Earnings Call: Q1 2021

May 12, 2021

Welcome to eMemory's First Quarter 2021 Webcast Investor Conference. Present today, we have Chairman, Doctor. Charles Hsu President, Doctor. Rick Shin Vice President of Business Development and Spokesman, Mr. Michael Ho Director, Ms. Lizjun Chen and Director of Finance Department, Ms. Theresa Koh. The format for today's event will be as follows. First, Inman's Chairman, Doctor. Charles Xu will give an opening remark. Afterwards, Lumenmi's President, Doctor. Rick Shen, will summarize our operations in the Q1 of 2021, followed by an outlook of our business. Next, Chairman, Doctor. Charles Qi, will introduce the topic entitled host is the key for Zero Trust Security. Then we will go into the Q and 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 2 hours after the conference is finished. Please visit the company's website at www.emamu.com.tw under the Investor Relations section. As usual, Before we begin, we would like to remind everyone that today's presentation will contain forward looking statements that are subject to risk factors associated with the Semiconductor and IT Business. Please refer to the cautionary statement as shown on Page 3 of today's presentation. Now I would like to give the floor over to Yimami's Chairman, Doctor. Charles Xu. Okay, thank you. Good afternoon, everyone. Thank you for attending our conference call today. As mentioned previously, we have entered a multiyear growth cycle. According to the royalty report received in the Q1, the contribution of the 12 inches is accelerating and his complete contribution will exceed 8 inch by the end of this year. Following the application of 28 nanometer process node, The applications of 60 nanometer and beyond are entering into productions, which will contribute to our royalty in the future. As for our new technology, we are very confident with the development and adoption Across various markets, I will explain more about the importance of PaaS for the security application in a short while. Next, I will invite Rick to report our Q1 operating results and outlook of our business. Rick, please. Thank you, Charles. Attendance, Hi, everyone. I will first begin with our 1st quarter results. 1st quarter revenue was a sequential increase of 20.1% and 43 point 6% year over year, up 22.2% sequentially and 51.5% year over year in U. S. Dollars. The operating expenses were TWD259,000,000, down 0.9% sequentially, but up 17% year over year, mainly attributable to expenditure increase such as resources expenses, rewards, bonuses and the compensation of employees and directors. This brings us to the operating income of NT338,000,000 with an increase of 43.5% sequentially and 74.1% year over year. Therefore, the operating margin increased by 9.2 percentage points sequentially and a 9.9 percentage points year over year to 56.6%. Overall, Our Q1 EPS was TWD 3.93 and ROE was 54.6%. Now let's move on to the revenue contribution by licensing and the rolling. Licensing in the first quarter accounted for 29.7 percent of the revenue, up 14.6% sequentially and the 56.3 percent year over year or up 16.7% sequentially and 76.2 percent year over year in U. S. Dollars. Royalties in the 4th quarter contributed 70.3% of the total revenue, increased 22.7% sequentially and 35.8 percent year over year, up 24.7% sequentially under 43.1 percent year over year in U. S. Dollars. In terms of the revenue contribution by technologies, The results are as follows: Neovat accounted for 15.4% of the total licensing revenue in the Q1, increased 3.3% sequentially and 13.4% year over year. His royalties accounted for 50.8% of the total royalties, up 8.9% sequentially and 7.1% year over year, mainly due to the demand and the content increases of the applications such as PMIC, NCU and the sensor related Neil Fuchs, accounted for 51.3% of the total licensing revenue in the 1st quarter, down 17.6% sequentially but up 21.6% year over year. His ROAD increased 44.5% sequentially and 99.4% year over year Due to the continuous production of adhesine and the new product applications such as CDDI, OLED ISP, multimedia, networking related. This brings the RODI of our new fuels to 46.7 percent of total ROAD. Our path based security IP contributed to 3.1% of licensing revenue in the Q1. Although this technology has not contributed to any road, engagement with industrial leaders is still actively ongoing. Yes, we expect more significant contribution from PONC this year. As for NTP Technology, Licensing revenue increased 2 fold sequentially and assessable year over year to accounted for 30.2% of licensing revenue in the Q1. Riodiesel MTP decreased 3.2% sequentially and 8.2% year over year to contribute 2.5% of total loading. Currently, our MTP team is working with partners on developing MRAM, IRAM and AI memory. Both IRAN and AIAN has been verified with proven results. Now looking at the royalty from 8 inches 12 inches wafers, 8 inches wafers, which accounted for 54.8 percent of the ROAD, increased 10.2% sequentially and 15.2% year over year due to the demand and the content increases of the applications such as PMIC, and CEO and the sensor related. Charge into wafers contributes to 45.2% of ROEs increased 42.1% sequentially and 70.9% year over year. Due to the continuous production of TDDI OLED ISP DRAM, multimedia networking related Doctor. DTV Zitterbox, 556 Bluetooth Ethernet Switch and the TSS. There were 155 products cabals completed in the 1st quarter, a record high quarterly numbers, reflecting increasing demand of our IPs. We will provide more information in the management report later today. In the next section, I will address our future outlook. We expect the growth of our revenue to continue in the Q2 for 2021 and beyond. For licensing revenue, there is continuing strong demand from new fields, top based solutions and MTP. We expect licensing revenue to continue its growth this year. For the ROAD revenues, 8 inches and 12 inches ROADs will continue their growth momentum. And in Quro this will grow due to demand and accounting increase for PMIC and CU benefit related in 5 gs, Automotive, the IoT related applications. 