Universal Display (OLED) 7 May 202020 Q1 Earnings call transcript

Good day, ladies and gentlemen and welcome to Universal Display's First Quarter 2020 Earnings Conference Call. My name is Sherry and I will be your conference moderator for today's call. At this time, all participants are in a listen-only mode and a question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

I would like now to turn the conference over to Darice Liu, Director of Investor Relations. proceed. Please

good call. to and quarter Display's everyone. conference earnings afternoon, you, Universal Welcome first Thank

on call Executive me Executive Chief Joining the Officer. Officer; and Abramson, Financial and Chief President Sid Rosenblatt, Vice and today President are Steve

consent that strictly in Before the call the any redistribution, or form property remind portion prohibited. any written Any is rebroadcast Display. without today's of Steve of Universal of me is begins, retransmission let Universal you Display of this expressed call

webcast live a date being accurate will be on Further, Display's this for is this of call of is and made available webcast of information call period Universal the call live only as that time May of the contains X, website. This time-sensitive XXXX.

and forward-looking These current on are and any discussed number referenced These make statements disclaims statements. company's filed uncertainties our to uncertainties a concerning periodic materially. During obligation based statements by Universal significant subject reports results this in the the expectations. risks these and actual risks any update of in and we the to are securities. the should any differ anyone Display call, company’s may be may of making investments SEC with

the turn I’d like Steve Abramson. over Now, to call to

these operations been we today's maintain programs. safe, and challenging and welcome pandemic, staying In keep to these times business We Thanks COVID-XX are Darice you to strategic due the have everyone call. extraordinarily continue your during growth our that times. our difficult family on to and hope healthy able safe our employees and

partners employees, and safety Our and on wellbeing primary the remains community. our customers, of focus

to crisis plans, arrangements. a to implemented employees, measures includes maintain global safeguard activated. adhering facilities business the Under work and During the we recommendations from management work and quarter, continuity environment. to health then are local and modified management authorities which healthy we our safe our And plans crisis were

R&D our to performing to and to programs plans efficient ship ensure are materials. continue business our customers mobilized continuity our solid and Our high ability energy manufacture universal

various fortifying evolving and fluid for quickly preparing and analyzing scenarios is ability to adapt our team and situations. Our to

partners times We closely the these uncertainty. are communicating suppliers of our in company collaborating and positioning high continued for execution and with are our customers,

quarter, and of environment first deteriorated about our the work pandemic material strategically the inventory we purchases. Towards as of our with than our anticipated, and end materials concerns suppliers the the proprietary build increased customers faster with additional engage advancing about some to

our Europe global enabler International which key Given Adesis subsidiary extra and safeguard headquarters, PPG operations business ordinary we the have able Ewing been our of our efforts foundry includes Asia in ecosystem. OLED a team, of our as partner and our teams the our continuation in to

challenging it In is me forecast this rapidly to changing results. future about environment,

materials our issues and constrains the supply While shipping our solid no customer had there chain consumer global manufacture our chain to we’ve supply customers and to concerns the OLED about in due pandemic. electronic panels, continue remains to are

of tremendous XXXX providing withdraw this consumer it standpoint, near prudent visibility surrounding the macroeconomic all In light environment improves, to annual visibility expect term guidance. guidance. unclear environment. and From we uncertainties the to a to due market resume When the we our of is demand believe is

to announced Samsung unchanged and due to and both long-term path shift exit macro may with their OLEDs. Display to we timing LG ahead growth of strong. manufacturing panel they their shift have is look we more believe business The LCD As adoption TV plan the OLED remains of of the as and economy.

future. to space, panel Chinese shifting OLED no some that the grow. longer LCD new invest reported for consumer OLEDs interest their manufacturers continues the will In their in of more manufacturing also tabs OEM in focus Is and

bigger a move the and products new the OLED premium IT are the and smartphone are and segments in seeing TV OLEDs segment. to adoptees push market beyond materializing New we

During this balance emerge a further ecosystem to $XXX stronger position leadership and time enable the to OLED our will to expect With in the even robust industry. in invest no R&D initiatives our in continue model we on debt, customers cash, approximately the and operating innovation continuing market. opportunities to a our are and sheet lean we drive and the in million to of capitalize help

