's look at product and where AVC shines. We deliver the best design products because we have the largest and strongest R&D team in the industry. From a thermal performance perspective, AVC has continually pushed the boundaries on TDP, thermal resistance, using different innovations such as microchannel cold plate that we announced last year. We have the strongest R&D team, and we intend to continue to deliver. Technology-wise, AVC has the expertise and research all thermal technologies. We've been working on liquid cooling for more than 10 years and actually have already delivered two-phase solutions in a smaller quantity, a more niche infrastructure project. We have also previously already worked on microchannel lid and immersion cooling, both of which are technologies we are very comfortable with but have decided to put on pause because our end customers don't have currently yet the demand to use these technologies. Form factor-wise, we've worked on from laptops to base stations, from large to small, from the millimeter to the meter. We have worked on solutions that range different scales, sizes, and shapes. We know the design intricacies. System integration, we aren't just designing for TDP, but also for manufacturability, durability, and specific customer applications. Finally, world-class equipment. We have the best equipment and testing devices to ensure that our products are perfect to the sub-millimeter scale. An example of this is that we've employed the use of a CT scanner that's usually used for scanning brains to use to scan our cold plates to make sure that we are 100% certain that the welds, that the machining has been done perfectly. Pillar number 2, AVC delivers the most mature manufacturing processes because we run the longest running, most efficient production lines. From a quality control perspective, we have strict adherence to standards, including multiple ISO certifications. We have robust incoming and in-process inspection protocols, and we have dedicated quality teams to ensure the fastest responses to customer problems. In yield, we've achieved 99+% yield on our most mature lines and have more than 95% yield on our liquid cooling solutions. Capacity and expansion. We will be able to share more in the following section. Our advantage of being the largest player in this space means we can expand very aggressively and can work with customers to support them with exclusive production lines and expand for them where and when they need. Manufacturing technique. We have the equipment and skill to deliver solutions that use cutting-edge manufacturing techniques. For example, with diffusion bonding that's currently used by the largest GPU player. This was introduced by us as a way to further improve the design for manufacturing for our cold plate solutions. Previous solutions of welding required a solder plate, when the solder plate melted, there was a chance that that would cause a blockage in the microchannels. Our proposal to transition into diffusion bonding is an example of how we've been able to extend our manufacturing expertise to really result in tangible gains for ourselves and our customers. Our inventory buffer is also very significant. Our large scale enables us to work to customer requirements in this area. Especially in the age of AI, where there are a lot of moving parts, customers need us to have inventory ready for efficient build-outs. Scale does matter. Finally, automation. We have a dedicated automation team of more than 100 engineers. If you walk into our factories, you'll see machines co-working with humans, where robotic arms and AGVs transport and assemble our products to the highest accuracy. In our most mature lines, we don't even turn on the lights as no humans are required there. Finally, pillar three, we deliver the most reliable supply in the most flexible fashion because our sales teams always make the best arrangements for our customers, backed by a world-class operation structure. We deliver the best time to market because we have the largest R&D and manufacturing team. For our largest customers, we are allocating more than 100 R&D headcount to them to ensure that our timelines are ahead of our customers. Global geo diversification. We expanded to Vietnam in 2018 during the first U.S.