Veeco Instruments (VECO) 6 Nov 232023 Q3 Earnings call transcript

Good afternoon, and welcome to the Veeco Instruments Q3 2023 Earnings Call. Today's conference is being recorded.

Now at this time, I would like to turn the conference over to Anthony Pappone, Head of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone.

call John Bill Officer. Kiernan, the Executive Veeco's on and Officer; our me today Miller, are Chief Joining Chief Financial earnings on available release website. Today's the Veeco is accompany have slide Please prepared that we presentation note to today's webcast. a encourage on slides with veeco.com. to along We you the follow is recorded copyrighted being call Veeco Instruments This is and by material. or recorded rebroadcast permission. be Veeco's cannot express It without

future otherwise forward-looking market Your make made. disclosures, the discusses expectations statements call that participation that extent differ a this of or expectations consent implies earnings sales risks market about future to statements statements to the future, the uncertainties acceptance and number conditions, the such and company's future could our are results from products, recording. to cause To actual are subject and materially of about

are and XX-Q, on the on company's and business discussion description, These in press and annual our report shareholders reports on in the subsequent of releases. management's Form report Risk sections factors current and discussed reports to Form Factor X-K and Form XX-K analysis quarterly

not undertake any on statements. forward-looking made such those reflect date does call, the update to to after including events this statements, future any of or obligation circumstances Veeco

management non-GAAP available to will financial During this including our regarding GAAP such non-GAAP call, website. Information financial measures measures. on of discuss is reconciliation measures, performance

I that, CEO, will With turn Miller. the our call to Bill over

be a and take and everyone, and our John our and significant joining markets questions. financial provide for Good opportunities few call I'll you on Anthony. to we'll highlights, Quarter guidance, more Third through growth thank provide take a update detail. then Today, you, you afternoon, an will happy Thank discuss in our today. update

guidance and $X.XX, and quarter $XXX range. of results. EPS our high strong each of Veeco non-GAAP line end totaled bottom of the reported another top Revenue above million

growth our financial results by business storage driven semiconductor in business. data solid and our strength were continued in sequential Our

key share results, also In excited strong wins. addition to business to several we're our

our to and annealing laser customers. multiple shipped leading systems memory logic Tier we First, X

the our for annealing we serve system market. automotive first to application Second, order received laser a new

our order for a make defect ion continue received ion our And manufacturing. we mask beam for we first semiconductor density to deposition wafer-level Third, beam low and annealing products new nanosecond pellicle application. blank progress EUV deposition with system

at in you Veeco our discuss release growing may annealing our our laser As significant for have a of road is map of struggle X is most evaluation annealing press advanced to logic nodes the traditional advancement nanosecond Further opportunity. as technology shipment piece in exciting our substantial our criticality customer system a this strategy. today, seen annealing representing I'll performance our Gap]. Veeco's customers' Tier announced laser an first [Audio company. requirements. to milestone meet of technology

to example, temperature precise technology damage. all-around shrinking For architectures require annealing devices performance gate minimize higher and new and [ ] increase

our position. lamp traditional system customers annealing new higher to pattern several lower wins laser and annealing a to by comparison approaches, laser with our insensitivity for thermal validating budget, and recent system dopant applications annealing. Veeco's In has to adopted new include existing advantages. be continues These activation

and during to due customers. remained logic elevated Shipments demand the from quarter broad-based memory

for adoption focused we're to to on positioned serve Veeco's of ahead, well deposition and the technology EUV is beam we're adoption and demand markets in lithography. defect-free density of low-defect Looking applications. ion gaining deposit further system films growing production mask from new choice blank EUV

strip, and as in high-bandwidth areas removal systems we solvent for this flux X advanced such strip. are to see continue X to temporary market beyond In wet the see and current deposition. about material application our business packaging, at used solutions per memory space for we potential pellicle our to expand While year, photoresist bond cleans processing

Based for AI. strong about systems year. clean customers leading up outperform XX% for and packaging to be quarter, expect that and business foundry placed orders flux for and several outlook, year-to-date WFE the our the support on semiconductor our results we memory During advanced

