Coherent (COHR) 1 Nov 182019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the II-VI Incorporated Fiscal Year 2019 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Mary Jane Raymond, Chief Financial Officer.

begin. may You

XXXX. on and our the Sarah, Chief Welcome I Mary fiscal am our call on is our Thank President Dr. is Financial Segment; Laser and good Officer Barbarossa, Raymond, Chuck year for call Chief quarter Incorporated. me and Officer; November Operating and here call Officer Jane today first the you, Thursday, Gary earnings morning. With Dr. at to Executive our Technology recorded the our Officer. XXXX. Solutions being This Mattera, Giovanni Kapusta, Chief Chief X, President of II-VI

obligation as this update reflect to subsequent forward-looking teleconference Chuck? Just of to these statements to during in events that, let Mattera. Chuck today. given over make any the it context today do any me to reminder, are Dr. We turn today statements we a only. With may undertake not

Mary we’re the quarter California. We we our our really everyone site Jane. in a Sunnyvale, colleagues and We Thank our morning hosting us the Center, for and Valley CoAdna had great to with Technology at here from ended II-VI a holding backlog. record new quarter welcome Good Silicon you, which former thank today today. call new

XXX.X and grew Our we revenue of of same year, the million had XX% ratio quarter last over X.XX. a book-to-bill

XX%, targeting. compared benefits end electric early scale share XX% to XX% with XX% military phased for interest communications prior more growth are that highlight Compared of to last the our are incorporate systems. grew to one that our Military new carbide and from and military from expand year Many during programs we and these the silicon market begins combining. and longer-term position and optical applications grew platforms EPS multiple XG XD-sensing we’re XX% of electronics silicon acquired grew the grew last to year-over-year a the for order particular of strengthen these grew energy $X.XX the the continue Increasingly, of and ramp. XXX%. array market per as high-power reconnaissance Sales coherent opportunities and in see to emerging growth, capture for us vehicles integration XX%, carbide quarter won surveillance, grew over in end our enable we Optonicus substrates EPS in technology of the beam share airborne seeing ranch space strategic over per $X.XX industrial than over solutions portfolio our manufacturing platform FY’XX, Our of customers the QX, was months. XX non-GAAP same that XX% the beginning business QX to of grew part year. innovator to directed To and an we lasers programs quarter

We directed that subsystem this we and will are platform expect technology energy enable further differentiate evolving. our

electronic very We are the strategic RF of Monday. on also around band that devices gap we wide collaboration announced proud

compound to fab HEMP and wireless begun and semiconductor our Jersey our HEMT transistors already to scale and SEDI estimate us that in electron Market GaN mobility state-of-the-art semi-insulating enable Innovations for manufacture holds Warren, with or We networks. with have studies number the SEDI these one wafer Device on new XG GaN our coupled working our and substrates and high to Electric that develop leadership market integrated devices XXX-millimeter epitaxial SEDI’s share RF qualify platform allow technology carbide XG GaN silicon devices. Sumitomo will and market capabilities leading XXX-millimeter for devices devices New vertically fab expand or

additional this have commitment will participating Monday, allocation I coming new to house our event regional embarked customers China. our the headquarters dedicate foot to in by ceremony II-VI, money celebrate Asia, transform multiyear new to investments excited that will facility Fuzhou, of world. opening also host this for forward future and are This in growth We and we assure buy. in XXX,XXX for will scale to really and overall offering the we Increasingly, to capital our exciting our customers the Four that could efforts. and the portfolio best needs. planned these for a space product time quality employees around we order customers It’s company discuss on manufacturing serve an ourselves our support products to plans. their ago, look manufacturing recognized to needed to our we have our and our been that square years

headquarters. one and we is October last example, and teams honor Quality Supplier XXXX held Nokia Competition in relentless For This are attributed Nokia's Excellence incredible grow strengthen work at II-VI and the worldwide the proud the to to five have achievement Nokia. partnership their Awards over with years for to our

in looking point employees to forward have to our quarter, With growth. Gary. have that, Finally, At for XX% focused it on and strong with fully energized XX,XXX coverage already revenue really and behind this and continued engaged are nearly delivering stage QX. a us, the one for the over I'll order Gary? worldwide we turn over month we setting

