All right, good afternoon. Everyone, thanks for joining us at the 26th Needham Growth Conference. With me here on the stage is from the management team from Axcelis Technologies. We have, I'm thrilled to have Russell Low, our CEO, Jamie Coogan, CFO, Doug Lawson, EVP of Corporate Marketing and Strategy, here with me. Gentlemen, thank you for joining me today.
Great to be here. Thank you.
Yeah. I know, I know. Doug probably has been coming to this conference for many years, but we'd like to welcome Russell and Jamie here.
Great.
I look forward to hosting you here for years to come.
Yeah, appreciate that. Thank you.
Yeah. So, you guys made a... Let me start with a pre-announcement you guys released yesterday.
Mm-hmm.
Can you guys kind of recap what you pre-announced? Specifically, I wanna ask you, I mean, the numbers seems to show some upside to relative to what you guided for the last quarter. Where the upside came from?
Yeah, as we think about the performance, you know, we thought our sales opportunity was above our guide of $295 million. We expect now to be greater than $300 million on the top line, relative to sales performance dropping through down to earnings per share in excess of the $2 we'd previously guided. We think it's now gonna be greater than $2.05. You know, we think the performance really just came through, one, execution, you know, relative to what the prior plans were. We saw, you know, continued strength in the power device market during the fourth quarter.
We'll have more commentary relative to that on our earnings call, so this is a little bit of a marketing ploy to get you to join our earnings call here in two weeks. So we look forward to having you there. But, you know, all in all, it was a really strong execution, operational performance that drove the results in the period.
Just to add to that, so definitely that was the kind of the Q4 announcement. We also wanted to affirm that we've, we're very much on track to our 1.1-
Correct
... billion-dollar model for the year as well. So we've always had two business models out. So we had the $1.1 billion business model and the $1.3 billion, and we said we're gonna hit that in 2023, and we're, we're pleased to say, yep, that's,
Yeah
... preliminary well done.
Yeah, exactly.
Yeah, lastly, you know, we also announced that we're on track to do the $1.3 billion in 2025.
Yeah.
So...
Yeah.
Mm-hmm.
Okay. Great. Maybe let's dive into the actual questions, right, for today's discussion. I wanna really start by looking a bit back into 2023, right? 2023. Now, it's an even more remarkable year, given your pre-announcement for Axcelis. I mean, the company's total revenue expected to grow more than 20%, right?
Mm-hmm.
Last year, and most of the U.S. semi-cap equipment companies see revenue flat, maybe down. I mean, so, the countercyclical strength, right, is truly remarkable. But for semi, semi-cap investors, right, who are kind of deeply ingrained with the idea of reversion to the mean, what do you tell investors about what may be the long-term secular driver of Axcelis for your growth in 2023, which may already be there, and what may have been a bit of a cyclical or transitional into last year's number? How do people interpret your numbers?
Yeah.
So, last year, power was-
Right
... very strong for us. When I say power, I mean silicon carbide and silicon. So... And that is kind of what I call a secular trend, right? We are going towards silicon carbide, EVs, industrials, anything that needs to work with power. The cyclical stuff, I think as you know, the memory has been very slow. And, you know, we've historically been very strong in memory, so we're actually looking forward to that recovering, and that's gonna give us, you know, a boost. But, I think the interesting thing is there's multiple cycles now. So you've got the general mature, you've got the power-
Mm-hmm
... you've got the memory, you've got the logic. And I think, you know, advanced logic was a little slow, memory was a little slow, image sensor a little slow. General mature, maybe softening. Power, you know, I think we've been saying it's about 60% of our revenue for last year, and we're expecting to see the strength in power remain.
Interesting, 'cause this is definitely has been a cycle with, I mean, with many asynchronous mini cycles.
Mm.
Yes.
But looks like you guys have been in the right place to actually play into some of the countercyclical mini tailwinds you have been enjoying. But it turns out to be a pretty significant one for Axcelis.
And it was a long time in the making in some respects. When you think back in 2014, 2015... there really wasn't a market in particularly silicon carbide power. We worked very closely with a customer on an emerging need, and, you know, we've developed an entire suite of products that cover all applications, and, you know, we've got mindshare, we work closely with our customers, and that's kind of where the growth came from.
Yeah.
So, uh-
Yeah
... there's a tailwind long in the making.
Yeah. We're gonna touch a little bit more on that part in the later discussion. So I wanna bring back a little bit of the story here, right?
Mm-hmm.
