Afternoon, everyone. Welcome to Innolux group first half 2025 investor conference. Today's event is being broadcast live through Innolux and InnoCare company websites. It's the same place where you can download the conference materials. Please take a moment to read the disclaimer notice line. Today's meeting, we will have three speakers who write the company's key messages. The first one is Mr. Jim Hung, Innolux Chairman and CEO. Second is Mr. James Yang, President of Innolux Corporation and Chairman of InnoCare. And also Mr. Eric Lee, President of InnoCare. After the presentation, we will conduct a question-and-answer session. Now, I will hand it over to Jim.
Good afternoon, everyone. Thanks for taking time to join us today. I'm always very happy to see everyone face-to-face. For those of you who cannot join us online, thank you for also joining us virtually. Today's annual conference, we will have the whole Innolux group, which includes both Innolux Corporation and InnoCare. Both companies delivered positive financial results last year. On the Innolux Corporation side, I will have James help you update the market outlook and also share with you the opportunity ahead of us in the next few years. Without any hesitate, let's have James start.
Yup, good day, everyone. My dear valuable partner and investor. Thank you for joining us. Now, I try to give you some kind of outlook. When we recall previous LCD panel industries, it's more focused on capacity, cost competitiveness. Through several years of transformation, now we're more focused on value-added manufacturing. Every piece is more focused on their own technology, larger size, more premium products, value-added products. By also very disciplined control of the production to maintain a better scheme to transformation to the value-added industries. Now, LCD industry is more healthy now. Yeah. I give you some kind of outlook about different applications. About the TV, of course, thanks to the Chinese government's subsidy, the larger size of demand is quite good in there. Also thanks to the emerging market, the small size demand is quite good.
TV's price got some kind of support and a foundation to bounce them back in the coming CQ2, as all expected. Also thanks to the everyday talking about AI. The AI booming will trigger the new application on notebook PC. That will pave the foundation for the second half notebook application. After the CQ1 digest, that is the inventory and leftover. The new application for coming AI era is quite a good driver. Also thanks to some kind of Windows 11 will boom into replace Windows 10, some kind of loophole to booster your security. These kind of things will also help the notebook application demand. About the automotive, what's most important is the luxury car also want to give you very unique user experiences to transfer your office experiences and home experiences.
However, when you play the game or when you play on your key in on your laptop, you can move to the car. The very unique and larger size integrate and freestyle larger LED, larger size integrate display is quite very unique. Innolux also adapt the OLED products and with collaboration with JDI. Except the traditional LCD, Micro LED, OLED product, especially by the eLEAP, it can give you better user experiences by the brighter and very colorful saturation and also the lower power consumption. Most important during the process of their manufacturing, they use the less solvent and the materials. eLEAP technology is some kind of green product and environment-friendly product. We will use that kind of product on our Car UX company. That is very unique and leading in the industries.
Next page, we not only share with you about LCD and LED. We also invest our own, that means time, resources, and money on the Micro LED. Micro LED will give you the more lightweight and high brightness, some kind of low color shift. This kind of wonderful user experience is very important. We will more focus on the high-end product first. Of course, there is a free- tiling type of finishing information display is our first target to do. Also, for the transparent display for the unique and niche application is some kind of we try to focus. Once we rent out the quantity and then improve our ERA, we believe the Micro LED's cost will drop significantly. We will focus on some kind of mainstream product. Finally, we will enter the commodity product just like the IT products. Yeah.
Yeah, here I show you solar meter simulator tiling product. Okay. Simulator tiling product here that will give you a very clear user experience. And also some kind of, yeah, let me say PHUD. For drivers, we just put our eyes on the road, and then we can simulate to catch up information and focus on the driving to boost our safety during the driving. The PHUD is another application. Also transparent display. However, in the meeting room or in some kind of war room, it's some kind of very convenient for this kind of image. Also for Gojos brand, for our export and also healthy industries, we can find the Micro LED's market is there. Yeah, here, we show you some kind of market is there. Technology by POC is ready. Now we need the excellent product.
Here we show you the two phase, all Micro LED achievements. That means here we do it by the high- definition information display by 40 PPI. Then we can freestyle by 4x4, going to the 106-inch larger display. Debut in this year CES in Las Vegas. Also we can use this kind of product by the 12.7 or 12.3 to different applications. Size-wise, it is one to shooting larger size HDID applications. Then we got two awards. That means the Gold Panel Award from the Taiwan government and also the SDIA Gold Award. The other product. Oh, yeah, here. We improve our resolution to worldwide record high 200 and 229 PPI by the 9.6 MicroLED display. However, it can use for the automotive and also the Gojos luxury product shop to display this kind of image.
