Asmpt (HKEX:522) Q2 2026 Earnings Call

0:00 Good morning, ladies and gentlemen. I'm Ben Pho, Head of Investor Relations. And today I will be moderating the call. On behalf of ASMVT Ltd, welcome to our second quarter and first half of twenty twenty six investor conference call. Thank you all for your interest and continued support. Please note that all participants will be in listen only mode during the presentation by the management. We will start the Q and A session after the presentation. During the Q and A session, priority will be given through the covering analysts. Before we start, let me go through our disclaimer. Please note that there may be forward looking statements about the company's business and finances during this call.

0:49 Such forward looking statements could involve known and unknown uncertainties and risks that could cause actual results, performance and events to differ materially from those expressed or implied during this conference call. For your reference, the Investor Relations presentation on our recent results is available on our website. On today's call, we have the Group Chief Executive Officer, Mr. Robin Ng and the Group Chief Financial Officer, Ms. Katie Xu. Robin will cover the Group's key highlights for the second quarter and the first half of twenty twenty six and provide outlook and guidance for the following quarter, while Katie will provide details on the financial performance.

1:36 Now I will hand the time over to our Group Chief Executive Officer, Robin. Robin, please. Thank you, Ben. Good morning, everyone. Thank you for joining us today for our second quarter and the first half of twenty twenty six earnings conference call.

1:54 Before we begin, I'm sure you're aware of the news that I'll be stepping down as Group CEO on 08/11/2026. So this will be my last quarterly earnings call with all of you. I took over as Group CEO at the very height of the COVID pandemic in May 2020, arming the first investor conference call, which was Q2 twenty twenty, and it has been quite a journey. I am proud of what we have achieved as a business. I look forward to the company progressing on its transformation journey as it sharpens its focus on the back end packaging business, a business that has experienced rapid growth over the last few years.

2:45 I'm grateful for your trust in me over the years as we've clinical this journey together. Looking to the future, I'm confident that the new CEO, Mr. Vasil Hedak, will continue on this transformation journey and bring ASMVF to even greater heights, given our technology leadership, strong foundations, and great people. Thank you for your continued support. Now, let me proceed with the earnings call with some key business highlights for the first half of twenty twenty six. For the first half, I'm pleased to share that ASMVT achieved strong revenue and bookings driven by AI and the recovery in our traditional mainstream business.

3:40 As AI capabilities advance, semiconductor architecture requirements continue to expand beyond compute to continuous planning, workload orchestration, memory access, and real time data movement. These developments have placed increasing demands on semiconductor manufacturing to support workloads from data centers to edge devices. Next, Asmpt achieved record bookings largely driven by strong demand from AI servers. AI servers continue to be a significant source of demand with accelerated adoption of SMT's iFLEX iFOR solutions.

4:30 SMT bookings were also driven by demand for optical transceivers and China's EV segment. Semi AP bookings doubled year on year due to Photonics and TCV. This highlights ASMVT multiple AP solutions which are key enablers for present and future AI infrastructure. At the group level, our first half revenue increased 18.9% half on half and 42.5% year on year, mainly driven by mainstream and photonics. In photonics, we saw customers ramping up production of high speed optical transceivers for 800 gs and beyond.

5:21 In mainstream, the growth business experienced some recovery from traditional applications such as consumer, industrial and automotive EVs. Looking at our gross margin, this growth was driven mainly by S and T in Q2. And finally, we are pleased to report that our revenue and adjusted EPS beat consensus in Q2.

5:53 Now let's look at the group business highlights. First, let's start with Advanced Packaging. This remained a strong growth engine for us in the first half, with AP revenue growing 17% year on year and contributing 30% of group revenue. TCV, SMT High Precision and Photonic Solutions were the largest contributors within the AAP portfolio. In TCV, we expect TAM to expand beyond dollars US1.6 by 2028 due to growing AI investments and increasing packaging intensity driving greater demand for TCV solutions.