-China trade war, during 2025, we've prepared a blueprint to move to U.S., which will be activated if our customers choose to do so. Number three, our supply chain is resilient. We have multiple suppliers for all of our critical components, we have the capability to manufacture in-house where needed. Example of this is with corrugated pipes, where we are already producing our own after supply tightness last year. Finally, partnership and trust. We have partnered with all the leading CSPs for multiple years and have continued to win projects with them. We have a large pool of experts for all things thermal. When customers are developing a new solution, we will put together the best team, the most customized team for them to ensure that they have all the capabilities from us that they need. To summarize, not only do we deliver the best product, our manufacturing is the most reliable, and our supply most flexible. Customers really do look beyond the product when picking a thermal partner, and we are winning not only at the product level. Next onto our Vietnam expansion. Here is a video of our Vietnam facility that is currently already in mass production. This image zooms out from our office space to cover the entirety of our first eight facilities in Vietnam, which we denote V1 to V8, as well as four rental facilities that we have externally. As you can see here, the scale is very, very significant, and we have a very, very large footprint in Vietnam, currently generating approximately 30% of our revenue, but yet to grow to take up a larger percentage. As the demand for AI infrastructure remains robust and translates directly into our aggressive and necessary capacity plan, we're forecasting significant growth in the critical components for liquid cooling, specifically cold plates, our manifolds, and chassis. Moving on to our global footprint. Here, this slide illustrates our aggressive capacity expansion in Vietnam and China. To ensure supply chain resilience and to meet the surging demand for AI infrastructure, we are significantly scaling our manufacturing base outside of our traditional hubs. As you can see from the aerial view on the left, our primary expansion focus is the Vietnam V1 to V8 campus this year. We have committed an investment scale of $600 million for this entire site, and it occupies more than 200,000 sq m of land. In terms of readiness, V1 to V4 are already fully operational and in mass production. V5 to V8 are under development, and production will commence as early as Q2 of 2026. If we look at our GNP rental facility, direct adjacent to our main site on the image on the left, we've secured more than 40,000 sq m here specifically dedicated to the assembly of liquid cooling modules. This specialized facility allows us to fast-track our delivery of advanced thermal solutions to our global CSPs. Looking at our further expansion plans, our growth doesn't stop at V8 that you see on the image on the left. We have already completed land acquisition of another 200,000 sq m for V9 to V12, where building is currently in progress. Furthermore, we are already in active discussion for the next stages, V13 to V15. Looking at our China expansion, we'll also be bringing in a new facility this year in China to support production for our U.S. GPU customers. We're still seeing incredibly strong CapEx spending from our major customers, demand forecasts are consistently being revised upwards. To ensure continuity of supply for our global partners, we are expanding both in Vietnam and China, and our goal is to provide the most reliable, geographically diversified supply chain in the industry. Now, to continue to meet certain demand, especially for next generation solutions, starting from second half of this year, we are significantly expanding our liquid cooling capacity across China and Vietnam. Our total monthly capacity across all locations for our liquid cooling module is projected to increase five times from 200,000 monthly units to 1 million monthly units by the second half of this year. Our rack manifolds capacity is set to jump from 1,000 units per month last year to 7,000 units per month also starting in the second half of this year. Finally, our chassis monthly capacity will increase from 400,000 units per month to 600,000 units per month by second half of 2026. To support this expansion, our CapEx plan this year is a significant TWD 15 billion in 2026, and we project an even larger TWD 17 billion CapEx for 2027. This investment is a testament to our confidence in the future of AI and AVC's essential role in enabling it. AVC remains the global partner of choice for the future of computing and thermal. Thank you. I will now hand over to Bill to take us through the financial performance in 2025. Okay. Thanks, Matthew. Good afternoon, everyone. I'm Bill, finance manager of AVC. I will now present our company's financial report for the year 2025. In Q4 2025, our quarterly revenue reached TWD 47.8 billion. We achieved a triple growth in margins with all three key indicators hitting record highs for a single quarter. Gross margin is 26.4%, operating margin is 21%, net margin is 13.9%, quarterly EPS is TWD 16.9. This performance was primarily driven by the continuous increase in the shipping ratio of our server product, which has significantly optimized our product mix. 2025 full year performance. The annual income statement reflects substantial growth, with the total revenue reaching TWD 139.6 billion, nearly double that of 2024. Gross margin, operating margin, and the net margin all reached historical highs. Annual EPS TWD 