Achieve. It'll be more than 140,000,000. Yeah. We have, we maintain 15 percent of our R and D investment. And we are TSNC, one of the TS see very chain aggregators.
AC market, is very big and unique. So this time, I'm not going to expand as in as in market business model and opportunity. LG is doing the ASIC business. It seems that we found the company, Currently, we are focusing on HPC and AI area. We consider HPC and AI area.
Has much higher, entry barrier, compared to most of our applications since the design always require the most leading edge technology. Currently, using 16, 7, eventually, we'll use a 5 nanometer or or below. The chip itself is very complicated and big. Nowadays, generating and transmit the data is no longer a bottleneck. Effectively, it's rather useful data.
It's still very challenging. Therefore, we believe HPC and AI application will continuously grow and sustain with a reasonable margin. And next slide, let me expand our q 1 situation. Basically, we meet our internal revenue target and with, record breaking numbers, revenue, q 1, 40, 50,500,000, that was the record high. Historical high, quarterly revenue high.
In terms of net income, 5.78 is also the record high. Send so does the EPS We have a great position in HBC And AI Business. Multiple design, plan to tape out soon. Yeah. In fact, q2q3, it's our PayPal, tape high pick PayPal quarters.
And we have other than this, design we're about to tape out in this quarter and next quarter, we have a lot of design in pipeline. Yeah. In fact, our capacity is a 120 percent 4 at this moment. Other than China, we also have a few significant business. 1, in US, all we we all we just new to the market.
But we're doing very good. We already have a few 7 nanometer, 6 nanometer, even 5 nanometer design. Japan recently, we just wing a a there's a significant win on against council business. And company is very familiar with the con again, Council business. About 10 to 15 years ago, Gain Council is our number one revenue maker.
Many 7 nanometer designs in the action stage, corporation stage. Another highlight for the q 1, we can say we're still doing very good on crisis management and control. We have a no significant in impact due to coronavirus. So other than Japan and US, most of the employees are working from home. The other the other region can say it's almost 100% go back to normal.
And but for the sales, there's some still facing certain challenges because, there's still the travel ban and quarantine requirement, for China and for Taiwan. But overall, as for the red an execution and engineering work. There's no impact. And we continuously receiving, benefit due to the trade war. Okay.
Daniel, why don't you take over this this side?
Okay. This slide, shows our 1st quarter, income statement numbers. And, it's pretty straightforward as Johnny mentioned. Revenue is record high and the net income is record high single quarter, profit. So for the revenue, the 1st quarter revenue is 50,500,000 7.4% quarter on quarter and the 39.3% year on year.
And for the operating income, The operating income for the first quarter is 6,900,000, almost 7,000,000. It's a 50.2% quarter on quarter growth. And and 88.6 percent year on year growth. And for the net income, the income is 5,800,000. It's 25.2% cooldown for the growth and the 79%, 79.4% year on year growth.
Translating into single quarter EPS 2.87. And this page is, about our, quarterly, application breakdown. You can see in the first quarter, the HPC percentage, reached 79% of our total revenue while, the consumer, and then they're working, still account for not significant part, but, 6% 4%, respectively, of our total revenue. For the niche, I think the major item for the niche, for the niche market application, is the, Jamaha mentioned Jamaha Pachingo mentioned, we expect this, revenue, this revenue will, will be steady this year to 1st quarter to 1st quarter. And for the yearly, since, we just have our 2020, institutional investor meeting.
So the 2019 yearly max is already shown in the, in the previous, conference meetings. So it's pretty straightforward for last year. The HDPC, contributes accounts for 59% of our total revenue. For the technology note, this quarter is, pretty much similar to last quarter, as the HPC, especially the CPU, revenue still accounts for the majority, but still be the majority element of our total revenue. So, since, this product is, in, 16 nanometer versus no, So the sitting nanometer process, no, accounts for 53% of our total revenue in the first quarter.
And, you can see the 7 nanometer category. Keeps on growing. And we expect as the 7 nanometer design, will gradually, take out in the following quarters. The percentage of the 7 nanometer 7 nanometer category. This is the this is the, original mix of our total revenue for the first quarter.