Moving growth market. to epitaxy the compound semiconductor substantial opportunity. with The Veeco market equipment for provides a

carbide progress to customers. X making towards strong advance, CVD performance shipments we're single to to several solution our continues tool technology silicon demonstrating our wafer next for with evaluation and Interest Our planned customers is Tier in year.

micro go-to-market unique us position remain Likewise, positive. also in experience the technology years Power we're LED share. these Looking of our epitaxy ahead, fundamentals design long-term in to GaN infrastructure capture system with well and and investing markets as extensive

beam providing at disk customers significant heads the drives. applications the beam looking the to leverage with as are value ion equipment for our products technologies market. manufacture our Lastly, storage industry data thin-film we important, the node as market. Equally in advanced ion semiconductor using them in advanced magnetic hard most has Veeco core for

expect Looking year-over-year forecasted. previously ahead, Based cloud. growth year-to-date as during the we're XXXX on proliferation data well the to continue on in the positioned we scheduled to of in stored fourth quarter, capitalize and shipments

intelligence in the artificial that Veeco higher-performance the to now maps, on AI chips. edge technologies a is AI and leading road of product the manufacture profound to requiring plays Growth process. manufacturing advanced impact Moving chip having role AI most

manufacturing GPU result, most a advanced adoption of systems for record blank for systems and X chips, production formation are ion Veeco's our areas. in for growing technologies deposition main tool established As our Beginning demand with our transistor laser of is as mask nodes. at products EUV beam with annealing customers'

systems nanosecond we and there applications GPU opportunities In annealing technologies for annealing challenged. technology, are traditional believe addition where our beam are to deposition ion laser in AI, our

HBM of high-bandwidth laser in or DRAM. our Second, annealing systems used are manufacturing memory

systems We memory this X nodes. advanced have are Tier multiple customers another and penetrate year, working systems to additional ship plan to shipped

deposition Veeco for for HBM and solutions future product submodule bumps nanosecond annealing and micro the memory And opportunities for systems beam of packaging Equally ion we our AI clean important, flux system support at processing see for level third, advanced AI applications. both the level. wet for

dive of into two nanosecond Beginning deeper our take largest annealing. opportunities. a growth to like now semiconductor I'd with

maintaining to Continued leadership. innovation is essential product

annealing Compared solutions, a annealing shipped nanosecond to if served be our we can a most advanced can earlier, lower logic nanosecond our thermal significantly annealing anneals. which, Tier traditional a that available our today's enabled than can budget successful, to up with achieve system evaluation expand time customer X,XXXx by dwell system mentioned shorter As X market.

in new enable strong requiring annealing system customers to from backside and heat and may grain coming months. modification, such is rapidly removal, for nanosecond as delivery and recrystallization shipment nanometers may also another Our and plan Pull material It tens as This memory enable into wafer. nodes. surface X the we logic wafer such growth. of can and XXXs anneal power void affect of contacted advanced applications Tier new the the the applications only evaluation

or potential As we XXXX. we orders look see ahead, initial in late high-volume XXXX manufacturing for

to beam advanced ion Turning node deposition applications. semiconductor now for

Our EUV technology semiconductor beam mask the production. honed industry in core has over been decades ion choice for is of and technology the

also as films solve data, customers' maintaining and technology compared as PVD. and advanced can are to semiconductor Lower core tungsten deposited device lower increasingly manufacturing. reactivity our and This geometries demonstrating critical Tier our device to Ruthenium problems continue performance to wafer are substantially Ion level metals speed shrink. traditional high-value customer X Beam on becoming resistance Based

performance the continue to customers electrical our scaling maintaining down thickness device. enables this DRAM, of tungsten while bitline For

ship customers base in months Tier on customers. new and future track remains logic, coming to evaluation For metallization to the we're X enable can integration at strong, schemes nodes. Ruthenium systems X DRAM Pull from

in this to to Although stages, introduce we're opportunity is market. Ion quite Deposition front-end early the still Beam semiconductor excited the

update. I'll a for turn it financial that, With over to John

and our of QX, semiconductor the representing non-GAAP presentation. be XX% After Revenue good million, quarter. semiconductor data compared a Thanks, release storage our between at discussing In GAAP QX came Today, end by financial market, everyone. from afternoon, and can QX. to to in will as total the from declining X% press encourage increasing earnings came would you Bill, business in the customers $XX $XX revenue $XXX I with in and find during at quarter million, market results, XX% of and Revenue refer non-GAAP was XX% our to comprising million XX%, at Starting quarterly record compound quarter which revenue the you to our geography. prior for the in reconciliation data of QX. in and the to from increased revenue. revenue revenue