12 inches roadies will have strong growth WiFi6, ProTools Ethernet, Switch, TWS, DRAM and others. In addition, loading from 16 nanometer, 16 nanometer and below will start to kick in. We expect to see 7 nanometer customer move into production and start contributing to RODI. Okay. I'm so sorry that we had some technical issues. So we are back. So sorry for you keep you waiting. So I will restart from the update in terms of our new business development. So all new applications are entered on the business development of the hardware security. So the new fuels in the advanced process nodes is being adopted by secure key storage and seeking the replacement of Conventional ePills. We expect that there will be a trend for the hardware security As applications are moving into more advanced processing, our efforts in the past will is gradually being seen with a Xu. The business at 50s of cloud based security solutions are in progress in the applications of IoT, industrial IoT, AI, blockchain, FPGA, data data processor unit that is so called DPU and mobile storage, UFS and automotive. In addition, our PoP RT and the PoP IoT have been adopted by the several customers across various applications. As for the collaboration with ARM, since the customer adopting cases have been very successful, We intend to expand the cooperation to move to more product applications in the future. For the new IP technology development, our 6 nanometer OTP has Demonstrated successfully silicon results and is going into qualification Mostly. As for the binaural nasal process, there's a so called N5P is on the way to characterization, and we expect to have a good result in this quarter. In Q1, we have announced the adoption of our IP by Aquanix for the FPGA hardware route of choice Xu. And we also develop continue to develop our base to implement HSN, that is our security module, which can be embedded into in the chip to provide a security function for network applications. Now I will pass the time to Charles. Okay. Sorry for the interruption just now. There will be a recording. You can listen if you missed some of the information and let us know if you have any question later on. Okay. Next, I would like to share with everybody about how Puffy is to be used in the so called 0 Trust Securities. You can turn to Page 15. I would like to introduce the subject of 0 Trust, which has received significantly attention recently as the security risk of the IoT becomes are increasingly consequential and more widely reported. And basically, Xero Plus Security has the following Features as shown in Page 15. The first is the for the 0 trough, it is never trough everybody, Anybody, okay. And it's always very far. The second feature is only authenticate And authorized devices are permitted and the third feature is Perimeterization security protections, I will explain what is the perimeterization security protection. And the 4th features, it is identity centric policy. Okay, let me explain what they are. Okay. The traditional security strategy and the principles are based on cattle and the moat for the so called security parameter strategy. And in a traditional network, employees who work inside the enterprise network are protected by Internet firewall within the security parameters and they are trusted by default. However, for those employees working remotely are left outside The security prime minister and the remain untrusted. So requiring them Xu. If they want to access back to the enterprise, they have to provide a very We have to provide very strong verification for them to access the internal network. However, as many edge devices are being connected directly to the Internet, It is very difficult to provide a secure parameter or boundary to protect everything inside the security network. However, each device should utilize a mixture of encryption, secure computer protocols, Computer system and the device level authentications, rather than the reliance of an organization on its network boundary To the Internet. And this is the so called 0 Trust security strategy and in which the device trust Only itself and we'll always verify the assessing party. So our Zero Trust security model Create the parameterization of the traditional security boundary within a network As the existing defenses are no longer effective, the defense war transforms from a single large perimeter to a small perimeter for each device individually. The device relies on its new link ID for verification each time for access during authorization or to be assessed during authentication. So please turn to Page 16. So in a short summary, 0 chance security is needed as the foreign situation increase. First is work from home during And the third is increased deployment of cloud based services. So there's no way to maintain The old security perimeter anymore in this Zero Trust era. Instead, a new order list The rematerialization approach is urgently needed. Okay, please turn to Page 17. So Zero Trust networking is based on the principle of Never trust and always verify and therefore requires authenticated verification. And the path is best suited to perform this function and is set to Become essential for creating a 0 Trust network because our Path based technology can provide a self generated ID for unique identification and assess