We won this kind of a Gold Panel Award from the government by SDIA and then also the TDUA associations. What that is here. We have some kind of product roadmap. This is a roadmap. From now on, we focus on the HDID and go into the main road HDID application and also go into the transparent and high-end for the PHUD application for the automotive. Since the car industries is more willing to adapt the new technology affordable for the high-end premium product, I think that can help us a lot. Finally, we'll enter the medical display because we can provide better color performance, lower color shift, and also precise color depth to help the doctor to give the precise diagnosis that can promote people's healthy industries.
Let's say some kind of, oh, I'll get once we have the technology proved by POC, and then we got the applied patents. Through the patents, we protect our products. Through this kind of strength, let me just secure Innolux in the MicroLED's industry development. We now got the American government granted as a worldwide number three IP's owner for MicroLED, especially for the color conversion. That is very important for power saving and cost saving. We believe we can make it, and we will deliver it soon in this year. That's it for my presentation, and I show to Jim.
Thank you, James. Okay. Corporate strategy. If there is anything worldwide on the technology space, people would all agree on saying, "Okay, this is a top-down trend." AI is definitely one of that on top of the list, right? I think the way internally our senior management team include all our board members started reviewing this a couple of years ago and seeing how should we be positioned. While just two years ago, that was still stumped at the effectiveness of ChatGPT. Two months ago, there is a big feat coming online. Two days ago, there is a new software called Manus, the general AI agent. All in all, no matter which AI model you prefer, the things in common is we need high-performance computing, and we need larger, bigger AI chips.
From that kind of top-down view, we start to review ourselves on saying, "How should we be positioned to catch on this kind of a global trend?" The next page shows you, I think we all agree that Taiwan is non-comparable globally as a value chain on the high- end of the IC manufacturing, right? This page, we want to show you that we are proud to say that Innolux is now part of Taiwan's efficient semiconductor supply chain. On this page, you can see a lot of the players from the software providing, service providing, from the material, from the equipment. You know that when we say the semiconductor, we actually more focus on the fan-out PLP. This is nothing particularly new, but the reason fan-out PLP has come to the people's spotlight again is because this AI era.
People started looking for, "Where is any more cost-compelling solution for the IC manufacturing and packaging, so on and so forth?" This is where we believe that Innolux, as an expert on the large size of the glass substrate processing, fine processing, will be able to contribute to the whole value chain for not only us, but the whole technology, especially on the semiconductor value chain. We are very flexible in terms of working together with our partners, either as a component maker or as a solution provider. The reason fan-out PLP is so exciting, I remember last year in one of the leading Taiwan IC manufacturing company's annual analyst meeting, the Chairman used to say that he believes fan-out PLP is a solid solution provider for the large size panel. We have a same view as this leading Taiwan IC manufacturing company.
We also believe that around 2027, things will start to kick off. What we are doing right now in terms of the last two years and now is we are getting ourselves ready for the client's demand. I want to use this page to explain to you why fan-out PLP could enable more efficient and low-cost advanced packaging. On the left-hand side, in the upper corner, you can see that for the top each wafer, if you use that as a benchmark of 1x , even just in the rectangular size, it already increased 30% of the area. Fan-out PLP will definitely help to include the larger area size.
In our generation 3.5, which is 620x 750, that kind of glass size, that is equal to 6.6 x of the 12-inch wafer, which means you can process it one time more than 6x of efficiency on the same area. On the bottom corner, you can see that also with this kind of large size, we can have a higher throughput versus the 12-inch wafer. If you only put the rectangular size of 2x, the vertical size you can put into a 12-inch wafer is 28 units. However, right now, the markets of the IC, usually for the high-end, will be five, 6x vertical size. If it grows to 7.5x , you'll only be able to put into six IC in one 12-inch wafer, which means if one particle dropped into that, your yield will immediately drop 16%, 1/6.
That is a huge damage and also a huge increase on the overall cost. However, if you put a similar size as a comparison like you see on the slides in our panel, like a 510 x 515 panel, that easily can increase to 35 units, which is around 6x increase of the throughput. All in all, from the larger area and also higher throughput, you can conclude into the right-hand side, the cost will be much more efficient. In our estimate, that should be around 15%-25% lower cost versus the original 12-inch wafer. That provides a significant advantage for the whole value chain to continue to move up and also increase and multiply the usage of more AI applications. This page shows you that where we start our whole fan-out PLP and also the execution plan.
