Good afternoon, and welcome to eMemory's First Quarter 2022 Webcast Investor Conference. Present today we have our chairman, Dr. Charles Hsu, president, Mr. Michael Ho, head of IR, Miss Li-Jeng Chen, and the director of the finance department, Miss Teresa Kuo. The format of today's event will be as follows. First, eMemory's chairman, Dr. Charles Hsu, will give an opening remark. Afterwards, president Mr. Michael Ho will summarize our operations in the first quarter of 2022, followed by the outlook of our business. Next, Dr. Charles Hsu will introduce the topic titled Why PUF is Pivotal for Metaverse Security. Then we will go into the Q&A session, where our management team will be ready to answer your questions. Please feel free to submit your questions in the input box on the webcast window throughout the conference.
As a reminder, this conference is being recorded and a webcast replay will be available within three hours after the conference is finished. Please visit the company's website at www.ememory.com.tw under the investor relations section. As usual, before we begin, we would like to remind everyone that today's presentation may contain forward-looking statements that are subject to the risk factors associated with the semiconductor and IP business. Please refer to the cautionary statement as shown on page three of today's presentation. Now, I would like to give the floor over to eMemory's chairman, Dr. Charles Hsu.
Good afternoon, everyone, and thank you for attending our conference call today. Our first quarter operating results are at a record high, reflecting our continuous effort to invent new technologies and increasingly adopted by various applications. We have accumulated more than 1,000 new tape-outs in past two years. Among those tape-outs, more than 200 tape-outs are below 28 nm. These tape-outs are entering the mass production stage, which will continue to drive our royalty growth further. With technology development reaching 4 and 5 nm and the customer's tape-outs in 6 and 7 nm, these advanced processes are the platforms for future growth. In the first quarter, we have began our collaboration with Arm's new v9 confidential computing, which incorporates our PUF-based secure root of trust into Arm's v9 confidential computing architecture.
Arm's future decade-long architecture, this will enable us to penetrate into the high-performance computing area. Moreover, we are working with Intel and GlobalFoundries, aiming for the U.S. localization of semiconductor security. All in all, we remain confident in the company's future growth. Next, I would like to invite our President, Michael Ho, to share our first quarter performance and the future outlook. Michael?
Thank you. Good afternoon, everyone. Now let's begin with our 2022 first quarter financial results. The first quarter revenue was TWD 727 million, up 15.2% sequentially and up 21.8% year-over-year. Operating expenses were TWD 314 million, up 4.7% sequentially and up 21.2% year-over-year, mainly attributable to the increase in salary and other related human resource expenses, such as an increase in bonuses and rewards. Operating income is TWD 413 million with an increase of 24.6% sequentially and up 22.4% year-over-year. The operating margin increased by 4.3 percentage points sequentially and increased by 0.2 percentage point year-over-year to 56.8%.
EPS for the quarter was 4.91 TWD and ROE was 55%. Next, let's move on to the revenue contribution by licensing and royalty. Licensing in the first quarter accounted for 26.4% of the revenue, up 17.8% sequentially and up 8.3% year-over-year, or up 17.4% sequentially and up 10.2% year-over-year in U.S. dollars. Royalties in the first quarter contribute 73.6% of the total revenue, increasing 14.2% sequentially and increasing 27.6% year-over-year, or up 15.5% sequentially and up 31.1% year-over-year in U.S. dollars.
Total revenue in the first quarter of 2022 grew 15.2% sequentially and 21.8% as compared to the previous year. In terms of U.S. dollars, the total revenue increased 16% compared to previous quarter and 24.9% year-over-year. With that, I will comment more specifically on our revenue contribution by specific IPs. For NeoBit, accounted for 18.3% of total licensing revenue in the first quarter, increasing 49% sequentially and 28.2% year-over-year. Its royalty accounted for 38.8% of total royalty, up 4.6% sequentially, but down 2.5% year-over-year. For NeoFuse, accounted for 64.8% of total licensing revenue in the first quarter, up 20.4% sequentially and up 36.9% year-over-year.
Its royalty increased 19.1% sequentially and 56.2% year-over-year due to the increase in penetration rate of OLED, ISP, network related, DRAM, and others, accounting for 57.2% of total royalties. PUF-based security IPs contributed to 3.6% of licensing revenue, decreasing 63.4% sequentially, but increasing 25.8% year-over-year. Its royalty accounted for 0.1% of total royalties, which is up 125.2% compared to previous quarter and up 100% compared to previous year. We anticipate a very significant growth in Q2 and the second half. MTP technology accounted for 13.3% of total licensing revenue, increasing 49.3% sequentially, but decreasing 52.5% year-over-year.
