Release Date: November 08, 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) successfully completed its first three nanometer customer license project, marking a significant milestone.
- The company reported a 14.3% year-over-year increase in third-quarter revenue, reaching $899 million.
- Operating income increased by 21% year over year, with an operating margin of 56.1%.
- The collaboration with Siemens on SSRM repair is progressing well, enhancing repair capabilities for high-performance computing customers.
- eMemory Technology Inc (ROCO:3529) is advancing its technology development to two nanometers, with successful design wins at various nanometer levels entering mass production.
Negative Points
- Net income decreased by 12.9% sequentially, despite a 2% year-over-year increase.
- Licensing revenue in the third quarter accounted for 32.3% of total revenue, down 3% sequentially.
- Path-based security IP licensing revenue decreased by 6.5% sequentially and 39% year over year.
- The company faces challenges in maintaining high density in AI accelerators, which requires innovative solutions.
- There is a need for new talent to develop IPs in areas like security systems, indicating potential resource constraints.
Q & A Highlights
Q: Why was it necessary to partner with an EDA company like Siemens for the SRM repair tool release?
A: Charles Xu, Chairman: Through our collaboration with EDA companies, we have developed OTP with an appropriate interface that integrates seamlessly into EDA tools, making OTP repair more user-friendly. Siemens' building self-test holds over 90% of the market share, making our partnership a powerful alliance.
Q: What factors have contributed to the ongoing growth of your operating profit margin, and will there be a need to expand your R&D team?
A: Michael Ho, General Manager: Our unique business model involves licensing technologies to foundries, with over 80% of revenue from royalties. This allows us to focus R&D on new technologies. We may need new talent for specific areas like security systems, but any headcount increase will be gradual.
Q: Has eMemory's business been affected by the current economic environment, given that several ASIC companies in Taiwan have downgraded their revenue outlooks?
A: Michael Ho, General Manager: Our unique business model and deep technology expertise mean we are not subject to price competition. Our IPs have a 100% retention rate, and we hold a leading position in the field, which shields us from economic downturns.
Q: What is the current status of your collaboration with Arm, and how will it impact your future operations?
A: Charles Xu, Chairman: Our collaboration with Arm focuses on hardware security. We jointly promote IP to customers and conduct educational outreach. As customers adopt our IP, licensing and royalties will increase, contributing to future growth.
Q: How will the trend of high-demand chips being developed using more advanced processes affect your company's business?
A: Michael Ho, General Manager: This trend is favorable for us as it means larger IC chips and higher unit prices in advanced processes, driving continuous growth in our royalties and licensing fees.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