In first quarter, Japan accounts for 14% of our total revenue. China accounts for 62%. And the Taiwan, only 3% and others, 21%. We expect the others the others include the, Middle East, the euro, and the North America. We expect, revenues from North American and the, middle east and the, the Europe area will keep up growing in the following quarters.
This slide, this ties, talk about the interest view. Honestly, think these two institutional investor meetings are very, close. So the view doesn't the view doesn't change too much. First of all, China CPU demand remains unchanged. Yeah.
Although there is the the the virus pandemic. The customers, still the customer's focus of shipment for the whole year remain unchanged. Although now it's only, we are only, we are we are entering entering main. We are still watching closely to the to the possible, forecast change from customer. So far, we don't we don't see any, changes from customer side.
And, for the China CPU market, both our number 1 and the number 2 China CPU customers are very aggressive. Kicking off new MRE projects. That's the that's also the reason we will, talk about later that, in the in the second quarter and third quarter, even though the mass production, revenue will remain strong, but since, the design since the design demand is, is is higher than we expected. So we think the mix in the previous investor meeting, we guided the mix, will this year will be 40 something percent for MRE and uh-uh 50 something to 60% for mass production. We believe the mix will A little bit shift of more than I, that's mass production.
For the AMM market, outlook is still Still good. AI projects demand from US, Middle East, and China is still good. For US, Although, the travel, and communication and the employee attendance, is kind of, It's kind of limited because of the coronavirus pandemic. But, overall, all in all, the field of the demand and, the future projects are still ongoing. So we don't see we don't see any any we don't see any changes.
We don't see any change for the trend, but the short term, slowing down. Is is is foreseeable. And, we expect AI tube makers gradually enter the 5 nanometer phase in late 2020 this year. Currently, you know, existing project, we are we are doing, for the AI, mostly 7 nanometer. And, we are engaging with customers the 5 nanometer projects.
Although, we don't we don't we don't we don't win a lot. Or but, many talks between Alch and the customers is ongoing for the 5 nanometer project. And we feel that, those customers are, the motivation for them to moving from 7 nanometer to 5 nanometer is strong. And the list page is about a 2020 business outlook.
Okay. Yeah. As for the 2020 business outlook, yeah, in fact, we just, 1 a half months away from previous the investor conference meeting. Yeah. Overall, we didn't see any big change.
The only difference is, various pandemic happen within at least 1 and a half months. Unfortunately, our customer, I think, do not change their production plan. Especially for the China CPU shipment. I think all the older remain very strong. So currently, NIE, all the project and based on the tape out schedule, no delay.
And next next generation also kicking MS production order are still quite promising. The only diff the only dependencies, 7 7 nanometer design challenge. The TSNC capacity, still, very tight. Unfortunately, we just received some, one good news from TSMC. They've been successfully allocated some wafer to us.
So 7 nanometer production already stopped. And 7 nanometer put, demand getting stronger and stronger, starting from second half of this year is that into prototyping stage, q4 early next year will be, will will be go to the, mass production, high volume mass production. We'll be continuously cautious about COVID 19 prevention. And right now, design stage, I don't think there's any impact no delay and new project keep keep coming. The only biz business related impact is, in US and time region, due to the travel ban, the frequency for visiting visiting customer, getting less.
So at the end, thank you very much for believing and trusting our chip. For the for the past 5 quarters, we can see we always met and outperformed the guidance. Yeah. Based on current 2020 forecast, we can say this year is going to be another great year. And q 2 is going to be another record breaking quarter for the company.
Thank you. Okay. If you now we are enter now we are entering the, to a next session. So if you have questions, please use the, raise hand raise hand function, and I can unmute you. And the police, Luis, please, uh-uh, tell us your name and the the company you are working with first.
Thank you. Luis. I'm I already unmute you.
Okay. Thank you. This is Luis Chang from East Spring. So my first question is, regarding 2nd quarter, as, measurement just mentioned that you'll be at record high quarter. Are we still expecting, like, a, minor, quarter on quarter growth or or it will be a more meaningful quarter on quarter growth in 2nd quarter.
Okay. Johnny, I'll answer
Okay. Okay.
For the second quarter, we expect the revenue growth will be minor. We'll be we'll be we'll be we'll be slightly put up and for the growth. But for the mix, we believe the 2nd quarter makes the MRE percentage will increase. So, of of course, because of the increase, because of the because the increase increase increase the percentage of, the gross margin, we believe it will be better than the 1st quarter. That's why we say since the first quarter is already the record breaking quarter.