2019 was my first time coming to this conference. I was a research associate, right? Back then. I joined the Axcelis session, yeah, and back then it was Doug, of course, you're here. But Mary Puma, who was the CEO of Axcelis at that time, and now, of course, she's still the chairperson, and said one of the reasons Axcelis could thrive is because customers need not just one, but two strong ion implant equipment suppliers to drive innovation and to improve cost of ownership. Of course, back then, the perception was Axcelis was kind of in the shadow of Applied Materials because of this asymmetric competition was probably a big overhang, I mean, when people discuss about Axcelis. But fast-forward to today, right?
You grew your market share-
Mm-hmm.
in ion implant, I believe, from high teens to high twenties. That's just that happened in a matter of 4 years, right?
Mm.
At roughly 10 points-ish of the market share gains. I know, Russell, you've been at the company for a while. Jamie, you're relatively-
Yeah
... new, but if I ask both of you, right? What were the one or two things that Axcelis has done right to gain that market share in such a short period of time, and what are some of the things you are thinking about that should lead to the continued outperformance for the next few years? I know this is a long-term question, but I'm just-
Sure
... gonna throw it out there.
Yep. I think we are a nimble company that is very innovative and customer-focused, so I think that's who we are, and I think that is, you know, some of the things that have really helped us grow our market share. And again, you can kind of think about red ocean versus blue ocean, if you like. We've gone into power, which was a blue ocean. It wasn't, you know, us fighting against Applied Materials. It was a new opportunity that was very small and has grown, and the fact we really are innovative, and creative, and work with our customers, we worked with a customer. And you don't always know what's gonna come into a full-blown market, right? But it was really exciting to see power grow into what it is today. And a similar thing happened with image sensors.
We realized quite early on there's an opportunity to segment those markets to make them more productive, and drive down, you know, manufacturers' costs by having specific products. So we have a whole family of high-energy implanters specifically for image sensors, then we have a whole portfolio of products solely for power series, and I think that is an outcome of being very customer-focused and innovative. And like we've said, that there are two companies that are innovative, and we would like to think that we can differentiate ourselves being very customer-focused and innovative.
Yeah, and to,
Yeah.
To build on that, you know, as I was kind of making the decision to come to Axcelis, you know, one of the things I looked at was honestly the positioning within the marketplace, right? So you've seen the phenomenal growth of the organization over the last, you know, 3, 4, 5 years here now, and in doing so, they positioned themselves through that innovation, right, to be able to take advantage of the market opportunity. Growing through the downturn, yet still well-positioned in those mature technology, right, the memory markets and others, which, on recovery, will provide, you know-
Mm
... secondary and third leg almost to the growth story and narrative on a go-forward basis. So, on top of that, right, it, it's an organization that, you know, delivers on its promises, right? And so as we look at, you know, the historical track record here, you know, we've been relatively, you know, conservative in our estimation process. As we go and make assumptions, we want to make sure that we can deliver on those targets-
Mm
... on a go-forward basis. You know, and that's the type of environment and ethos that I wanted to be a part of, right? And then joining Russell and the team, as I've gotten closer, you know, to the technologies, understanding sort of the remarkable nature at which, you know, we satisfy those customer requirements through technological innovation has just been really phenomenal. And that runs through the entire organization, right? That, you know, it pushes its way all the way down, where, you know, the customer does come first, you know, relative to trying to determine what those solutions are, how we position that in the marketplace, and how we attack that at the end of the day.
Got it, got it. So I think one of the few things, I mean, what you guys in the past has mentioned, and now you also mentioned at this time, is the about segmenting the market-
Mm-hmm
... innovating, developing that market-specific products. I mean, that may have been one of the reasons Axcelis has been successful over the past few years. Now, if I look at your numbers today, right, the focus on power, silicon carbide, has definitely paid off handsomely, right, over the past few years. But I think at top of the mind of many investors here, right, what is your expectation going forward for power and silicon carbide market? I mean, as there has been quite a lot of noise in the recent months or weeks, I mean, in the automotive semiconductor market, I mean, EV and some of your customers, or maybe not, they're not your direct customers-
Mm
... they have some not very positive pre-announcements.
Mm-hmm.
So how should investors think about, think about where this market is going, power and the silicon carbide? And yeah.
All right, I'll take that one.
Yeah, yeah.
Yeah, I thought I'm not one to sit quiet for the whole day. So I think, you know, the first thing to know about Axcelis' position in the power market is we have a very broad customer base. So it's global, it goes from top-tier power companies, you know, down to the small startups. And Axcelis has been working on this market, as Russell mentioned, when we talked about the segmentation, since the 2014-2015 timeframe. So we've developed a very full, complete product set across the high energy, high current, and medium current space targeted at this market.
