Entegris (ENTG) 3 Aug 232023 Q2 Earnings call transcript

Welcome to the Entegris Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation. [Operator Instructions]

I would now like to turn the call over to Bill Seymour, Vice President of Investor Relations.

Good morning, everyone. the for announced of second we XXXX. today, Financial our Results quarter Earlier

I remind the statements like comments we from and would Before begin, differ could to of and include materially forward-looking actual results number projected today some listeners statements. statements. a These in involve those risks uncertainties, forward-looking will our that

refer reports information to presentation. the annual report recent regarding our in most with the on these Additional information filed subsequent the risks that quarterly disclaimer contained SEC. the have and Please uncertainties is in we and slide

this to SEC as On call, financial we G. Regulation refer will the non-GAAP by also defined measures and

You on in table our well IR can page website a as as of reconciliation entegris.com. today's news find our release at

today LaGorga, Bertrand and are CEO; our our call Linda Loy, On CFO. the

I'll hand over to call the Bertrand. With that,

Good Thank to environment. in saying our to quarter, the welcome the start again, I second team. and solid am Linda, all, by dynamic I industry pleased of with the will in that you, Entegris Bill. execution light morning especially

the within our $XXX results were Sales were $X.XX. or EBITDA was we quarter, margins EPS guidance. XX%, million. delivered over above and During non-GAAP strong

as our see are Let also the with the strength few our a relative additional line explains which down comments importance to solutions. we in in and growth increasing chemistries but etching Meanwhile, quarter. second in CapEx-driven and of road but performance. performance me SCEM These expectations MC filtration divisions Sales technology liquid was include our in our mixed, were on sequentially maps. in product make that expected, did financial lines customers' our

gas remains fluid FOUPs for of year new decline with did WFE, While level see activity, so in construction steady the and resilient. we with in of our and filters, which gas consistent a purification line the saw in fab this contraction we far demand handling solutions sales

our line of profitability, well and in performed execute terms expectations. In to with we continued

important few is to I on. highlight Next, items a focused team that like would the

CMC on integration. First, the

migration in One common already months. the integration system. guiding to final few a transitions expect jinx that to but the days. To in effective a by complete that to want major to team, $XX principles and accomplishment have fast migration for million go-live of ERP target don't us the the we major of cost an it, of past XX completed X we I And ERP rate is the the on certainly just run achieve the accomplishment A puts our synergy quarter. fourth track end,

pay a us debt non-core high and we debt. assets for to are reduce of down a As is priority our you divestitures or know, significant lever using

Materials. far CMC into $X this than agreements of we of these billion X for businesses totaling of were year, definitive entered part businesses, in have more Two sale proceeds. the So

first The March QED, of in $XXX million was proceeds. with in which closed those

The we XX on May for second $XXX was proceeds. sale of the in announced Electronic Chemicals million which

transaction. a need this received approval jurisdictions, not approval already several the the in transaction we U.S., EC have We do China in regulatory and as just the for regulatory reminder, including for

waiting transaction weekly a the continue expect by regulatory to will few approvals for EC of currently are end final We year. the this close and

and Solutions at this the of announced the -- customer no June million for balance of $XXX expect transitions completed. for later distribution plating termination are we receive received On in We our with chemistries March to than million. X, on copper agreement $XXX Element time the announcement once exchange

Materials. used brings debt expected Element debt. We to sale which and transactions $XXX from the which do pay million when all potential PIM, also us this and PIM proceeds pay for The gas QED down business. has and to also oil business realized year, of the intend far well this of industry we agents and proceeds CMC so for more to and very have of That sell the EC performed part drag-reducing received sells divestiture from be down, the used was one a the to are

an to this more communicate. when provide have on update will we We

Another would they we APS SCEM and next in majority APS that like the will and semiconductors. is both are The specialty are businesses highly and of I or materials of share be important update manufacturing consumed the are They to complementary. SCEM month. starting combining that the divisions what unit-driven sell

their ownership. the end-to-end to solution Frankly, but Our line of time divestitures maps, benefit reduces a the to contemplating. not superior at did from set this sight we cost and considered doing the customers will of of we to were solution have close immediately the road set robust transaction, their we more critical yield that provides CMC definitive

industry To that always in Now count scale done we works, end, are or would divestitures X solidly X% to structure head facility new combining focus. environment. size, expect we be as the we do, Taiwan. approximately current total our and net down year, the divisions this even into in its to align And cost the will new look at X our those that our in it of with and hires enhance continue