So now when we look into the second quarter, the revenue will be could be slightly better. The gross margin could be, better. And, so we also expect the same quarter will be very good. And then for the whole year, we expect for the first quarter to 3rd quarter, the quarter on quarter, quarter growth guidance will be flat to slightly. We may see, we may see, more, significant revenue, growth in the fourth quarter.
But of course, as we mentioned, it depends on the 7 nanometer capacity support ITSMC. Okay. Charlie, I already unmute you.
Since since Daniel, can you hear me okay?
Sure. No problem.
Okay. So, during your your, opening remark, you you said that this year, probably the mix from NIE will increase. Does that mean you see some provincial forefront turnkey, or there's a a Absolute upside from your, NRE business. Can you clarify a little bit?
Oh, okay. Johnny, you want to answer?
Okay. Yeah. So getting stronger doesn't mean our mass production order getting less. Yeah, basically, we can say NIE is under our control based on the, desired capacity, based on the people we have, we can easily estimate how many design we can enable and how many design we can pay by. But for the mass production, 16 nanometer.
I don't think that's a issue. Whatever the forecast we we should be able to deliver accordingly But for the 7 nanometer, it's still certain dependency from TSNC.
Okay. So can I can I get a sense of which, which NRE projects see, they kinda they kind of, they of upside or is a kind of overall pull in of the schedule?
Schedule, I think scheduling maintenance and is a kind of very difficult to pull in the schedule because, when we sit down with a customer, they already proposed very, very aggressive schedule. The reason NIE increased because of the new business.
Our new business. Oh, okay.
So China, US, and even Japan, there's a lot of new business kicking.
Okay. Thanks. And I I guess this, related to my my second question. The company executes it very well in running as a 120% kind of utilization. So long term journey, how how how big do you think the company can be, meaning, in 3 years, 5 years, based on your current business model, do you think your business size can can be 2x?
And, what would be the bottleneck?
Yeah. That's a very good question. And the question is also very big. Let let me try to answer. First of all, the most efficient way to increase the the desired capacity is to increase our desired efficiency.
Yeah. I I still believe with the same number of people, we can enable more projects. Yeah. And also, my company does have a growing plan Yeah. Right now, we have 450 people.
By the end of this year, we'll be for sure, we are over 500. So, to answer your question, yeah, but right now, our sales team be very, very selective to taking, to choosing the customer. It's not the bad news for the for the for the company. We've been able to choose the right customer either they have a future or they have a existing production. So by the and by the end of this year, I estimate that in the middle of an see, our capacity will increase to 30 to 40%.
30 to 40%? Yes, sir.
Yeah. To the middle of next year.
Middle of next year. Okay.
Mhmm. Mhmm.
Okay. And if I may, want small follow-up. I I think recently, there is a, some announcement from from the US government. They want to tighten the export of the semiconductor to China for military usage. I I know the company and the TSMC has been very careful from this one.
But, this time, you also mentioned that even the end customer sell silver as civil entity, Minyongchi. Mhmm. You know, they can be considered as, a kind of embargoist if, the the chip can be used for the min military purpose. So how how can come in, you know, kind of, manage the the districts, right, because I think for, your China CPU customers, sometimes it's very hard to tell, their, you know, final purpose. And it seems from your comments, they are very aggressive even in this kind of environment.
So don't you think that there's some risk around these projects?
Alright. Thanks, Charlie. This is a a very sensitive question. I tried to answer accordingly. When we when we select a customer, we usually, we always be transparent to TSMC and to all the supplier.
This is a customer we are going to to take. We will sit down with, TSMC and site and and site on the three way NDA before we're doing the design work. For sure, there's no military, no direct military usage. And, that's why both TSNC and us consider, that's the customer we can take.
Mhmm.
Yeah. But but just like, Daniel always say when you're making, for example, when you're making a knife, it's very difficult for us to to guarantee the usage. Yeah. They are making the chip. This all kind of application they can do.
Yeah. But so based on our study, our customer also tell us, if for the military usage, usually the the the demand and also the number are very small. In usual case, that's a FPGA related application. They don't need to make a ASIC. Yeah.