... So what it's meant is, we've been able to move out of our original customers as tool of record and be the tool that customers, when they were starting in power, wanted to use because they had confidence in the product. So, you know, that's probably the first thing, and, you know, that buffers us a little bit from individual, you know, customer issues that come up in everyday life and, you know, has really helped. You know, the other thing, you know, if we look at the EV market and the power market as a whole, is, you know, the power market, if you look at what everybody was talking about at CES, in the power market is, you know, it's not just EVs, right?
There's big applications in industrial areas, and energy always has been, but as the cost of silicon carbide comes down, it's able to penetrate those kind of markets and create growth. And you would have heard many of our customers talking about those areas. And the last area, you know, that I think is important, you know, as an equipment supplier, ion implant, first of all, is the most critical process tool within a power device. It's the equivalent of what lithography is to advanced logic. And so—and, you know, if you're lucky enough to score a tour of a advanced logic fab, they'll take you to see their EUV tool. If you go into a power device fab, they will take you to see the implant bank. And so, you know, so that tells you, you know, just how important implant is.
So they're continuing to invest, regardless of what goes on with, you know, what, what the car companies might be saying of their current plans, because they have to continue to get the cost down, the yields up, and the performance of their devices. We also, you know, like to remind people that when you look at automotive, whether it's a hybrid or a full EV, if it's got a battery and it's got an electric motor, it's got an inverter. It might be silicon carbide, it might be silicon IGBT. All of those require a significant amount of ion implant to create them. So those are, those are things that allow Axcelis to feel confident in the, you know, continued strength of the power market as we go through this year.
Great. Great. So I mean, regardless what's happening in terms of the near-term noises, it doesn't seem to change that the silicon carbide remains a secular growth market for the, over the long term, right? So when we think about, try to think about the long-term upside for Axcelis, because you guys have has been successful. One of the problem with being too successful is you're gonna be trending closely with the market. You're gonna suffer the ups and downs of the market. But when I think about your silicon carbide upside in terms of market share, share gains, are there still any major opportunities there for you to get the next step up in the silicon carbide in the market in terms of market share?
So I think we... If you're looking at silicon carbide, I think we already have a high market share.
Yeah.
I think we're in, as Doug mentioned, all of the top tier one manufacturers, and we certainly have a long tail of companies down to the start-ups. I do think that, as people ramp their production, they're gonna require the full suite of products, which plays even more to our strengths. And those tools we're now seeing being sold in roughly equal numbers now. You need a high current machine, you need a high energy machine as you go, you know, planar, you go trench. You know, so we're seeing that. So high market share, strong position, lots of, you know, breadth in our customer base geographically as well.
I think, you know, just as this, this market grows, and you can put different numbers on this market, right, at what, what rate it's growing at, but, like, we're, we're looking to continue to grow with the market.
Yeah, let me, let me just add. So, you know, Russell mentioned two terms, planar and trench. Those are types of transistors. And, for a power device, whether it's silicon or silicon carbide, there's 25-30 implant passes from the time it enters the fab until it exits. So it's a lot of implant steps compared to just about any other process area. As you move to, you know, from planar to a trench type of device, it requires much deeper implants, and that means that it requires more high energy implants, and that's, that's a place where Axcelis has a tremendous competitive advantage.
The second thing to look at is trends in the industry, moving from 800 volts to 1200 volts in terms of the device operating voltage, which improves, you know, significantly improves the charging of vehicles. That requires much higher dose implants, which our Purion H200 is designed around. So, so that's, you know, that's a key part of our, our overall strategy in power, is to make sure that we're able to provide that product set to be able to deal not only with the customer's ramp, but with their device evolution and, and design.
Mm-hmm. Got it. So maybe I want to ask about China, right? This is a question I'm asking this to most of the management team. By the way, I mean, how should we think about your local competition in China? I know China is a very important market for Axcelis, but do you think you can maintain that market share, given that Axcelis is a U.S. company, right? And China is trying a lot of things to achieve self-sufficiency, including developing local alternatives, whenever they can substitute the U.S. incumbent. So any thoughts here?
