Entegris (ENTG) 14 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to Entegris' Fourth Quarter Earnings and Analyst Update Webcast. Last night, we released our fourth quarter earnings and we posted the earnings slides and earnings prepared remarks on the IR site.

We will not be presenting the prepared remarks for Q4 live in today's session.

So please refer to those online if you already have it. In today's session, we will present a brief analyst update presentation, and then we will take Q&A on both the presentation and Q4 earnings.

today the approximately Q&A. webcast XX hour the including minutes, expect will X be and We

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of year's appendix results PIM and and results presentation, One of reference, for last in divisional business included quarter. the other year the exclude today's divestitures your that item and have we by full consolidated for the for XXXX note,

The CEO; CFO. and Loy, Linda President and speakers our LaGorga, Bertrand today are

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

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

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

IR page which presentation, You our of on in can find the tables posted reconciliation our website. is

I'll that, to hand With over Bertrand.

and is update refreshed all Today's completed business, planned joining for our main brief. you focused divestitures. and with a financial thank and you provide The us. core will on analyst excluding to be model morning, Good purpose

a move we night. of quick the our I recap Before results to update, on last posted

very in with XXXX. our quality the execution of pleased are We

guidance. industry current XXXX resilience quarter Our EPS strong during fourth and unit-driven downturn. the sales with our closed And model displayed above we both results,

the in the For X technology backlog by had we driven by position at the nodes our we and year. the outperformed entering points, leading-edge year, the parts market large strong

and to addition, off and noncore proceeds $X.X businesses billion divested pay X cash flow the of free used In debt. we

our a term view In terms while what of have XXXX, the is believe guidance in believe significant we for prepared the in short fully a the snapback market. we to being we be taken likely industry of prudent for

model, and targets. quarter fourth agenda capital X both the target will to updated the business presentation update the provide I questions growth, our Then updated earnings. sales today. our will our Entegris' we X-year overview for financial On of an algorithm priorities, capital talk allocation, take cover analyst our briefing and and our structure, on about our will model Linda divisions.

Here you and business Entegris' unit-driven model is is like moats. differentiated would what I highly strong today. competitive to has impress unique, upon

of the unprecedented for and a challenging complexity. growth industry. The period is entering the remain year, optimistic industry semiconductor XXXX technology long-term about was ever as While prospects a as we change device

purity in customers. Our materials for critical material proposition core and and our has value enabling solutions increasingly science, become end-to-end

our organic Entegris a is translates toward to this attractive value rapidly to strong Entegris. means a debt. to come, leading for into wafer moving years market this EPS and especially sales of given reinforcing And compounder the our expanding lower significant and as EBITDA growth, with All the ultimately commitment per expansion, outperformance content Entegris

advanced solutions materials the For mission by for the We has changed. not most manufacturing technology past our enhanced and performance customers help our improve productivity, and decades, environments. their process providing

or moment. XX% are recurring. revenue now CapEx-driven provide filters and These be dispense detail sell solutions them can in or is gas XX% other They unit-driven our other built. are more components will is on used fluid manufacturing that is and are can that be or in frequently. our gas and I each there daily sell when there also filters, replaced be of fabs and products. of or products comprised materials equipment The products we single-use are systems semiconductor remaining of fabs we can purification can platform that unit-driven wafer advanced to carriers, be makers a chemistries systems Our revenue X that and divisions, handling of consumable new

see to greater foundry, And the provides the memory our middle profile, XX% across business solutions stability cross-cycle fab that of you customers unique XX%. can rest, while industry, a are basis. about to and the when fab represent we revenues, financial industry customers, unique is performance see, of the the to have exposure our greater on and the and widely in our our can logic it You approximately right, ecosystem. as This representing broad resilience base used comes model as in slide our further customer to

next one competitive On comes that of the X have the in the advantage slide, we on industry on SEMI. built to these almost close want focused while touch capabilities, dimensions over our especially exclusively combined to I being decades. No

you've value book, customer am on Collins to First, I the Jim flywheel. Good that the read creation Great. left, sure

ultimately with help samples transitions solution. they when enabling provide to customer work, the them of customer go start recognize concept, to years will challenges new face. needs ahead us node expecting call to solve new which time. create are key to to the X to over asks meant up value starts out a through share steps then It organization development them and flywheel We the a major So is and you compound our

at high it creates hard Finally, ramp production and quickly right, areas of the excellence. of point quality. this technology, the virtuous in next is doing is to global volumes The operational to again, of and depicted high infrastructure industry competitive here. The advantage and trust, customer is extremely must cycle time leadership to dimension commitment we our levels is do. And it our

front, with incrementally development partner requiring our the continue but research very complex we on challenges a On technology strong effectively in and steadily earlier to customers invest we have foothold to involvement. product more

global infrastructure close us customers them. are to the to front, increasingly be On our expecting