Chuck. you, Thank

revenue solid ROADM revenues and Our business, usage QX of for were high communications industrial continued demand. seasonally systems very in In with business once experienced industrial particularly systems. strong laser and adjusted again growth products quarter, the steady and bookings bookings this

it’ll of under both, applications and structure. XX% order our tariff be prior In immaterial, communications our year. diode were existing industrial results and to increased for book we fact, the to shipments the effect industrial, laser tariffs immaterial on In expect continue and

of markets North Europe, rest the was capital XX% consumer the was XD-sensing including XX%, X% revenue, function was revenue our was equipment China, XX% military in and XX%, the was communications a as industrial of XX% was total quarter, X%, semiconductor Japan, XX% Silicon of including world. carbide X% all in Geographically, were revenue, and EUV of XX% revenue. automotive X%. across in For end distributed in America, QX in in

We both for facilities expect part among million invest into XXX-nanometer million carbide components. to XXX pumps, this XXX silicon this and optics, of capacity go year. equipment other in will and A diamond capital to good expansion,

In agreement revenue laser signed this to fact, component which just EUV-related million EUV the a our nearly customers double years. five-year of to potential nearly major with customer has from five we one within $XX

our We crystal operational on those release, and of systems simplification, press our Performance our finished Products continue growth in of into optical noted operations to work Photonics integration in the since moved as most group China. isolator we laser into are

our drive our new over about I had integration systems and continue $X consulting simplification million With that, it business Giovanni platforms. for products. advance in We highlights a in to turn approach expenses to to of

volume quality XXX introduced multiple introduced active rating which diode including including Thank XD our high beam microelectronic micro X direct head and bonding aluminum has enables direct welds on vehicles. processing laser a annealing This Gary. We power motion for last for required material kilowatts process welding batteries batteries laser soldering, high engine from aluminum manufacturing. had a on you, non-contact remote car innovative show with week where at processing EuroBLECH We electric to reliable up our components. including localized head in produce rectangular successful shaping products we those to

maintenance that direct intrinsically which and in tools, delineate are most processing areas visually diode efficient precisely free. investing power beam are process the enabling material lasers are geometries We unique

uncooled the cost the also We lower fab the longer market. redesigned of also demand meet lens and the micro-pump integrated we’re with ranges independently respect optics developed material the capability of focal laser emerging X-inch of established gallium BIMO-FSC processing At arsenide milliwatt we rates. autonomous XXX milliseconds. Such the roadmap and vehicle in epitaxial a amplification terabit cutting With We launched world-class embedded to entirely micro-pump as over This and head. XD-sensing, uptime address by being of diameter laser the vertical for ECOC on zoom part focal to introduced second extended to the optical capable XX-kilowatt faster just operation platform. seeing wafer adjusting enables ownership. driven benefits transmission welding is our

and applications reality arrays devices for end to several that consumer, the and automotive innovated next We to functionality. XD-sensing development customers several of be and differentiate engaged module seen markets laser generation to through large integrators. for recently continue prototype customer technology, devices in We’ve we enable industrial in augmented services and shipped laser OEMs product laser an interest including increase time-of-flight with to seeks

to We expect it and by XXXX, to these customers precedence set of over we’re let so additional UK Jane. production capacity for turn run qualify the of fab some me growing in With that the the the in calendar to at Mary to our working market. end

was XX.X% expenses XX.X%. morning, margin gross was adjusted QX was for M&A The Giovanni. EBITDA CoAdna. margin XX.X%, or for overall The for Good Company’s margin and operating the thanks XX.X%

on XX XX XX% orders the that expenditures X.X X.X as Regarding to with efficiencies. XD-sensing, The margins, QX FY’XX. in a margin include share The XXX in million. a of of a amortization and share last months. Laser transaction and operating communications of a operating million costs. an costs due XX.X% Photonics the The of X.X backlog Solutions FY’XX margin expect and The the in XX.X% rate of and a we XX% in year. the transaction million million of combination were an XX% contains in margin mix XX EUV XXX segment QX Products growth over Performance the was margin operating time. XX.X% saw and XXX million share $X.XX backlog the in to a was and to exceptionally to Solutions. excluding noted Performance $X.XX adjusted rate quarter compared high basis. based tax of Laser to in The The for compensation in next adjusted operating Photonics, optical a ship year’s adjustments quarter Products we compares advanced million X.X% Capital at million reported million higher tax operating in favorable EPS QX this consist will benefits