other XX% In revenue. up and of made scientific

by in the as decline Revenue semiconductor XX% Now increase from turning customers. resulting to prior XX% United Revenue Pacific quarterly to compared prior XX% quarter, the revenue total to in States revenue, a revenue increase quarter of from an region. in from Asia in due region an data totaled to of sales. from storage XX% declined the our to shipments

decreased forecasted, to from total XX%. the in from revenue percentage XX% quarter prior the China As of

the in was revenue, full revenue the at came and from in China more sequential lastly, to prior We quarter. Switching XX% higher revenue our in approximately positively expect XX%. favorable approximately margin to volume gears And an results. QX XX%, non-GAAP increase a mix. increase XX% increase from XX% year by China product be quarterly margin expect and EMEA range. of a impacted was Gross from an in in low Gross

in million, for cost guidance with prioritizing Operating opportunities. $XX we future as expenses at investment growth on also while came line management maintain in focus our

the R&D due XX% quarter, increased from annual and to effective was projected other During from rate to deductions. XX% tax the benefits credits reduced

tax tax rate. X% the expense for effective quarter was million, a result, $X As yielding a

million $X.XX diluted Lastly, shares. share and net on of was income came million in count at XX $XX EPS a

declined the sheet in cash days. quarter prior DSOs the perspective, of line and $XXX balance with the million, with working a cash investments $XXX accounts capital quarter with receivable to Turning short-term million million, to From ended We and to highlights. for flow decreasing our the XX $X by quarter.

$XXX remained recorded notes. of $XX sheet debt the increased the outstanding $XXX days. at on from representing prior $XXX convertible the days our to days. carrying million days $X lastly, value Inventory long-term inventory payable balance Accounts while million declined was million, And while to outstanding XXX million, XX of payable of declined to million, quarter flat at by

to to turning QX on Commerce's to XX. the Before regulations discuss non-GAAP of Department I'd update export October our like U.S. guidance,

we to will complex new anticipate business. our these are material they under this do review, at a still While impact have regulations not and our time,

turning forecasted XX%. QX to XX% $XXX million between Now is margin million, QX between our and revenue guidance. $XXX non-GAAP with gross and

share expect on of income million million net $XX $XX diluted million, count EPS and XX OpEx and shares. $X.XX between million $X.XX a and between and $XX $XX between We million

of year-to-date revenue profitability to full $XXX million $XXX our on our stronger our revenue, prior XXXX million, now color And for range market lower quarterly for outlook looking based share. be fourth $X.XX diluted similar increase EPS are quarter revenue and now raising is the year and XXXX. margin again our visibility, million. additional our second non-GAAP higher tax an year QX expect for from on We results to tightened Based some we per guidance QX, in of to our gross XXXX guide, revenue account is million rate. and range $XXX Moreover, $X.XX $XXX between beyond to a half to and the in conditions

I'll to over that, Bill the remarks. now With turn for call closing

Thank you, John.

investment to compelling prepared opportunities significant our years, highlight concluding Veeco the opportunity. remarks, of we're Before Veeco opportunities. a take We is in advantage coming see why full and investing I'd like for these to growth

growth foundational the Our top market and for our to successful evaluation program priority is a has XXXX. been semiconductor in

portfolio Likewise, and compound we our to our unique semiconductor differentiated in R&D further technologies. of strategic semiconductor the investments expect strengthen markets

particularly is we our We're to excited laser map advance markets, new new to to our expand annealing applications as road the technology served to our market well annealing. and opportunity a footprint our reminder, available expand laser nanosecond annealing established for products gaining applications to are and efforts traction. our As

laser-focused technology node In unique advanced core Beam decades technologies traditional versus in experience and Deposition, us believe Ion Ion Beam for semiconductor give our as executing. like our team technology Beam is our has introduce Ion PVD, wafer-level we applications. confidence Deposition We advantages of on

opportunity long-term and the semiconductor growing to market in for demand a on applications. equipment have photonics electronics power, capitalize we Lastly, compound