So in tech differentiation These operational accelerating us, ramped and is engagement. all major in our have ring customer to local last we for of and are centers a markets. manufacturing source investments this proving investments of excellence. local graphic be great learnings The

more customers cleanliness with and Our lines. and supply windows, process control, process of automation, control achieved which tighter process expect greater our to stability we continue process greater

combination materials. No end-to-end the our time has CMC means industry other and obviously is to capabilities. breadth our which by lower companies comes huge believe serving been of faster to customers technology materials device The better final we solution. dimension offering, this our cost ownership value to semiconductor brings And ultimately performance, our greatly close and strengthened with of

our is Despite semiconductor is continue I them fundamental us, our trillion everything and all today. will more ways, well not And changed. exponential in reshaping The expect semiconductors. the we digitalization to to energy-efficient views downturn, revenue accelerating. belabor themes not of which $X do reliable reach around drive understood, and believe need recent These to have demand I faster, more lives very are It global by XXXX. for

industry particularly on you true the simply will is place for here is great semiconductor see a this that message Entegris, slide. next to the And as My is be.

enable is toolbox, and To the major performance. they on chip overarching wafer. new major this, purity process their need dimensions the achieve and and tools customers' right road have our are optimal customers to when ever-greater mean Entegris. And goal, have for operate of say we now. Our to improve yields complex intersection chip do at a technology that and is critical purity. this, maps architectures precisely to calling this X And market materials in more material miniaturization This science is customers the to the moving we At Entegris, and is we cost. optimal what of what materials our

nodes. to in is expected improve is and And yields. their fab by this process filters is translate yields The to Entegris, XD here into ultimately, and From complexity our material points. greater to technology our is can material a more example, solutions several process mean materials structures in per making and and slide outperformance. this served The and these customers logic purity it fuel wafer, complex our for help content materials. expected a leading-edge perspective, market, yield punchline our of expanding making per impact From of Entegris more customers' This positively roadmaps wafer point for using the new more challenging steps greater expensive novel is particularly NAND customers. our management a into exponentially expanding our miniaturization market per science perspective, and increasingly advanced for compounding translates our our layers, that more is wafer solutions more content spend more valuable more customers

AI solutions revenue because are in new requiring These which our more of for science unique complex enabling for This listed engaged material's ones Entegris. enabling chip Entegris architectures in solutions, unique and breadth applications develop purity capabilities like result are all like material great on solutions, and this fronts, streams we deploying is will on new slide. these solutions, the demanding to

that does growth in organic introduce, mean Well, and all reaffirm summarize this what fact, Entegris? So for our me algorithm. let

outperformance industry continue greater we customers. industry by at to then portfolio for outperform have differentiated by our we to of twice to GDP Entegris on core per to as mission-critical points. our we as to to continue This growth. semiconductor grow will capitalize discussed, be and create highly expect driven we our market, unique gains share the wafer the And content market X X First, solutions expect capabilities

investments made growth make significant these and continue will have realize to We opportunities. to

critical reflect going why to support industry maps R&D environment. we R&D in customers' our last X% R&D This approximately is our spending spending our a to technology was road to in challenging our of And positions Our up and commitment investments be winning year, sales. new nodes. expect even forward, are

CapEx capacity Colorado. we years, XX% production realize our are expect and close of we investments be long-term sales. we us this our down year in our X Taiwan forward, should for by back last And, to And in to come way, been new the to elevated in also the going as In in has XXXX. XX% facilities Our CapEx to growth. X invested vital fully

the divisions combination solution. is and With the with a set on to reduces let's MS, end-to-end form to solution of platform. superior solution will SCM newest cost ownership our XXX% almost our set, APS unit-driven yield and robust their provides Moving divisions, of to a our road for maps, more performance, materials customers critical a X single, that device start and MS to improves benefit from customers. time our

materials to year's very divestitures slurries Some CMP, execute specialty etching include the X advanced materials X materials, opportunities excess potential of believe full out cleaning and All of platform of unlock last on and molybdenum, this slurries. came the deposition chemistries lines other the in gases. we points exciting major X CMP in some can new achieve like and growth pads, chemistries we of of industry and of and We division. as etching and our product

as solution within The Advanced packaging. include manufactures, Materials chemical steadily their With and our wafer construction solutions and a we is to tubing. high-purity higher levels this of projects last drives wafer fab as ecosystems ensure higher is fab new EUV handling carriers, MS XX% from wafer of valves XX% revenue fab ultimately unit-driven well AMH growth as of and products comprised known products yields year differentiated Handling These related equipment. set, XX% within and and division, and and both pods, improve XX% containers also can and wafer sensing such business we time. the control XX% to fluid margins and products believe customers' to that purity finished capital-driven FOUPs, highly as over environment.