49.2, historical high too. Here is our annual revenue CAGR. Our core financial indicators demonstrate consistent year-over-year growth. Revenue CAGR is 25%, and EPS CAGR is 58%, and the gross margin CAGR is 20%. Both revenue and EPS have shown consistent growth on both a quarterly and annual basis. This is quarterly revenue and EPS. This is annual revenue and EPS. This is the AVC revenue breakdown by product. The growth rate in descending order are chassis, thermal product, 4C tech, and system integration. Chassis, which recorded the highest growth due to the surging demand for server chassis, capacity remains in short supply. Thermal product, which is our core business, including cold plate, VC, and fans, saw significant growth. We anticipate increased adoption of liquid cooling this year, extending beyond chips to other components like CX9 or OSFP. As the preferred provider for thermal solutions, we expect strong, sustained growth in this segment. This is our revenue breakdown by application. Our server revenue account for 51.7% of total annual revenue, nearly doubling compared to last year. While other application grow in absolute value, their percentage of the overall mix remains stable. Growth outlook. Server remains our strongest engine. We will continue to expand server-related capacity this year. We believe the server revenue contribution will keep rising, reflecting positively on our top and bottom lines. We remain highly optimistic about AI development and will continue to lead the industry in capacity and technology. This is our quarterly revenue breakdown. Okay. This is our non-operating items and balance sheet. In Q4, we recognized gains from the disposal of equipment at the end of its useful life, along with income from MRE and interest. Overall, annual non-operating figures remained stable. Okay. This is the full year non-operating breakdown. Here is the briefing of consolidated balance sheet. Assets and liabilities have grown in tandem with the company's scale. This is 2025 financial ratio. Ratios remain steady. Notably, inventory turnover days decreased, partly due to the faster pull through the customer hardware house, leading to improved inventory turnover. Cash flow. Net cash flow from operating activities increased significantly. The company maintained a strong cash position and remained flexible against international shifts while staying aggressive in our growth strategy. Okay. Thanks everyone. Sara doesn't know that her son can get a sum of money if she dies. Check which insurances you have through your job. Thanks for watching the video. Now we will run through our prepared question list from investor. The first question will go through the outlook for first quarter 2026 and second quarter, also full-year revenue and net profit. Please also explain the growth ranking by product category and whether 2026 revenue will increase quarter by quarter, or how the first half and second half revenue spread out will be looked at. Okay. Our management teams hold a positive view for the entire year. We believe that both revenue and gross margin will improve quarter by quarter, driven by the upgrade in GPUs and ASICs. The spec for the thermals product will also upgrade accordingly, and the revenue proportion of liquid cooling solution will continue to rise. Meanwhile, chassis and fan remain our core products, and we will continue to expand our product capacity in the future. Overall, we expect more shipment of Of ASIC related liquid cooling product in the second half of this year, which is something we are highly looking forward to. Thank you. The next question will be several question for Rubin, we will go through it one by one. The first will be, has the cold plate Group A vendor list been finalized? What is the allocation rate among suppliers? Will AVC share of Rubin cold plate supply market share decline? Hi, this is Eric. I will take this question. It's still under NPI development phase. It's not the good timing to make a comment. We feel optimistic and high confidence that AVC will still be participant in the meaningful positioning for this Group A product. Compared with GB200 and GB300, how will Rubin cold plate pricing change? Will the revenue contribution of their Rubin tray, in tray side liquid cooling content value higher than that of GB300? Yes, from tray level perspective, the content value is increasing. How will the additional gold plating process for Rubin, for cold plate affect pricing and profitability? When we provide quote to client, we are doing fundamental quotation plus any new special manufacture process premium. As all the special manufacture process is not finalized yet, so we are not in a position to comment this. Like what we mentioned, if there is a special manufacture process in addition to the existing one, we will discuss with client and do the cost up pricing charge. How to deal with the pricing pressure caused by Nvidia standardization