We growing of company and headcount are our customers. also the the to strategically world, around our the increasing meet needs long-term

centers we in we footprint in and new Korea. filling and Asia expanded year, our last Hong As shared with offices Kong application

qualification. been several has months Korea now, Kong are phase the open currently in for labs initial while of Hong their in

new new and immersive Our design including continue yellows discover, teams and technologies materials greens, and to reds, R&D develop hosts.

continue On the system. a our excellent emissive commercial in phosphorescent development make blue for blue to progress we ongoing front, work

also Jet to in advance to work Organic We TVs. novel Vapor our manufacturing OLED Printing process continue our

and OLEDs proliferation of our in in we invest to we're continue the As continued of consumer future OLED, also customers the electronics landscape. seeing the

were placement segment In the display dominate. cycle and the smartphone the smartphone market in market, premium star will XG believe is OLED we help

under move premium Moving as smartphone the and even mid-range of Galaxy XX indicative recent to the the of the for market, OLED's MXX beyond the is Samsung market. in Honor $XXX end for and opinion our launches $XXX OLED such the smartphone of low the

end believe OLED low more its mid-range we while the and OLED's accelerate. proliferation there As and XX first were TVs is of year the OLED further OEMs launch TV capacity we Last OLED Display will the and OLED makers panels. will TV built about launched Vizio In and TV. LG players Sharp in the recently ramped, Huawei, landscape models, products. additional new TV Xiaomi, This of world and OLED into broadening four year using

a that first than a TX. been which to expected produce in XX,XXX expected mode, OLED panels flexible reported is to China investments second From per its month recently be when currently fully It's fab Gen-X in as invest OLED will OLED all is larger TX, OLED continue. fab standpoint, fab expansion Star first ramped. capacity new Its

our long-term subsidiary agreements Wuhan with other agreements that customer Star multiyear agreement, license we we Optoelectronics, commercial included long-term end and are a that agreements, these to signed China TCL. Star, are announce material agreement. supply Regarding Similar pleased China to of

that benefits both diligently natural With replicates agreements presented factors, markets light that to to the innovative that including form and companies continue niche energy novel no I believe managing teams beautiful its quite would operating respect events. these the for like best we challenges worked efficiency, to all compelling glare sunlight, residential and current OLED the are by and lighting, cool including automotive. thank of temperatures on outstanding commercial, while

call note, On turn me that to let over the Sid.

quarter In Revenues million. QX And were from XXXX Included quarter first XXXX, $XXX.X thank Steve. you for for again, $XXX.X you, XXXX joining million. the $XX.X call sequentially related in quarter's Chinese of up of due today. used purchased safety $XX fourth customers, our of stock Thank everyone were revenue this recognition million estimated QX, a the trade in to portion was during we which March concern, the million quarter. from who

stock any due $XX on XXX. call. This safety material, that difference million a revenue the to in no not we last discussed quarter's under recognition quarter last recognize our we we window As million $XX from conference in ASC closed report rule is full discussed Since big had March. did return return customers the

through $XX Also advanced that of COVID-XX million customer revenue in an quarter, the uncertainty. purchases estimated there's were

suggested some safeguard As measures Steve building mentioned customer and maybe we inventory our potential discussed that earlier, proved. with

in quarter quarter to Our sales material XXXX. total million. first of which in quarter quarter, $XX.X $XX.X emitter in of Green fourth million and at sales of $XX.X the in $XX.X sales XXXX yellow our the emitter material million first green compared the of million XXXX, first the include were

quarter $XX.X million XXXX in to emitter million to fourth $XX.X million first and quarter of XXXX of of million. This the $XX million $XX.X the $XX.X quarter fourth quarter quarter the first This XXXX. Red in XXXX. in the in and was XXXX compares the first in of compares sales

past, we patterns to the have vary quarter. can material As quarter discussed in buying

as the Some of include loading efficiency mix, ramp been consumer customer production factors we've discussing, that COVID-XX expense. inventory product device cycle, schedules, customer issues rate, product the capacity, production material ordering levels, and well demand contributing pattern, recipe, as

these of variables are number factors for moving us. They customers. moving a variables for are Since also our