When we talk about, "Okay, this is the overall market trend," you might say, "Yeah, even I agree with that." Why is Innolux positioned well? Why can Innolux, as a panel maker, now transform into the fan-out PLP? That's semiconductor, nothing to do with you. No, it is absolutely wrong. The reason Innolux has a significant competitive advantage on the fan-out PLP is simply because we revitalize our legacy panel factory. I think here there are a lot of the financial experts. You definitely understand that when we leverage our existing panel factories, we have seen that around 60% similarity of the whole manufacturing process as the panels array versus the fan-out PLP as the high-end packaging. The EUV will be the same, the photolithography, or even the spin coating, they are all similar.
With this kind of advantage, we only need much less of the investment on the CapEx, which can generate a much higher ROE than the other peers. That is a significant reason why we repurpose this fully depreciated panel manufacturing line, which is our type one in Taiwan. It is a 26 years old fact, and we turned that into the largest fan-out PLP fact in the world right now. Secondly, we also have a very broad product applications with mass manufacturing experience. As you all know, as a panel manufacturer, we are almost close to the very end to the SI companies, right? The system integration. We understand the whole process from the very beginning to the very end.
When we're targeting on the automotive, which is one of our current strengths, and also high-voltage and energy-efficient PMIC and AI chips, we can simply put into the mass production much faster, much more efficient than the other peers. That is also one of our key focus. After that, I think you can see that also all the panel fabs are highly automated. Like I mentioned earlier, there are about 60% similarity between this panel and IC packaging process. Given Innolux's 20 years experience and expertise on this glass panel, we believe that this automation processing will give us a significant advantage. Lastly, like James mentioned earlier, our IP has been accumulated over 300 in the last couple of years. We are actually one of the major leading companies globally on the fan-out PLP patents.
In terms of our technology, we have been laying out for the whole fan-out PLP. We focus on the three different trends. First, on the Chip- First, and second, on the RDL-F irst. That can also translate into the chip last. Lastly, on the TGV, the Through Glass Via. All the three different applications, all the technology, we are investing and doing a lot of research on it. Chip-F irst is the entry point for a lot of the RF IC or PMIC IC, which we are passing the R gate with our customers. We are also waiting for the clients to work closely with the future mass production plants. For RDL, we are also focused on the high-end consumer AP. For TGV, that is also looking for the high-end, high-performance IC.
All in all, we are positioned well on saying, "Yes, we are a glass solution provider on the fan-out PLP space." After this corporate strategy, I also want to share with you some of the strong financial results we are being post. Yesterday, our board meeting has also posted strong financial results. I believe some of you have seen some of the happy face on today's share price outperformance. A lot of analysts actually asked the IR and asked me yesterday or last night on saying, "How come you guys are able to deliver ahead of your peers on the second quarter turnaround, making it into the profit even the third quarter?" There is no secret recipe. The answer is actually very simple. We are focusing on lean CapEx. We are focusing on the light assets, and also we are focusing on the angel product mix.
What that means is what you see on the slide now, we focus on four different pillars: from facility, from capacity, from profitability, and the return. Each of these to review our position. Facility side, for example, we used to have 14 fabs, and we review one by one whether the fab would have competitiveness in the next five years, 10 years. We try to optimize our asset utilization rate from the facility angle. Even with existing facility we have, after we maybe dispose one to our partners, for example, for the capacity we left, we also try to optimize to try to find the most agile product mix. We believe that we can even, for example, using the outsourcing capability to provide the maximum capacity to our customers.
With all of these facility and the capacity efforts, we therefore see our profitability start to show the improvement. I think later on, there will be page showing you on the different categories that our profitability has significant improvement after we optimize our supply chain management. That all in all delivers into our maximized shareholders' return by the ROE and our capital allocation. We are happy to share with all our investors and our shareholders is simply from the open source on the Bloomberg. In the last six years, average Innolux is one of the best panel companies in the world. We deliver 6.5% TSR, total shareholder return, ahead of all our peers. Like I say, there is no secret recipe. It's the whole team, the whole 40,000 employees working day in, day out, trying to find the best solution for our customers, for our shareholders.