generated a key, both of which are inherently created in the past. And this set apart set us apart from the conventional method, which is shown in the left hand side of page 17, Both ID and key is injected from outside, while in the right hand side of Page 17, in the path for path internally, it is self generated Xu. Xu. So for the so by using PoP, this set us apart from the commercial method and which you require And injector ID and a key from outside of the device as I presented in the page 17, and which were exposing the A tech service before the key is injected into the device. And in addition, the injected key and ID, Which are store as the key storage memory and which is not as safe as the Xu. Those ID and the key store in the path. So in page 7 18, So the key in the path can be used with crypto engine to provide comprehensive security service as shown in the page 18, such as unique identity generation, authenticity, Confidentiality and integrity and known reputation, which are essential for 0 Trust Network. So in conclusion, as the security become more of a concern for electronic devices, 0 Trust Networking will push the secure memory from a single large perimeter into a device itself. And the path because path is the basis of the rule of trust. So it will play very important role and become essential to the success of the Zero Trust Security Model. Okay, thank you. Thank you, Charles. These concludes our prepared statements. We now begin the Q and A session. Please submit your questions in the input box on the webcast window and you will answer Xu. Should you wish to raise your question in Chinese, we will translate it to English before our management answers your question. We are now ready to collect questions and we'll get back to you in a minute. Please stay with us. We already have many questions. So we're starting from the first question. The first question is what is your strategy to increase your IP adoption rate in 15 nano FinFET and below. So please wait. Okay. I think this is a very big question. So currently, the technology was already used, adapted in the 6 nanometer and the below is eFuse, which is offered by Foundry as a cylinder sale. In comparison to the eFuel's technology performance, Technology's performance is superior in terms of the small feature size and the lower power consumption for the operation and the higher security protection for the data storage. Since our OTP, so called the NeoPhils, issued its patent in 2013, We have developed more than 200 process platform and have designed the solution for more than 500 products. So as customers move into production, they will be contributing significantly to our loading. However, most importantly is the accumulation of our production record. We can also see the increased adoption rate for 60 nanometer and below. This imply That the 28 nanometer customers are migrating into lean age process node. As this happens, we predict the new customers and the new applications will shift from the generic eFuse to our solutions due to the performance and the security concerns. In addition, as we mentioned previously, Conventional e fuse is no longer secure and can offer higher density for customer use. Together with email, Ms. Neo, top technology and our security IPs, we are happy to see Our IP deployment become faster. As you all know, learn from recent news, hacker attack is getting severe. I believe the chip makers, especially for those who provide the complex SoC chips in the advanced process nodes, Well, Xu Lei may consider the necessity to enhance its product security level and to deploy our security function to against the increasing security risk. So I think this is our strategy to enhance and increase our IP adoption in the Leading edge participants. Thank you, Rick. We have one question regarding the hacker. Recently, international hacker have been ramped and the issue of information security has evolved into a national security issue. So can in memory hardware security IP protect against such a hacker attack, where the adoption of the application be accelerated for child abuse. Okay. Because now the so many attack is from attack on the software. So the software security is no longer enough to protect the system. So the adoption of The high level security will be accelerated and the eMemory's path based security offers unique identity, Secure storage authentication and the anti counterfeit features and they can protect against such attacks. And the largest system companies are focusing on creating 0 trust network solution that requires really every device to perform Verification, authorization and authentication. And this could be provided by our hardware, our proxy, And which can be easily self generated by the path in the device to protect the System Security through the hardware. Okay. And another regarding security question. Can quantum computing be able to create e memory path? Is your path still useful for future quantum computing. Charles? Okay. I think the quantum computing cannot break down e memory is tough Because the quantum computing offers supercomputation power and can only use brute force to try every combination from a huge pool of numbers to find the right numbers. As I explained in previous investors' conference call, eMemory NeoPOP technology is based on existing CMOS process, And it features 100% randomness and robust robustness because it's unique feature product Designer can easily have a sufficient security key district that is so called a large district We saw that this would be very harder than identifying a single brand Of course, the whole earth in a very short time. So I think it is very unlikely that even with the quantum computing, Xu. This is a