in X points division forward, yield we in for and of device operating purity essential industry chemicals and materials. industry customers solutions and provides a their reliability. margins our rapidly the the excess products growth need semiconductor Microcontamination consistency for the address top have low of of The expect Going and line mid-XXs. to Control to growing become optimization that in These long-term for X quest in

and sizes concentration classes feature sizing to stringent. as permissible and contaminants as their continue shrink new exponentially well as more are As materials are of becoming levels adopted, the

introduction ever filters, achieve also of purity of advanced more the filters process translates the the result, in filtration fab a push upstream need replacement into points As these the of for greater deeper of and frequency to supply lines. more includes greater

we value expected of All outperformance reach expect of And of our operating to XX% points drive this the is XX%. these growing for to for margins given to customers, solutions MC. X X an to

hand I Linda. to will now it over

cover and a Today, I morning. to Bertrand, plan key few you, good topics. Thank

$X.X capital Then Entegris. of debt structure I XXXX focus the and First, rock to is ended will allocation our debt of our on of turn The our the for last paydown Debt in driven financial debt from down structure I Solutions paying solid. the Element billion we after slide Electronic punchline billion We and by will to that sold year, with Chemicals, opportunity $X.X tremendous and QED is XXXX forward-looking flow. priorities. a divestitures proceeds free total was accomplishment. cash business this

is The blended the interest X.X%. a very portfolio attractive rate on

paydown. comprised is what and fixed last both debt of term after remains notes Our loan the year's rate of

entire billion. While variable, the term $X.X loan is have almost hedged the technically we

maintenance note, we no no covenants the currently have X% we until close and Other variable on to So rate debt. points XXXX have maturities debt. important to

well current again, debt is and So derisked. structured our

priorities is on to near-term reduce debt our Looking focus our the capital at our priority allocation a term clear loan. going further with forward,

expect to EPS. a and We in of equals to earnings. of on of debt powerful $X.XX paydown will focus continue by net contributor Xx The with balanced leverage our debt future. the to critical below gross end to be paydown making $XXX paydown Debt our million investments is below XXXX X.Xx. be Each approximately be leverage

is of continue in expenditures. mentioned area drive particular improvements XX% approximately Also, in revenue repayment, will This started invest earlier, XXXX. X% focus working plan debt we maximize capital our of R&D approximately further for to an Bertrand we and to of me. and As capital what we in revenue

minimize also maximize in focus general, major will levels. and, be We another us. for cash repatriations This our cash will area

balance course of over year. also about our We million sheet expect $XXX average global on to the the of cash

Moving organic near complement to acquisitions. we past growth the with term, will strategic our seek

shareholder value We creating M&A. record of have a track through

appropriate to on time. the that expect remain active So us front at

repurchases continue and But for hold. future. course, pay may now, a remain to of will, consider share dividend, share We the in we repurchases on

shared want I Not and plan future on next, to also company. to It's this importantly, time more the to target run externally, framework our the model pretty this spend business. we power have some So of we straightforward. earnings but use only

see, driven leverage SG&A different next That expansion critical can is model As XX% and the at A the gross margin to assumptions model. Core margin in over time. you flow-through years. levels. shows this model will other line outcomes revenue assumption the of to several be by flow-through the EPS few and EBITDA over

all First, paydown million debt we approximately assume an This revenue annual additional interest expense of cases. no $XXX forward. that remains going constant in implies

continue for count Of tax expect The X.X% by model, share rate million it course, model down XX%, pay illustrative simplified this we assumes approximately is as interest a the do of an scenarios. constant. but holding shares, and assumption we to to depreciation of term the XXX again, of loan, also all

compounder. targets. financial value a demonstrated our our is spoke algorithm on Now about our X-year focusing and Bertrand sales performance growth earlier

mean to this The expect and XX% we last sales numbers? XXXX. divestitures growth left, XXXX approximately baseline Solutions. an business CAGR does to Element we in year's the excludes from what So XXXX sold the Starting from

from have baseline excluded In we to That is laid rate as the Bertrand addition, essentially PIM XXXX intend the growth PIM sell midpoint out. the business. range of we assumption XX% the

and of and of to opportunity. which ramping of SG&A overall, The flow-through margin this gross of our Colorado coupled EBITDA margin volumes as Taiwan on XX% the product volume the a This be amounts are in look this, Key benefits the facilities slide, improvement of approximately EBITDA gross at mix. XX% XX%. XXXX, and mentioned CAGR, Taking closer margin expected top with line expansion leverage. leads CAGR drivers growth a by previous to an the I to are drivers