of cold plate as a Group A for Rubin? Yeah. Like what we mentioned in previous questions, what we are looking for is, November is a tray level or rig level. We are looking for a healthy content value increase. By doing standardization design of cold plate, which make us more utilize rate in universal design, and the cost will be triggered to going lower as well. We remain a healthy margin position. What is the difference between Group C and Group A? Will Group C cold plate pricing also decline like those in Group A? Okay. Group A is if you are the end customer, when you buy the machine, when we sell you the machine, you will see the component already assembled on the system. That one we call it Group A. For Group C, you can follow a design book and make your own design. You can make your own design, make your own purchasing decision. This is the difference between Group A and Group C. Like what we mentioned, Group C is more customized. It's not a universal design versus Group A. Again, for the tray level and the rig level, we are looking for a health and content value increase charge. Thanks, Eric. Leo will have several questions regarding to ASIC. What is the liquid cooling penetration rate for ASIC this year? Please explain the willingness of various CSPs to adopt liquid cooling. Yeah, no problem. Thanks, Helen. We've actually noticed that most of our next generational ASIC products have shifted to use liquid cooling as their predominant solution. Most but not all. We see this as a longer-term trend in this space to move towards liquid cooling as it becomes more and more mature. We also expect that liquid cooling, as we've seen in Nvidia deployments, will extend to beyond the GPU and CPU to be applied in more components, more of the auxiliary components, the PDB, the DPUs, the NPUs, as I've mentioned earlier. That's the trend that we've seen in Nvidia. We also expect a similar trend in ASICs going forwards. The next, what is the AVC market share in ASIC liquid cooling? Are the competitor in ASIC liquid cooling the same as those for Nvidia? Yeah. I'll answer the second part because it's easier to answer. We are seeing our main competitors be the same players as the competitors in Nvidia. Our goal has always been to take 50% of every project that we take part in. The reason it's 50% is because more so of a requirement by our end customer. Our end customers want two large suppliers and one small supplier in their supply chain. Each of the large suppliers will take 40%-50% share, and the small supplier to take around five, maybe 10% share, as to be used as a backup. In this configuration, our goal continues to be the main supplier, and therefore our long-term target market share is 50% across all products. Beyond cold plate, how is the progress in other liquid cooling components such as quick disconnect and also manifolds? We are continuing to extend our offering to our customers to more and more components. Manifolds, racks, chassis, QDs from our subzero 4C tech. The main limiting factor for us remains to be capacity. We are expanding extremely aggressively in Vietnam, and even then, we have to dedicate most of our extra land space to liquid cooling modules first, because that remains our strategic product. We are expanding for other components. They are prospect business opportunities that we have yet to take, and we definitely will be looking to gain a stronger presence in these areas going forward. Will cold plate for ASIC also require gold plating? Will gold plating cold plate become the norm in the future? Yeah. We've seen gold plating used in several deployments in ASIC. It's not all. We are always committed to co-designing a solution that's most suitable for our customer. Therefore, we are unsure whether or not at this point gold plating will become the norm. We continue to build that capability and to be able to offer that to our customers if that may be the case. Thanks, Matthew. The next question will be, what proportion of server revenue will be coming from GPU and ASIC in 2025 and 2026? How does AVC view the growth potential of ASIC and GPU liquid cooling solution this year? Okay. Overall, in our 2025 AI server revenue, GPUs account for 70%, ASICs 20%-30%, with the remainder coming from AMD. For 2026, we believe GPUs will still accounting for over 50%, but the proportion of ASICs will increase. Furthermore, we expect that by 2027, the revenue proportion from ASICs will have the opportunity to surpass our GPU revenue proportion. Thank you. Thanks, Bill. Next, what is the progress of AVC's two-phase liquid cooling and microchannel lid product? Yeah, no problem. On these two technologies, we've touched on briefly just now. Two-phase, we are tremendously excited about what that might bring going forward. We've already been able to achieve thermal resistance that's 15% better. Two-phase uses 30%, 33% of the liquid that's required compared to single phase, and also it has