Taiwan critical, critical realize What our needs the industry to Colorado are the we vital returns growth. get end, the it for short get us where cost that term, it be in potential. is expansions is Springs to we it and our ultimately ready capacity long-term growth to structure in To equally when fully

expected shipments year is begin Taiwan and shipments Springs initial Colorado begin in later will to early this XXXX. in facility Our

customers elevated promising our are addition, downturn R&D support with of making valuable using to spending spending pipeline. In advantage, R&D also we to this levels our our collaborating time while

the of XXXX. at Looking rest

be continue to year, position to XXXX the market together, our approximately in sales in we X the down And our to Putting new it full at also be all to we mid-teens. X%. expect down we market given by strong nodes, forma the expect expect the will outperform For technology to the points. continue least in pro continue

revenue EBITDA will to also XX% XX% our We $X.XX are the And year. full than we of expectation to increasing EPS XXXX to non-GAAP continue per expect year approximately for be share. greater

logic computing, and, overall growth, modest, half about and of chips is demand that much the the for trillion to semiconductor many by discussed this being just for and way we $X electronics that high-performance growth second course, expectations to driven by the growth are in a optimistic the and both the including AI year power our industry of The XXXX. drive industry secular long-term memory on extremely end in recovery emergence are markets of name few. will of While

expanding ultimately complex, per device and breadth higher trends market that, translate and to like are In count becoming trends Entegris. structures strength. These content Entegris' play capabilities our in purity growth materials gate-all-around share which addition and material into layer are of and to to wafer for much architectures more expected rapidly science

would and Finally, the industry navigate in as I I take to want environment. the their Entegris. they to to Entegris a trust And confidence our for execution this team dynamic customers strong place thank and moment we for like thank dedication

me to Linda. turn the Let Linda? call

review Entegris. eager I at everyone, on you, U.S. terrific this to results getting the morning, and a on to a first that I'm Good is call new traveling the months and team know be thank to sites as Bertrand. delighted solid win, and Entegris, to proud am team. had CFO first of our to I X

X% on a pro a quarter Sales the in XX% forma $XXX second down were year-over-year down year-over-year basis. million, XX% sales sequentially. and were reported basis Our up on

revenue negatively As $X Japanese and the pro headwinds closed driven million basis July reminder, by million FX forma in primarily year-over-year by by transaction a a approximately impacted negatively CMC the XXXX. in impacted $X FX sequentially QX. yen. revenue on were

a margin lower XX.X% second facility and Gross was The driven the by and in volumes on the margin our basis Taiwan gross non-GAAP range. GAAP costs. was guidance quarter non-GAAP in decline ramp-up sequential the within

QX In QX addition, FX we not expected. in repeat an benefit did had as that in

totaled were basis included $XXX our million a in expenses slightly basis termination on and expenses gain Operating with million guidance. QX $XX million, agreement items were a on distribution in non-GAAP Operating below Non-GAAP of the QX. $XXX on our $XXX a Element. million GAAP

our structure manage this would As continue dynamic in you environment. cost we expect, to

was Adjusted Operating guidance benefit held-for-sale XX% EC our of asset The tax per the a QX range. includes treatment. a share EPS driven the which our or in the $X.XX with guidance. $XXX just non-GAAP quarter, million GAAP was share was million $XXX income The distribution of was $X.XX above income in Non-GAAP in tax was per $XXX quarter non-GAAP second and the diluted within our revenue Element. over XX%. termination approximately EPS by was rate EBITDA agreement on basis GAAP million. on in GAAP operating was QX gain

in and forma SCEM the are basis up sequential division. The year-on-year sales and sequentially. X% up at divisions. I of MC The APS last was sales our a year by million looking on $XXX am X% gas filtration inventory the from in for pro were facility operating Now performance driven the production quarter our Taiwan referencing sales growth plant due the Adjusted and of the by for purification primarily was associated ramp MC sequential and by of the driven decline quarter. new margin liquid costs was impact The XX.X% lower to margin reductions. solutions. with comparisons for

and were down million last year versus XX% $XXX of down XX% QX in sequentially. sales AMH