Royalty from MTP increased 64% sequentially and increased 99.2% year-over-year for MCU, wireless charger, and others. Now, let's look at the royalties for 8-inch and 12-inch wafers. For 8-inch wafers, which accounted for 50.7% of royalties, increased 15% sequentially and 17.9% year-over-year due to the wafer shipment increase from PMIC, MCU, sensors, and others. For 12-inch wafers, contributed to 49.3% royalties, increasing 13.4% sequentially and 39.3% year-over-year due to the continuous production from OLED, networking, ISP, DTV, DRAM, and others. In total, 138 product tape-outs were complete in the first quarter. The number of tape-outs below 16 nm has increased significantly, especially tape-outs for 6-nm high-speed computing related applications. We will provide more information in the management report.
In the next section, I will address our future outlook. We expect the growth of revenue to continue in the second quarter of 2022 and beyond. For the licensing revenues, licensing revenue will grow due to the continued strong demand for our IPs, especially NeoFuse and the PUF-related solutions. For the royalty revenues, 8-inch and 12-inch royalties will continue their growth momentum with increasing wafer shipment and the wafer ASP. 8-inch wafer royalties will grow due to demand and content increase for PMIC, MCU, fingerprint, and sensor-related in 5G, automotive, and IoT-related applications. 12-inch royalties will have a strong growth with increasing penetration rate in OLED, ISP, DTV, set-top box, Wi-Fi 6, 6E, network-related, DRAM, and others.
The royalties from 12, 16 nm, and 7 nm FinFET process continue to contribute in the first quarter and are expected to become the next growth driver after 28 nm. Moving on to new business development. The focus of our new application development is in the field of security. Business activities for PUF-based security solutions are continuing to progress in IoT, industrial IoT, AI, blockchain, FPGA, data processor unit, DPU, mobile storage, UFS, and automotive applications. Furthermore, eMemory's OTP PUF RT plays an important role as the root of trust in the Arm v9 confidential computing architecture, CCA. We provide the most fundamental security protection for the next decade of confidential computing. Furthermore, we also have started licensing security IPs in Intel foundries. For new IP technology development, M4 and M5 are under verification stage with customers' request for adoption. Our ReRAM is being designed into AI applications.
Lastly, NeoFlash is being licensed to multiple foundries for specialty process, such as BCD. This concludes my comments. Next, I will pass the mic to Charles.
Okay. As you may know, recently, we have received many requests for the security IPs. One of the application is in the metaverse. Let me take this opportunity to share with you how PUF plays an important role in metaverse. The metaverse is a hot topic, especially among today's generation of technology users. It can be defined as a virtual reality space in which user can interact with a computer-generated environment and other users. Essentially, it is the next phase of the internet. The metaverse is an immersive experience moving away from 2D into 3D, allow users to enter the artificial virtual world. Initially, the metaverse emerged as a concept in the game market. However, the metaverse has quickly evolved to include major tech companies alongside emerging innovators as the inhabitants building this new ecosystem.
According to Jon Radoff, an entrepreneur, author, and also game designer, the conceptual framework of the metaverse consists of seven tiers, starting from what the consumers will be experiencing to the backbone of the metaverse. The first layer is experience, where users engage and interact with the metaverse through games, social experiences, live music, and so on. The second layer is discovery. This is where people learn and they discover and experience, and where information sharing occurs. The third layer is the creator economy. This includes everything aiding content creators to generate and monetize the metaverse, such as the design and the graphic tools, animation systems, and the financial technologies. The fourth layer is spatial computing, which refers to the software that merge virtual and augmented realities. In other words, allow us to digitize the physical world surrounding us.
The fifth layer is decentralization, which refers to the absence of a single authority within the metaverse. This creates a more permissionless, democratized structure and allows creators to retain ownership over their own data and the products. The sixth layer is human interface, which is the hardware that helps us access the metaverse, including gadgets and the technologies like biosensors and the spatial computing. The seventh layer is the base layer, infrastructure. This is what ties everything mentioned above together. It involves material science, cloud computing, telecommunication, and the semiconductors, all working efficiently and seamlessly together in a network. Based on the seven layers, six core technologies are needed to realize metaverse.
For any activities that occur in the metaverse, whether a simple interaction with your friend or a shopping for property, it will consist of some, if not all, of the six core technologies. This includes blockchain interactivity, games, artificial intelligence, and the networks, and, the Internet of Things. Each of these core technology will require a security element. Digital assets, such as NFTs, for example, exist on a blockchain to safeguard their ownership in a decentralized ledger. Identity protection, confidentiality, and authentication protect user identity on connected devices in the metaverse. The interaction promote connected data and more. The metaverse has the potential of multiple universe, promoting communication, virtual assets, virtual transaction, and more functions than we can imagine across these universes.