the added benefit that if they're in the case where, it doesn't happen a lot, but in the case where there is a leakage, the coolant that's used in two-phase vaporizes under atmospheric pressure and room temperature, so the damage control element of it is also better. We see there are a lot of benefits of using two-phase, and that's why we continue committed to developing the solution. For Microchannel lid, on the other hand, that's a solution that we've done in the past. We've looked at it five, six years ago in the past with an end customer. The challenge remains that we have not been able to find a good business model for microchannel lid, and one that works for both ourselves and our customer. In this case, we are not seeing any end customer willingness to use microchannel lid, and therefore we put this project on pause for the current moment. Now, naturally, if that does change in the future and microchannel lid becomes more relevant, which we currently see as highly unlikely, we have the technology, we have the team, we have the manufacturing skills and ability to be able to be extremely competitive in this area as well. Thanks, Matthew. The next question, what is the growth potential for chassis and rack this year? Besides the major ASIC customers such as AWS, is there any progress with other customers? For chassis business, we'll continue to see a major growth in this segment in 2026 as we continue to increase our capacity. For rack, we have multiple clients we are working with to have next generation rack business opportunity. Yeah, we have some progress. Yeah. Thanks, Eric. The next question will be, with the increasing number of sidecar designs such as power sidecar and CDU sidecar, does that benefit AVC? What component can AVC supply for sidecar system? November, we call it power sidecar, CDU sidecar, rear door heat exchanger sidecar. All of these are different kind of. combination of thermal and mechanical product. We remain a critical player for those products, including fan, pump, rack itself. We are working with multiple clients, already have some mass production experience for those components, and we are going to win more projects. Thanks, Eric. Next, can you provide an update of capacity expansion plan in Vietnam, including cold plate, manifold, and rack in 2026 and 2027? The capacity expansion are as follows: liquid cooling module from 200,000 to 1 million unit per month. More component will adopt liquid cooling modules. As Matthew just mentioned, components such as the CX9 VPU and the transceiver will all adopt liquid cooling. Rack manifold from 1,000 to 7,000 unit per month. Chassis from 400,000 to 600,000 unit per month. Thank you. Actually, I'm going to add to that answer. Thank you, Bill, for that answer. I think specifically, even from last year, there has been concerns from our investors that we've received outlining that we might be over capacity or that the thermal industry might be over capacity as a whole, but yet we are expanding our capacity 5X this year. This is really to do with the auxiliary components, the extra components, right? When we're looking at that transition from, take for example, GB300 to Vera Rubin, liquid module count increases very significantly from two in the GB300 to seven or eight per tray in the Vera Rubin, and really that's what's driving that need for that expansion plan. We don't expand off of unsolidified forecasts. We are very confident in what we're doing, and we're still expecting to be very stretched for capacity even going into 2027, even after the capacity expansions. Thanks, Matthew. The next, what will be the revenue contribution of smartphone vapor chamber in 2025 and 2026? Besides smartphone, will major customer use vapor chamber in other products as well? In 2025, the revenue proportion of smartphone VCs was less than 5%. In 2026, tablets will also adopt VC application, which are expected to start contributing to revenue this year. We believe the combined revenue of smartphone and tablets has the potential to account for 5%-10% of our total revenue in 2026. Thank you. Thank you, Bill. The next question will be, since late last year and early this year, we have aware thousands of listing Chinese competitor. They have announced to enter to liquid cooling markets. How do you view the future competition landscape also the impact to AVC? Yeah, no problem. I can take that question. For our investors online, keep in mind that this is the last prepared question that we've received ahead of time. We encourage you to ask any questions in the chat box if you do have any to add. To answer the question on seeing Chinese competitors making way into liquid cooling, we think it's important to distinguish ourselves and to look at the competitive landscape in thermal. It really does split into two categories of suppliers. Number one, you have the thermal architect, the thermal designers almost, the ones who are making that zero