gross For your margin XX reference, from the was facility basis XXXX approximately points. headwind our Taiwan

as We in we expect that half the this volume this headwind will alleviate year. of start to shipments ramp second

and by Next, EBITDA the than $X we is driven a by key to EPS other expect be assumptions. few growth expansion XXXX. This greater

assuming we slide, $XXX only debt approximately XXXX. completely of the bonds and term billion annual leads on than loan First, approximately $X.X the I by an remain expense million is to we XXX are is paid of different count outstanding. of showed, the assumed This off and our slide interest that This additional share tax XX% mentioned And where we model rate target million. as paydown. previous assumed have no a approximately just a I existing

outperformance. the The value the Wrapping is we long-term secular semiconductor is content believe things differentiated. up, highly our our of optimistic leading per unique very position is about and industry. to and wafer We to market moving us add higher meaning remain Entegris growth model

improving, Our lot moving rapidly of capital is structure a optionality very us forward. and gives solid which

the and you, leads debt, in will to presentation, model our down and attractive leverage commitment Finally, EPS growth. moderate outperformance with to This to our turn accelerated to Thank Bill, our market Q&A. growth the pay our you. the I growth back it and sales our concludes and

from a in Thank [Operator different Instructions] people. This you, question that came different is forms Linda.

So the results XXXX, above X Bertrand, guidance the drivers? then the the points about for talk are outperformance what of drivers QX of and

Obviously, very well. forecast with the most the which that the divisions late to in AMH were recover to started very a finish. very way QX segment slightly earlier was strong in the converted of has memory tailwind XXXX. MS X as Remember XXXX. line year, MC we course, and exposure performed pleased in into memory, division but All headwind the above a had finished MS and were or we a

that overall, very of the was trying pull-ins, rebates Another customer XXXX. customers strong during to or what But of finish advantage factor impacting to the MS take pull-ins, performance CMC completed acquisition in available materials, was project, in within year to some get QX integration this very calendar existence aggressive them very in XX were we integration that XXXX. To leading the very for put of post-close. Entegris. a busy good context, months remember a completing We

we X billion promised $X.X generating do. successfully As part to of businesses our to as debt proceeds large this we applied in had of integration, we divested process, which the

into strong managed slow effectively very environment maintaining the investments our also while We industry future.

As you the a points. that X the investment lot defocus spending We you case. Taiwan, significant of source in in all projects in a in those and of can we the saw, And largely and by Colorado. KSP we increased the completed a know, organization, we outperformed distraction, industry initiated the as of new R&D be lot was not XXXX, of investment

We delivered of EBITDA is our levels XXXX, commitment. healthy also line with very in which XX%, in

So we strong are we a obviously that we presented build upon exiting XXXX platform, very a today. with as expect platform to

XXXX for to So it for the and bodes come. well years

Okay.

So that has from on of Loop a bit Chris Kapsch question. down little a double

major MC at looking down drivers in performance, are mainstream? year it a the the of What Is market. Is the of that? What last really that? leading So drivers well MC edge? it are performed

but So a XXXX, MS asking year. I our highlight really MC them. maybe that start strong full the obviously, year strong demand thank want MC XXXX mean, the a And The from division for of the start very few continue results, was benefited our you question. full for story. that's the of the to into not the getting division. backlog if follow-on was QX I through be solutions of product to

Our very purification elevated continues for system, perform example, level. gas to at

the construction at activity and those systems standards QX our now of that a years. systems that have And steady matter a is fact mostly fab several fact, was purification level. for revenue gas As a become record of for industry function

really in platform. -- Liquid the that The Microcontamination the strongly part of was Filtration went XXXX other performed that division

the industry. purity You this in materials unabated quest heard me, for is

they increase smaller long-term Our more reliability are to ever to And to do stringent. their purity the and really of higher continue that, need making to chase contaminants concentration the chasing trying permissible devices. and requirements, customers levels yields

MC So XX by were the essentially work industry why at And these XXXX. in the close forces points. that's reason to outperformed

X in of for continue basis earlier. to XXXX. an X we that's outperformance for the a And So next level years, see that's that expect we points, expect actually a the X massive to of trend to as going level the And X presented level to outperformed I forward. outperformance

Okay.