approximately was which AMH partially to Bertrand tied been down sales are has facility growth in by more offset fab primarily Taiwan. XX%, like lower resilient. indicated, was As and was tied driven Adjusted the to operating by in FOUPs volumes sequentially, in driven products, and of again, the for AMH construction, handling decline by sequential more WFE products margin our more fluid new ramp which,

and quarter for SCEM in with unfavorable driven Adjusted sequential increase decline sales operating the margin was year-over-year The chemistries. in was primarily expectations. in by XX% approximately SCEM driven up by modest mix. QX down sequentially. of sales margin were line XX% for etching our X% million $XXX sequential modest growth The was

year-over-year sequentially. year-over-year the QX primarily the strong volumes memory X% restrictions impact product overall and $XXX slurries quarter. the in of China. Adjusted XX% to was in margins XX% lines, market The driven driven up APS particularly were was memory decline and We were APS the down lower in primarily sales decline for modestly of down across SiC in sequentially sequentially. applications. decline most operating continue sales sales by did in approximately of in by the sales million see growth The

to Moving and balance cash on sheet. flow the

was and $XX from flow million quarter $XXX cash flow Second cash million. was free operations

cash continue free to be improving We to flow. committed

Excluding Electronic asset balances, to Chemicals held-for-sale. which moved inventory were

more Our and needs for of in progress, will focus this done the year. down second to the the area of major a That half inventory X% remain quarter. the work was is second be in but team

quarter CapEx the was $XXX for million.

to $XXX our than lower million previous We in expectation market expect investments spend have $XXX moderated conditions in in response to XXXX, and of CapEx CapEx million. our approximately now total

equates was net of X.X the target We gross our net mentioned, announced discuss divestitures. debt our $X.X structure. our X.Xx end key XXXX. $X of Bertrand cost a At of This remain forma the our and leverage QX, of ratio of lowering synergies. let's was X.X by leverage times component includes pro our debt capital to Next, billion. down committed the a toward gross our pay debt to times leverage and a ratio gross of for billion, leverage end

expected rate be debt rate CMC outstanding blended environment total the a we very deal. since is approximately experienced X.X%. on variable the rate announced Our of debt. bit a debt considering rate interest interest XX% solid to the portfolio The is our was more Overall, than

to on QX our outlook. Moving

$XXX to We from million million. $XXX expect to range sales

XX%. the be to expect XX% margin We EBITDA to approximately

share to EPS be be share. per EPS and GAAP expect to $X.XX per $X.XX non-GAAP to $X.XX $X.XX We to

some me Let additional items. modeling provide

agreement Element, focus ramp impact termination margin the volumes reduction. compared gross distribution higher in margin lower lower both inventory be Taiwan XX% the on new third our to non-GAAP by with QX driven GAAP on in associated the our XX% temporary The of basis. our quarter, reflects to of and of with facility plant expect and to the modestly We costs a continued

reflects non-GAAP starting million to expect QX the quarter QX Chemicals status in capital $XX $XXX in estimate QX. our operating the GAAP operating $XXX expected be expenditures. approximately timing depreciation million million. in to in is to held-for-sale We $XX This and to business expenses approximately moving million expenses be and Electronic approximately Depreciation and of be second

going We expect forward be quarter interest expense million EC. divestiture collect of until the the proceeds to from approximately we per pending $XX

forward tax of to year expected tax the second the second to approximately We going the The half into is Entegris the be CMC half of rate both of lower non-GAAP the expect the XX%. year rate due in this business model. and for integration

and the all Electronic Just have have the to full provided it distribution both with QX guidance be includes clear, until Chemicals both until the and agreement year Element closes fully business the for today we transitions. that we

it closing back for Bertrand hand remarks. to some now I'll

unit-driven showcasing progress also full CMC resilience In Linda. met team's all making and strong the execution. the of environment, cost business integration will divestiture milestones you, on this pleased we Thank assets, by We're year-end non-core we of as am our being and planned. synergies the with market uncertain very I position. are good the critical realize are

We the in investments making Entegris outperformance. and for into an And our because investments short-term right in are strong future. increase the have value management per because of balancing we're the the will while Entegris conviction growing long-term growth which our effectively those industry secular of semiconductor wafer the of translate and proposition, importance making cost conviction content in we the

With that, let's open for operator, line the questions.

from coming with is [Operator Sachs. Toshiya Hari Instructions] first Goldman Our question