6:47 In Logic, order momentum for group's C2S solutions remained strong. This was supported by repeat orders for larger compound die TCB tools from OSAT partners of the leading advanced logic customer. In July 2026, the group received new bulk orders for more than 50 C2F TCP tools from OSAT customers. In CW, we secured a bulk order in Q2 twenty twenty six from a leading global idea for advanced CPUs to support client computing and AI inferencing. We also delivered ultra five page TCP tools to the leading advanced logic customer.

7:39 In memory, the group continues to secure repeat orders from HVM manufacturers. However, the timing of some customers' new tool purchase decisions remains dependent on HBM4 product rollout schedules. The group also entered into an exclusive joint evaluation program with a key memory player to establish its technology as a preferred production standard. Next, panel level packaging is emerging as potential growth driver for ASMVT as the industry seeks to improve throughput, scalability and cost efficiency.

8:28 Beyond TCB, we saw strong performance from our photonics solutions. Customers are ramping up production on high speed optical transceivers for 800 gs and beyond as demand accelerates for bandwidth intensive, low latency AI workloads. As a result, semi's Tractable Optical Transceiver Solutions revenue almost tripled year on year to approximately US75 million in first half twenty twenty six. The group is confident of further growth for the rest of 2026. In co op package or CPO, the group continues to deepen its engagement with multiple leading global CPO players, positioning it well to gain market share as CPO adoption accelerates.

9:26 The group offers the most comprehensive range of CPO solutions, spanning ultra high precision photonics, TCV and hybrid bonding. I will also elaborate more on this in the next slide.

9:43 Our semi mainstream business experienced significant growth supported by high utilization at leading IDMs due to improving demand for power management requirements for AI JI centers and industrial applications. In China, revenue and bookings were particularly strong with wire bonding and die volume two demand supported by on Hui AI infrastructure expansion and high OSAT utilization. Our S and P bookings hit record highs for Q2 and first half of twenty twenty six. AI servers continue to be a significant source of demand with accelerated adoption of SMP high flex, high force solution for large format board assembly.

10:36 And finally beyond AI applications, I'm pleased to share that the group's mainstream business also experienced some recovery from traditional end applications such as consumer devices, industrial systems and automotive EVs in China.

10:59 Let me now turn to photonics as shown on this slide. We have built a strong position across the entire photonics value chain, extending from pluggable optical transceivers to CBO. Our comprehensive portfolio spans SMT, advanced packaging and ultra high precision photonics assembly tools. In the current optical transceiver market, as shown on the left hand side of the slide, ASMVT supports multiple critical assembly steps. Our SMT placement solutions are used for digital signal processor and passive components attached. Our high end photonics and emigration solutions enable precise placement of transmitters, receivers, sheets and subnotes and optical accessories.

11:55 Our solutions can deliver placement accuracy down to sub micron level, a key technological differentiator. Looking ahead, the industry is transitioning towards CPO solutions to address increasing bandwidth and power efficiency and latency requirements of AI infrastructure. ASMVT is well positioned in several key assembly sets. As you can see from the right hand side of the chart, these include EIC on PIC integration through hybrid bonding and TCP solutions, optical assembly assembly using flip chip mass repo solutions, and fiber attached unit and micro lens assembly enabled by our ImuPrA solutions.

12:46 We are excited about the potential in photonics which represents another important growth factor for ASMVT. With these highlights, let me now hand the time over to Katie who will walk you through our group segment and financial performance.

13:06 Thank you Robin. Good morning, good evening everyone. Let me take you through the group's financial performance. I would like to reiterate that unless otherwise specified, the numbers I'll be referring to today are for the group's continuing operations only with adjustments made under non HKFRS measures. This slide covers our financial results for the first half of twenty twenty six. The group delivered revenue of $1,140,000,000 in the first half of twenty twenty six, representing an increase of 18.9% half on half and forty two point five percent year on year, driven by semi and S and P. Group bookings reached $1,630,000,000 representing growth of 68.1% half on half and 85.1% year on year.