$XX.X were compares $XX.X XXXX the This million. and of in million XXXX. to million license fourth Quarter $XX.X first quarter of quarter First royalty XXXX fees

were XXXX the million $XX.X in Cost fourth sales the revenues XXXX quarter the XXXX. Adesis of of $X.X This quarter to million. in to of of million XXXX XXXX $X the quarter first first the in $X.X of compares Quarter for of million XXXX. quarter in and this First million were fourth compares $XX.X first million $XX.X quarter and

XX.X%. year-over-year quarter in of OLED material material million the and margins to quarter XX.X% XX.X%. of comparable gross the were translating This XXXX margin gross material Cost of compares of sales $XX.X into fourth

gross the we margin can vary noted in As quarter material have to quarter. past,

up and was sales from million. operating quarter's million excluding down XXXX dollars comparable year-over-year $XX expense of of last quarter from First $XX.X $XX.X quarter's million the cost

of for million. $XX.X quarter's $XX.X XXXX was compared to quarter quarter income the comparable Operating million $XX.X the last of year-over-year first million

tax quarter been without First would tax income of approximately rate of have XX.X%. was XXXX ASC XXXX-XX, our XXXX first rate XX.X% quarter

share. Net the or last income quarter's million year-over-year share was compares diluted quarter comparable diluted per the for This $X.XX XXXX $XX.X per million first quarter $XX.X $X.XX to $X.XX. of $XX.X million or or a and

or approximately with $XXX and cash in the diluted ended over of We cash equivalent million quarter share. per $XX.XX

the to it to uncertain XXXX annual to withdraw due prudent times pandemic, the mentioned, our Steve highly is believe we As related guidance.

strong dividend our program, providing resume the in to robust our with we to long positioning OLED markets, regarding program. As sheet annual visibility through a growth lastly, expect we shareholders balance capital to returning and continue clears, intend dividend And our term costs.

to $X.XX of June the on reflects The will flow shareholders. board record continued directors of a Our and XXXX dividend XX, approved capital paid to our business be quarterly stockholders commitment close to positive return generation cash which as XX, of XXXX. of dividend, expected June our on

that, back call to With Steve. turn I will the

Thanks Sid.

are demonstrates these business difficult UDC culture times, to a that established our overcome has While challenges. ability

persistence startup handful with Our a growth than breakthroughs, challenges less people and filled obstacles, from been with R&D leading company unending an journey a and has to vision. of

As work commercial changing for has to evolved horizons. broaden Universal company the almost continues years drive international that into XX hard and ability to and technological adapt to successful that growth to dedication a and its Display environments, in

the the by pandemic. term We in long-term uncertainties OLED. of remain unprecedented Notwithstanding confident short path caused growth this

map introductions for the to are support coming working customers our new materials they product their and them. architectures and as years are OLED new developing We out with we closely

we to well play to employees achievement, and advancement. our collaboration drive, thank innovation, critical revolution. OLED and are and and desire, shaping take strengths in this positioned each extensive Display's heart the like a to continue to role for accomplishments We'd Universal and their our in of building dedication, With opportunity

delivering in and customers our and for technologies are committed and We being OLED to long shareholders. superior industry materials our a ecosystem term for the achieving edge cutting leader growth for

Let me close is with this. The spirit resilient. human

the in times materialized been by United stronger around inspired through communities resolve and have compassion has to these We strength, and forge future. bright difficult will the the emerge world. that we a

that let's And the with start operator Q&A.

Cowen Our from Instructions] Krish proceed. [Operator is question with and Please Company. Sankar first

taking my Yeah. Hi. question. I Thanks of have for them. two

First your demand profile qualitative the one how in guidance. I giving Can and as said you're understand not base, Korea? you statement you on South give seen some have China Steve in customer especially

Thank you, Krish.

answer these from healthy during earnings that I our I social let me Before Steve's homes. to call staying want and everyone reiterate hoping this introductions also and on and that I also your unprecedented Steve, is are Darice times. mention respective question, distancing safe

technical any So glitches of occur. our that may pardon

Now, you to to forecast it's of all know in we times, financials. near difficult our uncertain try for term these

pandemic issues various shape will will long the that environment, be and impact assessing the including consumer how our will and process monitoring last, the demand macroeconomic this and how on an recovery long it the much how and all recovery have are be. of will We

impact are OLED. robust. in future term this long-term believe We technology crisis. health have and of display near Panel of the makers looking beyond looking of to underlying fundamentals remained that are global industry the However, OLED the investing