not shares Our on XXX is did and cash XX this any debt repurchase remaining still million. have was million position XXX and authorization. quarter We our million, our net

per to $X.XX ending refinements at count tax second noted, average transaction amortization of shares. but This basis, diluted weighted outlook Job for of quarter costs The any costs for to the is million diluted and exchange earnings earnings Act. comp, $XXX of for one-time Company to Turning the million shares of and the fiscal collaborations adjusted estimated includes share all to per is for $X.XX On we $X.XX shares transaction $XXX including transactions rate. finalizes a which implementation Cuts and one-time share of and $X.XX as as transaction Tax prevailing excluding $X.XX for the based the its XX.X XXXX, announced. at to outlook, revenue $X.XX and and XX, our share recently $X.XX December an million, $X.XX the

so million This anti-dilutive, the add shares. back convert quarter the remained slightly X.X need we not

comparisons diluted for period, million for of For and Act, the This of for ended results the $X.XX December stock and of were to $X.XX. Job under foreign $X.XX $X.XX XXXX prior per earnings $X.XX the $XXX.X transaction GAAP includes for second $X.XX. adjusted XX, XXXX tax comp amortization, share revenue Tax quarter EPS the

we on results turn materially. forward-looking for based may for contain as mix, and only your remember on vary are based certain conditions. this customer economic actual Q&A the may may our to actual to also which which today results best Now, today that our general product statements that and remind call, you knowledge answers orders, in I'll our competition, questions differ changes

to will we may protect Sarah, Q&A, abide lines by the during our for obligations questions. customer the that, you confidentiality. our addition, open With In

question Instructions] Our Dave line the Riley with comes Kang [Operator first FBR. of from B.

line is open. now Your

for actually in This drilling is Kang on Dave morning. Krowl this Lee

experience at if go we've curious will ramp you the know if business about into the Just what of good or traction? kind the talk expect really XXXX? as a you looks quick could if observed guys you just as then towards business seasonality curious are you to calendar end we it get just mix the on the component year end of XD-sensing linear more And high like rate starting XD-sensing, maybe of level some because

Giovanni is here. This

-- across we a are and for platforms several those regarding XD there and even is mix, engaged sensing. consumer industrial So, customers automotive in number of still with in

mentioned. script. during you in I a So, like of lot we time-of-flight we as interest talk wouldn’t platform said see necessarily about particular the anything the Android,

revenue the a expect in QX little experienced we higher year. for then maybe outlook, terms as In last QX revenue bit of we

but see year probably is will this of higher what And then, of So, in numbers. kind a last repeat with next the happens following we the quarters.

foreign you a you but could exchange? just maybe quarter impact know I talked then, guys And run it through of kind about of just last modeling perspective, from

this the million probably little of about prior U.S. certainly That’s had say We in quarter against exchange quarter. has FX in that than given weakened less would we has So, I say I’d R&D the $X immediate the total dollar. significantly foreign in the neutralized. a quarters bit seen a had

just then kind qualification the last And and opportunity talked your guys just about of fab. carbide question, you process silicon the for

could comes you talk of when after qualification? the beyond the quickly revenue how and maybe, Just maybe timing that about timing

Yes, this is Chuck, Lee.

me Let parts. two it in take

and GaN expecting approach a integration final through through that all, running the methodical the be on began qualification, including through we we be mid in Warren, expansion is pace a XXXX, to Jersey with qualified run fab, ramp. very-very the silicon with above of required we calendar expect already We’ll carbide. in partner keep for demand forecasted our New fab we’re the what order First and our to begin which process and should

Thank you.