Next Goldman. question from Toshiya from

the So if MSI versus you X% can down CapEx end break growth industry for markets? XXXX,

relatively rates. be is Advanced industry. recovery DRAM. different industry year that, to in the expected will and times recovery XXXX year. stay that year. XD and And first that of mean course, be mainstream expect downturn remember rates, quarter the ago, will segments by I The and and And entered especially for muted, fairly a the led the at be this at different will few a NAND just fabs compression, we significant So logic utilization of recovering of the reductions in by start just wafer months different especially early have

So when what of our quantifying that's that's land, the for the account expectation took the industry. lay and we into

we MSI And be just context about essentially industry the about in again, remember here then And talking XXXX I'm the flat. not X%. to So WFE. expect total CapEx, we talking XXXX. again, expect about here compared industry be up that And to to CapEx

those X in XXXX. blend you get growth So to X% that industry if you numbers,

And Atif that okay, from drivers our performance our a follow-up growth, ask be, the XXXX, then would from in we talked market outperformance that's the for of what which XXXX? of level are and Citi, about I'll

we out greater Entegris We called to expect content continue drivers right? the drivers the per are the presentation, in benefit essentially from wafer. Well, to

in ready late in of particular, some a in node XD start for also expect node manufacturers and XXXX. in transitions the number XXXX. for advanced And transitions significant NAND, logic expect getting preparing year we We to

to X in of So points that will of XXXX. that all outperformance contribute X to

Next question, Mizuho. John Roberts,

performance last you around maybe revenue AMH some how maybe the QX. Can in So year. the provide into And color that? decline drivers of context put AMH then margin

with the I add on margin. can you and Linda, performance, can then Maybe the start

actually really times, you a are the revenue that we XXXX. the really half of QX impact That of them that elevated multiple sustain seeing you in about think AMH, in very entering QX And of AMH that's if as XXXX. backlog backlog significant disappeared year. first in So helped have XXXX. levels And mentioned the had

the Going AMH steadily through year to in would forward, we recover expect XXXX.

And out. a margins Yes. for regarding I'd drivers in AMH call of couple QX,

some was deleveraging revenue. on onetime volume some of variable the between including rebalancing secondly, the impacts, our there First, And our with divisions based -- compensation.

Bertrand those we QX of very recovery and of much rest go margins said, as expecting into So as the a XXXX.

combined Okay. question. This a be will

Silver. and Kapsch Chris from Loop So David

Chris So the some item of progress the can the is doing about a from Silver CMC? products sort then little the acquisition from that and about end-to-end David from first talk number X Kapsch solution. on in a those Bertrand, little sales synergies of are bit examples you And the bit asked how that we got

Okay.

with pleased pleased CMC teams very very X the out. way we're with the But engagements is gratifying. metrics. importantly, few I a Materials way talked with So months. combination of together XX customer the I'm that the have more the very, the And we've quality seen in is extremely shaping also the come different about last

based slurry on the solutions ways So various and combine co-optimize optimize seeking understanding across mix. of cleaning salary new and of that on to understanding ways different our platform all blends our to our slurry. the optimizing contributed based platforms, better filtration chemistries opportunities, of the to better actively the Ways post-CMP of

taking So that all place, would as you has expect. of been

that is you the as pipeline compensable only that at we last objective. know know opportunity and that not a particular should actually, should goal we far when but the the actually objective, that met And MS matter had X year exceeded this is fact, funnel. And to to we of You looking the a the confidence forward. we why of what points to X And us the platform is going potential we MS come. outperforming about giving by are talk years market for in that committed

Okay.

for question Linda. Next

see XX% EBITDA margins, next we drivers? what the throughout from QX. then Seaport. Harrison Mike year? and into margins as do are of go QX So you in cadence EBITDA How the And

we margin is a into year, Bertrand mentioned, EBITDA for recovery guidance XX%. XX%. next we're expecting So we approximately approximately QX, the gradual as said, the is as year. throughout In the go guidance

margins. in EBITDA you'll gradual So also uptick our a see

a that to I bit year, working very first, impact productivity, our volume look there's talked our as always the will mention last as will on item we driver, But impact about the focused This some reduce one absolutely aspect other not inventory leverage still will helping drivers, there's inventory we're an As great And reductions the on is across as year, as on capital. margins. with it are we remain of mix. a be at margins board. and of I continue was. We focused

Now, all that XXXX will the points. the of in that XX we have headwinds those still positives, KSP. approximately I ramp from were headwinds XXXX, in in mentioned the basis comments

should about is slightly in 'XX the think to of those You more. headwinds same

and Pulling EBITDA manage we will with the continue first we what half. alleviate flow-through. XX% Now then the happen between going in cost. XXXX talked all this to and about, we'll the in as be heavier half, to together, KSP are investment we're in And is that to impact second that will start going to to balance

how gives the that see of context margins you coming EBITDA together. I So XXXX

Okay.