in regarding and to our down. we and OLED all coming enable mean, execute will And fronts, we're questions, factories continue operational, stronger the our perspective, period. on commercial And we specific the are is obviously industry. utilization to the we the seeing that during customers this R&D in I emerge From expect further to

how the us. withdrew to that guidance our going on and think perfectly going honest, due it to we magnitude demand consumer that uncertainties. it's to we the difficult But OLED long forecast industry itself, is And impact it's last. is reason business be and on impact the And to really the to the

impact them? commerce you interested the then That's be it. your Any glad the follow that is to for out And you it also last fluid And Got on impacts the and OLED to a of family be your came business customer helpful. as of that up, any be a in know department think on would thoughts kind have would and it color value, happy. helpful non-China will hear and positive everyone and how week, situation. it rule safe do on that sense

Department much. this we you time our very any have last impact. will seen week, on issues And Thank that issued it impact Commerce do us. have think we were no At not

Thank you.

Thank you.

Our proceed. a next with question from Citibank. is Please [Indiscernible]

safety COVID-XX two Are the advanced trade my Sid the tensions advanced because of and March environment supply March towards still two quarter? quarter. the quarter taking And purchases a year these components in the been stock the seeing the which then with talked was building that’s purchases the tough current and in the for questions. disruptions. in Thanks you the about job good components last new you for inventory happening chain starting in

issues one that talked was we the safety obviously, stock the customers. in The advanced question to purchases actually purchased is and is two our QX

was that we now the quarter, used probably last safety right So, less half portion stock it was used a during the purchased during it's of quarter. was that than quarter, believe the

In was the was maybe purchases you that are this advance revenues that three sold in about it really it. million that year, believe about for them the X% of of to was material worth $XXX sold that of stockpiling. is our and approximately fact prudent million, do terms represents weeks' in quarter. we about or customers last think $XX other if what We addition, what And at look we by

our very are I because prudent think possibly in knows could happen. what one no customers that

we had So advance we and some them contacted purchases.

So, are today. we very we're where comfortable

understand, to OLED as my the that guidance. do of what year your And or you helpful. to Very by just rip press material I'm the industries mean call follow release, a like up recent disruption anticipates for is withdraw in part trying you utilize material full exactly your company this statement for disruption?

- is material I'm sorry, the question

industries that this a year the You in for to press material call release? disruption utilize OLED

it Okay. I about in and turn just demand - - COVID-XX talking the then impacting customers impacting have the This our impacting us. on will impact and is what we think you're macroeconomic environment side and and

general about think you're I risk this So talking factor.

Got you. it. Thank

with And our proceed. next Please question ISI. Muse is from C.J. Evercore

Good to to of builds. mid-level not OLED afternoon. Glad pricing? any assumptions first but improves have seeing that, And you of recipes. question, talked are I about through you're within your XG you high are as guess only the changes both if Curious, well. material as hear end, thinking how moving your about visibility material for part interesting that you in And impact might pricing on contracts smartphones. long-term

is But material top recipes. I recipes always something different new them. into always go think, on we over providing that agreement. build we we're are in have life new customers always is there's and because the to each And that it we products the may seeing, have into what something that And our of we're pricing Material of the terms of our contracts. of,

talking they what But add and new want future. our just fit into a just to products where to about may bit little Steve

closely very have customers, with it's new product introductions. have and various of customer model they multiple work not anyone, but Obviously, their specifically use. recipes working We the on work with that that each for we projects customers they

and more that up it's pour therefore So and continues in move to direction, different products with there out you this. of continuing end but to types

that, trajectory the I higher OpEx part you. would calendar than came the follow rest as related Thank think thought. Curious in if COVID. guess question, we And any about you. have Okay. I to of through Thank items year? my onetime little how as there's should OpEx up of a

little a CJ. higher. you, it Yeah. Thank Yeah is

leader invest a continue of in to and we in our long customers as position OLED OLEDs and the the in ecosystem, our growth to enabler will as term key However, industry. a

believe of needs. to amortization overall, go excluding year. XX%. over strategically our is of headcount no Our the quarter, and any to XX% We OpEx for to layoffs with numbers comfortable XX% the we're our up There still down. meet really year year to we're sometimes estimate guidance and increasing these XX% quarter global But that are

Thank you.