So, just to kind of calibrate people, so, you know, let's say, you know, Applied Materials in the 50%, we're in the 30%, and then the other 20% mostly is in Japan. There's 2 companies in Japan and 1 in Taiwan. That really is the implant market share. There have been, and there's remained to be a couple of companies in China. One came out of kind of like national labs, another one is actually much more of a private endeavor. And, you know, they've been around for probably 20 years, and, you know, I think they've got a working product. It's at the very lowest level. So I do think, you know, that they are developing it, but it's very slow-moving.
Then I can say, you know, that, what I think about ion implantation, I think the technical barriers to implantation, I'm not talking about intellectual property here from patents and stuff, just once you've got a machine that's working, the continual operation and innovation of that technology, the barriers are really high. It's not really surprising that the two main ion implant companies in the world are about 20 miles apart from each other on Route 128.
Mm-hmm.
It's a certain skill set. It takes a huge amount of research and development to continue to develop those technologies. So I do think there's a large barrier, and then kind of an aside comment would be, and if I was gonna go after put-- So when I think about this, there's the really heavy metal tools, like an implanter. I mean, it's really just a beautiful physics machine, and then you think about the little chamber-based tools. The chamber-based tools are very simple tools-
You mean the other type of process tools?
Yeah, so like a CVD tool-
Yeah
... or an etch tool.
Yeah.
They're very small. They're very simple technology, but the magic happens in the recipe. For us, the magic happens in the hardware, and the recipe is almost trivial, right? It's trivial. You dial up the dose, the energy, the species. It's really straightforward. So they're quite separate. So I think, one, you've got to really have an appetite for hardcore physics when you want to take on an implanter, and you've also got to realize that, you know, there are much, much bigger markets to go after as well. So in China, you can see that the CVD companies are actually doing quite well, 'cause one, it's simple hardware, and two, it's a much bigger market they're going after.
Mm-hmm.
We're not really seeing a significant progress of local manufacturers in ion implantation, and again, that's not a short-term thing.
Okay.
Yeah. The other thing I'd just like to add on it is, you know, Russell addressed the hardware. Russell has designed implanters, you know, from the ground up, so, but the thing I'd like to highlight is, we refer to it as dosimetry, but the software that powers these implanters, that allows the recipes to be simple, is very complex. And it's... You know, we've been in business 45 years. It's 45 years' worth of iterative development of those algorithms to do that. And that doesn't, you know, that's not written down, you know, in the public anywhere. That's not something you can, you know, buy a tool from us and get. That's something you have to have the gray matter in the company-
That's a good point.
- that knows how to do that.
Yeah. There's a huge number of algorithms that are coded into software, and you can't just take those off the shelf.
Got it.
Yeah.
I think that sounds to me that that's another similarity between ion implant and lithography, right?
Yes.
Yes.
It's where the complexity of the hardware itself, it's hardcore physics, it's very high technical barriers to entry.
Mm.
Thanks for that color, and I think, so far we have mostly, right, talking about, we'd probably talk a little bit about power device, silicon carbide. We didn't really touch upon general mature node, but let's not forget about memory, right? You said that's the cyclical part of the business. Hasn't been doing very well in 2023, but it looks like you do feel some optimism about that part of the market. But what I'm trying to ask, trying to understand is, memory used to be like the used to have the higher ion implant intensity, right? Across the Axcelis end market, and markets and, or, device types, different device types. I guess probably not anymore, right? But it remains an important market.
Two things about memory, right? One, what kind of visibility do you have right now in terms of memory recovery? And two, this hopefully is an easier question. I noticed that you shipped the tools to a new Chinese DRAM customer in Q4 last year, right? And I believe the customer is going to be limited to legacy DRAM nodes, but I think you still decide you wanna ship that tool. Kinda means you think there is going to be meaningful business, business opportunity there still, despite the fact they may be capped at a certain technology node. So that's a two-part DRAM question I have. Is that the...
I mean, especially the Chinese DRAM part, I mean, what can you tell us what exactly is the, is the rationale behind, the doing that, the, shipping the tools over, and trying to get qualified there?
Sure. I'll kick it off, and then I'll let Doug, Doug finish. So memory. So memory has, like you mentioned, always been a historically strong, part of the market for Axcelis, and, you know, we have very good relationships, with, with the Korean memory companies, and, that was kind of really where the Purion product line,
Right
... took off. Breaking memory into two pieces, DRAM and NAND, they're quite different beasts. So, you know, when we look at the market recovery, so what do we see? We certainly see orders and, you know, POs. Okay, that's one way of looking at it, the recovery. Another part of it is, you know, we look at utilization rates. We can track that either just by counting the wafers coming through, or we can look at the consumable spend as well, 'cause if a tool's not running much, it doesn't use up a lot of consumables. So we have lots of leading indicators. So I think, you know, we see, and we do speak a lot to our customers, that DRAM is gonna be picking up in the second half of 2024, right?