However, for metaverse to operate, the fundamental need for security elements such as root keys, encryption, decryption, authentication, and the confidentiality still holds true no matter how many universes exist inside the metaverse. Without the proper security measures, attacks in the metaverse could result in the loss of one's wealth, or worse, result in physical harm. There have been instances of a cryptocurrency exchange being attacked, where individuals have lost all of their crypto coins. In the case of metaverse, if an individual's identity is hacked, their properties and the digital asset can be taken away. Together, the seven layers create the metaverse ecosystem, and within that ecosystem are key players. For example, Discord and Nintendo are major companies that make up the experience layer. Facebook and Google are part of the discovery layer. Adobe and Unity supply tool in the creator economics layer.
Google AI offers the programs for spatial computing. IBM and Ethereum enable decentralized. Microsoft and Oculus create the human interfaces. Intel and Qualcomm create the infrastructure that brings everything together. This is just a small sample of companies that have entered or are entering the metaverse space. Several of these companies currently collaborate with eMemory directly and have incorporated with our IPs into their design and products. These companies also need to protect their systems when it comes to security. Moreover, for those companies that we don't currently work with directly, our IP may be found in the infrastructure that still enable experiences in the metaverse.
Since eMemory and PUFsecurity are collaborating with Arm in their new Arm v9 CPU architecture, which introduces confidential computing architecture as their method of securing data for the next decade, our hardware root of trust IP, PUFrt, will provide hardware security to the new generation of computing, potentially spanning across different security solutions in the field, such as automotive devices, infrastructure, and IoT, all which are foundational part of the metaverse. Building off the seven layers described earlier, let's imagine a scenario that applies. Logging into metaverse alone requires spatial computing that allows the system to map out the space around you. A human interface, such as your headset, display screen, and the haptic touch gloves to experience the metaverse, and then the infrastructure such as system hardware and the software that builds the universe you are entering.
Although it is a simple act of login, if the device such as the VR glasses is used to enter metaverse is hacked, the hacker can even damage the person's health, in this case, their eyesight, with illegal operations such as laser illumination. With PUF-based hardware security, the chip fingerprint of our VR glasses is now one of a kind, and only you can access it. Similar scenario can be applied to more complicated experiences, such as a virtual gathering for a movie with your friends or a work-related scenario, like a virtual meeting with your coworkers. In such case, you can imagine that the attacks will complicate further as there are more layers and the requirement for security, whether in communication between users, authentication of identity, et cetera. The possibility for metaverse are endless, making the potential threats in the metaverse endless, too.
Pervasive data collection of users' private information, including personal information, behavior, location, habit, lifestyle, and the communication is already commonplace. Because of this, network credential theft, identity theft, and the ransom attack are just a few of many growing security concerns. Simple vulnerability in a device or with identity credential can potentially lead to user identity misuse. PUF-based security enables us to prepare for the threat of the metaverse by protecting user identity, data, and privacy. To do our part in protecting the future computing, eMemory is looking to achieve the following. First is the PUF, which most of you know is the acronym for Physical Unclonable Function, is a physically defined chip fingerprint that serves as a unique identity for semiconductor and is a tamper-proof.
PUF digital fingerprint could help secure the metaverse in the same way by providing a unique, unforgeable user identity and a credential for each individual entering the metaverse. Furthermore, eMemory's quantum tunneling technology creates the best PUF available on the market today. By using silicon variation during the manufacture process, PUF can be used to generate keys. Keys are essential during the exchange of information in the metaverse because they are the basis for encryption, decryption, and other security functions. This brings us to my next point. Our integrated security solution derives truly secret keys to protect identities, assets, and the transactions. Not only does PUF generate keys, but our PUF-based IP solution also utilizes eMemory's patented OTP technology to securely store these secret keys.
PUF can also protect device firmware to ensure normal operation and avoid potential threat because it has a PUF-based Hardware Root of Trust as the basis of the secure OTP. Lastly, PUF-based NFT can uniquely identify any virtual object in the metaverse because of its indivisibility, irreversibility, and unique characteristics. NFT can represent digital asset or identity. These are all what I would like to share for the very broad usage of PUF in the metaverse security. Thank you.
Thank you, Charles. This concludes our prepared statement. We will now begin the Q&A session. Please submit your questions in the input box on the webcast window, and you will enter a queue. This time, we will be answering some of your questions both in Chinese and English. We will now collect the questions and begin our Q&A session. Now Li Jing will ask our first question, which is in Chinese.