of Our from Morgan Stanley. next comes Marshall question the Meta with line

Your line now open. is

to I wanted the a on laser the get side. -- of laser just industrial sense on

Just there fiber of versus and and the about as what as kind side? if the you of laser trends renewals laser far you’re if COX already could of you apologies, side the talk kind kind did

industrial the is is revenue on laser this COX, the good capitalize too our revenue of as basically our -- don’t as you a difference the EUV still not between we we We've if super it’s know, revenue it -- similar. recall past in even we it, pretty you’ll is revenue. Meta, an There in see And no and much kind COX than balance Giovanni. fiber laser pickup seen market say as going pump advantage laser in which these Obviously, than fiber supplying market, semiconductor know fiber we’re year-over-year definitely China would pump enjoyed don’t on the particularly in China, nicely. I XX% XX% by little and add laser bit they you technology. taking is all a newcomers China laser more we’ve growth devices pretty the particularly to of growing

supplying the pumps growth we’re by them the products. engines, for So, laser diode their enjoying their laser diode

are like Meta, this one-stop I would thank laser. that components that related laser for supplier including by required you, suite just a add modulators the we us people have Chuck. that the to power that -- our differentiated that to is other optical that we us for of component isolators The would is get allow semiconductor I is benefit to fiber isolators, builder. high acousto-optic a like add centerpiece of -- and be opportunity Giovanni. related

been maybe on more obviously, then side, mix? wireless kind Where at coming we and what of the your That next announcement ahead silicon side you of that XX-XX was we guys of And made the the carbide primarily of running of of the had at could year had growth on the a between wireless kind or or at I kind should vehicles stay electric think understood. that least quarter. from

the years, X go I out time me, any to mix X say grows in And silicon just dominated or allow business to X to going RF. and and years near the to power fraction. be market. electronics you just expect by semi-insulating at with grows. going become power of X mix of smaller the smaller given to carbide our market the is time horizon longer It's would if the a term, is for diminish in substrates as point That going we electronics

strategic than it the one-third electronics a that even our might power to semi-insulating, will is of But to going A, market be around And only builds the grow market. grow it is rest I going and faster grow, So, to faster. expect business the based two-thirds and matters by grow the today, reserves. balances on inventory is it thing and semi-insulating that it long-term,

Our Fahad comes line from Najam the of with Cowen. next question

line Your open. is

revenue? can remind A year-over-year grow X% you us revenue qualification it carbide the first, your please total to silicon in XX% did quarter, of

that’s Yes, said. what we

weakness China? apart, from recent you on that What markets guys China China Question of why guys us that? challenges different that have bit peers obvious Can that regarding so any understand some competitors, the seen in peers your terms little China? relative having these help have commentary in have is Is in are peers the industrial you the significantly help you to to market, in haven't slowdown of that your you help on been of who end can the us from sets that you understand, us highlighted in you business. related

Fahad, to this simple. pretty with is them. Giovanni It's don’t here. We compete supply them. We

So, we if grow. they grow,

in growing are because are IPG suppliers you say, suppliers, China So in and having you that competing so in Chinese is end way. the your supplying they terms of up to business local Chinese retails

the most are earlier, went build and optical laser I'll fiber which public fiber have mentioned have don’t don’t required I of of say of that technology, also majority some key in components the to semiconductor this mentioned, laser. this China --as some vast companies they As Chuck of laser the

So we that’s growth market. China in particularly and supply the we what they need results enjoy their and their

would industrial in our part the business of that place. driven business say I in with usage of that our is good laser a just also keep by the

perhaps unlike or lasers used lower, are more. dependent when are at new on sales system in sales, even necessarily often laser that placed new others, So are don’t laser the systems we all times

So, for business the our industrial that’s part keep laser important mind company. that an of in

How or or that should ask one silicon SEDI the clause I we we your your merchant right your any wafer capacity this about laser partnership implications business? laser how put first on you your with has way on partnership? any more may If on think question announced in Does SEDI. think merchant business should to about exclusivity

Full steam ahead.

you. Thank

question Loop Kisner line next comes from Market. the James Our with Capital of

open. now is line Your

single of XXX% I drill but is wrong, think basically correct to maybe me you if the of can a peers. down better than -- more that I just broadly, kind deceleration just pretty sort of for can it on But contributed you get you and that ex-XD-sensing, that? you're XD-sensing mid a solutions but just bit with solutions I confirm being you said a much was that that peers, is Matthew, in want pretty teams just -- are and outperforming I laser to sales and big am about in seeing this you ex-XD-sensing X% you of of Company am said decent still low single of obviously think getting want up first kind quarter. terms I a just going clarify said, So indeed up I to laser solutions, deceleration laser digits want in comment I of your

the just It’s opposite.