next question And with Sachs. Please proceed. Lee from our is Brian Goldman

Hope well couple here. for the you're Thanks doing a staying questions. everyone. Hey safe. and all taking Had

the Star Just the have you've it in a other similar announced you in the contract. say with six other to China duration or it's timeframe past? in license? agreements is Is on the more fixed then agreement portfolio like as your And that would And China you terms of your contracts year Samsung? five,

of excited structure financial second relationship manufacturer. long the agreements. don't and and are very agreement further other of subsidiary we're a as license This Well, agreement to agreement, LCD our supply with a includes It our terms TCL are The multiyear term all a and Star. largest agreements commercial and our China they a which is disclose. of we similar, is

the this experienced enough. Okay, advanced fair And then on guys just you last purchases year. here,

sort old it second all pull year? $XX So probably Is the it's from this like it last your hat. forward from smaller. seems like China? a was it becoming half the it's million I know Is of

be you would quarters. think year? of over quarter out consider So more to it a versus was a that last spread I couple

little of I than past. different in Yeah, is $XX advanced this million purchase the think a

customers. related. from are believe think we this COVID-XX in multiple customers. this million $XX is We with I And is actually, our contact

quarter fourth a this just last only in that chain, they in than what ensure year's little purchases, as of earlier, $XX of the were is revenue upon bit to million, weeks' had And material. The million And $XX there said different needed. just some last which worth year. of everybody is based three case supply disruptions the were I about BOE

been just back getting into respect and to and recent Samsung them OLED. me. growing debating optimism pass nano it And around quantum there's With like then for I'll future TV last some its about, great. from one Seems roadmap. technology I TVs. there's been QDOLED think on. a Okay, between chatter dot Samsung And maybe

So implications just expecting of versus another? QLED wondering bigger route feedback you're one picture there? and in the of if versus if what And just Samsung out to be you had term longer any go terms QDOLED you decided thoughts what thinking or would for then

working for XX good for use Yeah, the and us think that we overall to technology, OLED But with And we've extent industry. can't for our it's good obviously, they speak been OLED Samsung the we for years. customers.

So we're back TV into very pleased they're that the market. getting

Thanks Okay guys. fair enough.

you. Thank

with Research. proceed. Please Shannon is Our next question Cross from Cross

Hi. Yes, impact the you fact social up. taking efforts given or research have you. just just Thank able so intensive. kind you for I'm thank how my any I'm to to R&D your are that, you've follow a distancing work then I if question. been around there's and how guys curious, as of to curious and that been

you. Thank

have to essential We Adesis see are businesses. beginning in subsidiary, considered PPG our and

of and from some employees on working So are are some are working home. our and and employees of staffed we our operational site

Our and employees. top is priority our safety health of

We number of does and a time. limit strict cleaning well of for the protocols facilities the in at our lab have implemented any overall in included which given distancing, people disinfecting safety number can everyone as social as be protocols who

I'm business plan sorry. in we so put continuity that place. Under our

materials. programs our to and our ship are We continuing phosphorescent run R&D customers

about fair And pulled had or used customer think then ahead a that of say how level that to half on And first to forward was I like maybe XX to just reported by they Sid, is great. off then attempt I about. about base XX and you come a had just that base revenue am sort I'm Okay, That thinking out you level up it? in quarter. quarter. about to maybe was fourth XXX, ahead pulled the revenue that look of it with for And think the to then took is trying what was

correct you of thinking Well, I are in mean about it. terms

it XX you look If million away what's of It's predict difficult take from XX to going the at whatever And out. pushing portion to the to happen. taking $XX BOE.

April from hard how varies shape know all do significantly with to And uncertainties at really the the demand will weak We fourth activities it's to with quarter really was month We predict. initial month was and the uncertain occurred to month that really know this month. time.

So figure quickly know. you the look just is will withdrew things we around all wish going real what of year help don't But that try to guidance I turn like. out the We to could reason because around. the that's how I to uncertainties

given Yeah. you're clearly That's fair, alone. not everything,

something don't sky. when logistics the planes question know, I last given if supply or challenges from and or chain you goes how If soon quickly? think out one of Is your I one Just you think hopefully, of the China of could come had did about coming your partners? address quickly demand a How, to to it shipping, in fairly you in some world this other seem that and like fairly we semblance normal? back

they - chain continue supply solid. really, being are that soon. meet customer needs. prepared to we can occur. strategically may hoped go that supply And for building Our global and we is chain to And inventory our we We our whatever are up demand ensure of spikes all

And soon, you it. much. Appreciate so thank

Our with Deutsche from Sidney is next proceed? Ho Please Bank. question

I for Thank Great. taking couple. my got a you questions.