因为我们有被反映，就是说我们教授上课有点太困难了，所以我们还是有蛮多的这个股东是这个，中文的为主，所以我们这一次呢，特别是会讲中文。那我想刚刚是给大家看到的是未来的希望，那是希望，我们也很努力，那要整个生态系统去达到。但是回过头来，大家现在一定是非常的担心，就是景气怎么样，我们的权力已经来自于手机的应用，占蛮大部分的，而且现在手机的市场非常的疲弱。那我想这一部分的问题呢，大家都非常的关心。终端需求 demand，那对我们公司到底实质影响会怎么样？这一部分呢，我们请 Michael 先回答。
好，我们在手机晶片的渗透率一直在提升。从早期我们导入像DDI、PMIC、fingerprint，到去年导入像Wi-Fi、ISP，以及今年开始导入的RF，从一家客户到多家客户。举例来说，DDI的成长来源主要是market share的gain。我们现在坐进了韩国最大手机厂的OLED，加上OLED的渗透率提高，带动平均每颗权利晶的成长。至于PMIC，则是5G的使用颗数相较于4G大幅增加。即使是疲弱已经很久的fingerprint市场，也是导入更多的晶片客户。而且应用端来说，从手机一直扩展到notebook、车用以及一般的consumer的产品。相对于客户的营运，我们在这部分的权利晶一直是持续成长，这也跟公司制程的开发以及持续发明新的技术的进展有关系。从早期以八寸为主，到这几年随着十二寸累积足够量产的纪录，就导入了单价更高、量更多的应用，譬如ISP跟RF。手机里会用到公司的晶片还有很多，对公司而言仍旧有很大的成长空间。此外，每个应用发展都是往更先进的制程走，例如DDI，现在演进到TDDI，以至于到现在的OLED。每颗晶片的权利晶都是倍数级的成长。再者，我们随着晶片客户往更多的应用发展，譬如车用、穿戴式，也扩大了我们在其他应用领域的市场。我们认为在手机应用仍处于渗透率提升的成长趋势，就如同我们在晶圆厂的渗透率一样。
给大家一个这个数字的一个概念，因为我们是从八寸往十二寸走。譬如说我们最早做的这个 power management 主晶片，我们一颗晶片收到的权利金大概是 $0.01 美金，我们不含这个晶圆代工价涨价。那 DDI 呢，一颗呢，大概是从早期的大概也是 $0.01。到 TDDI 呢，一颗呢，我们收到权利金变 $0.02。如果是 OLED 呢，我们一颗的权利金呢，就是 $0.05。所以我们因为从八寸到十二寸，手机不成长已经很多年了，可是因为我们导入的这个晶片呢，每一颗晶片收到的权利金的单价是过去的好几倍。像最近呢，我们导入的叫 ISP，那个一颗呢，大概也是收到 $0.05，一颗手机里面呢，有一到三颗。那这一季里面呢，第一季我们导入了这个 RF，那个是更多的颗。所以我们对手机的这个状态呢，一直都不担心，反而觉得这是我们应用领域导入最大的一个饼。因为一年呢，全世界有十几亿手机。所以呢，大家不用担心，因为过去里面很多新的这个应用呢，它会陆续量产，所以即使终端需求不好，我们能够维持一个成长的趋势。
Okay, the question being asked was a large portion of the company's royalties come from smartphone applications. As the smartphone market is actually very weak at the moment, what is the impact to eMemory? Michael will answer this question again in English.
Okay, thank you. We have been increasing our penetration rate in smartphone area by increasing chip applications from DDI, PMIC, fingerprint to Wi-Fi, ISP and RF this year from one customer to multiple customers and towards becoming the industry standard. There are some factors for our growth besides increasing penetration for more customers. For example, DDI moved to TDDI then OLED, which increase royalty per chip. Content increase 10 PMIC for 4G and 20 PMIC required for 5G. Also, all smartphone chip customers are expanding their application into automotive, wearable and other end applications.
Taking fingerprint for example, as the end chip price dropped and affordable for wide adoption to automotive and consumer area, we have seen steady growth on royalty contribution from fingerprint segment. There are still a lot of chips not use our IP in smartphones, so there is still a lot of room for growth, just like our penetration in the foundry. Thank you.
In the beginning, the first chip we adopt is a general driver IC. The per chip royalty is around $0.01. When they move to TDDI, the contribution from TDDI per chip is $0.02. Right now, move to OLED. The per chip royalty will be $0.05. The most recent, we get into the image signal processor, ISP, which is in manufacture in 20 nm. The image signal processor we can have is also $0.05. The one smartphone can have the one image signal processor to three image signal processor. Not to mention the most currently in Q1, we just get into the RF area, which will have lots of RF chip in one smartphone. They still have a lot of chip. We're not into that.
For example, if we get into the AP processor, so the per chip royalty we can have on the current wafer price will be $0.20. Smartphone still remain a very huge market for us to grow just like our penetration rate in foundry, still pretty low. Okay. Thank you.