be And happy please take your line. the with that, to open we'll questions. Operator,

from Shi Needham. first ] the [ question of Charles with comes [Operator Instructions] line Our

to because the X evaluation you Can ]. little this the these of the customer, -- mean, Maybe use as ] that is from shipped the seems Tier orders of guys of buys? curious behind to or the question expecting to to a or some why you tool adoption of be maybe XXXX, as to from that -- dropping the [ expecting kind turnaround the a repeat tools I tool shipment repeat repeat replacing about mentioned adoption the -- develop maybe here out provide [ the 'XX, such like existing you were the And a application? turnaround context shipment you rapid first from bit first you're NSA late that of quite the early quick

say really working to on X question a excited to thoughtful of I Yes, number milestone shipment I after company about we would Charles, of that's the a it system first represents there. lengthy for customer. Tier it the a believe introduce a technology for evaluation significant years. this are this logic

have important about this that just your technology. on complementary class think which then investors time, And to effectively, I I thermal first it's because And less the we annealing to technology we our that for new subquestions X,XXXx laser is for. think existing here. dwell a a applications can up a really can we compete one opens follow-up of understand our budget significantly reduce of

and logic and usually system installed. to a evaluations, What these after is start have tool the we X-year shipped is they done a are we've customer

let's installed by cycle. order clock have on signed and receive you we beginning goes are the the before If so unheard would start not we've smoothly, an this That now say right, it of integration be well. would it for it is shipped runs very evaluation But could off. to it the us well, the year. And and the evaluation the

easily orders First XXXX as could very in be well.

hopefully, looking the clarity So for. that provides you're

Yes.

bit to want a new for think maybe application kind on more high-end that's can AUV you Is you That's it second question. question, ask EUV do the with expect -- Or to kind manufacturing the your little win high-volume something I customers, tied to maybe provide what So curious, more about do you early? pellicles. of the your second you you timing receive Also to discussion for do adoption? it from -- your orders? of . my color be

membrane that deal are for on say, to being the our pellicles a mounted would know, today. investor defect. are transparent introduced improve yield as And I you Charles, pellicles, reduce photomask just thin and

is application So us. for new a this

low Deposition, tool. The Beam needs ASML industry to Ion IBD X one for X traditional Our these of defect shipped. density every scanners

at X that ASML still a shipped. market of systems function we're X sizing year So to as per scanners

time. this an will production first see make this over And be we . thought used opportunity. as incremental tool to is our due So pellicles in

a clarification. Just slight

one then that . to EUV it's market, for So turns into of scanners every a X shifted for XX to system XX the X our which has tools us. requirement ASML into

Yes.

up Because that expecting not tools, fair pellicles just Is I down John, you're a it the high introduced today years statement? on be just sounded still that. Sorry, with really tools AUV that like want standard road. follow to to a few to today's the EUV years, maybe -- not . a end few just

want goes being small too hypothesize a I wouldn't to . want NA. steps, My is that into introduced. I number detail. go EUV with of for high much don't pellicles are understanding to mask percentage really what to

comes the question next Sachs. Our with Brian of Goldman from line Lee

I know of breadth data first in you quarters, I to segment. [ support have storage recent had enough you ] been the talking about one guys kind backlog, guess on I revenues. two. have

quarter on [ you business and that, move that thinking we all you had extending data preliminary think nice QX us I a in you a for of backlog kind be terms about in you storage Is about you a on in then into what And as had view And QX. the a ] here is where a kind give bit the next of today? then sense as meditate Can well. You you think cycle of the follow-up. year? way -- would the gave little here of as segment

the inventory the industry There's challenging. kind trying still say is industry Brian, remain excess of off. that the across data work an to conditions I channel would storage

would from our We two have public a about But call that we they would talking have have heard early commentary company we to time some clearly, of for bottom. of recovery. before it see customers maybe can sustained stages --

look XX% our good the tailwind very for longer of of thing be about X exabyte when over would that clearly, customers interest CAGR to both growth and years next do X Veeco. I a one the would I project say term, at