13:57 Both SMT and semi registered significantly higher bookings during the period. Book to bill was 1.43, the highest since the first half of twenty twenty one. In the first half of twenty twenty six, group adjusted gross margin was 41.2%. This was four forty one basis points higher half on half and 86 basis points higher year on year driven by better gross margin from both semi and S and P. Group adjusted operating expenditures was billion, up 2.4% half on half due to higher volume. It was also up 15.4% year on year due to higher volume, unfavorable FX impact and strategic infrastructure R and D investments as we announced at the beginning of the year.

14:47 Both adjusted operating profit and net profit improved half on half year on year due to higher revenue and operating leverage. In the second quarter, we delivered revenue of $630,000,000 which exceeded the upper end of our guidance. It grew by 24.4% Q on Q and 52.1% year on year driven by both semi and SMT. Group Q2 bookings were 903,600,000 up 24.8% Q on Q and 97.6% year on year significantly better than anticipated for both semi and SMT. In particular, SMT's bookings came in much stronger despite a high base effect in Q1.

15:34 Group Q2 adjusted gross margin was 42.5%, up three zero two basis points Q on Q and two eighty four basis points year on year. Group Q2 adjusted operating profit was HKD847.0 million, up 114.1% Q on Q and two hundred and sixty eight point eight percent year on year due to higher gross margin and operating leverage. Group's adjusted net profit was HKD637.5 million, up 90.2% Q on Q and 253.9% year on year due to higher operating profit. Adjusted earnings per share was $1.53 on to the Semiconductor Solutions segment for the second quarter.

16:23 Semi delivered a revenue of US369.1 million dollars an increase of 34.9% Q on Q and 56.1% year on year. Q on Q and year on year growth were driven by photonics for AI related applications and Y and Die Founders for both AI and consumer related applications. Semi Q2 bookings were US428.1 million dollars the highest since Q1 twenty twenty two. Bookings grew by 39.0% Q on Q due to wire and die bounders and photonics and up 125.9% year on year due to wire and die bounders, photonics and the TCV. SEMI's book to bill ratio in Q2 was 1.16 which has continued to expand for the past four quarters.

17:13 Q2 adjusted margin for SEMI came in at 46.5% up 10 basis points Q on Q and 150 basis points year on year. Q on Q increase was due to higher volume offset by product mix, while year on year increase was largely due to higher volume. Adjusted segment profit was HKD603.2 million in Q2, up 94.9% Q on Q and 170.1% year on year due to higher adjusted gross profit and operating leverage.

17:48 Next, let me move to the SMP Solutions segment performance for the second quarter of twenty twenty six. SMP delivered a strong Q2 revenue of US260.9 million dollars up 12.1% Q on Q and 46.9% year on year. It achieved record bookings of US475.4 million dollars up 14.3 Q on Q and 77.6% year on year. Both revenue and bookings growth were largely driven by strong demand from AI servers. Q2 SMT adjusted gross margin was 36.8%, up five fifty one basis points Q on Q and 04/29 basis points year on year, the highest since Q1 twenty twenty four.

18:34 Q on Q increase was due to favorable product mix and a higher volume, while year on year increase was largely due to higher volume. Adjusted segment profit was HKD284.8 million in Q2 twenty twenty six, up 100.8% Q on Q and 386.1% year on year due to higher gross profit and operating leverage.

19:00 Now this slide highlights ASMVT's revenue breakdown by end markets. The computer end market was the largest contributor to group revenue at approximately 33%, up significantly from around 10% in 2024, driven mainly by SMP solutions, PCB and photonics applications. Please note that photonics applications were reclassified from communications end market to the computer end market for both first half of twenty twenty six and first half of twenty twenty five, reflecting the increasing alignment with AI related applications. The consumer end market was the second largest contributor to group revenue at approximately 18%, mainly from group's traditional mainstream business. The automotive end market contributed almost 12% to group's revenue.