information going at we've update in you, for question are can us, is, presentation, BMO Linda, how you looking forward? Another obviously Bhavesh some from you leverage from presented the

Yes.

that X.Xx. the less presentation XXXX, end in net leverage by expect So leverage gross Xx than we we mentioned to be to be our expect of I the less and than

as As continue have structure. news but we talked a go I great will to forward we optionality. the on deleveraging, in we XXXX, some about will is we also capital presentation, is, retain to rock-solid focus beyond The continue

allocation going The most our some so the is optionality we've as move balance thing prudent continue, have and capital forward. to of strategies. important we'll will want we forward, in deleveraging we we demonstrated, the between as And to be

KeyBanc. critical? -- around from that. of sales. driver from a Is of put this comes the Aleksey for color this R&D is outperformance? percentage And just Bertrand, Maybe some -- to is part -- is Guiding X% this this that as this a why

why actually mentioned, customers to collaborate first -- complexity and think as of to are us growing over noise number inviting on And the that time. challenges number what has been is, growing. different our Multiple that I the about the one is

we that, are invited You should customers their with in technology because that earlier to development cycle. our of also know process collaborate

that And that It's that to value grow. So our opportunities The value to Entegris us. we contributes just new just that the the greater there's number fact continue wafer Entegris indicative see can of solution fact all that content of expect end-to-end of to capability spend. the the we per customers of then marketing. are of that the provide, that ahead see

we node be customers. to device extremely performance, for transition, to They be willing not of important that's that current to for that's to and key we of also time do in of are But the that come. our yield and to level to invest maintaining And ahead really something we XXXX, downturn committed the going to in increase and understand ultimately, it's to R&D. but to to years that in only are the time realize that investment opportunities did all us, which an have the

Okay. as Shi, about progression okay, you we And kind the asked Charles on can see as year. and revenue we 'XX? I'll and for -- about a market How MSI go that well? and this flavor talked about you so forward of little going talk that, add through CapEx then he do

Yes.

steady in as a mean first, we growth we a which there again, logic. Logic first sequential sequential So I in advanced course, many start mainstream in in the that actually normal of and And line is of quarter, down X%, logic expect From seasonal compression increase utilization. expect sequentially have the again, of in our are cycles. let's fab Advanced in with on, we customers with right? guiding reflection indicated revenue fact

some also from mainstream We expect in in at more year expect recovery memory and customers. conditions the further point we our stable

the the Taiwan, Excellent. where for on first does second ramping half? Question And are with we there, half, facility? in the what volumes Aleksey facility that the mean from at that

pleased take the you in our little impact. I let we maybe Maybe on first on if a of about construction have can the site. Linda, made are KSP investment. part. say employees just the But we XXX have me very want with elaborate to the we progress that bit Today, margin phase

already customer cases, have progressing qualifications rapidly And internal Our are progressing a and in well. qualifications few started.

generated already second orders, $XX be from now. I of the small reach million million they to of expect customer somewhere for $XX revenue we facility taking some in between actually but We that are out in level would the KSP to XXXX. revenue year the we So right half facility the expect year. very orders, are to of mean, the

Right.

about start cost. that And to the said, quarters, start to think side, that taking revenues cost. we will offset margin as quarters, So of will X ramping then the up, some have the that it Bertrand the first across of couple in

alleviate to in have a we still that progress continue we we're starting XXXX. through from and So will into but as headwind XXXX, KSP that XXXX,

ask will a And then question, this bit a similar I already Linda and Toshiya. from talked little you about

EBITDA about and talked trends. drivers You

going trends position you gross So opportunities margin improvement and how would forward?

mentioned Well, a gross really are the I EBITDA improved I -- mentioned lot around of the that trends that margin aspect.

mentioned, I around lot example, of productivity A margin. So for gross come productivity. the will

addition, In really volume the impact of the margin. ramps some gross

leverage. volume Now EBITDA, ramps us comes to when give SG&A it also,

volume utilization. that in But as we ramps, we grow will plant get both. more it's So

XXXX. are big that evolution those about to some throughout that drivers So the as mind my come gross margin of think we of

And from gate-all-around? KeyBanc. Bertrand opportunity -- from Aleksey, a how here and qualify what's would the word you

So in to them. the this being during the And of we those presentation, come. years industry flavor number one architectures a of of gate-all-around opportunities, XD expect that to is new the we another just highlighted in proliferate

and gate-all-around, around, well. as slurries precursor opportunities see other expect to around specifically implant well we materials, for new So as solutions solutions as etching polishing ion and chemistries

of early expect we the the very from expect to are nanometer saw increase Advanced driver wafer of X.X all to to So content, that a logic. see big And analysis in X-nanometer terms of adoption we in for we way be in the the as that you believe architecture. that the particular on we innings

little there carbide any A obviously, this bit you really silicon updates? for year, well applications, in slurry -- provide of what a follow-up silicon did pads, and Any terms of there? can color slurries, carbide, us,