China China about have went over First one since were fully run-rate you the in back shutdown March. improved and the understanding in issues weeks? how work past But to can back the business and talk February is logistics few

April just China to that's with a about common and on here? I year fair not assume that big logistics the elsewhere? guidance. or driven follow talked full very that, withdrawal factor in Is Is being it think on mostly is And to demand up you've weak. the supply of really

Well, I demand are you driven. It is think correct.

you our we look why we know. withdrew at just guidance, when don't So

the on the side. location. across side things In weighing much not, It's one And production of it's terms versus one board. the customer, clearly it's quickly it not return obviously is demand heavier how will

is everything weak. very I think

on growth - in Maybe helpful. you looking I Are look XXXX still the at between that the few question a thinking can like and guys grow if about talked a are XX%. you just is OLED based the that - around past capacity at add to Thanks. that's XXXX Okay, geography delayed. the follow-up mean, projects the be you helpful? all seems doable XX% color is whatnot will it or being some headlines, you there and

our by measured increase from for capacity XXXX square capacity in year-end meters. model the approximately of OLED Well, the as to still at install installed end XX% costs XXXX, capacity

unchanged, this this in is timing high think affected. forecast could environment of I While be uncertainty, really

It's really - plans. fluid situation. cycle. that growth are it's continue in we've same At shifting [indiscernible] focus growth remained including a we of CapEx very a with the a their more we to time, OLED confident as customers long-term strong, that investment believe And new to multiyear capacity

off, an do that Great. be will needs panel Thank can see size, board. there to in the If done you by about needs more. of most what maybe period demand you. use and great? soon you Can work with areas whatever digestion the but by squeeze one can us quarter, be across metrics worse as gotten it's falling still I geography, you as Last the you give talked kind inventory update

say issue clearly has is with and LG consumers, demand out going demand folks everything. mean, With for phones and I hearing like an impacted. buying TVs people being that you're aren't

I across rates can't, I another I are So, say therefore being do the versus it - utilization it board. think the one is across impacted. because is I And board think can't area I mean it's

question next Needham from proceed. Our Instructions] [Operator & Jim Company. Ricchiuti Please with is

purchases it advanced afternoon. like it print several and Thank was weeks the more of quarter when, wondering, was you. the were I'm or could customers whether if made Good than course you over two? these say during

the we And XX% the impact obviously became, it It was QX and be what was clearly our And across be on we in would about the the talked about QX thought COVID-XX our of would as in February news. more revenues. more and Board. conference call, issues

to much got things that contacting worse so obviously Subsequent were that, then we customers.

call were in to Right think the hell So to [indiscernible] after went these honest. the I March in things really timeframe. purchases more be

something, spreading a that To U.S. was the it reflection the also uncertainty and of around that? all say into this

they sure up - stuff Yes. had that everything needed. that shift It you can they and making was

met So can with we we from contact to everything sure that trying our we can customers in constant we to do needs. our and sure side were make that make do their

you transpired is I talked the guys that it because Is critical, what's or challenging fact the about becoming Go understand? just please. In China not - have know in what's in the get Didn't past you fairly talking regularly. customers that front kind more of try folks of think, to happened, and to to sites Korea. customers ahead that

No.

You Jim. finish, please,

What I And maybe same was going make these it. having understand that where are. maybe rates customers sometimes does and contact are misinterpreting utilization I'm to harder have may say levels inventory to to of direct inventory you it with as if understand all it have customers not or is, the level you contact levels where you're

ahead. go Sorry,

Yeah. We're all via connected technology.

with customers a Both our local teams So engaged customers, headquarters on really communicating with pandemic. this basis. continuous our partners and has suppliers are not been during disrupted and

recently for application have Kong and locally in Hong [indiscernible] available the a broader New breadth our open of and new Korea, solutions with And also State York of center offices customers. services we

utilization my you're rates to last commentary and reconcile about question And Got just it. some making that of the weakness. is trying

in continuing industrial the the are market, anecdotally and up of activity think some parts of March China in picking I in of hearing in We April. that semiconductor strain