Thank you. Our second question will also be asked in Chinese by Li-Jeng Chen.
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Okay, second question. The question was, what is the company's progress in the area of high speed computing? Michael will also answer this question in English.
High speed computing refers to two things. One is the use of the most advanced processor, such as CPU, GPU, DPU, etcetera, and so on. The other refers to related chips that need to be upgraded to match the speed of the main chip, such as Wi-Fi, SSD controllers. These applications are all in 12-inch. As our process development have reached 4-nm and 5-nm, and successfully have adoption processor related applications of leading company in Q1 this year. Also, our collaboration with Arm on V9 confidential computing is targeted at this type of application. We are confident that high speed computing will be a major source of growth for the company. Thank you.
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好，这是一个蛮大的问题。一般半导体产业的营运中最大的成本会来自于工厂设备的折旧、营运材料的准备，以及像成品的库存备货等，那这些当景气有所变化的时候，就会造成营运的风险。力旺是一个R&D的公司，主要的业务就是发明新的技术，授权给代工厂跟晶片设计公司，以收取权利金跟授权金为营收的主要来源。我们的营运本身并没有涉及制造，所以相对的营运风险低很多。加上我们所发明的技术都是用来提升晶片的性价比，不论是在良率性能上的提升，或者是提高晶片的安全，在不景气的时候，客户会更愿意导入新的技术来提高竞争力。另外，这个循环绝大部分的客户的获利都是前所未见的，也累积了不少的现金。在终端需求不明的同时，会更加大研发动能来找寻未来的新应用，开发未来的新领域。不论是自驾、AI、IoT、工业自动化、security都是很好的、很重要的一个基础，对我们扩大security的应用导入是一个最好的时机。我们最近也很明显看到这样的一个需求，比如我们第一个NeoFuse的网通客户就计划导入我们的PUF-OTP，用来提升产品的竞争力跟区隔化。谢谢。
What are your thoughts on the concerns of a down cycle for the semiconductor industry? Michael will answer again.
It's a big question. In the semiconductor industry, the biggest costs are depreciation of factory equipment, operating materials, and the inventory of finished goods, which will lead to operational risk when the economic changes. We are an R&D company, and our main business is to invent new technologies and license them to foundries and chip design companies. In return, we will receive royalties and licensing fees as a source of revenue. Our operations do not involve manufacturing, so our operating risks are relatively low. The technologies we have invented are used to improve cost and performance of customers' chips. Customers are even more willing to adopt our IPs to improve their competitiveness when economic conditions are tough. In addition, the vast majority of customers are making unprecedented profits and have accumulated a lot of cash and will increase their R&D efforts to invent new applications.
Future applications such as automotive, AI, IoT, industrial automotive will require security as a foundation. This will create the best opportunity for us to expand the introduction of our security IPs. We have also recently been able to see the results of such demand. For example, our first NeoFuse customer is planning to implement our PUF-OTP to enhance product competitiveness and differentiation. Thank you.
全球的晶圆厂一直在扩厂，那请问对公司的影响为何？
我们是一个技术研发的公司，主要的工作就是发明新的技术，然后再把这些技术授权给晶圆代工厂，再给晶圆代工厂生产的晶片客户来使用。平均每年大概都增加二十到三十个制程授权平台，也就是能够生产产生权利金收益的平台。目前全世界的晶圆厂一直在扩厂，也就表示我们能够授权的技术平台的市场一直在扩张，而且越往先进制程走，因为这权利金是跟晶圆代工的价格是联动的，每片 wafer 贡献的权利金越高。另外，由于现在建厂的成本越来越高，代工厂相对应所收取的代工价也会越来越高，这些对我们的权利金收入都是很正面的。谢谢。
The question that was asked was, what is the impact on the company as global foundries continue to expand their foundries?
On average every year, we are adding at least 20-30 process licensing platforms. That is, platforms that can generate royalty revenue. The worldwide expansion of foundry means that the market of our licensed technology platform is also expanding. The more advanced the process, the higher the royalty contribution per wafer since the royalty is linked to foundry wafer price. In addition, as the cost of foundries under construction become higher, the foundry will also charge a higher price, which is a good thing for our royalty income. Thank you.
目前车用电子占公司权利金的比例是多少？那未来的成长空间如何？Michael。
目前我们并没有特别去区分车用跟一般的部分，因为绝大部分像手机的应用的客户也都有在做车用的。此外，有一些特殊车用的晶片，譬如七奈米的ADAS、车联网，如2228的switch、Ethernet、Wi-Fi，以及各类的sensor。我们在过去累积了不少的设计订单，相信这些都会陆续对量产，并进入贡献我们的营收。此外，我们也把PUF导入车用的平台，譬如我们现在已经加入鸿海的MIH联盟，正在合作导入车用的晶片。谢谢。
The last question is: What is the current percentage for automotive in the company's royalty revenue and what is the room for future growth?