This is a overkill entire design. Right now, HPC and AI, BD and GACON, I think That's a care for a specific military usage. We can tell this, obviously, that's a cloud computing and also data analysis to relate the application. Yeah. TSMC also consider the same thing.
Okay. Thanks for the call. I I will, get back to the queue. Thanks for your answers.
Okay. Thank you, Charlie.
Okay. I already unmute you.
Hey, hello. This is Chiu from Diaman Asia Capital. So I have a first question. It's related to your comment about the, China number 1, number 2 CPU customers are getting more aggressive in takeout. Could you share with us why, what what caused the sudden increase in, design activity for, the CPU makers?
Not aggressive in in taking out aggressively, open new project. Okay. Yeah. So I, okay. I'll I'll I'll hand it to Johnny, because it's expectable because, because of, of course, part of the reason is because the tension lies between China and the US.
And about, those China companies who have the ability to, develop the the advanced technology notes chip are our field, our field is to it becomes more aggressively in recent days. So it's not a accident accident residential things is is pretty respectable.
Okay. Understood. And then, for the for the China CPU, I know that they usually have a tender, every year. But I think this year, we still have not seen the, government tender on the, on the, local government or the, government utilization a PC, is there something, you have some clarity with your customers or any timeline? And does it does that impact our mass production volume for for that specific customer.
Okay. Let me let me try to answer. Yeah. Yeah. For sure.
China is, going to reduce the dependency from US And that's a that's their strategy and that's a trend. For the for the CPU right now, I think every you know, it's a huge dependency on the Intel and also related, CPU. So, China does have a China plan, China government does have a plan gradually replace the dependency from from Intel CPU using their own design. And we do rec we do receive some order. Yeah.
Actually, when we ship to the customer, we don't know where they ship But when we chat with them, they already mentioned some government related, business unit already being enforced to use their design, and this trend will continuously grow. So that's why, the 16 nanometer CPU demand and also layer next generation, and they've they've put a very, very high expectation and focus on that.
Okay. Understood. And and and then, yeah, related to your previous comment about your closely watching about any order change situation at your downstream customers. I'm just curious which area are you referring to? Is it the China CPU, the Japan, or, which area up and down?
Like, you are, watching closely.
Still China CPU seems the older size are very big. So we'll be watching very carefully, not only on the older, but also on all the payment stuff. Right now, I think the the reason for us to take this project is a very, very minor. Yeah. It's almost a prepaid deal.
Okay. Okay. Understood. Okay. Okay.
And then, you mentioned the numb TriNet number 1 and number 2 CPU makers. Like getting more aggressive. You're referring to it. You you are not, supplier of for both of them or you are still just a supplier from the the previous one, then we always, know about.
Yeah, for one of them, we can say we are solar supplier. The other one, they have a multiple suppliers. We are one of them.
Oh, okay. So we actually have a file for both now. 1 and 2. Okay. Understood.
And my last question is just about your, is there any change about your hiring plan? Because I think you previously talked about about 5 20 employee by the end of 2020. Any change about that? And you'll you'll be able to help me understand, the split by different geography. I mean, you set out a new US office.
Right? I I'm not sure, like, maybe then additional 100, a 150 new employees. How how how are they divided, by different countries?
Okay. Chihong, you were really doing a good study for our company. Yes. Before I mentioned about 5 20, But at least, today, I'm revised to find hungry. Yeah.
I I did we did change hiring plan a little bit. Being more conservative, other than China, other region, for example, the US, Japan, we've been a little bit more conservative, but overall, we still expect to grow at about 15% headcount, total headcount this year.
Oh, so, actually, you maintain your China hiring, but then you basically reduce a little bit.
I would say.
Okay. Thank you very much.
Okay. 1st of all, in some ways, asking about us, about something is actually about, the game console thing. It's not it's not a Pachinko CPU. It's a game console chip. But, assigned as I know, it it is not a major, chip for game console.
And, but a very good, but very, but the customer is, a very sound, can counsel, maker, worldwide. So we don't we don't expect a huge volume for this project. And then for the schedule, we are just, winning the budget. So, most likely, the mass production will be won't won't happen this year. It will be last year.