And of substantially so suffice wouldn't would backlog not to color 'XX, and say future. to do into be it to on our I give towards specific different able the say we from think view but that would 'XX, going view have really be we our question we're more in 'XX here But it near give 'XX. quantitative will

of remarks. of fall Okay. across different with tighter I weakness kind And maybe about as you geos headed been the it. view well like Can of your macro maybe the to level as navigating that Fair it other other stabilization exposure hearing . industrial markets about where what think ground expect other a sort some incremental gave there? and your of end continues That's then markets a you as enough. the us in think know should 'XX, elsewhere the look out categories. we us. are know you signs you're giving you exposure, prepared you But the is do sales kind and are that into with as see China and concerns maybe set how you you as industries helpful. or China that I into real-time here But around respect there's and updates off you of you're question QX in anticipating similar you're And preliminary you percent to on making and some

John. Sure, Brian. This I'll is that. take

being forecasting China were this continue that is But our revenue half half we also first strong that see percentage indicated the that year, of overall we see a XX% our revenue and would from we of high not the to China, in had first that. about as year. China we said, as of revenue had as the coming in of we So this year

will for of a we in the a So quarter quarter fourth third our business to see pickup bit China. in compared

XXXX see for time, to this we We is business full in our at that there pretty for what really business with that it's can we're a bit China see ready is year see activity call we expect to demand and what But XXXX. customers we as I that do not think do the point still -- strong. levels look at into current I comment customers. on ongoing early,

several in nodes. that make are are mature for customers aware We investments to continuing areas

in point our for customers. this still at China business So environment time, good a see pretty with we

comes of O'Malley Tom . the line question next Barclays. from with Our

I on just question wanted to follow up China again the there.

are So on know guys the near low have you I could for China up record the levels. semi just fourth that what so. in you depending coming year, on from? guiding defining year or Could the entire for as where that's describe quarter that the business? XXs Is XX% revenue you in you're

revenue So are back any towards Or in you in business being would seeing the . semi move a China? that majority that into the fourth mix helpful. of just comments on quarter your be

Yes, there. Yes. I question Tom good think a that's

for the be out. to our expected the is year, expectations half holding where in second we So of

deliveries delivery scheduled scheduled QX had for we dates, on in Just than more these customers QX.

really were to I there, don't so just really the think scheduled systems So be shipped. the how on change in it's demand a happened

coming customers revenue expect in in in range China. the So yes, we of XX% from fourth . the high quarter

it trailing Just it out Is describe Got leading been ordering from? to is little the from you edge just figure any maybe there that . that change edge. to coming all before? a was Has Could it. as the there? just a one, where follow-up coming And demand is than trying patterns in disparity? that more

Yes, yes.

China, annealing that's in and . principally our the and change year year. seen been the pattern XX% see continuing line growth coming where about coming has the quarter we beginning the it's It's been that about of years, product What there, the of company's is past of revenue in of increased to fourth revenue. revenue where couple laser Tom. next and no XX% into over from, the we've this from So as into

more one just sneak quick if And one, you. in. could it I Got

QX. you difference you could any disparity give from were between a guide on you any think I March? rates or backs the There's the than your have Are flattish used So if least helpful. big that That And guys saying words of similar just into outlook you expected March. split guys up would better revenue December? color obviously at to a September QX, that exact if QX be you said kind and expectations, and

Yes.

looking at in average, get one we think shipped the I of systems. QX. more the range high our We end or two over Tom, revenue did guidance

-- So expecting a growth whole half the We in of the were at expected. we're second where we year. for half year, revenue number second in the the of but

it, in that's the and be way of So yes, of point, look range look to I right middle commentary in average this a sort of expectation the QX at QX and what somewhere at at would be think the our our would of mean that's QX like there, similar XXXX.