We don't break down our revenue specifically by end application because most of our smartphone customers are also doing automotive applications. However, there are special automotive chips such as 7-nm ADAS, 20- and 28-nm switch, Ethernet, Wi-Fi, and various sensors, which has accumulated a lot of our previous design tape-out and will contribute to revenue after mass production. In addition, we have also introduced PUF into automotive. For example, we have already joined the Foxconn MIH Alliance to cooperate in the introduction of automotive chips. Thank you.
PUFsecurity 系列 今年 客户 licensing 跟 royalty 的 展望 如何？ Michael Ho。
这系列的IP因为有广泛的使用跟客户积极的导入，我们预计相关的授权金跟权利金在今年都会有倍数的成长。这都是我们过去几年来持续努力推广的一个结果。在PUF授权利金的部分，因为安全的密码跟安全的储存是分不开来的，所以一般而言，PUF的权利金会一起带动OTP权利金的成长。这个部分相信在更多的应用以及更多的NTO产出之后，会有大幅度的一个成长。谢谢。
The investor asked, "What is the progress for PUF licensing and royalties this year?" Michael Ho will answer again in English.
Okay, due to the wide application of our PUF-based IP being adopted by our customers, we will expect PUF-based related license and royalty revenue to be multiple times as compared to last year. This is a result of our continuous efforts in developing world-leading PUF security solution in the past few years. Since our security solution integrate both OTP and PUF together, the license and royalty of PUF security solution will increase our OTP royalty too. Thank you.
一直有提到将来28奈米贡献越来越多，这个部分是在foundry 28奈米的新厂还是旧厂呢？Michael。
28奈米的权利金的成长贡献会同时来自于新厂跟旧厂两个部分。一方面是来自于持续增加的新客户以及新的应用，比如今年就增加了很多像新的ISP的客户以及RF相关的应用。另外一方面也来自于产能的扩充，增加既有客户的出货量。另外，我们过去以来累积了将近两百个28奈米的新的NTO的数字，也持续导入更多的客户以及更多的产品应用。这些新的产品设计方案在代工厂逐步开出更多的28奈米的产能之后，会帮我们带来更多的权利金收入。谢谢。
That previous question was, "eMemory has mentioned that 28 nm will contribute more in the future. Will the contribution of 28 nm take place in the foundry's new facility or old facility?
The growth of 28-nm royalty will come from both new and existing foundries. On one hand, we continue to add the new customers and the new applications such as new ISP customers, RF applications and the other this year. On the other hand, foundry's customers are expanding their production capacity to increase the wafer shipment from existing customers. In addition, we have accumulated nearly 2,200 28-nm NTOs from the past and continue to introduce more customers and applications. Thank you.
Licensing 授权金营收对未来的 royalty 营收是否有指标性的关系？还有市场目前看淡明年半导体行业，我们的 license 会进一步下滑吗？Michael。
一般来说，我们的授权金都是稳定的成长，因为我们的生意模式是追求权利金的成长。授权金主要是cover我们的营运备用，但有时候大笔的技术授权金收入，像是去年的MRAM，这类的授权金是一次性的，也就会造成授权金会有比较大的起伏。这类的新技术要花比较多年去开发，权利金也会花比较长的时间才有所贡献。我们相信我们的授权金仍旧维持成长的趋势，不论景气的好坏，主要是因为我们持续新的发明技术，除了渗透进去的终端晶片总数越来越多，在代工厂也持续扩张，增加了更多可以授权的制程。加上各国为了晶片安全，都要建立各自的半导体制造体系，这造成了终端晶片客户会有分散制造的需求，也会扩大我们技术的授权范围。即使是景气最差的2009年，我们仍然是全球极少数营收、获利仍旧成长的半导体公司。那时候我们只有一个八寸的技术NeoBit。现在公司的规模大很多，但同时技术的广度及重要性，终端客户以及客户的分散和可应用还未应用的市场实在太大，我们并不担心这个会受到景气的影响。
The previous question was asking if our licensing revenue is indicative of our future royalty revenue. With the market pessimistic about the semiconductor industry next year, will our licensing further decline?
Okay. Our licensing fee is growing steadily because our business model is aimed for royalty growth, and the license fee is mainly used to cover our operating expense. However, sometimes there are a large amount of technology license revenue, such as last year's MRAM, which is a one-time license, resulting in large fluctuation in licensing revenue. We believe our license will continue to grow regardless of the economy, primarily because we continue to invent new technologies. These new technologies, no matter NeoFuse, PUF security or emerging memory, all with much higher license fee.