19:49 Revenue growth was driven by EVs in China, while automotive for the rest of the world remained soft. The communication end market contributed around 10% group revenue, mainly coming from high end smartphone related applications. Lastly, the industrial end market revenue contribution was up marginally from 8% to 9% due to gradual recovery in industrial activity. Now as you can see from this slide, we are truly global business partnering with customers across all major regions. China remained the largest market contributing 42% of group revenue in first half twenty twenty six driven by Y and Dai founders, while share of revenue from Asia outside China declined from 37.9% to 36.2%.

20:39 Share of revenue from both Europe and Americas declined year on year from 23.7% in first half twenty twenty five to 21.3% in first half twenty twenty six. The group continued to maintain a low customer concentration risk with the top five customers representing approximately 19% of total revenue in first half twenty twenty six.

21:08 We have an existing dividend policy of distributing about 50% of the profits dividend. For the first half of twenty twenty six with adjusted EPS at $194 for continuing and discontinued operations, the Board has recommended an interim dividend of $0.97 per share. With that, let me now pass the time back to Robin for next quarter's revenue guidance. Thank you, Gary. Let me now turn to our Q3 twenty twenty six revenue guidance. The group expects Q3 twenty twenty six revenue to be in the range of US630 million dollars and US690 million dollars At mid point, this represents an increase of 4.8% Q on Q and 46.3% year on year, exceeding current market consensus despite longer lead times for certain materials.

22:10 Following a very strong Q2, the group still expects Q3 twenty twenty six booking to grow by a high single digit percentage sequentially, mainly driven by TCP and photonics. The proliferation of AI will continue to drive structural demand for advanced AI applications and computing needs, benefiting the group's products. Our AP solutions are able to address complex technical requirements across the AI value chain, while our mainstream solutions can support the demands of extensive AI infrastructure build out. Beyond AI applications, we also see continued demand for some traditional mainstream applications.

23:00 The group remains confident of revenue growth across both semi and SMT in 2026, despite longer lead times as mentioned above and customers' dynamic AI product rollout schedules. This concludes our second quarter and the first half of twenty twenty six presentation. Thank you and we're now ready for Q and A. Let me pass the time back to Ben to facilitate. Thank you, Robin. Ladies and gentlemen we will now begin the Q and A session. To ask a question please click raise hand on Zoom and I will request you to unmute. Please limit yourself to two questions each time.

23:48 May I request Gokul to unmute and raise your question? Yeah, hi. Good morning. Thanks Ben. First of all, thanks Robin for your leadership and good luck in your retirement. Maybe first question on PCB. It looks like memory PCB shipments are quite slow in first half of the year. Just looking at your career, revenue momentum is down quite a bit year on year. So could you talk a little bit about when are we expecting the memory PCB shipments to really start picking up meaningfully, especially given the order status seems to be still quite good. So, it seems like it is very much a timing kind of gap.

24:40 And is that the main driver for much stronger Q3 kind of momentum? And also on PCB, the 50 chip to substrate

24:53 orders from all that that you highlighted, Could we also talk a little bit about the delivery schedule for these 50 tools? How quickly do you expect to recognize them in revenue? Okay. Thank you, Gokul, for your well wishes as well. Thank you very much. I think your first question is on memory, okay, and also follow-up with what you expect TCP memory to pick up since the orders look muted. Okay. Now let me answer your first question first. Now if you look at the industry as a whole, and according to what's out there in the market, the reports that are out there by the industry experts, it seems that HBM 3E continues to be able to meet current requirements for a GPU per packaging.

25:54 We also understand from this report that customers are also taking a little bit more time to make upgraded HBM4 technical specification. Now this obviously has implications on the product loss schedules which we also highlighted in our outlook as well and definitely has an impact on customers' purchase decisions, you know, for HPM TCB tools. But having said that, from our own perspective, we continue to secure repeat orders from HBM manufacturers.

26:41 Our in stock tools with one of these customers, I'm also pleased to announce that we're also being deployed to four in high volume manufacturing. At the same time, we also are having low volume manufacturing with multiple memory makers for HWave four without tools as well. Last but not least, we also announced in the MD and A that we have entered into a JEP with a key memory player for advanced memory packaging, particularly for HPMV. So these are some of the developments from our side that are very promising for HPM business.