And, and, sorry to everybody that, my computer seems crushing. So if, in the next moment, next minute, the the zone closes, please, Please lock up again because now my computer can only only do the do the do the talking. We cannot unmute anyone. My my screen shut down. So, I'm trying to to to to fix it.
So if the Zoom connection is, is is is off, please
For any of the timings, we cannot take any question.
Okay.
Okay, Jeffrey. Are you there?
Yes. Do you hear me?
Yes. I now I can hear you.
Okay. Yeah. So, you know, I guess there's not just 2 Chinese CPUs. Right? There's several of them.
And, also, you mentioned that one of your CPU customers is multi sourcing, So, you know, I guess the question is who are you competing against with, you know, for those back end design businesses?
With me?
Yes. The question is you're, you know, you have 2 China CPU customers. You said one of them is multi sourcing. So for that multisourcing customer, who who are the others? Who is the other sources?
And then for the other China CPU customers that you don't have, know, who do they go to for the back end, whether it's in house or there are other, you know, design service houses like like out to that or competing for that business?
Okay. Wait a moment. Okay. I haven't said that our customer has multi, physical design source. At least for now, our chip is the only, back end design supplier to video, our number one customer.
For the number 2 customer, based on my knowledge, Altice is also the solo, back end design supplier to to them. But both of this company have, the Dino has the has the back end design capability in house, but the ability of doing leading edge technology node is limited. Mhmm. Okay.
Let me try to have I and more on on this. Yeah. Basically, for these 2 CPU design, we don't have, we don't have any competitor. Yeah. To be honest, in China, there's no competitor who has the experience doing 7 nanometer or 5 nanometer design.
Yeah. But like Daniel just mentioned, customer does does have a COT team. They can do their own design. So for the mentoring design, for example, the 28 or even 16, they may take out by themselves, but for the latest technology file or eventually 7 or eventually 5, they, they always want want to, tape out through us. Yeah.
There's a, yeah, there's a, a lot of dependency. First of all, we are the only one who has a experience and track record. And second, they may not be able to take the latest technology, PDK, or the file from TSNC directly.
Okay. And what about for the, the other China CP makers that are not your customers?
Oh, they are our our customer.
Jeffrey, because of the China CPU definition is is ambiguous.
Yeah.
Talk about China CPU. They talk about FADM. They talk about, long machine. They talk about,
Right.
But based on our definition, the China CPU supplier to the government, it can only be on base the supplier. Which makes feed in and, high city come on the market. Yep. I see. Mhmm.
Okay. Great. Thank you.
Mhmm. Thank you, Jeffrey.
Already unmute you. Please ask questions.
Hi. Thank you for the presentation. Is this Oliver from the bright rock? So, you you've mentioned the, TSMC actually give you some additional allocations for the 7 nanometer. And then your, growth, incremental growth, may be subject to the, the 7 narrow allocation.
So just, can you actually elaborate how how do you actually, you know, interact with the TSMC, in order to get more allocations s 7 narrow, then then is that possible actually to get more allocations? And what is the key, actually, TSM see would like to give you more. It's like, the visibility of the project or, like, the pricing or Okay. Can you actually elaborate a little a little bit?
Okay. Yeah. TSMC 7 nanometer, I think, right now officially, they do not make any promise to to promise to us, because, they are they are demand is much, much higher than, supplier that everybody know. So once, every time when we receive the order, we have to sit down with the TSNC to expand, the difficulty, customer facing and also the potential of this design. And then we can be in usual case, we can get some wafer allocation.
Yeah. But, at this moment, I think there's no guarantee from TSMC. But TSMC, but I can say TSMC is very supportive for for the company. In usual cases, based on the past experience that they will they may not fulfill all our demand, but they they always give us some in order to make a, in order to let customer doing a prototyping and doing a small small volume production.
Okay. I see. So, if if I quantify that, is that possible? Like, you ask 100, they give you, like, a 70 or something.
Now even for this year, I'll be very happy, honestly. Uh-huh. Oh, okay. Okay. Okay.
Thank you. Thank you.
I would like to add some, something that, okay, t as in usual, the GSMC, choose, They designed the the the level of support depends on, the application, the customers, and the many, many considerations. But for now, it's it's good for us that, all major applications within the HPC, area. This application, I think, TSMC now is is a a much more. It has has high interest in this application is it is the the very important area for them to to grow. So, at this moment, we think situation compared to in the beginning of this year, the situation seems better.