to one step, the ones who are coming up with the first design. Then you have the second category, which is the thermal components manufacturers. It's relatively accessible equipment to be able to manufacture a cold plate. You need a CNC machine. You need to be able to work with copper, for example. Really, we separate ourselves from the thermal manufacturers, which we are seeing more so be the case for these new joiners who don't have the 20, 30 years of experience that we do. Where we lead is in that architectural design. This is also why, as mentioned in the presentation earlier, we lead in product manufacturing and supply. This combination of these three things essentially is why we are able to continue to be the reference designer for leading GPU providers, but not only leading GPU providers, but also leading ASIC projects. We are the main designers. We're the first person that CSPs are consulting that they want to work with when they're designing next generational thermal solutions. Yep. Okay. Yep. That's where we distinguish ourselves, and that's why we're not very worried about new entrants, particularly entrants who don't have the wealth of experience that we do. As an added point onto specifically Chinese new entrants, we are even less so worried because American CSPs are more sensitive towards using Chinese suppliers, and therefore, they would naturally prefer us over a new entrant in China, per se. Thanks, Matthew, and we have received several questions from TechSpot. Why is the tax rate in the fourth quarter 2025 a little bit high, and what is the tax forecast in 2026? Okay. As the revenue contribution from our Vietnam facility increased, we had fewer tax incentives available there. In 2026, we expect to increase liquid cooling module shipments from China. We anticipate this tax rate will decrease. Thank you. The next question, what is the current bottleneck or challenge in two-phase thermal solution? Yeah, thanks, Yvonne. The current bottleneck or the main challenge really is the system-level reliability. When you have a two-phase system, you have a mixture of gas and air in the system. Because two-phase relies on the boiling of the coolant to absorb the heat, and the boiling point of coolant is actually closely related to the pressure in the system. All of a sudden, you've gone from in a single phase, you're controlling for, okay, the inlet temperature, the outlet temperature, and the liquid flow. Two and two phase, you need the inlet temperature, the outlet temperature, the system-level pressure, the system-level flow, as well as the air and liquid mixture at the inlet and outlet. You're controlling for more things, which makes system-level reliability more challenging. That's really one of the critical bottlenecks that we're still working on overcoming. The other critical bottleneck is auxiliary components that work with two-phase systems. Example being QDs. We would need to think of a way to redesign QDs to make them adaptable to the high air pressures that we're seeing, the high gas pressures that we're seeing within these systems. Thanks, Matthew. The next question, is there anything you can share with us regarding the design of LPU thermal solution? Sure. As mentioned earlier, liquid cooling is extending to beyond the GPU, CPUs, and LPUs are something that we are working on. We won't be able to share very many design details at this current moment. What we can say is it will be predominantly liquid cooling. Thanks, Matthew. The next question is asking about the capacity expansion plan for CDU, in-row CDU, and pump set. Yeah. Thank you, Jerry, for this question. At this current moment, we are still finalizing our capacity expansions for these areas. What we've outlined earlier as the liquid cooling module, the rack manifold, and the chassis are the critical components that will be the main drivers for our revenue next year. The other components that you've listed here, while also important, are currently not the main priority at this moment. Thanks, Matthew. The investor, please ask the question you may have because I think this is quite a pressure opportunity for you. I think I can add a little bit more on Jerry's question. What I've mentioned just now is not to say that we aren't expanding. It's just we need to prioritize our liquid cooling modules, our rack manifolds, our chassis, and then we would then do an evaluation on how much room we have left, how much factory space we have left, what our next phase of expansion plans are to then accommodate for these areas. We are definitely still growing in all of the listed components there, and just wanted to make that clear. Looks like the presentation and Q&A section has been finished. If there is no more question, then I think we can wrap up the call here. Thank you everyone to join the call, and if you have any questions, please contact AVC management team or Diana Helen. Thank you. Thanks, everyone. Thank you.