With more technologies for license and higher license fee, it's not difficult to keep our licensing fee growth. Even in the worst economic downturn of 2009, we were one of the very few kind semiconductor companies in the world to continue grow in revenue and profitability with only one 8-inch technology, NeoBit. Now, although the company is much larger, the widespread application and the importance of our technology, the multitude of end-use application and the customers and the untapped market are so large, so we are not worried about the impact of the downturn. Thank you.
请问 ISP 相关产品约占营收占比多少？另外，在主流制程已经升级到 28 奈米以下，ISP，就是那个照相机的那个 processor，ISP 对于 programming density，就是对于这个数据要的这个 density，就是容量的需求是否有提升？那这对我们的权利金的贡献为何？Michael？
好，谢谢。ISP就是image signal processor，那基本上就用在这个影像的处理，那它应用的OTP确实我们有看到相关的容量会大幅地增加，这有一部分是来自于说CIS sensor的pixel画素增加，另外一方面则是来自于ISP的功能增加，因此也拉高了更多的一个设定跟程式的一个需求，带动OTP容量的提升。然后这个趋势会让原本只使用eFuse的客户因为程式内容的增加而需要改用到OTP。我们在28奈米已经很明显看到这样的一个需求。目前我们的OTP已经成功地导入许多一二级客户的ISP以及相关CIS的晶片设计中，并且在代工厂的相关制程都有部件平台和IP来供客户使用。今年第一季这部分的权利金比重约为7.5%，这才是一个刚的开始。随着越来越多的客户导入应用，相信这部分在往后会看到很明显的一个权利金的成长。谢谢。
The question was the revenue of ISP related products has moved to 28 nms in the mainstream process. Has the demand for ISP programming density increased? What is the royalty contribution?
Okay, thank you. ISP market is very big, not only in smartphone, one to three chips per phone, but also in surveillance and automotive.
We have just gotten into the market in the recent years. Royalty contribution is 7.5% this Q1. This is partially due to the increase in pixel of the CIS sensor and partially due to the increase in functionality of ISP, which had increased the demand for more setting and programs and driven the OTP density. This trend will push customers who were using only eFuse to switch to OTP due to the significant increase in the required program content, this density. Currently, our OTP has been successfully introduced into many tier one and tier two customer ISP chip designs. We also build platforms and IPs for customers to use in foundry related process. The growth to our revenue is just at the beginning stage. We will expect a very significant growth in the future. Thank you.
研究机构预估MEMS oscillator，就是一种振荡器，OK，2025年市场的产值会来到50到60亿美金，将会是未来取代crystal，就是它用半导体去取代一个叫石英元件，大概是这个意思。那其中它会需要一个在asset端会需要programmable的特性，可编程的特性，这是很重要的一点。那请问力旺在这部分的布局为何？那有哪些地区的客户？Michael请回答。
好，谢谢。现在很多的clock设计都是用crystal，因为取得方便，而且已经沿用很久，但是用MEMS来产生这个oscillator取代这个crystal的部分的话，它有这个体积小跟可靠度高的特点。因此在用MEMS oscillator来取代crystal的这个部分的市场，我们已经有很多的客户使用了很多年了，就跟MEMS其他的应用很类似，这些都需要large NVM来做调教以及相关的设定。我们的OTP、NTP在许多的制程平台都已经有IP可以让客户来使用。在MEMS oscillator的这一块市场，我们已经有来自像美国、欧洲、日本等等诸多的客户已经导入使用。他们所需要的IP都有这种面积小以及超低功耗的特性，我们都可以提供客制化的IP来符合不同客户的需求，也希望这一块的市场能够继续地蓬勃发展。谢谢。
The question that was asked was, research institutes estimate that the MEMS oscillator will have a market value of around $5-$6 billion in around 25 years, and will be an important product replacing crystal in the future. The programmable feature on the ASIC side is a key point. Please tell us how eMemory will assist the oscillator manufacturers in this area, and what are our regional customers?
We had many customers in Japan, U.S., and Europe using MEMS oscillator to replace the crystal for many years. Similar to other MEMS applications, which will require large NVM for tuning and configuration. Thank you.