That's kind of, again, I don't think there's any news there. I think a lot of people have been saying that. I think NAND is gonna be behind that, and we're also seeing an opportunity there. And as Doug would say to me, "You know, if you think about AI, and you think about these high-bandwidth memories, all these things, they don't directly support us." You don't get more implant steps in a high-bandwidth memory, but it certainly pushes up utilization, which is always a good thing, right? So, you know, for memory, it's the number of wafers that come out. So high-bandwidth memory, DDR5, any of those things, that's just wafer count. But I think one of the things that, you know, we haven't seen people talking a lot about is just the sheer amount of stuff that AI creates.
That stuff all has to be stored, otherwise it can't learn. So, you know, I do think NAND is gonna recover fairly quickly and abruptly. You know, just I think, I think I'll pass it over to Doug now, 'cause we've had many conversations about this.
Yeah. So memory is, you know, a strong market for Axcelis. During the last upturn, it represented about 17%-18% of our systems revenue. In 2023, it's gonna be somewhere between 5%-10%. In two weeks, we'll give you the exact number.
Yeah.
So, you know, we expect it recovers, you know, dollar-wise, to at least where it was in this last upturn, and it's. There's possibilities for it to be a stronger memory cycle. I think, you know, many people feel it could be. There's good drivers, you know, there is a PC refresh cycle that needs to happen, and now with the latest marketing gimmick of an AI PC, which I think comes with a Copilot button, then we'll. You know, people will have a reason to go out and buy a PC. That helps drive it. AI is, you know, we hear about HBM, but in those servers, it's not just the HBM that's attached to the NVIDIA or AMD chip. It's, you know, it's got a lot more memory in there.
And then, you know, then we move from there on to NAND, and NAND will absolutely, you know, drive a lot of, AI will drive a lot of storage requirements, and we, you know, we expect to do that. I'd like to just go back to one thing you said at the beginning when you talked about memory being more implant-intensive in the past.
Used to, probably.
You know, one of the things I think is important to understand, we talked about the implant intensity relative to power earlier, and Charles mentioned it relative to memory. But I'd like people to make sure they understand that in the mature markets, you know, the 28 nm node, which is probably the lowest cost point, if you get 300 mm, 28 nm mix, that's your optimal point if you wanna build in a foundry. That's the most implant-intensive node along Moore's Law. And so as we look at the mature markets, as people drive down to the lower cost point for their device, it actually drives the implant intensity up and creates opportunity for Axcelis across our full product line.
Like, more like gravitating towards that, that particular 28 nm
Right
... node looks like.
Right. And so, the big driver, you know, as we look at the mature markets and what really brought them, you know, what created them, because they didn't exist, was the Internet of Things, right? The first wave of IoT was in the 2015-2016 timeframe. We saw a second wave that was driven primarily by communications. 5G rolled out and enabled new applications. One thing that doesn't get talked a lot about relative to AI is the impact it's gonna have on IoT, right? When when people talk about AI right now, they talk about, you know, generative language models, and they talk a lot about advanced logic and HBM. AI is just a data beast. It just wants more data. The place you get the data is from the IoT.
It wants the sensors. It wants to know your tire pressure, when you get lost on the Jersey Turnpike. It wants to know all of that stuff, 'cause that's gonna go into, into those models. That all comes from mature nodes in IoT. Again, a great place for implant.
Yep, yeah. So the China DRAM-
Yes
... customer question? Yeah, please.
So, we've always been strong in memory. We know that, yeah, I think you're probably very aware of that. A couple of potential customers in China got put on the naughty list, so we cease and desist, but there is one customer that we're now shipping to, and, you know, they're taking a combination of high energy and high current machines. We are the high energy leader, and so it's just natural that we would be working with them for that.
Mm-hmm.
And we're also working with them on high current, and you're right, it's not a leading-edge DRAM node, but again, we've got a lot of experience supporting the memory market. And it's a subtle difference. I mean, there are big differences between the power markets and the product performance and the product uses versus image sensors, versus memory, versus general mature. So we've worked out how to optimize our products for memory. So it would be natural that if a company came along in China, that they'd want to be working with us because of our strength in memory.
Got it, got it. So, for the sake of the time, I think I want to-
... ask another, my last question, then I'll open it up to the audience for Q&A. I do want to ask about capital allocation. I mean-
Sure.
