Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- eMemory Technology Inc (ROCO:3529, Financial) reported a significant increase in revenue, with a 28.2% year-over-year growth in the second quarter of 2024.
- The company's operating margin improved to 55.5%, reflecting a 3.1 percentage-point increase sequentially.
- Licensing revenue saw a substantial rise, accounting for 33.6% of total revenue, up 31.3% sequentially.
- The PUF-Based Security IPs experienced a remarkable 105.2% sequential increase in licensing revenue.
- eMemory Technology Inc (ROCO:3529) is developing new IP technologies, including NeoFuse for FinFET HV processes and RRAM, to meet growing customer demands.
Negative Points
- NeoFuse licensing revenue decreased by 16.7% sequentially and 11.9% year over year.
- PUF's royalty contributions remain low, accounting for less than 1% of total royalties.
- The company faces challenges due to US government sanctions affecting royalty collections from Chinese customers.
- Despite advancements, major high-performance computing vendors have not yet widely adopted eMemory's TRNG technology.
- The competitive landscape, including price-cutting among Chinese foundries, poses potential risks to eMemory's market position.
Q & A Highlights
Q: How has the price-cutting competition among Chinese foundries affected eMemory?
A: Michael Ho, President: Despite the price-cutting competition, eMemory benefits from China's expansion of production capacity and increased penetration of our NVM technologies. This expansion is expected to drive overall growth in royalties, even if foundry wafer prices decline.
Q: Will Trump's statement about TSMC paying the US for protection impact eMemory?
A: Michael Ho, President: eMemory's IP is licensed globally, including in the US with companies like Intel and Global Foundries. Our widespread technology platforms make us less susceptible to political influences.
Q: Are customers incorporating AI capabilities into their designs, and how does this affect eMemory?
A: Michael Ho, President: Yes, customers are incorporating AI functions, moving to advanced processes for applications like recognition and image processing. Our IPs are used in data input, storage, and computing, driving future licensing and royalty growth.
Q: Why haven't major high-performance computing vendors used eMemory's True Random Number Generator (TRNG) if it's the fastest?
A: Charles Hsu, Chairman: Our TRNG is based on OTP and PUF technologies and must be qualified in each process. As more customers adopt our technology and hackers use faster computing, the demand for faster random number generators will grow. We are promoting this technology with CPU partners.
Q: What is the reason for the slow increase in PUF's royalties?
A: Charles Hsu, Chairman: Licensing for PUF technology is increasing, but US government sanctions on our first customer, China's largest chip company, affected royalties. However, over 60 tape-outs are entering mass production and will soon contribute to royalties.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