Bertrand, market is my question background I first environment. noise. do for the apologize on the

for mentioned said guessing have expecting consistent you're be few great. your of the would logic, are if and in you've so on stronger the quite curious said walk you've you for that over to MSI months? of have being just still can some you past point past for X if that down experienced minuses both over the peers being year, to I'm advanced months TAM could ago. and year, But months with kind the X [indiscernible] And foundry, based and your takes you trailing expectations what pluses the mid-teens, what on memory experienced full and weaker. CapEx your full a SAM be You through what But or X puts perhaps the

not accuracy, As I our with But of on a the dynamic, we've forecast very it said, much and and quarter. take market. lot remains mean, last I that all to the of seen have and changed views still puts great challenging industry really balance is degree a since really in

back it not MSI, expect of half to year. comes do the When the we any meaningful really recovery in

bit little pressure offset logic coming downdraft in be DRAM. advanced XD as We wafer and likely expect in well a starts mainstream starts. and some will wafer of an But this from uptick by NAND

not half recovery the a takes of we a the in reached we So and bottom expect QX, again, and here recovery back of of in believe on we lot really side. front, year. have lot real puts CapEx that the any in not And do but

in that what that the view really So industry will industry us. mid-teens that's for that's for backdrop, are the and as with that the leads performance. said, us And down be pleased to you in context, we our

content per I continues to Entegris mean grow. our wafer

seeing start edge wafer We in memory to A taking leading we have and wafer. older per memory, cuts more memory. lot the migrating to the seeing in and starts are more transferring place higher of are of content higher the in especially actually production leading where production wafer we wafer are edge, generations --

positive. that's So

XXXX. headwinds constraints are We gain some to also we continuing chain in And were supply resolving share. that are

for basis to XXXX. level we in deliver the expect the that that's So of outperformance

point your your guess, radar as then on my follow-up, regarding last And I outperformance.

expect this ago. consistent year, you a is said know is high X% the customer think midpoint the to with X% given inflections logic and your you and X%. would a memory XXXX? higher, which too in model plus outperformance than presence deposits in X% But your in X know with long-term the outperformance and little technology distance. gate-all-around, across your bar. repeating maps minus foundry. under important 'XX your XXXX be had what think advanced is I Do But or you I much lower for about road noted you is think as or I months your in at again

what amount see reasons would many keeping to will saying know us that bit Toshiya, start us are next I say that, would too by those so expect between again, I little to that beginning too things. and I the talk to one, for But on a year. been it's eye number two same about in XXXX I two starts node statement. specifics. ending things and there points. that points believe for about with But of it's probably would probably wafer and -- early fair end in we we Well, be node that will a why that's we positive talking And terms then, are And customers transitions go say early transitions. more activity an to would into of that have change. that too say

Roberts from John Our next Suisse. comes question Credit with

timing? you construction new those is affected effects? normal Handling Fluid lumpiness of new if And construction it know Just more the untangle similarly? don't fab why delays I can fab Or wasn't in

question. great a It's

timing it those solutions being so products the built. really has are new for And and fabs with demand when the to do of

So ordered chemical FOUPs early are used and typically, fluid are the on handling products being when when are installed. the really built, subfab, being buildings

happens So look fair been amount in a projects. early from you of that. construction products fluid in have this relatively the been that constructions benefiting of handling year actually terms And if and fab new activity around, there's

you go especially in is often to site a have be lumpiness can big saw decline actually semiconductor back can something you shipments, will impact in When business. they large those the and in it created more in QX, we fairly FOUPs, the know, the shipments coincide but comes with the what to tool FOUP has deliveries millions manufacturers of that, And sequentially slowing actually stable And the a downturn, right? That's was And we very several very of we business that's significant that that tool in our QX. down, as quarter-to-quarter. the usually a of if timing see lumpiness that have those some intakes products dollars. time, been

position leading fabs. strong, Having edge in said the that, extremely our especially remains competitive

in any timing opposed shipments as of to competitive have you may it's spending. So of concerns a really question

comes with Bank. from Sidney question Deutsche Ho next Our

you're that MSI revenue growth is whole the hear have question year. ask My about -- something AI. this for expectation reiterating to good and industry I first It's your to

looks the demand. if IT least CPU foundry? it trade-off, CPU Entegris? to out GPU, one-for-one demand higher budget GPU both I don't How Any in way products near-term, crowding shift and for how the content So like you the that us if from your SCEM for at include of server help conceptualize can know Entegris MC there's does that and GPU but or this impacts business? is impact from even you