Our next question comes Richard of line from with Capital. Northland Gus the

QX, I up talked million, just you doing math do to got for I about . commentary, I $XXX the the XX%. you of semis think And hit million your right $XXX Am to number being kind plug there? XX% in in year-on-year. if

this Gus, John. is

full year, XX%. revenue of year roughly expect million guide $XXX be for to somewhere that's the our the midpoint up We around at semiconductor

$XXX around midpoint in our of guide. QX the million should be number range at that So revenue

So ] there. I think [ you're in fiscal the right

EUV And pellicles. sorry, to it. opportunity then wet EUV mask mask, the in just Got Okay. I'm mask blank, blank, back shifting

Just of a questions. couple

of existing manufacturers? And of as you the accommodate then Or all, customer, it fabs? First a substrate. larger of is blank a to is to substrate. NA tools tools have different go that EUV, to require going like set Is go the the to just when -- pellicle that do some go high you we X-inch/X-inch we modification to the

be the would with answer would we pellicles to we equipment. And sold mask is blank your I for deposition prepared tool I larger the part engaging moving our for blank on question, the first mask to traditional are not I of EUV the then NA this format high that with would say industry customers. size, say to

So that well. as working we are . on

line comes from question Schafer with Rick next Oppenheimer. Our the of .

first for . Mok XQ? first is Wei the there pulled Was results Rick. NSA see tool. line on in XQ? the that is My was customer export anything question order customer you Congrats This patterns. Did for on XQ orders on from shipping the any into

is don't bit, did I to inclination it system anything But but a first overship the the don't We upgrades I me. [indiscernible] think more pull-in color little of no. My John, at know, was maybe related related any level, and like. some Any there? .

No.

I drove revenue either that of the was the our but a not or in that the it of think if high end end our what QX. the couple things you essentially, range was of new a something and that had more high in the And the QX looked during already at shipped guide backlog quarter out was it biggest quarter, range. of the systems order gave . end for of towards activity, that's we scheduled we that the the guide beginning

I'll -- that. guess add just I just I'll me, excuse add

systems if for delivery extremely XXX%, XXX%. on-time our think was, not I close to

So getting on we're our closer time. to . factories

are Great. NSA like It on Appreciate question rapidly is in the looks My space. that. system. things second the moving

some I to see predeal Or this LSA. Has to NSA opportunity? opportunity you do help as So from more you NSA? [indiscernible]. a of better customer from taking share you a do interest shift understand wondering LSA see ] if been [ it relates separate NSA us as can there was of Or

say memory. click available look were about would to and served in memory. for NSA forward the and million, were opportunity logic business actually of say, say next I LSA. for in I field both traditional put available out about customers I LSA our to complementary incremental market X/X us in a be road say is is $XXX if would to I We're million will I in if today, would really logic like in million our $XXX $XXX totals node market map. our served would to XXXX, evals LSA, planning probably I

nanosecond about annealing. from product an So it's clearly X/X active and

equally XX sizing market in now and And so at in we're about and kind the both $XXX NSA split logic million $XXX right annealing this memory. business, between of laser incremental million

of question with Securities. comes Dave the Steelhead next Our Duley from line

Thanks a how helpful guess, here. off, TAM much be I bigger for were mentioned the if guess And that customer. Could be? you to when second into with just remind on . big systems customer see first systems for that giving evaluation potential memory us how you you high when opportunity information customer. assortment -- be us it of bandwidth another you seeing number memory with And had high-bandwidth shipped might or might you now? two, is to might production to the

Yes.

split in AI high-bandwidth we So see numerous opportunities advanced overall between GPUs, memory and packaging.

point, probably would of that have an the probably Obviously, but to And drive point not -- so a would Dave, this Veeco's say phase, X-year at the think we agreement. here, memory at number the a don't And that that think incremental, year, kind period I year. as for $XX all of totality, my tip customer. in would say, demo over that in this yet business that thumb bring would I are we've we of would I the of we sized about XX% revenue million, right I million on HBM evaluation the second I $XX at provider,

And so integration. would evaluation place from eval, probably the time of year we an a be that plus

in and time mid-XX would up -- expect I 'XX any in probably we would don't maybe this frame. we So revenue more be believe

I get the several 'XX then there's big but . revenue is in driver whenever opportunity should area. opportunities Could 'XX think, revenue Veeco And you the your how now or understand from you help -- memory here, us to, memory us think or understand you'd help biggest is in understand you how the of could much how either big what I like that market? high-bandwidth just

our and most customer with hard Dave, learned that Last their say, first in It's now why. we're qualified We've memory. we qualified more in Yes. became HBM. to generic here's quarter, advanced

and And the know going so high to don't before I standard But memory. high these for us, we bandwidth now could memory. shipments can't now mix what's we bandwidth really say know were between