We are very happy to deliver this result and share this with our investors. This further elaborates into the result that when we do the capital allocation, people were wondering that you do the capital reduction, what's the result out of that? In the last three years, we've done three rounds of the capital reduction. Now our capital size is about 20% lower than 2021, where we were. In the end, that's where we have this stronger ROE than our peers. This page also gives you another close look of our operation performance by the different domain. You can see the three different colors from commodity, non-commodity, and the non-display. Each category has different kinds of the average gross margin. What we are trying to do is we try to even out the scalability. All of you understand that panel is a highly technical industry.
When the demand was strong, you could enjoy the one-time peak. However, when the demand was bad, you try to fill out the capacity, you were suffering from the loss. One thing we are trying to do is try to even out this kind of scalability by diversifying our product profile, our customer profile into more global and high-end products. On the non-display side, we're generally looking at the margin, gross margin last year around 11%-15%. That includes the automotive industry. For the non-commodity side, they also have a higher margin in between 21%-25%. Both sectors, both categories have double-digit gross margin. Compare with the commodity side, which is only 6%-10% and also much more volatile quarter on quarter or year on year.
This strategy has worked out very well in terms of diversifying and delivering a more stable result to the investors. Like I said earlier, our board meeting yesterday has announced that we are likely to propose to the AGM, the Annual General Shareholder Meeting at the 7th of May, of TWD 1 cash dividend payout. Among that, TWD 0.75 from our profitability generated and TWD 0.25 from our additional paying capital. That is a tribute to our strong financial results from last year. Even if you look at the quarterly result, our 4Q gross margin seems to drop significantly. It is actually more because of the seasonality on the quarterly price decline. However, we believe that we see this year's looking ahead, like what James was mentioning. We see the demand was stabilizing. We believe the margin will also improve. Like I mentioned earlier, last year's result was very encouraging.
That is thanks to all the employees, strong efforts, and all the shareholder support. Our gross margin has improved from 1.5% in 2023 to 6.5% in 2024. Our total EBITDA margin has almost doubled from 5.7% to 10.7%. Net net, we are net cash. We are the only panel company in the world running at the net cash position. That gives us a strong capability and the flexibility to be able to distribute the money back to the shareholder. Or if there is good opportunity to invest, like fan-out PLP, we are able to immediately move into the sector, be able to generate much faster, earlier results than others. I think this table shows or says better than my language. You can see easily from the results. Okay, I will stop here and pass it to Eric. Thank you.
Thanks, Jim. You gave us a good story.
I need to share a more exciting story. Otherwise, you will lose your focus, right? First, I will give you, okay, InnoCare. Yeah, this one. Sorry. That means I will give you the update about the CQ4 last year and the whole year's financial status. Later, Eric will share with you about our strategies and business development and also insights about the industries, about Medicare. Of course, welcome your Q&A later on. First, that means I give you some kind of a statement about CQ4. The most important thing is that we have a single quarter record high revenue in last quarters. That is thanks to our unique technology, IGZO product, and also the right business model entered a fresh panel detector assembly and also entered the emerging market. We gained record high revenues.
After the record high revenues, I think we also got some kind of non-operating income to record high due to the NRE and the denied service again, and also the foreign exchange gain in the CQ4. Finally, you can find we got a net pocket. That means still up TWD 40.6 million. Reflecting our solid operations performance. That is very important. That means we reached record high revenue. After this, you can find next page. That means the whole year revenue, we also almost reached TWD 2 billion. Beyond TWD 2 billion in this year, it's my target to Eric. That's the most important things. Year- over- year, we gained 8.3% in the net sales. Also you can find our EPS can reach TWD 3.75.
We also announced we will share TWD 1.8 per share to all our shareholders after the approval AGM. The most important things are our net profit also can improve almost 31.4%. About the gross margin wise, InnoCare thinks we are in the Medicare business. Here we give you the stable gross margin, almost 27.8%, even higher than parent company. We should do. Thank you. The next thing is about talking about, I think, the whole next page. The consolidated balance sheet highlights. We are running in the net debt. We actually net debt to equity is 48.8%- . That means we are a bunch of cash for searching the right partner to invest on the technology or market. That is very important. Also our cash and cash equivalent gross year- over- year is 16.4.
Then also our short debts reduced almost, that means TWD 100 million. That means 41.2%. Finally, our current ratio reached 255%, which is very healthy status. We management by our way very well, especially even the inventory by the lean manufacturing and lean management excellent operation. We control very well on our financial status. Here I try to hand over to Eric to discuss our further development in this year. Thank you.
Good afternoon, ladies and gentlemen. I'm Eric Lee. It is my honor and pleasure to share you about our strategy roadmap and outlook for 2025. Just like James mentioned, 2024 was a year of a very strong financial year and filled by the successful product commercialization, expansion in the emerging market, and the increasing adoption of our detector technology.