that great a I say it's it's just Yes, would question. that remember exciting. AI,

is the requires When it's years larger-sized that semiconductor larger-sized to for to a in typically management. It's today, during GPUs positive, Entegris focus creates of the going small. between that positioned believe, small. solutions. are But comes I obviously And that actually of the used it very come. be content a a complexity remains on the dice. very and create And in some difference, those is effect demand dice we think growing of actually Analyst recent architectures. had, would we well opportunity difference those big are mentioned to X Day, more in that terms but in some been catalyst types filtration CPUs I as it's which very one and chemistries it are The microcontamination our relatively for much rapidly, terms that significant purity say GPUs, of I

talk is lagging the is follow-up a build geopolitical a suppliers, domestic seems new products, stepped China about competition is, Clearly, which chemicals in last to to all and months. little fabs ecosystem focusing you Maybe be at up on? here. bit trying to for Can tension in what the a looking self-sufficient these seems edge question especially material this few have

in the a qualify competitors This there those those is been domestic even created or we our alternatives. Sidney, customers push ago So China. And has XX, think of years I new. seen XX companies by of big longer. were not domestic have Chinese domestic Many emergence to

said been the far, continue likely midterm. to superior I many that, Chinese say case demonstrate pretty capable expect Entegris. share in able fully Having emergence think I very cases, competitors So in And the effectively. their longer short- the that able of will hold the we've been that would term. to proposition to I of And see we've to be to value

something in going that's control then big saw which you in we see think -- But I So very have to we're step can watch. we QX are effectively results production. continue in continue in stabilized, But up compete that the following mainstream down, a punchline things export to starting China, mean between restrictions that seeing to QX China, and we growth fabs to that today, QX. our and obviously, the I the is and as are ramp probably new China

from Bhavesh Lodaya comes question with Markets. next BMO Our Capital

Taiwan Any maybe advanced the On have utilization announcements more ramp-up your the on can side of your there region. set the around things. you And that more relates packaging we the facility, AI, impact for for around was how your fabs how and some perhaps the quarter? second opportunity it cost for quantify on much third in Focused the new of start-up and heard facility? color to you expect new

Yes.

invested in we Taiwanese of the So in mean importance we the reason continue actually believe to Taiwan is the I ecosystem. that

We support expect ecosystem. our investments significant years be a customers to to the we their of in extended the and and appropriately wanted growth in position come, to see to

a opening back. great investing. And we few we had why said, months that's a as So we're

giving new lines. of to accelerate really us are those of we customers all Our need the conviction the manufacturing qualification

our that's focus. So

an not to that about We're anecdote had is number employees very share headwind. site. -- in you cost just with we is terms is the That's can some KSP, as total which of our precise our at give put -- going calcium a site. name the of I you to What XXX context

the by year. remember end do of year. expect end So any meaningful be this levels that And production number of of the not expect this of we to XXX by we at the end XXXX, that about

a quarters. Linda a it openly So guidance for it's about great are margin extent now in what that's talked seeing We've the to was several that to be drag. going providing. very And you

in you you around integration, is have spoken to the deposition But how past, I filter that? on color Any Are color guess, already slurries, as any talking journey. basically the combining X CMC your progressing? about materials, synergies co-developing around of pad, around then customers this? part segments the on that revenue And that

Yes. Good question.

will number phases different to as there a us So be of we the synergies. unlock said, revenue for

focused And The really cross-selling. first electronics, phase are SiC and particular, actually inroads on that really really mainstream we of connecting with first made phase and fabs in solutions filtration. our is slurries our known pads great for SiC methods those really around are in and power some combining we to the best

So we this are volume SiC actually a in increase to in catalyst proposition. productions using the sharp as great value validate

happening. happening that's That's So success. now with

the then notes. the that will will co-optimization. And phase next be we the of about product doing in context be And new

So again, the around are engagements none recent for the promising. year two. the probably of be those customer meetings line in a very that We've will active, world had another very of on really lot But or the months. engagement, the top visible

Charles from with comes question Needham. next Our Shi

two questions here. Maybe

I to provided color demand. you Bertrand, one, want in First some end about different Toshiya ask of terms market angle.