mean we industrial talked growing which I quarter So question. business for the answers I about XX% the think the

as the you But you about too mostly? you products China impact you in clarify worried based the the Can Is about I it of leaving you’re in hold expect it performance tariffs, being even as subject and any not tariffs is to your comment you a can largely had and that just is -- incremental any to not up? not of talk more XX% if know seeing the going classified impact. said because still kind U.S.? going impact, with because China you not tariffs that you're tariffs don’t are much your are also And like result is that

imported that first are thing. that’s the everything our just So, the our of it’s I all say the necessarily that company incoming that first U.S. goods is happens say China -- not from either necessarily in let’s in made company import not would that,

is, customer. second The China directly out ships not to everything of thing the

our tariffs, are, we’ve options say the beginning working or codes recently tariffs since whether at we’ve hard where the whether the that’s very-very settled the importer, option customers look an the in with of as that customer been that’s I to cases would HTS for the is the promulgated the been for operational Finally, in filing regulatory option that or exclusion. along, the certain have management allowable changes of what

successful So, that disposal pretty tariffs. on, We the have but opportunity have filed yet and relatively rolled not everything much with minimize and been we’ve many using on won to we’ve that still that we’ve. are gamut so been dealing far exclusions

more, one just could. if I And

in late I’ll am both you of not concerning you talked it. be sure and hyper-scale to investors can of Thank of comment separately? I for you. China general and Just pass in on demand those, but areas just really one in

Sorry, James.

repeat Just question. that

you that kind slowing of investors there also just off late, I and talked short company demand trends hyper-scale in -- on there’re I’d know in about Thank companies so have additional your you about talked either just just. market number those X.X about hear queue Web being one of to just Yes, skittish kind love China two you. update the of is two could? you’ve if think markets, general end just don’t in just

Sure.

general board. have Chinese demand in Let's across matter. that say we China pretty as talk trends I a to about would decent see the the continued demands

mind, us. in keep is So optical as both it's a and big well. industrial It's China for market

day So, in at as we strong hyper-scale, market respect typical obviously China a general was the then Chuck? adjusted industrial this us but to quarter. demand, saw for And seasonally would relatively a I remaining matter with

I would add intra-data center, But just really -- good ending both flat morning, DCI and James. I'll say for we quarter-over-quarter. was ROADMs, what it regards are we to strong. for experienced our business with Yes,

question next Sidney comes Deutsche Our with Bank. Instructions] the line Ho from of [Operator

open. Your is line

there times. give you of more about IP color, Maybe it now supply of will that’s product strategic expect companies do collaboration similar sounds the importantly, coming question XXXX. more the couple And a future And mid been I first asked labor owns on that’s duration little of know What's us arrangements? qualification and of this the contract? But is co-development kind talked dedicated My by agreement? it? who is your like any the of out do you

it into very and today. the silicon it's deep. carbide the carbide of Except broad And of technology with our them. GaN close relationship And a on it's it's on their strategic, technology agreement producing the GaN get silicon we are say, have devices to GaN able silicon carbide First on of detail for market involves the communications and with we of to incorporation all, integration for purpose them. we that be going have not the to and

We have for been planning quite some this time.

we really we regard. relationship both is time right. We is with right. are about We and it And market leader love market the growing think the leader and this excited in enabling think the a

next give little talk Can you given range you on all midpoint? revenue a wide guidance there? is. just I X% end be year-over-year? of my overall seems us market question there Can asked either Maybe or color like being this the quarter guidance outcomes that because about up by that it could a at quarter-over-quarter the noise out

change, of already don’t of say First there we by end communications, very we in to don’t there by industrial for now. could I we some range we there. have all, those sure, wide set would quarter, any nice the good guide with a yesterday, it The and the guide respect and as outcomes. is right segment same onto always possibility with mean market thing of have way but of quarter really could that way next mentioned, we hanging of upcoming a QX, be as a military, optical discussed essence range I looks Giovanni reasonably is wide

last the question the side. on is Maybe semi-cap

products? EUV You for it do lead Can solid with you same the of of remind and long-term outside being and times partner. us about have trends some you EUV the agreement talk the of in kind is And what non-EUV this if EUV? segment, talked about EUV pretty products for this your

lead say -- said repeat sorry you times? -- can am did you you -- I the

concerns lead more times the a the the part in last because the of question there is semi-cap Yes, lot about the of demand. side of side clearly OEM of

to from get you trying a Just sense guys what seen? have

few allow in the that primarily the these seen forecast increase by the the increase over end seen forecast, and seen past advantage understand specific take can chain being Well, the in first of now we’re was we so increase we’ve all, bottleneck primarily customer, on was then have eliminated to that there forecast in that to drawing forecast. versus change an the the months were supply the we’ve of past bottleneck we and ask and elimination of an we the and the capacity driven EUV