27:35 I think your second question is on TCV orders, right? Yeah. So the CQS orders that you are the 52, any delivery schedule? Poku, I think you understand that for TCP tool, typically the lead time is a bit longer than the traditional tools, not counting the longer lead time for certain materials as well. So we believe some of these tools, the majority of these tools will be delivered probably in the first quarter of twenty twenty seven.

28:10 Some of these tools may be delivered in the second half of twenty twenty six. So I think that customers are trying to pull in and we're trying to meet their delivery commitment as much as possible. Got it. That's clear. Thank you very much. Second question is on the photonic side, which is seeing very strong growth from pluggables. Can you talk a little bit about as we transition to CPO, how much value capture does ASMVT have? Let's say we, it's not one on one in terms of the comparison, but just to understand like the transition from, let's say, a pluggable based solutions to a CPO based solution.

28:58 How much of a value increase does ASMVP expect, even a lot of it is much more finer pitch. But at the same time, hybrid bonding is probably one area where you're a little bit kind of behind the market data. So, I just wanted to understand how that value capture expands as you go from pluggables to PPO? And also, are you starting to see PPO related orders also increase?

29:22 Or most of the upside that you're seeing right now is coming separately from Plugbubble and Q1? Okay. Let me answer your your probably the last bit of the question. CPO is just more at this point in time. We believe from the packaging standpoint, probably the inflection point would be somewhere between 27 and 28, more likely 28 for CPO. So most of the volume that we are experiencing right now to dense

29:55 are what we call collectible optical transceivers which we also have a very strong position over there. Now in terms of CPU, we are confident obviously. The Omnicra is very well positioned for CPO market. At the same time, even now as we speak, we are deeply engaging very key customers in the CPO side of things. So when CPO picks up, as I said, probably '27, '28, I think we are well positioned to capture the market going forward. Now in terms of solution, put some pain to show you what we can participate on the CPO side of things. There are a number of applications, very key applications there which our solutions are well fitted, well suited for those very high precision placement kind of bonding requirements by our customers. I think overall I think we're confident of catching a good market share of CPO market.

31:05 Okay thank you Koko for your questions and I'll move on to the next raised hand. I would like to request, Ani, could you please unmute yourself and raise your question?

31:18 Yeah, sure. Thank you. Good morning. And thank you, Robin, for all your leadership and contributions over the last few years. Wishing you all the best and exciting new chapter ahead. So my first question will be on the TCP orders as well. I want to double check on the current outlook for chip on wafer, especially for the leading edge foundry side. And so how should we think about the visibility for the foundry client in terms of their migration to TCB for chip to wafer from here? And also how should we think about the competition for the opportunity?

31:57 Thank you Sunny. I think we said quite a few times that the way we view chip to wafer in terms of opportunities, for current year we have been saying that chip to wafer demand would be still lower than chip to substrate, but we have started to ship already chip to wafer solutions with AOR to the leading advanced logic customer. Now the way we see chip to wafer development is this. Now it all depends on, you know, the next generation of GPUs. We believe that the next generation GPUs may go into chiplets. So that's where our PCB tools for chip to wafer will be deployed.

32:44 Because when it comes to chiplets integration, the die structure is very different from an SoC.

32:52 So for that reason, chiplet kind of architecture requires a TCB for chip to wafer solution. We're looking forward for that to happen and then when that happens, chip to wafer solutions or TCP solutions will start to pick up in a more meaningful manner.

33:12 Thank you, Robin. Sorry, let me quickly follow-up if that's okay. And so in terms of the potential opportunity from GPU migrating to your chipboard, do you think that opportunity may still come through in 2027? Or do you think based on the current engagement with the client, that may come a bit later? They have been using our tools for testing, qualification and so forth. We believe there is a certain amount of urgency to start to use our Q2 wafer tools. So we said before, I think 2027 could be the year whereby we see more demand for Q2 wafer tools compared to 2026.