So relative markets are side, expectation, DRAM of relative versus a expectation logic, specifically ago, trending the quarter does how down? one foundry, mature each and the NAND, advanced up quarter to on your let's to ago, on your say, end MSI

was to bottom. the the imply is quarter understand one want revenue I specifically, because in to going QX year but or your to guidance maybe QX, either QX maybe And ago, full did you bottom expect seems

what's just ago? us I wanted a together two to these tie understand and quarter really changed help So things

Yes.

lot industry there's mean, now said, and -- very I right As for the of a choppy views our it's sure. I in

of bit than So think recognizing we DRAM to have NAND, more And ago, more NAND, we bit terms on XD are little we year. we couple months than the have back we in no bullish transitions business. about pessimistic half NAND probably to which also of translates XD I for today more probably are we some less starts the and of XD that XD a right? were quarters in exposure ago, which of today little We're a were wafer some NAND a in pushouts DRAM both than about impact seeing modest our few probably views a into do

some modest the And to the half node expected good news transitions as good of We're also for us. in year, then half and way a back that back year, always back there into expressed and in kind then concern seeing anticipated, of we we could materialization that year. full recover is we That's some softening of our certainly interesting seeing taking for something be half forecast account the that's the the us this year. the the Logic mainstream, of Advanced news the for think in of and in we're in and well. always some I that's for are

packaging. wasn't period Entegris Bertrand, more the help I opportunities opportunities packaging but it's the SCEM why would the the want to of include advanced major focus see for change? one long-term longer being team of to interesting members of of a and in one Advanced I over hear your time. event is seeing did question you growth a key really thought combining ask Packaging past, really from advanced Can us earlier recently understand the a some actually investor your We that APS. in -- in future July,

understand advanced -- in today? it see as major are may not a of there? may especially us complex And fab space. lot what not do help packaging, complexity be And as you teams be a just Why your the wafer opportunity in as the seeing

Yes.

automation, are I In It's the true we are DRAM. for The So was the require good cleanliness greater we news not of that that advanced number processes. solutions more road true industry is packaging, required that advanced developing. all of traditionally of the degree much also precision think you're of their expect in that, past, did are degree those a of maps It in for a road advanced packaging. becoming there demanding. maps in much a right

cleaning be wafers. for opportunities pads and more AMH line. product of the all And also wafer applications, for polishing the and step will there for the very that terms required believe slurries of open polishing up likely our bonding and will We carriers, opportunities also with filtration our products in

to terms view a way So per very than on that's this road similar say of is DRAM that typically, that, I map, on today. again, something that chip is focused wafer changing. a would And the Entegris less content or are DRAM But NAND Logic. in we expand again, XD

a of transition. In the are we seeing for DRAM, your push more case

XD on our which and solution all are required new approach create backside Will of seeing for will of chip, will be new chemistries for DRAM precursor architectures set. architecture. for the also the etching require the films a highly-selective upcoming opportunities We for microcontamination the

the increasingly Board you for us the content excited Entegris many in we will about per industry, and to opportunities look the if there believe continue to maps, we various semi-conductor the be wafer. across increase road So are

Brun Our comes question De with next from Kieran Mizuho.

as the to If abate be start the exiting these about think maybe headwinds talk we lap like the helpful. get we we about to how would you be as of seeing, that how SCEM. Can mix margins some year, been should of you've going kind thinking there's color or on year forward? about off, that seem mixed Just on of into the end any

Yes.

advanced packaging, the road materials the and context of of to opportunities. or area back the clear that NAND comes new to it maps DRAM, really years that now even think is our I for we've that, that's time ambitious comment this in the I making an support a XD several I SCEM, chemistries to remember we see was when So lot will customers. of enable where been that the I very mean,

very the want line and we the of modest investing, bottom performance this why that's to be XX%. year, around SCEM is So

and we're recovery adoption that year, the to modest the expect the the materials will recovery high in some back come we reach half new but the materials We very developing, with need of volume. those of really,

notice combination level Analyst expected you segment be intend all lower X -- and X will you go APS function there. starting terms of we investment the last lower external intend is we that of of the But reporting divisions. the that of QX. mean, Day to to in make the remember, reporting a have a SCEM, the of the with And to back If the year, I business -- was SCEM to yes, margin the

maybe SCEM just on the combination then APS. and And of

combined basis XXX a in a Day, of be range going is range rate growth of that versus I XXX at think growing back bit of to lower kind XXX there ambition in APS point when SCEM above points. XXX CCMP, where a probably be do factor to kind market, you basis the the about basis XXX XXX Or broader of points is And going that it broader back little so, basis When points? basis to up combination XXX to in synergies XXX that both in get to Should points the think think revenue about point like the we the of segment? we was how like kind basis to thinking the about basis we integration market businesses? points points Investor and of to basis is of forward? if