question for Rick. What is the impact on foundry aggressively increasing CapEx to build more capacity. Okay. I think this is a Very hot topic, isn't it? So we're considering the return of the CapEx increase. Frank speaking, most of foundries were very conservative in past years, as you know. But that is not only for the advanced process node. Due to the increasing demand from the specialty and the mature processing technologies, Lexis, CMOS, Image Centers, Power Management and Connectivity IC for IoT. As you all learned, the increasing capacity across fungus covers wide process node. The current shortage of the foundry capacity creates opportunity for us. It's the facts. As our competing technology is foundry based internal solution, eDOCOS. Customers require multiple foundry strategy solutions more than ever to diversify the supply chain. Our technologies are widely deployed across most boundaries from the legacy nodes to leading process nodes. By adopting our ITs, I think the customer can guarantee a higher level of flexibility in terms of layer product production plan and allowing NAND to move from one side to another. In addition, The current foundry pricing is favorable to us as our royalties are based on the percentage based on a percentage of the wafer price. This increasing cadence leads to more foundry capacity, also an increase to our total addressable market. Xu. This is for Rick 2. The link is 7 nanometer Chief from Global FPGA Manufacturer, has announced their cooperation with eMemory. This new eMemory high level of data for patient IP, will reach the mainstream market. Okay. Yes, I believe so. So our security solutions, combined with Neopulics and Neopul are set to be fully introduced in the advanced process network impact, expanding their application. We are confident that our PaaS based solutions provide a high level of security when compared to the competition, where we are placed to close the cancer into the mainstream market as the customers shift their production. Many potential customers are that are waiting for a premier leader to emerge before adopting solutions. So our growing production rates and The payroll benchmarking made us to believe that this will be likely be our IPs. Okay. Another question regarding the Aperol revenue. All boundaries have a full capacity and the order price has also increased. Why did your actual revenue drop compared to January revenue? Okay. So this I think this is the major focus in this investor conference call. So thank you for this question so that we can have a chance to respond to everyone. So if you look at the our revenue pattern every year, the April is always lower than January. There are two reasons behind this. The first one is our largest end customer for our U. S. Smartphone related chips, which has very obvious seasonality. Q1 is always the low season for wafer shipments, which contributes to our April royalties. The second reason is the semi annual royalty recognitions of 1 of our Chinese foundry partners Xu, making the quarterly revenue comparison on equal. This is the security question, okay. The data process of node AI chip is responsible for the security function. How does the company introduce new path into the design architect of the DPU product process unit. How is the growth momentum of the DPU Xu. Okay. Yes, I think because in the IoT era, a lot of data Need to be taken care of and also many cloud based application will be realized in the 5 gs regime. So if you depends on CPU alone, the CPU efficiency will be low Because it has to take care of the network services and also application service and also the data storage. So that's why the recently the DPU become a very start to become very popular because DPU will share with the CPU. If you will take care of the data storage and also the all the security activities. So we have integrated our NeoPhils and NeoPharm with digital design to perform our rule of trust functions to be embedded into DPU. So with NeoPath, we have innovated a new security Xu. Architecture for rule of trust, which can achieve high level of security in DPU. So another question is, what are the difference in architecture between Apple's security chip T2 and our NeoPark? And the trend to high security is to invest secure element into SoC. So our path of rule of trust and the secure element are the key security IP for embedded solution to facilitate higher security solutions. So in the future, security functions will be all embedded into The SoC. Okay, that's the I think that would be our advantage at security solutions Because we provide embedded into the SoC, which is different from the current T2 is using, which is using the Xu. Separate secure element chips. And this question for Rick. The year on sea water price continue to increase from each quarter. What is the impact on company profitability? Okay. This is a very interesting question. So our load is based on the percentage of the wafer price. So usually, it is correlated to So it's correlated to the foundry pricing movement. So the price with the price increase, He will make a lot of help to the company's profitability. Does there remain any room for the 8 inches penetration rate to grow from the current 20%? Or are there any applications still growing their market share in 8 inches? Okay. Yes, I think This is the question always asked in every quarter. So our penetrationally, Our penetration will still have room to grow in age. Recently, we have developed new path in an embedded fresh process, we call that is the secure fresh, which can increase our market share across the embedded fresh platforms. There are some legacy chips Like a power related IC that still use conventional laser trimming or eFuse. We are