So it to to aggregate back the look a it . and I memory. And in gets that mix and totality. annealing for in we the at laser at in for But step laser about a opportunity half hard if look higher between very ultimately see market of level us in million XXXX in be it at annealing, $XXX

to Just clarify.

just So memory . has customer your LSA the not high basically your now high-bandwidth memory, but standard other DDRX the taken you and said first in products? bandwidth product, in

Yes. .

add I gears you. did Okay. to on to have interrupted something you Then saying what because or were switch just to you

fine. I'm No,

this was Okay. LSA be tied logic is going business and awesome. think gate applications information. and power to we Do TAM about it around . when all for in expect are Or to us? we or backside NANO elaborate the you And foundry revenue? then That the maybe the should a that's more thinking way the type bit of little ramp -- just would of that that and be

Yes. type I just tool But power there they're are are interested that customers would starting . this there to distribution very floor. nanosecond sized like when other in annealing to our backside and void applications But applications opportunities that markets. in say, also yes, very reduction, are evaluating in interested explore customers, things new trying product. recrystallization they're those with those we haven't out really, we talk

do you just you when And expect whatnot? approach. question with Final bit to and wafer a for elaborate have single more demos tool give has just evaluations for could that little you mentioned carbide, Epi update then you on Okay. me the and a us silicon just

pursuing market this in And are other approach. you the Why the are approach? you think what advantages batch particular do think a I guys the . are

year. of are plan epi company in we our that acquisition this with carbide on January Dave, our say, post silicon would I equipment track

tool have operating Somerset, We Jersey. in New

are demonstrated And cetera. film et bingo growth high running Good good there. building quality. We've progress our you morphology, sheet, films. uniformity, demo rate. if demonstrated and We We've we're making out will,

Our plan be by is to year-end. demo-ready

we're so systems of feverishly field year. toward working few with silicon next the a goal out in And the evaluation carbide that putting

out. with on So I track laid original the feel we're plan we

that from customers there's really versus customers no like they single single And simplicity industry. lot the to to And in question on approach having your all the a Regarding machine. on over comfortable introducing with market -- of the our in They the today of and customers really, tool. and crawl we've Tier solution customers' that meets the tool of some X our wafer feel the we needs. really spoken wafer very batch,

opportunity the which tools green be today then design going to the coming require green real has of cycle. to maintenance, cost of fleets a be maintenance to is from these ownership Veeco the so detractor in be area into these can't by putting is fair And PhD. fact and equipment -- amount a I machines that of to needed and And like maintenance really they're place. they a think, They the cycle a and also large has the this, run they past of many a putting an in all in out fabs, excelled where

And so comfortable we pretty with stand where in we feel today carbide. silicon

line question comes of Benchmark. the Mark from Miller with next Our

good quarter. another Congratulations

for technology next transition Just also? was upgrades year HAMR wondering in into you this year business, that opportunities as there we expect of are type terms or storage would data your

complexity etch There some, of would the deposition and becomes business. which the probably as a increases, the and of be demand therefore, as more broadly but What broadly say . head adopted. more would as hopefully tailwind well, our interesting a steps might driver it's be major not is number of for adopted, is HAMR should equipment probably I view the HAMR be increases becomes more

Okay.

What last look margin in quarter, guidance Your backlog. this does about like just you've come wondering the for I'm profile been and to quarter X margins last up. current the quarters? what seeing have your similar also

Yes.

working our gross areas in the some increased we've I We think our margin right. year quite about And gross terms did of effort And of improvement. a company. you're been And customers. Mark, for real focus getting progressed. providing our see That's better favorable that our that. gross manufacturing, margin like we've servicing as we hard bit as a better utilizations on of quite spent the efficiencies, things improving We've margins. on think, been

I'm we going give specifically forward. our make say next to into as much give next this continue would we not year going gross improve guide to for margin. margins year gross But that progress target year and against a effort us margins gave I to going will

CEO, this time. comments. to would closing questions I the floor Bill Miller further no over are back There to now like for at turn .

along Veeco thank Thank great our for And growth our the and a execute team Good I customers as have continued you, with night. do United want shareholders we their operator. support to strategy. evening.

This concludes today's teleconference.

may You at lines time. disconnect this now your Thank for you participation. your