Yes.

superior And into we to reset going of So so will right? and degree combination a ability solutions translate growth this And term, develop customers. unique those that's have the in really to of high expectations. for conviction longer very end-to-end we power the

are growth of an the of year. that's in about X half potential Analyst reset having first for actually of for the and bottom line of And going be top opportunity in to Day We terms each potentially some expectations line potential us divisions. next thinking an those to

Aleksey Our KeyBanc next Capital question comes with from Yefremov Markets.

I -- starting lower is have guess question Ryan the guys you MC for I Aleksey. on would in production in This from first headwinds XQ. flagged is

then what just if thing half? for might same expectations wondering on back quantify the be potential your that to secondly, you from able off, are And headwinds the First guys us? in

-- supply easing. some constraints, modest lingering mean really but supply it's material. I I chain are to have trying the point been make. not I constraints very think chain That's was There Yes. those

that So micro We expect quarter of platform you I our mean, -- this year-to-date, of well has It's has year-to-date. X% a record liquid up star growing particular, are filtration shining very the of. delivered course, aware spite our contamination in we been been In industry conditions the portfolio. actually in QX year nicely. of

to half So year. chip again, do back yield it's to continue very of filters it reliability. in of the comes validation the again, importance comes well when expect, to it this the to growing optimization when of a long-term And just business those we

XQ, secondly, just a for XQ at there's And looking the implied it looks then Very is Great. EBITDA helpful. to step like kind XQ. up of strong like just what fairly

talk about if you could wondering the some of there? just So drivers

Yes.

lot to do we've businesses a we mix moving a think fab more going CapEx unit-driven our have on the MC, -- we I that side, is the So with as to mix then mean, have the as be about far impact -- construction. the businesses have XQ, into of it business. seen tied strength like so seen some in which good we does And

be a will it. piece of that So big

going we are to focus Secondly, control. cost on to continue

investment. really we the against it's balance balance to So critical year, cost throughout controls as

we balancing, our is We hold what for year guidance full on. did that and our as guidance on about the hold think focused EBITDA the So margin. that we're

is balancing. that piece another puzzle So of that we're the

Arcuri question next comes UBS. with Our from Timothy

to the model moving Can the revenue, takes different on we're parts? lose some these obviously, helps but with about lose you margins. I and the talk going mean puts obviously EC, you

the termination You Solutions Element have of deal. the

some get that you be plating of these That channels. did You existing chemistries. but to not factor because rebuild might your kind use for channel cash a have you

sort rightsized kind just you could could and take pro wondering -- looks December I'm it as base us, sort enter forma if of you the on what you of maybe like for basis of a like So XXXX?

Yes.

the Tim, lead So can probably I take here.

termination being on, helpful margin QX. an your all to gross existing ends everything. will and are probably confusing a it's unpack pieces moving of factors, to probably cite to with of though. have try a actually One to say agreement distribution the is point, that the for there of I really more would couple to lot we'll than Just it instance, be only a QX are proceeds, on serve in of roughly. customer need impact detrimental the while we transitions and impact X significant to collected of until of at X.X And gross margin that margin completed. we'll The potentially about pretty the point have that going that's still we reason customers, do but --

think to like a that's sometime one Day the not company we you doing completed, today. next all talk platform. of the attractive. will show about The year that going actually have you that once are So on there the the divestitures will really something of different and that's call financial once to again, potential in indeed, takeaway puts think of and be do Analyst are lot what Entegris looks of And the profile first we of of completed the half to more for the are all reasons those takes. why I be we're long-term and And an be of those divestitures is

get that there's a I moving of parts. Yes, lot

chipmakers. of but your guys? is China but mean, do into it's isolate China into chemistries So of report just question, of ultimately handicap making there I there going will they was sort that How sort you risk it, domestic But you that's as companies investments. they and of domestic handicap -- how a not China guess know are question the before ring-fence portion the you revenue, They're making investments I chipmakers? in what you on roughly that about and hope I my of going revenue displace is what like you. certainly, the big domestic a So China. generally XX% things and how sort do question was huge do

Yes.