Oh, great, Danielle. Good comment.
Okay. Thank you.
And, uh-uh, Charlie.
Hey. Yeah, I I have some follow-up question, in particular, your NRE upside this year. So Johnny, do you mean those upside come from all those regions you mentioned above, including, US, Japan and China? It it said, from all of those. And if you you you you can, can you please elaborate a little bit, the application in the US and also the application from China and their geometry.
Thank you.
Okay. Yeah. Since our capacity become full, so we've been able to select a customer before we, the current project will be tape out. A lot of project will be tape out in q2andq3. And based on our original plan, the pipeline project, maybe it used to be 16 or 28.
But we owe squad to 7 and some 16. That's why the the NIE total contribution will be will be getting higher. So right now, we can say, only if the they have a huge volume, we will not take any measuring design, like, a 20 a or below. We only take a 7 nanometer or field 16 or 12 nanometer design. So NIE for the advanced technology is always higher than the mainstream.
So even our capacity doesn't change it by changing the the pipeline portfolio or NRE number will increase.
Okay. So it means the the mix from the 7 nanometer, is higher. Is that the right interpretation?
Yeah, the 7 nanometer design application, I think, the project we take is either HPC or ai.
Oh, okay. Yeah. Sorry. I I I saw you you you you said, you know, for those in our, you know, those in milestone and schedule are pretty much, determined. Right?
But it seems you still have some set up a flexibility to, you know, remove some, you know, trailing edge projects and, squeezing some dim edge, like, 7 nanometer. So how how how should I think about, did this, you know, kind of kind of a disconnection?
Uh-huh. Uh-huh. Go ahead, Daniel.
Sorry. Okay. Let's let's say this way, when we, release, our guidance in the in the yearly, investor com, is a digital investor conference about 1 a half months ago. We are our approach is very conservative. And, they say some of the upside come from, we are when when when the when the days go when the days go by, and we we have become more and more confident, some projects.
Some of the part some of the upside comes from comes from the confidence level increase. And, of course, some comes from, new projects. As you know, we may sign new projects and we instantly can can can, set up the schedule, the milestone payment for the next, the the whole design phase. So they are they are, little things combine together to create the upside.
Okay. I see. And then, regarding your security in China, I think, I think we made several months ago, your company seems to be you want to allocate your resource US customers, except for fee team, because fee team has a big volume, right, but, for other, China companies like the, BAT, Baidu, Alibaba, Tencent, you didn't seem to be very interesting, whereas Alibaba, a week ago announced a very huge CapEx increase, including, developing their own AI accelerators. So do you reconsider to reimburse the the, opportunities in China, meaning those big VAT companies.
Okay. I'll I'll I'll ask Johnny to answer the
Okay. Yeah. We will never never give out the VAT. Yeah, in fact, for Alibaba, we still, continuously discuss with with their key decision maker. Yeah.
Hopefully, in the short period, in fact, no there's no surprise Alibaba will be become our we're getting to our customer for portfolio. Yeah. And also the US business, similar size to the BAT and seeing the they are They are still ahead of, ability right now. They have a fixed road map and also have a production plan. We are all, if a capacity allow, we will continuously, doing business for US customer, but we never, yeah, we never refuse the VAT.
We, in fact, we still have a dedicated team working with them, very closely.
Okay. And I you you guys already, did a fantastic job, right, just some very micro scope question because, one of your previous customer, Cambry Kong, recently disclosed that in their prospectors said that they changed their the sensors panel to Avago, I I think, which means Broadcom. Mhmm. So can you, explain the dynamic here meaning why there's such a change? And do you think, other design service customers, competitors can also, gain some share in China.
Okay. Let me try to take this question. I think the relationship between us and campaign and still very strong. When we're doing their, both seeking nanometer design, they already mentioned to us for the 7 nanometer due to the IP limitation. They plan to, they would like to work with a, Yeah.
For for a specific IP, I also give a embargo a very good credit, and they are, they are outperformed compared to other IP provider. Yeah. But in usual case, people cannot afford this kind of a IP IP cost, for me, it's it's not it's not so cost effective. You will get something, but the, the ROI to use those IP, I I I think usually most of our customer do not consider. That's a good investment.
