Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Chroma Ate Inc (TPE:2360, Financial) reported a 16% year-over-year growth in sales revenue for the third quarter, reaching NT$5.6 billion.
- The company's automation sales saw a significant increase, with a 133% growth compared to the previous year.
- Gross margin improved by 20% year-over-year, maintaining a strong 59% margin.
- The semiconductor and photonics sectors showed robust performance, with a 70% increase compared to 2023.
- Chroma Ate Inc (TPE:2360) has been qualified as the sole supplier for new capacity in metrology equipment, indicating strong customer trust and future growth potential.
Negative Points
- The ATS sector experienced a decline, down 11% compared to last year and 22% for the first three quarters.
- The power business is expected to decline further in the fourth quarter, following a 22% drop in the first three quarters.
- Inventory levels have increased, which could indicate potential inefficiencies or slower sales in certain segments.
- Long-term debt is accumulating due to capital expenses for factory expansion, which could impact financial flexibility.
- The company faces challenges in the EV and ESS markets due to low capital expenditure sentiment, affecting growth in these areas.
Q & A Highlights
Q: Can you clarify if Chroma is involved in surface metrology for RDO and not inspection?
A: Jennifer Chien, Director of Investor Relations, explained that metrology is not the same as inspection. Chroma focuses on metrology, specifically interposer alignments and TSV measurements, rather than inspection.
Q: What is Chroma's market share in the metrology sector, and what are the revenue expectations?
A: Jennifer Chien stated that Chroma is the only qualified supplier for new capacity ramps, and while specific market share figures are not disclosed, the metrology equipment's role in overall CapEx is expected to increase.
Q: How does Chroma plan to compete with other metrology equipment providers, especially those with strong AI platforms?
A: Jennifer Chien emphasized that Chroma has already secured orders surpassing existing vendors, indicating strong customer trust and a competitive edge in performance and pricing.
Q: What is the outlook for Chroma's semiconductor business, particularly in the fourth quarter and beyond?
A: Jennifer Chien noted that semiconductor sales are expected to surpass power business sales, driven by strong orders from major HPC customers, with momentum likely to continue into the next year.
Q: How is Chroma's free cash flow expected to evolve with the increasing semiconductor business?
A: Paul Ying, CFO, mentioned that while the current payout ratio is around 70%, the completion of phase two factory expansion by 2026 could potentially improve cash flows, though no immediate changes are expected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