So into supplying laser, we’re into the goes EUV and of pumps these one laser parts tool. that the other go course, laser laser and

we’re the So, like. pretty the if food at you bottom chain, of

And EUV are into time, take of we’ve capacity our so, as that in would end so at at to we’re always as for be all. system, definitely available would product it don’t from long. a demand the see component comes But lead our being pretty standpoint we time the from the we and make actually see customer, coming it challenge and up least that shipping our the we terms

into since me semiconductor really the of relate a -- they this capital in add, that routes. as number Giovanni’s in go we different Sidney, number addition channels. to to are Let market comments we go different a exciting from market separate of EUV into EUV by three

going that And that a to we’re of as qualify this that to backend lithography, increasing of as next developments we’ve we’ve factors line immersion time DUV including NV is types continued number line And qualify, months, and increases that business, manufacturing our demand. all change so we’ve end the demand for develop for a back as normal end and our far new line seen is well. of normal our we’ve over our goes, EUV, the next to addition for when we’re that In the X generation of underway of steady ready the those line using to product. back XX

that not for steady market portfolio impact We’re than increased product segment. the or across any other demand seeing

you. Thank

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

line Your now is open.

on Can going the that’s ROADM you how for comment market you?

where today. Yes, we of actually pretty involved Kaiam particularly we than as after you are acquisition the know

and speaking is deployments our our can an definitely generally more there required we increase of had the gap XG think beginning demand in the bit was interest with management I And a seeing backhaul in platform, a We’re of now networks for the see and it the the little particularly of first with with by demand combination and in part customers. portfolio we Korea clearly of in Japan.

we products opportunity had to of we I platform. already are Kaiam the as revenue that addition participating said So, the with with somehow the a combination of and

I course in fastest that very the we including as the add also including our subsystems, amplifiers the component to cards. the portfolio segment switches, integrated entire across seeing monitors, of of cases would and we the optical pump some strong a channel our line are in the market integrated but and that also XXX demand

by and can RFQs an if quarter And time are really, point the space. including order for XX% things exciting We is in taking quite with at in, additional really this pull this that this we the us, on fact in busy. asking we have moment measure published any us people for everyday

we the realized of quarter revenues carbide, the do say a XG ramp. expect where from turning terms percent of related were this In year are that What now? just you silicon go I and

I'll as market silicon our as at and we Mark. to quantity, customer in their On the a because again is for don’t steady preparing make is are XG increases first its differentiation leader it well the at of least moment all carbide, relates our take way both and deploying the substrates again making XG. semi-insulating customer hence,

for as distinction a for in to semi which which make or are silicon enable are don't insulating our They will we both. XG. So carbide XG substrates

laser? backlog performance Photonics the Could terms you me give in of

XXX, was course Performance of QX $XXX for Solutions XXX was million and at the Yes, was Photonics and Company total Laser its Products XXX.

line next comes Our Craig-Hallum. of Richard from the with Shannon question

Your line is open.

call. questions lasers couple on a to want earlier fiber up following again, on touch the I do other

sequentially issues I'm what expecting they there reporting be China your but is recent what there more IPG seeing to in whether effects market going on you're that that that were any in their in wondering growth December are competitively, suggested think there. continuously is quarter? the I are of and if you aggressive customers call

is this here. Giovanni Richard,

So and for broad nice, array very lasers that as exist a we of just very demand just growing is passive lasers. not and as players see their and of I their making and from components only. supplying enjoying the them or to I China fiber semiconductor nice said laser some earlier, are mentioned just years necessary optics an outstanding, by growth diode them we’re continuously didn’t in in lasers participating X ago which maybe to pretty to growth of X just sector the customers China from are we earlier These