So what space? of OLED some the more what I'm market different wondering you're like this to potentially is, maybe Is drivers the in the larger seeing? of than reflection mobile

that placed because there and issues that a restrictions think China. of lots I were I think that in their number of impacted there travel their were were ability that logistical the in And and running were of China, rates. fabs utilization

for manpower the that in we're around. hearing more But lifted, have said things think getting is But that's things And and happening it's, but anecdotally, to will having needed. work as I better, go turn seen what's to that folks now. really now what's that's the not you we ability past.

quick I can one question? more ask Okay,

Sure.

doing blue? we are How with

We're making excellent progress.

you, Thank Steve.

you we're specifically. until by provide us though really specs don't encouraged know, but As commercial to really we continued intend to initial progress, we meet

you. thank Okay,

Sure.

Berenberg Please from Our Andrew [Indiscernible] next with caller proceed. Capital Markets. is

the revenue. know X when that the material know situation was X is ratio said licensing But in Thanks. royalty you looked I question. sales. to unprecedented. just had a a X.X your at to wondering you versus and I I were expecting I quick we just bit past

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Well, on is our global really customer difficult of material mix. it's uncertainties, to ratio royalty And dependent to because forecast.

history X. our the typically based to However, upon is oscillated X.X and between ratio X

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so Great. much. Thank you

Thank you.

proceed. Nam-Hyung Please Research. from next Kim with our is And question Arete

in you IT thank some taking I'm monitors. means sign my notebook have sure Hi, on going project you question. and for panel

or IT your next the of by would get to in What growth of be portion mid-to even long-term picture here. your related wanting year three revenue Just panel years? end thoughts on

very of is right now. penetration think is about total Steve. that It's market. low We X% This IT

room So for we do that significant growth. think there's

look business the you the third If as of smartphone always. being market about at smartphone

a growth there's this that opportunity really for think in segment. we So nice

thank Okay, you.

Nam. you, Thank

proceed. next Andrew Please Abrams with from our And is SCMR. question

guys. Hi,

Have PPG. some rare an earth a you quarter at that has basic or about having PPG? issues you over materials seen you Meaning PPG Just been or of all with difficulties materials the any for last that the so? And use? getting question issue

considered Well, as PPG essential is are. we

of inventory And from forward. addition, kept we no have from or is terms supply or production else. there either We've the are sourcing in India materials raw of that up. from chain built issues been materials in materials or having a we has multiple - So have anywhere moving And sources. China

foreseeable issues believe see we been So and has - don't the materials. earth we rare all And at the in no that not future for there

you. lot. Thanks a Much I Thank better. appreciate it.

right. All

we're CJ we see you. your a line Please Evercore. please muted. proceed. CJ and question follow Muse have is to And unable with from if do hear check up CJ

Yeah. Hey, sorry about I'm that.

to customer it. therefore follow not But up question at change treatment of X.X the inventory, a if and mix a at how Does on all. not customer Just book the that is does all, building you driving Does materials change X.X change you talked relationship. really about royalties? -

upon And license Based royalty the agreement, out figure corresponding expect not. the report whenever of fee and you does that. to gram you over much sell. how you you or the that you report XXX, life a It material, with sell

purchase So purpose that It's the for that it what is. of ship. and matter a formula every gram how the doesn't you use you

Okay, and there. follow-up just last one

just assume treatment prior talking about But the years over versus just now Should XXX You going there? from and the under that that be in going accounting XXX. we'll in the we historical not talked direction. new we're not

Yeah, I it it's at meaningful that out. to point, this break not think

quarters two SEC our think last most companies actually model. at seen did the for it don't each pretty for and just But much to meaningful it's We you And requires two few year. that companies most business - are this other. close the do we it Over years point. one you've aren't doing it because to

to we So intend not XXX do results. give

Okay, thank you.

Thank you, CJ.

over any concludes Rosenblatt like This remarks. I Thank additional back the closing and to to program for answer you. would session. question the Sid turn or

to we all And as interest all we you. Thank you And want always. call like of stay I'd safe. you to the appreciate joining healthy and thank today. for your

concludes call. today's This

great disconnect. a now have night. may And You