力旺四月份的权利金营收创历史新高，而且年成长率达到了将近64%。因为每年的四月都会比一月下滑，今年是往上涨。那请问除了台积电代工价调涨因素之外，是因为有更多的28跟22产品量产吗？还是有最新的16、12和7的产品量产？还是有什么因素？Michael。
一般来讲，四月份因为客户的库存调整，相对于一月来讲一般都会比较低。但在我们今年四月的权利金收入里面，我们看到所有的主要代工厂年对年的部分都有蛮明显的成长。除了既有的应用因为渗透率而持续成长之外，我们有看到新的一些应用，比如网通、多媒体相关的应用，也都有明显的成长。这些应用都分布在不同的制程节点。另外在 FinFET 的 process 上面，比如十六、十二跟七奈米，我们在上面也看到有持续的新的产品进入量产。所以这是一个多方面成长的结果。
The question was, for eMemory, April is usually a low season, but our April's royalty this year was actually record high and year-over-year reached 63.6% in terms of growth. In addition to the TSMC foundry price increase, was this due to 28- and 22-nm products and mass production, or has the new 16-, 12-, 7-nm products started production? What is the reason for this?
In our April royalty revenue, we saw significant Y-o-Y growth for all the major foundries. In addition to existing applications that continue to grow due to the increased penetration, new applications such as networking and multimedia have also seen significant growth, all of which are distributed across different process nodes. Furthermore, new products continue to enter mass production on the FinFET process like 16, 12, and 7 nm generation. This is the result of multi-faceted growth. Thank you.
众所周知，目前半导体警讯不断，请问是否由于进入 tape out 的产品生产递延或取消，那对公司的影响为何？Michael。
一般客户的tape out以及在代工厂的生产排程，都有一定的前置规划，尤其是越先进的制程需要越长的时间来安排。我们目前其实都没有听到客户有进入tape out，但是却造成要做生产递延或取消的讯息。而我们目前手上，根据客户要求做的案件，设计案件，目前都仍然照着客户的规划在进行，目前没有看到任何的影响。谢谢。
My question was, as we all know, there are a lot of noise and concerns on the semiconductor industry. Are there any production delays or cancellations for products that are in tape out? What is the impact of this on eMemory?
Generally speaking, our customers' products have a certain amount of lead time for advanced planning. The more advanced the process is, the more time is required. We haven't heard any news of production delay or cancellation from our customers' tapeouts that have entered the tapeout flow. Our current design cases at hand are still processing according to client's plan, and we haven't seen any negative impact. Thank you.
Synopsys.
We don't know what the reason for the investigation is, but the company has always complied with regulations and have an internal audit control system. We are confident we will not have any problems. Thank you.
Security IP.
Our PUF security IPs are based on the technology developed by OTP. There are 106 process platforms under 55 nm in NeoFuse OTP that have been qualified, and 44 platforms under development. These platforms can provide related security IP for customers to use and are mainly in the top few foundries. Thank you.
IP business model.
无论是MRAM或者是RRAM，我们都是在提供IP的服务上面，我们走的仍然是现在的这个IP的设计授权，以及从代工厂收取权利金的这种商业模式。所以现在的IP的business model依旧可以套用。谢谢。
MRAM can enter mass production in the future, can our existing business model be applied?
In terms of IP service for MRAM and RRAM, we are still following the current business model of IP design licensing and foundry royalty, so our existing IP still can be applied. Thank you.
PUF-based solution.
是的，这些成熟制程的MCU、sensor、PMIC跟其他的应用都可以用PUF的安全解决方案来提供安全。譬如在车用里面，你可以看到说如果车联网这么重要的时候，你要确定每个你使用的IC都不是被骇客所可以攻击的话，这部分都可以应用到这个上面。谢谢。
Other than advanced nodes, can PUF-based solutions be used in legacy nodes such as 0.25, 0.18, and 0.11? Will these legacy nodes also require PUF-based solutions?
There are MCU, sensor, PMIC and many other different applications in these legacy process nodes. PUF-based solutions can be used for providing unique identity authentication and data protection for these chips. Thank you.
公司跟 foundry 配合时，是在什么阶段会收到 foundry 而不是 design house 的授权金？Michael。
的授权对象有晶圆代工厂跟晶片公司。对于晶圆代工厂，我们针对各个制程授权技术，并收取相关的技术授权金。对于晶片公司fabless，我们则是授权IP，然后收取设计授权金。谢谢。
This is actually our last question in the interest of time. What was asked was, at what stage will we receive license fee from foundry instead of design houses?
Our licensing revenue come from foundries and the chip companies. For foundries, we license our technology for each process and charge a technology license fee. For wafer companies like a fabless, we license IP and receive design license fees. Thank you.
We'll now begin the closing comment. Charles, can you please proceed?
Thank you again for your patience and the support for eMemory. We will continue to work hard on IP innovation and the security solutions for our customers and bring higher returns for our shareholders. Thank you.
Thank you, ladies and gentlemen. Before we conclude today's conference, please be advised that the recording of the conference will be accessible within the next three hours. Thank you everyone for joining us today. We hope you will join us again next quarter. You may now disconnect. Goodbye and have a good day.