Yes.

is this $XX fairly about company. still our an on of annual power are So area small part million for is a around to today, revenue talking focus that million $XX it slurries, remember business And there But expect the the extremely a do opportunities that in double about us that lot but to other business range did We I'm really a XXXX. to levels business. to basis. Think And great of here, continue electronics. we for of well. from mentioned that XXXX

of hand are we in for that systems slurries, opportunities terms the really beyond power purification we slurries gas pad So work that opportunity with great and the cleans. electronics. of customers in also have post-CMP glove solutions in in providing our great terms There are

emerging very is we fast market area an this are a think that that growing I where segment very is and and is focused. So

Okay.

how target Arcuri those the one Tim like-for-like 'XX target, September How on Linda, today, from a provided question, X-year you basis? the we from EPS you to would Next UBS. compare do compare

question. Good Absolutely.

It's have target, by to X-year current XXXX, key Number do if look revenue. factors: our out driven So you divestitures. one, less X we

we target said, exclude So Also, model. PIM as this divestitures, we had we the look we all as we XXXX which at X-year know about.

downturn Secondly, been expected. has the than longer XXXX

does that long-term So impact the number. revenue

divestiture That's good program has the been important schedule. Now here. news really on our front, ahead of

and faster, So of faster paid have a result interest that. got rate done down debt lower the a as divestitures

really about critical divestitures EBITDA XXXX. bit a tax when There's think couple that's a and look accretion. as we we us where The lower give other positives. key of rate bit the are we of at So a is

you we So look you target X-year more XXXX delivering the and and the are levels, that and is factor all at at the punchline same revenue in EPS.

this model. X-year very good target at look we a when it's outcome So

Okay, Bertrand.

but a what changing edge in So with bit, in leading the David -- our interactions presentation more we our maps, to do Silver a do about this has these with these the is little customers and more addressed we them? with how technology complicated with question need road

becoming the process in with our bond trying challenging for the all, to of technology accelerate a technology first road new So transition to with maps is fact, more customers, opportunity Entegris. really

has achieve yields cases, performance, again as of and device indispensable new very partner they Entegris and, as compress to them frankly, acceptable unique for an the see engagement So many partner levels in a solution. of increased, level time to

we're more investing mentioned, I as in R&D. So

in centers. a all more significant engage technology leaders We in similar more in the order with announced Taiwan. to, lot tech the have investing XXXX regional Korea again, space. of late We specifically in locally effectively in investment very are We investment a a already

differentiator, very centers for few, Those options provide customers learning, really if reinforces tech really local well think those the the customer those and both up for in investments competitors our our as for Entegris. in capabilities quality any, are, interaction. of our speeds a cycles it also as fact, the It great of customers. I of And

focused to quality this very now. on many customers the are developed that with we of continuing improve have for years we relation symbiotic So very our

Okay.

So this is probably for Linda.

well. something So to combine this and to Bhavesh from as going BMO, I'm

margins he's see talking And sequentially Solutions so So divestiture? Materials some Solutions, model, down margins how in forward? significant a provide you pretty Obviously, presented we post around the in Materials that. the color do about going improvement

of Yes, course.

of what all, to So margins. QX, first flat somewhat divestitures. think we first to is back you're from I the have Bhavesh piece to QX referring This comes

low all Bertrand MS had These If the division. in were divestitures that the in XXXX OpEx. that you remember, mentioned took divestitures place

line. own, earlier, tremendous about accretion as when So while we the OpEx businesses, division on the spoke and forward, you But mentioned, MS, low with you as we see accretion, MS don't have as on look go margin opportunity. has its these we profit particularly gross Bertrand at

unit-driven a business. it's First,

ramp across portfolio. We MS to up. see are going to going see the We're the volumes benefits that of

our we This think really goes about so invest R&D margin the not opportunity up, MS, if about to to as get the sales with this and as opportunities how comfortable going company sales the we the marketing and are set, is but the will the same the the continue brought we something are why we addition, potential thinking of will applies see increasing, like well for rate to all ramp, with you In solution as we're SG&A leverage. as around critical, longer-term MS. sales really core at divisions increase is together,