to that X/X within going what fabs that's And customers, about to for close I technology regulations, very, to. that asking very to something engaging domestic, mean, continue obviously, we So that given the are would every node. with paying we level, said, high we've that's precisely. we're and operating to they something them operate And are current be are we'll us it's permissible represent the their attention individual

So help behind me. Maybe sure can you I'm not question, is exactly what Tim. your

going know likely edge restrict that push to smoke, some I -- where going be there's what typically do. there's they're guess, Bertrand, I asked certainly, to I don't But fire. nodes. because lagging to even there's it does appear there's

wondering that. get you So I'm could just how kicked in

would just edge kind because of of the which trying -- of what's restrictions. to I'm China So domestic which companies, to most ring-fence the lagging current going be

I mean, to mean a that's -- don't speculate any can talk restrictions. sport controls about talk wave new Yes. that I We'll is there I not if on you that. on I only enacted. any anything knowledge the about unique will speculate I it I won't or have specific and is measure. existing other of

next with question from Research Seaport comes Harrison Partners. Our Mike

hear okay? you Can me

Yes.

the talk that little a about I bit planarization within you you're seeing maybe business. the was hoping could mix that

you called nicely. opportunity, You but SiC growing across said today lower small that volumes I lines, product believe out that sequentially were which most know I but is

slurries and you the half look into are as recovery expecting curious, a the see Just advanced some within second more at to XXXX? you faster of

Yes.

mostly it environment we to growing And applications. a silicon year-on-year, be EPS So the be first to for continue of given the would better than when a are our saw have memory. bright SiC the of half expectations, That that year. we APS in the second I been both -- the back and especially But half. the case the depressed part we've pads. half and to we results, The we the at they spot expect also has that sequentially, with growing in corner been would to in experienced the say expect overall I I continue and that performance line to slurries look expect in expect has very application, business to turn in

then outlook of And delayed? doing work Springs? terms your that's what's you year, just any being us give any in of assume this CapEx But for sense you're is can that that in Taiwan. of related I not the Colorado reduction any ramp-up the to in in of the delay

the Taiwan Springs. We remain on in Colorado and focused very growth Yes.

also, market that at general down to well continue as to said, having us specific we a So cash to less ties And our standpoint as to looking to environment, going well environment it's It pay from timing. was the CapEx is we're the benefit debt. goals nothing very market a delay. and as

Our Markets. next Kapsch question comes Loop with Capital from Chris

the focused business. or questions on slurry were my the So APS

given color specifically, tungsten been when complex some wafer also, advantage looking I architectures. curious in position provided what then just characterize NAND content by change doing, oxide end per generally, memory just any is is if maybe market the there's you as the how for there. curious I'm could And slurry business weakness? slurries And if an those business just advanced the proprietary at more the You XD given competitive landscape But advanced there? gauged is slurry believe more doing how

Yes.

awarded to around tell would a memory. changed has So competitive the dielectrics. get results. actually and position wins And right? number not and are been advanced not so design are share say gaining that we're very the able all in right we've mean, that short-term both especially I there look, that I not is we now, that any interesting you then that share, that are that logic I And exciting, new any impact much, would would of losing very

answered optimize we made to better that co-optimize that's rate legitimately our to positive learn synergies So come? question years the we And of can goes unlock grow what -- in at it's a question SCEM one the fair to expectation, the reasons the I a and growth I EPS would say, expect a I similar as about, we way solutions to previous commitment back platform. the and to the revenue to did to across

number and to of very that's hard receptive of working and actually full a unlock possibility going very, and very potential products. hypothesis, are the to the to and in we're customers said, both platform, this into translate I As ancillary growth, slurries

like content tungsten. it's follow-up. around one advanced perhaps polishing you inferring in maybe per wafer by answer comment there versus it per, just it's both maybe visibility as increasing, and terms Or I'm memory is sounds but it's of the will, driven that Any there? -- if your from more Just oxide

I'm some not think calls. making across But to into I'm go I good level specificity sure I not the to going Board, -- we're these of I'm want in that sure progress. go

turn our for time And Bill we reached back for will to remarks. the allotted our floor question-and-answer now session. I have some Seymour closing over

you and up follow me questions. Have any have great a Please if today. now with joining for everyone, you, disconnect. Thank you can day,

concludes today's time, and disconnect Second at Please this Thank Quarter a your wonderful Call. line have Conference This you. day. Entegris XXXX Earnings