34:03 Got it. Thank you. And my second question will be on China. And China obviously grew a lot in the last twelve months by about 50% year over year for first half of this year. So wonder what's the key drivers for the strong growth? Is it still mostly coming from traditional or we start to see a good progression on the advanced packaging side? And in the coming maybe two to three years, how should we think about the overall potential from China for advanced hygiene given their very aggressive investment for linear logic and memory? Do you think potentially China could be maybe larger than foundry, IBM memory overall? Now let me talk about the mainstream first. Yes, I think if you look at the NDA, we have been saying that the traditional mainstream business have received recovery momentum.

34:59 These are really coming from Huawei and Dibond. The traditional Huawei and Dibond are coming from a China side. On the end application side for these tools they are typically consumer driven EVs and so forth. For sure the China mainstream business is on the recovery path. Now lithotripsy advanced packaging they still lower than the rest of the world, but we believe that this momentum in China will continue to increase over time. Got it. Okay, thank you. Thank you, Sunny. So next I think Daisy's hand is raised.

35:49 I would like to request Daisy to unmute and raise the question. Thank you. And congrats on the strong result. And Robin, wish you all the best for your retirement. My first question is regarding hyperbonding. And you mentioned that hyperbonding has moved to the sampling stage. Could you share us with possible timing that when you expect that it could be qualified for the memory and the logic customers respectively? Yeah thanks David. Hybrid bonding, yes we are confident of our hybrid bonding solution as we have highlighted before.

36:34 We believe our second generation PHP solutions are very competitive I would say in terms of certain key metrics like alignment, precision, boundary accuracy, footprint efficiency and also UPH. We're still of the view that heparin folding inflection point could be still a, from our perspective, course a couple of years down the road, maybe '29, thirty kind of timeframe or even '31. It's very dynamic so we can't really put a definitive time frame on hybrid bonding yen. But what we do know on the flip side for TCP is that there is a possibility that the the chip the the memory chip height, the stack height for HPM, there's a possibility that it could increase from the current seven seventy five micron to beyond 900, for example. So so if that happens, then TCB could be the could be TCB use could be extended for HPM packaging beyond HPM4 into HPM5.

37:51 Right? So that's a super another factor to take into account the deployment of hybrid bonding solution. Now as far as hybrid bonding solution for ourselves, this year we were definitely trying to break into the top hybrid bonding customers. If we can break into that space, I think that will position us well for hybrid funding solution for the future. Yes indeed we are doing same thing for both logic customers as well as HBM customer for hybrid learning solution. Thank you, Robin. And my second question is for Kenny. So this quarter we see that both SMP and semi solution, their margin improved.

38:48 And we all know that this year, both the OSAT and the PCB companies CapEx is very strong. So again, how should we think about the normalized margin? And also how do you see this CapEx spending momentum? Will it continue into 2027? Dzieder, think maybe we'll break your questions into two pieces. One is on gross margin, the other one is also I think on the top line side due to also CapEx. So let me answer the first question. In terms of gross margin, we announced Q2 already. You guys can see the numbers. Looking looking to Q3, we believe the gross margin will actually remain quite stable for both businesses.

39:37 The semi side, it will continue to benefit from the favorable parts from the exabyte of TCB, high end, etcetera, while it will be moderated by live on mix. So that's semi side. On the SMP side, it will continue to be in mid-30s in terms of gross margin at this volume level. So I think put these two together as we look out Q3 and maybe even if we put this out, the overall, the group margin could stay above 40%. The next question, I think that you also asked about the CapEx spend to the top line impact.

40:29 I'll start and if Rodney has anything to add. I think overall, I think the yes, the CapEx spending in mirror is strong and we definitely have experienced that in our actual results. And I think going forward, this momentum will continue to the line of sight that we have for the remaining of the year. And we touched on that in our outlook for ABMVMA. You, Daisy. Next, I would like Levin to unmute to raise your question. Hello? Can you hear me? Yeah. So my first question is about the plugging optical transceivers.