Okay. margins basis, what And of forward? on then this MC going the a are on -- MC forward, margins progression improvement the drivers divisional a for little bit going

divisions. Well, there's so a of across MC, the lot various similarities

XXXX, our positive. very the it's market, recovery, on we long-term and it, but As talked gradual we've said, view about

portfolio. products, this have we portfolio, the a -- will again, customers is our perspective. MC benefit the And attractive of mix there's need as more from a very So filtration attractive do

a into MC perspective leverage. And margin we that some of ramps, 'XX, in on so KSP more second the benefit. to will happening help as therefore, the going that's that's really from also. get And We'll 'XX, get of volume half us

Act, questions Chips So maybe the around in terms of couple Bertrand. -- of a there's

what So the couple provide should can maybe of and updates progress you expect. there a on people

Yes.

project last promote many in here built we development overall for supply supply $XXX line X domestic this new of the know, resilient Multiple to which, remember, supply as last chain year believe big announcement you'll to And in chain with objectives is the is or the be as of is U.S. to in year. trying investment. new one Act, in derisk fabs a the Colorado. chain investment risks a So an a that we phases are domestic that Chips the and U.S. Phase the expected you much made initiated around Phase about million. we this very is facility X that

been believe have program share. in We discussions So the active very been with have update we we very and you we've Chips positive, to that and office. will when those dialogue, more dialogue constructive specifics

Okay.

on color end little And look forward? a from about Anything bit of some some why the what of that markets Bhavesh talk and can lot add products We any you BMO. here, Going it going is -- molybdenum. around does a like the important?

to expect lot as or class electrical turn for new of we have a performance. the molybdenum that similar industry look example an talking been with we thinner to the of materials materials precursor better as about film they Yes,

point, expect some then XD materials We NAND architectures logic introduced and in at those to first well. in be the as Advanced

wafer time very the offering provide to ownership. of lot system not positioning just leading the the that an material, of material ability that also but a very deliver can to at attractive cost industry-leading total believe that a onto delivery players. effectively precursors, provide a with the around those spending very been solution we Remember solid the have we our NAND have capabilities unique we So XD

players very close. have last the whether molybdenum, I our likely we confidence we layers the think they in XXX layers I And a at think XD increased question wait new remains mark. adopt significantly to will until molecule years. So this several are believe has XXX that adopt NAND very, we level But or

about what it is this again, in see opportunity NAND, what at content it is increase of the XXX think SAM of double terms the is in exciting. could XD layers. So why And from when per-wafer Entegris today you we at reasons tomorrow essentially layers. one This in XXX be

similar little And just follow-up talked Analyst benefits about filtration forward? positive that in the questions talking per per last a you wafer content we through. story And few the that and in the wafer, filtration the what still or the were about. content drivers? In to -- Day, what a is are Yes. going a came Is same very where

because and Microcontamination getting our outperformance reason it's the evidence expect terms usage that the not to Yes. that filtration normalized mean which of device I track we environment, is and to can link opportunity is precisely. architectures. lines, only actually remains of lot a per-wafer precisely on opportunity we can just see to harder But opportunity supply gets a the in harder of we in fab track story is a something advanced that in and The to fairly us actually the simply same, have the level particular see really not upstream that is basis to you just that for that in do in division. expanding the

their in that, of purity. new more levels achieve customers increasing. Those greater frequency using seeing in atomic filtrations, are of change upstream filtrations the filters also and new points are manufacturers of of supply higher lines. introduction advanced points is result of the are asking chemical levels increasingly you purity, As a achieve significantly our to know, And of as to order fab bulk we out of

Microcontamination the of are So that drivers for all fundamental our business.

So for a just wafer nothing to It's technology number. that pin to us that has to changed. to node and hard a normalize particular

big term. Goldman. of final a has been from a in company. the the paydown growth be will This Obviously, priority Toshiya near from is Okay. driver M&A the question debt historically for

what looking for a Bertrand question do we're are the that we M&A start the again, is looking target? we potential So for are what to characteristics when in

I expect obviously, Look, should probably around of optionality. value XX was mean, good very really has I the additional in we've is a past Entegris is we mentioning to story we think businesses. organic statement. of you integrator have at demonstrated the long-term how selectively with us But to go years. the is a CMC well are proof shareholder very very that done we I earlier the what of continue blessed of do. This I And that compelling. to growth a I And we platform gone is think that, what that create integration latest by that platform, This exciting a what top can are provides M&A lot on think certainly after targets. point

that, right go to debt the Linda back I first now of bring priority down. our all said of to is order Having will what said,

going expect to shareholders us available that to additional that of keep our to forward. mind But do lot create us and on to So be there for options that. capital and focused are to value deploy in our a

thank very Great. the much us for you today. joining webcast on Well,

a go the by -- provide up the website will We recording of end will day. on our

weeks. coming and to questions, of me. Thank out If really a We forward you you again, reach many have further the great seeing look please any to day. have in you