First, I would like to use this slide to explain the whole market trend for the X-ray sensor technology. Yeah, like Innolux, Innolux is doing many kinds of the technology, the display, non-display. For InnoCare, we are very focused on the X-ray sensor technology. How can InnoCare keep our leading position and grow continuously? It shows that InnoCare has a great opportunity for coming years. First, you can see that there are different kinds of X-ray sensor technology from the film, CR type. We are using the amorphous TFT, the II-CCD. II means the image intensifier. The IGZO TFT and the CMOS for the semiconductor and the photon counting detector. The product feature also covers from the static one to the dynamic one.
The applications are including different medical applications, for example, from the general, the dental, or even the surgery, and to the non-medical, like industrial application. From this chart, you can see that the green arrow and the red arrow. Green arrow means this technology is dominating this market gradually. For the red arrow, it's declining. First, regarding the static application, although the film and the CR type is still working in some hospitals for some of the emerging markets, but in order to support the medical imaging digitalization in hospitals, film and the CR type were decreased rapidly because of the amorphous TFT's strong advantage. Actually, the amorphous TFT was becoming the mainstream technology for static application from 10 years ago.
The adoption of the amorphous TFT DR in emerging markets like India, Middle East, or South America is a major growth driver in the coming future. To support the sensitive price requirement for the emerging market, InnoCare's strategy is to introduce our Gen5 TFT solution for the better cost structure. Right now, we are in mass production, and actually more than 3,000 pieces shipment so far. Also, we are supporting the total OEM/ODM solution for the local medical system integrator. That's the first one regarding the static. Regarding the dynamic application, InnoCare, we start to introduce our IGZO technology because of the strength of higher mobility and the lower dark current for the IGZO from year 2020. IGZO is also becoming the main technology for the dental market.
Right now, the II-CCD solution vendors plan to terminate their product line due to the basket design and the higher cost compared with the IGZO. We believe that the TFT substrate technology, including the amorphous TFT and the IGZO, is dominating the static application and penetrating to the dynamic application very soon. Last question is, how about the high-end CMOS? InnoCare also wants to join this market. InnoCare has two approaches. First one, we will develop our new generation of IGZO, and we have our first device sample, which has the 2x higher mobility now, and we plan to launch from Q4 of this year. Our IGZO PRO, that's the new name of our next generation IGZO, will have higher mobility, 2x to 3x higher. The detector's frame rate can achieve 50 FPS .
It's similar with the CMOS device. We also can reduce our noise level around 10%-20% for the lower dose requirement. IGZO TFT has a larger size benefit than CMOS. The second one, of course, CMOS is still very good. Our second approach will be to cooperate with our partners to build our CMOS with the PLP technology. I think we can make some differentiation in the CMOS market. You can see that this page. Finally, some of the technology film and the II will be terminated. Finally, only the TFT glass and the CMOS will maintain in this market. That means InnoCare can do not only for TFT, but also IGZO at the same time, and we are leading right now. That's our good opportunity.
Here, with the explanation of the previous slide, I think it could be more easy to understand our growth in 2024. First, the mass production for the new products. First, the important thing is the Gen5, 43, 43 size, MP from Q4 last year, and achieved more than 3,000 pieces, and it can have the 20% cost reduction than before. Second is InnoCare, IGZO technology. InnoCare is the first TFT company to introduce X-ray sensor market. Main application now is dental cone beam CT market now. Actually, for C-arm, for surgery use, is also adopted by the giant system makers now. Actually, it is larger than 50,000 pieces shipment by accumulation base so far. Third, we have a very strong performance in emerging market.
Local medical system integrator of each country are trying to build their own strength and brand based on the government support, especially after COVID. Medical imaging digitalization is also supported by each country. Therefore, India and South America are the major areas to increase the demand of the X-ray detector. Fourth, regarding the Chinese market. Chinese market is still struggling, but actually, we can see some of the good signal. Actually, China market was quite good during the COVID era, but it has become slower from 2023 because of the local economic situation. Right now, I think we can see some good signal because the government support, the new replacement subsidy, and the lower inventory level at the channel side will encourage this kind of demand. Here, we showed our product portfolio.