This is probably directly addressed to you. So a few years ago, right, you guys basically made a bet, I mean, not, not exactly a bet. It's a calculated
Sure.
You're taking a calculated risk, and you want to invest in organic growth, investing in R&D, developing market-specific products, investing in that production capacity, investing in working capital. It has been a very good bet.
Yeah.
Right? And I know M&A in organic growth hasn't really been, like, a big focus for Axcelis and in the past, and then now as you grow bigger, right, in the ion implant market and by that. Is there any change of direction in terms of how you think about, you know, organic growth, M&A, and is M&A you think is an option for your capital allocation? And if yes, what kind of M&A targets you'll be looking at?
You got it. So you know, I think, one, we're still gonna prioritize investments in the base business. We believe that, you know, we've got our $1.3 billion model in 2025. We're in the process of working through and finalizing our discussion on what we're gonna call the next model, which will demonstrate where we think the business can go on an implant-only basis. You know, and we'll have more information on that later in the year. You know, we would. We believe that, you know, through that, it's investments in R&D, the continued investments in working capital to take advantage of the opportunity and the upswings that we've seen.
It's really positioned the company very well, you know, to continue to meet customer requirements, you know, to keep lead times, you know, for our customers in line with our historical expectations, you know, and to continue to satisfy them. You know, we, we do believe that there is a path to supplement that organic growth with, with, you know, some, incremental M&A opportunity set. You know, we are in the process of, you know, sort of formulating what that looks like on, on a holistic basis. Making sure we try to target, you know, those types of opportunities where we can actually provide, you know, call it meaningful value, by, by bringing that company into the portfolio or that technology or that product set.
You know, opportunity sets where, you know, we've got, you know, either strong customer overlap, strong technology overlap, and ways for us to leverage, you know, but whether it be our sales force, our field service organization, our R&D environment, to be able to continue to bring value to those targets. As to what we're kind of looking at, you know, kind of again, we'll leave you waiting there, Charles, on that. It's a good question.
Mm-hmm.
... but, you know, we won't talk about our specific process or what we are looking at at any time and... But we will continue to update, you know, relative to that M&A journey, you know, as we progress.
All right, I think the folks in the audiences are eager to ask us some tougher questions than I do. Please.
You referenced the $1.3 billion for 2024. I was curious if you had any opinion or would give us some guidance about first half of the second.
Yeah. So the $1.3 billion... Just to clarify, $1.3 billion is a 2025 model.
Yep.
Yep. Yeah, and so in 2024, you know, we put some minor commentary in the pre-announcement, you know, relative to our orders that we saw, the bookings, especially in power devices continued to be strong for us. We believe power device will continue to be strong in 2024. We expect, you know, some memory as well as mature technology recovery in the second half of the year. You know, other than that, we'll provide more commentary relative to our full year 2024 expectations and sort of the cadence of our guidance on our call in about two weeks. So we're in the process of, you know, finalizing all of that comms for 2024, and we'll have that on the call.
The second question has to deal with Chinese restrictions coming in. You equate ion implant to the SMIC lithography to see what restrictions look like-
Mm-hmm
... for the photography.
Yeah.
And so what I'm wondering is, what sort of restrictions are you assuming as it relates to power and ion implant? And more importantly, we're starting to hear more about legacy nodes getting kicked down in terms of restrictions. What are your thoughts on that?
Yeah.
Yeah.
Yeah, we at this point, you know, we have one customer who's on the entity list, SMIC. Everything we sell to them that requires licenses, we have been able to get, you know, always tell people that, you know, we follow the rules exactly as they're written. And, you know, wake up every morning, our folks in the supply chain wake up every morning-
Yeah
... and check on any updates, so we make sure that we're on track with that. As far as legacy nodes and power, you know, there's been chatter in, you know, on various chats and other places, but there doesn't seem to be lots of real action in that area at this point. And so, you know, we honestly don't expect those markets to be impacted anything like the advanced logic. Assuming that it's related, you know, to defense and homeland security and so forth, you know, power nodes and so forth are really targeted more at environmental and, you know, automotive and some industrial and energy applications, which, you know, are more, you know, related to clean air and so forth, so.
We can take, probably at least one question. One more?
Okay, I have a question.
All right, maybe let's wrap it up.
Great, all right.
Thanks so much, guys, and thanks for coming to this conference, and I look forward to you guys coming here every year for years to come.
Yeah. Really appreciate it.
Thanks, Charles.
Thank you, Charles.