seeing these customers shift to our IP solutions for their new products. Also, the increasing demand for automotive And the IoT applications is 8 inches which require higher level of security and better reliability. We'll also increase the adoption rate of our IPs. Okay. URP on DDIC and PMIC is already used as an industry standard. Are there other applications where potentially eMemory's IP who also achieved this position. Rick, please. Okay. I think then as we reported In every quarter, there are many applications with the adoption of our IPs. For example, Lee ISP, image signal processor, DRAM digital TV set of box, Bluetooth, Wi Fi And the executive. Typically, once a customer adopts our IP, then they will achieve And they achieved better performance over their competitors, leading to a market share gain. So we expect their competitors will follow on by adopting our IPs. We have seen this scenario in the past with the application such as DDI and PMIC and the fingerprint sensors. Therefore, we believe that it is just a matter of time for Our IP to be widely used in those applications. What are your opportunity in automotive applications? Okay. I think in addition to the PMIC, yes, our IP can be applied to Xu. Various applications, including the advanced driver assistance systems, that is ADAS. First, we already have customers tap out in cell 7 nanometer and 15 nanometer. And also the sensors, microcontrollers, power management IC and the display drivers ICs for Infotainment. In addition, autonomous driving Require the highest center of security. Therefore, our path related solution will be widely adopted. We are a coalition of royalty from device companies in the same as foundry in the 1st month of the following quarter enter production. How are royalty paid and what are the payment method? Okay. I think this is a very interesting question. And I think currently, the e memory class loaded from foundries and IBM. Only when design offices adopt our subsidiary, top security solutions, There will be extra royalty incurred. The payment will be the same time as their wafer shipments Xu, through the foundry. We also charge by percentage of wafer price. Will the customer who use the NeoPark process platform also use NeoFuse simultaneously? Yes, yes. Yes. For the first thing, the NIO part is based on the NIO field process platform as we reported previously. Xu. So when customer and the second, when customer use NeoHarp for security key and the UID generation, In general, customers need auto meet the OTPIC together with further security usage. So in general, when every customer use a new path, yes, they will use the new field simultaneously. Show us your progress on 7, 6 and the 5 nanometer process now. Okay. I reported just now that the IP development in 6 and the 5 nanometer are running smoothly As scheduled. So the 5th nanometer is in qualification stage and we expect to complete the whole of patient procedure in Q3 this year. Regarding the 5 nanometer note that is N5P, We just received the test waivers from the Lilian Foundry Partners, and we expect to complete the cost verification in Q3 as well. On the way will production be expected. I think this is a topic that everyone want to know. Now up to now, we already have 5 products tap out in 7 nanometer, and then we expect the production with royalty contribution later this year. If the revenue disclosed each quarter, can you further of dividing the proportion of 8 inches 12 inches Okay. I think as we just reported and please refer to the Page 9 in our presentation material. The royalties from 8 inches 12 inches accounted for 54.8% and 45.2 percent of our royalties, respectively. Please stay in the competition and collaboration relationship with ARM, lead now. Okay. Yes, this is yes, good question. Yes, I think that has nothing to do with the competition. We work together closely. So on over CPU IP, Where is eMammi offers large NVM and hardware security IP. So for increasing demand in the higher computing performance as well as security level, The collaboration between ARM and e memory will become closer. So ARM B9 He's a CPU solution and we can support on V9 to have a better security level. As DRAM customers started production, when will there be royalty contributions? Okay. Yes. Yes, Duren customers are ramping up the production now, and they will contribute a royalty more significantly starting from July this year. Can you provide outlook for AMOLED DTI, RFP, DRAM, WiFi and the DTC for this and the next year. Okay. These applications indeed are the main growth driver For this year, for OLED DBI, we are gaining joining the new HoriO OLED customer, which are customers which are dominating the play in the OLED DDI. And OLED ISP and DRAM and the WiFi will manufacture in 28 Yes, which has much higher ASP and will contribute significant to our loading. We expect their production volume will increase significantly in the next year and drive our royalty growth further. DTV, digital TV customers are migrating into 15 nanometer and will be in production in second half, which will have higher ASP and higher loading contribution. Okay. There are some security questions. Okay. Who is your competitor in Zero Trust Security? Is there someone else open this? We are not we actually are The security rule of trust provider for the zero trust security. So zero trust security is Hughes regime is not the product, okay. So the competition in the providing the The hardware security to the security solution. There are a couple of them in the market now, which is basically competing on the like for example, on the path Will be interested ID. And on the security IP will be inside secure or secure IC, those Xu. Okay. So can you please