growth enjoying of are and may we dynamic their enjoying the challenged market. have them kind which and and of to necessarily the supply the there course products, local them growth companies of these obviously internally combination China other our strength don’t players in I which think by We’re with industrial same the in being components with market new technology then

period Giovanni. time? A Do guess capacity you question for Chuck Is on for to constrained any maybe this be carbide, or today? I it expect of silicon in market

we for we constrained. definitely would sold being is we’ve in sold in to we’re the -- the past the be while the we capacity a believe to we out furnaces, to sold ramp And and market we future so our investing would for keep so a say definitely several because out that years had continue, make our have we’re that proprietary while. out, because we’re for and I going furnaces say, it’s I been we investing own and we definitely feel add furnaces, but

silicon how for fiscal us way want tempting to to you it? capacity much months next the grow about Can or you’re of in talk carbide you the sense either XX give year, a

in of bottlenecks. to mean increasingly but goal XX%, I about say the machines pace talk all in in which of doubled might is months, would goal Company would by take we’ll be is Well, the XX, XX at forward. anywhere expect capacity keep the last your we the least almost our that that to main we’ve expand capacity, the probably multiplying neighborhood expansion, to right. terms market the with and I going I’d break is over you

strategy us opposed break allows to the see integration to do we being for whole demand vertical develops continue the market it all but the expect to once. nice with goal and is I silicon to a as bottlenecks, it on capacity is that at in the think growth as carbide

bit it. So ahead pace of I a if little with us expect our would much to pretty keep not demand

is -- an for is time, a a this Chuck. it’s important everybody about would I understandable, it’s we’ve roadmap capacity Richard, roadmap. was the product technology else we all everyone question, add, have us

roadmap equipment highest the deliver yield constraints can We’re on solving focused ultimately carbide very not quality capacity by we’re and that throughput focused on silicon best just substrates. adding

that devices most most is and with make starts the that so reliable the customers our happening make for reliable that’s make it so their can all a cars. in their customers can why market. the the can their reliable So inverters of customers foundation And most that substrate, critical, as entire this transformation

strong sub quarter on of number opportunities if types is My of any I'm different December about you actually space? facing XD-sensing do of it the the a world I are you here. mobile wondering can questions us in last and last having the you that to were on quarter sense shipping where a year-on-year Talked you question dealing customers growth couple engaging expect basis, XD-sensing in with of tell any on year-over-year or whether customer to had profile

it's it's would most is all if diversified we our it’s out so it's this laser are welding. visions machine whether for whether where Giovanni facing steel smartphones whether that say integrate in not electronics, whether a applications Richard, front of own we applications cars XD-sensing here. kind there. whether I with engaged head consumer it's It's industrial facing, rear

is far welding so And there a tracking. steel

a have diverse very of set applications. We

and of wait one kind have of we so be terms it's see So performer top which will revenues the to far. in

we power Jersey. UK now New as busy our We because bringing are and qualifying the We of space best speed out are design said during script and process really to capacity we and in more fiber the of the than I up in five. have to in are

have this we paying integrated obviously decision lines, put major it's So ago. to time made growth the sometime strategic currently together for to vertically Company. fab world-class will being and we anticipated but a capabilities to demand that qualify we We is come I a that’s I continue be engine think the why ATM new think the and dividends,

Jaffray. Troy Our Piper from Jensen next line comes of the question with

Your line is open.

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be we quite So is there, for quite time. -- but we I be some growth there should think this quarterly there would sustainable, think adjustments believe in the

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several mean wondering good traditional I portion think you to in and way of various for a solutions in that help solutions of industrial, to you of your there's seeing still am us book-to-bill have pieces business? Looking I about industrial differences laser And I'm that. laser the there's at but pieces the if any you're book-to-bill just if fact below there’re the talked that about just in one, strength the that wondering

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ask. Chuck. of mix is a this everything It’s Jim, you

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call to Jane There any further back now are would at Raymond Mary I to the turn questions time. no further this for like remarks.

you Thank morning and call us We second time. that for Thanks our We look of XXXX for for call. you fiscal a thank is on good January in day. eastern ends an the would there. quarter all and to o'clock year that say conference joining much at our Thursday very have on X our 'XX you giving fiscal scheduled this XX, I update for today joining to like would forward again

Ladies conclude and in does participating This for today's thank program. you conference. today's gentlemen,

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