Now Capricorn is a different story. I think they plan to use the best of the best. Yeah. So this, doesn't hurt our relationship. Yeah.
They are current productions. They'll go with us. They are next generation 7 nanometer. Goal is, Avangou. That's that's true.
Mhmm.
Okay. That that's clear. So so just just to clarify, And for example, your, Japan, game console
Mhmm.
Project, what which geometry is that?
It's a tower, a more mainstream.
Oh, mainstream. Okay. So meaning
It's not the most leading edge technology.
Okay. I see.
Yeah. But we consider that a significant win in fact, we companies try to win this customer for the past 15 years. Finally, we did.
Well, okay. I I think it should be should be a huge win because you already had a a great, relationship with Sony's live stream is, other 2 game console vendors, one of them. Right?
Right.
Okay. Congratulations. Thank you.
Thank you.
Okay. I'll I'll use Chinese. Since this question is asked, in Chinese, the GAA and fetus link, when the number and customer. To get a PCU, the CPU, the rolling forecast. In which a virus is a Guanxi woman, Guantu, so a way like that's a proven the woman's motion.
The the this is slightly up. For revenue. Sample 1 shot, 10% 7%. She's not happy to like, design you the quote mark margin guidance not, but the idea of what the design service revenue, the percentage that guy that says it's. Alright.
Some bug up. Nah. Uh-uh. Yep. We'll send that.
I'll give you, Kevin. Yep. Okay, Kevin.
Hello. Well, I don't know why I don't want
Okay. Okay.
The gotcha.
Do take kind of server to for that. Now PRG, WISMA,
Yeah. No. Well, just just when you try to do it, did I hook you to make a partner? Natural server guarantee, make a fuss and face to be in the you're gonna do the project.
With some color on it. Data to go for server to see using that it's it's in design. Okay. Who used to trade the technology? Capacity.
But when the decent capacity, when she happened, though, she won't wanna go to the code code to do the visuals based on the based on the Okay.
Hold on. You got your, you can try to go into it. You didn't buy a 1,000,000 to guidance.
Okay.
Reached out. No, we'll maintain the margin. You
can guide it through range
This is
Okay.
Chiho won't, raise the hand again. I, I I think you you have the second long question.
Is. Took a track record system. The iron hall woman do it. Usually, second quarter, just as soon as go to it out, just it needs to take out took a synthetic confidence level system. Yeah.
Just a 7 nanometer tape out the ping me on 16th was a 14 then go easy to grow, easy to stand for the past 17 years and how easy receiving repeat customer. You know, you can decide also to the home and pay reputation based on the impact. So whatever the decide PayPal even under your 4 competence. She hope. Is that
Okay. 7 nanometer.
Okay. Okay. China, the number one, number 2 CPU 20. And then, like, a definition, I saw just high silicon, data and so on. You're hosting that 1,000,000.
I'm good. I was just having a supplier Oh, so, Lynn, why you guys had this about? Okay. Okay. Yeah.
Yeah. Yeah. Okay.
Tanya. I don't know. Can you, do we have further questions? Oh, no. Okay.
So, Jeffrey?
Yeah. Can you hear me? Yeah. Okay. Have you have further questions?
Yeah. One quick follow-up. You know, you mentioned 2nd quarter should be revenue flat, maybe up slightly because more NRE gross profit margins should be up a little bit. What what does that mean for OPM when there's more NRE? Does that mean OPM could also be up because gross margins up, or does that actually mean OPMs down?
Because mass expression as higher gross higher operating margin maybe?
We believe the operating, operating profit margin would be compared to the 1st quarter, we'll be we'll be up.
Okay. So along with gross profit margin. Okay. Great. Thank you.
Thank you. So, it's anyone, has further question. Please raise your hand. Chiyo. We're going to do a few Okay.
I guess nobody nobody is raising hence, asking questions. So, again, thank you for your participation. And your precious time for our, first quarter institutional, investor conference meeting. Thank you everyone. If you have further questions, you, or if you want to, know more about the technology, for this, feel free to email me or, set up other conference meetings with me, in the future.
Thank you.
Okay? Alright. Thank you very much. And we are looking forward for the phase 2 phase 2 phase 2 meeting soon. Alright.
Thank you.
Thank you. Thank you. Thank