InnoCare is the only one company we can produce the X-ray detector from TFT, CsI coating, real IC binding, and the FPD detector assembly in one building in Thailand. Our business model is the total solution provider, and we can provide our diversity solution to different customers for what they need and to create our value. From the left chart, with the whole X-ray detector market changing, actually, we are shifting our product portfolio from the pure TFT substrate to the open cell. Open cell means the TFT with the CsI and the real IC and to the OEM/ ODM solution for detector. OEM/ ODM actually contributes around 30% of the sales, and the CsI solution also contributes more than 40%. This kind of change helps us to increase our revenue and profit in the last year.
Anyhow, we will still keep the different business models from the TFT, open cell, and the OEM/ ODM for our different customers' demand. The right chart shows our progress of the growth of our ODM solution. It's quite good from last year. The joint customer released their evaluation for our ODM generator models and the ready for the mass production from this year. We are expecting very good growth for coming years. Sensor technology is InnoCare's core competitiveness. Diversity business models from the sensor device and the OEM/ ODM and the system solution for inspection application are the service value for our customers. We are aiming for the directions to create value for the customer and ourselves. First one, go advance technology for our technical capability.
Go broader market for the different application and go higher value for our customer certification with our hardware and software service. This page is regarding the device. InnoCare, of course, we are from Innolux. We are very dedicating the X-ray sensor technology for more than 20 years. There are three major strengths. First one, the new technology collaboration, customized service, and the long-term customer relationship can keep our leading position in this market. We are exploring our technology from TFT to CMOS and even IR, the infrared, with the cooperating partners from the medical to inspection industry. OEM/ ODM service. Actually, for X-ray detector market, price is also getting sensitive and challenging no matter for emerging market or developed market. Recently, the tariff topic is also changing the whole ecosystem.
Also, every country tried to establish their medical system much robuster and resilient after COVID. Right now, InnoCare is supporting our different regional customers to provide OEM/ ODM solutions from the sensor design, supply chain management, manufacturing, and the medical regulation certificate. Lower cost with the higher performance is still an essential factor for the customer's requirement, no matter for brand customers or emerging market. We are working with our local partner to build our retail line or even assembly line in different regions from the Q4 of this year. With this kind of local service operation, not only the tariff issue can be handled, the faster response also can be fulfilled. This page shows the different kind of service, the inspection system. Actually, it's non-medical, but actually, we realized that it's a really good market. Even it's also very challenging.
The AXI, the market is still a rapid growth market for different applications. We build up our capability from key components like a detector, X-ray tube, and the software for the imaging processing and the system integration, and even high-end 2D, 3D inspection system during these years. You can see that we have many installations at our different customers, and it covers different markets. From agriculture, sports, ICT, automotive industry, and right now, we are aiming the high-end semiconductor and the PLP industry. X-ray inspection is the best way or even the only way to inspect the deep inside of the object. Recently, the AI chips need the many 3D dimension structure. We are working with Innolux PLP team now to develop the total solution for TGV inspection.
How to combine the AXI solution, AOI solution, and the infrared inspection can improve the effectiveness and the productivity for manufacturing and the quality control. Okay. That is our outlook for this year with our growing strategy for new technology, new product, and the new market. That is how we want to aim for this year. First one, we still need to increase and to improve our profitability. To increase our profit through the first one, optimizing the product portfolio. Second one, reducing the product cost. We will keep migrating our mainstream model from Gen4 to Gen5. Another new model, 43x35 size panel, will be the mass production from Q2. Our CsI coating also can create the higher performance, like 80% higher DQE and lower the material cost by efficient productions. Second one, how to expand the emerging market.
In order to expand the emerging market continuously, local assembly line will begin from Q4, and it can increase the tender project opportunity in the emerging market. Also, the local service like repair RMA can enhance the relationship with the customers. The third one, for the ODM, how to strengthen our ODM. We need to engage with the giant brand makers and the local king of the emerging market. They will continuously drive our growth continuously. Fourth, to deepen the partnership with the system integrator in different markets like in India, U.S., and the E.U. It can bring more business chance for the win-win situation. Finally, regarding the AXI, I think the AXI market is still growing and becoming bigger for different applications. I think from this year, we will be more focused on the high-end AXI category.
We have our good parent company, Innolux, and they are changing their kind of different direction for the semiconductor. We will work with the Innolux PLP team for the PLP and the semiconductor application to catch up with the AI growth. I think that's our outlook for InnoCare. Thank you.
Thank you for the comprehensive report. Now, it's a Q&A session. We will have two parts today. In the first part, we will answer the questions collected from investors in earlier time. After that, we will take questions from the floor and online participants. [Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
[Foreign language]
That comes to the end for today.
[Foreign language]