explain what HSSN is? Okay. I'd like to add a comment to the last question. So given there are a few of competitors in the security provider, but only eMemory has the complete solution with the PAP and the OTP and also with the solution, digital design for the integrated Puff with OTT and with PI and G together. Okay. And the question is on what is HSM? HSM, the Full name is the hardware security module. So it's basically to put the security into the And which can provide the security services like encryption, like authentication, like Authorization like in checking the data integrity and also Like a signature of the services. So the HSN basically can provide the Key generation and the key storage and together with the crypto engines to provide all kinds of security services. Okay. So could you give an example how the security application in the remote working would impact the user more possible. Okay. Yes. No, the more possible because for example, the FIDO, FITO Society. They already come out with the DEID standard, device ID standard. And they also promote that for the future IoT device ID. So for the device ID, Basically, in the future, previously, ID is only the identity number. But in the future, the ID becomes device ID, which will become the active ID, which is not only provide the unique ID, but which also need to perform the authentication functions. So in the future, For the people working remotely, they need to if their device want to walk remotely, Then it is better to have the active ID, I mean, the device ID, so which can protect their assets And also their data very well. So I think that is the impact is to the user is The device, all the device connected to Internet need to have more security and the most high level securities, Not only they only provide ID, but they also need to provide authentication functions. So this means In the future, as more people working from home, doesn't matter whether it's because of the COVID-nineteen or because of The enterprise has a lot of employees working from home. The future, the security, Particularly, our security will become increasingly demand By the industry and also by all the people in the world who would like to use the device connected to the Internet. What safety measures are being taken into to ensure the safety of your employees in this changing pandemic involvement. Okay. Thank you for your kind of next to ask this question. Yes. As you know, that in Taiwan, we are facing the increasing pandemic and the more in-depth cases Xu. So firstly, we have a lot of health Already done before, and we are always looking to the progress and actually the pandemic situation I don't mention it. So for the basically, we ask the employees to do the body temperature measure whenever they come to the office. And in the meantime, we also recently, we suggest All the employees to have the meetings in line instead of to visit customer on-site so that we can help not only for our employees but also help our customers to be free from any risk. So in the meantime, we also look into the latest progress, And we'll follow the government's suggestion in the related follow related actions. So we also consider the possibility to restart the work from home project with our employees so that we can help to secure our business and also keep set for our employees. Okay. As we mentioned about the ARM cases, they do see a very good result for our corporation. Can you explain more about a show of more progress about new project with ARM. Okay. Yeah. I think everybody knows that ARM is Very good company and a very successful company in providing the high computing CPU. So For the security operations, in addition to CPU, you also need to have very good CRIPO engine has a complementary expertise with ARM because as everybody knows that the security For security, the most important is how do you generate key and how do you store the key. So e memory provides the integrated and OTP and also TAP based TRNG to generate the key and also to provide a very secure key storage. So together with ARM, then we can provide the total solutions for the security processor and also security services. I think that is why the 4th company who work together will give the customers a very High level and very high performance security solutions. And that also get we also get Successful results from the customers that we both engaged. And so in the future, we will work more closely together to provide the security, IT security processor and also security solution to customers. Okay. Last year, you mentioned about the 15 nano and the 5 nano with very good result of verification. So what's your customer application for the final leader? Okay. This is a very good question. As we mentioned, I think in the for the for our for all IP in the leading process node. Our major application is security related. So when we move into the 5 and the 6 nanometer, so the our customers are in the FPGA data processor unit and also graphic chip segment. So all these products are all high performance computing, so that is so called HPC related product segments. So in 5 and the 6 and even for the 3 millimeter, we will work closely with those customers In the interest of time, we now begin closing comments. Charles, please proceed. Okay. Thank you very much for attending This quarter's conference report and also thank you for your patience and the support to eMemory. And as Emery, we will continue to work hard on IP innovations and also security solutions And the innovations for our customers to bring higher return for our shareholders. Thank you very much for the meeting. 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 2 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.