41:20 You mentioned that your revenue tripled in the first half this year. So how we should look the sustainability or the potential of this business? Will it become even bigger business versus your other like the TCB or other high potential business? Thank you. Yeah. Me start with that. Yeah. Please. Yeah. Yes, I think photonics is really interesting. So if you look at if we look at the q three open that we laid out that is gonna be increased by high single digit q two, part of the increase, I would say, is also due to photonics.

42:15 So we believe our photonics booking in q three will continue to increase sequentially as well. Right? So so I think you're said you're you're it's whether it's sustainable. I think this gives probably give you an idea that the photonic we believe the photonics business in the second half or the demand in the second half will be growing as well relative to the first half. Now optical transceiver definitely is a bigger portion right now for photonics. As I mentioned, UCBU is a smaller portion. In terms of TAM, I think you asked something about TAM.

43:00 Right? So let me give you some color on the TAM. I think right now I think for this we'd rather not focus on a specific 10 number to date. But as I said, I want to emphasize that we will continue to see a meaningful growth around in both pluckable and CPO photonics in years to come. I think more importantly, think the opportunity for us is really expanding as customers move to a small advanced optical architecture and and we strongly believe that ASMVT really can participate across several critical process steps in that particular variant chain.

43:47 Now I also want to be mindful and also want to be careful about drawing direct comparison with TCB at this stage for photonics. As you're aware, TCB is a much more mature market with much more clearer visibility in terms of adoption and market sizing. Photonics particularly for CPO is still in the earlier stage of development. I think what's important for us today is that we continue to see strong customer engagement on our part. We see increasing adoption activities in our tools and we see a lot of opportunity across multiple process that where ASMVT can participate both in the CPO market as well as in the optical transducer market.

44:41 Thank you. Okay, and also the second question is about your third quarter guidance. You mentioned that you see strong growth, sustained growth despite long lead time of certain materials. So number one, are the long lead time, the supply chain issue you are facing? And it seems to be the third quarter, the revenue guidance is slightly slower than the booking, is slightly slower than the second quarter booking growth. What was the reason? Is it because you are facing some supply chain issues or you are still see and what's the growth coming from? Is it coming from mainly the SMP or coming from the SME chain?

45:29 Okay good. Let me answer the long lead time question. The rapid domestic growth has certainly led to supply chain tightness resulting in longer declines of certain materials which affected both the ASMVT as well as semi operation. I think you're earlier to also the probably the longer conversion time from bookings to billing. So definitely longer lead time is one factor. Now the other factor that you might have to take into consideration is that the increase in our semi product mix towards advanced packaging also contributed to the elevated auto to billing conversion time because AP has relatively longer manufacturing lead time compared to our traditional business.

46:30 So for these couple of reasons, the group's booking conversion time is estimated to be a little bit more extended than before to be around six to nine months, roughly, depending on the product itself. Okay. Thank you for questions. And next I would like Kevin. Kevin, could you unmute and raise your question? Thank you, management, for taking my question. And thank you, Robin, especially for your past leaderships. Wish you all the best in your upcoming retirement. Now my first question will be on the TCP 10. I think in the announcement we mentioned that our 10 right now we're expecting that could go beyond $1,600,000,000 by 2028.

47:24 I was wondering, what do the management see this upside coming from? Would it be more coming from memory or logic, especially given right now there are some growing market concern over the memory outlook? What do we see any changes for memory sector driving the TCP outlook? Would it be any additional customer coming in? Thanks Kevin for your well wishes as well. Yes, I would not give you any specifics because this is a half year. We aim to provide an official update at this year's full year earnings call on the TCP 10. However, having said that, let me try to provide some color on the TCP 10 situation.

48:15 Yes, indeed we expect our TCP 10 to expand below US1.6 billion by 2028. That was the last time we dish out this number during our Q4 earnings call. Now we believe this expansion of TCP-ten by 2028 will come from several areas. First, there will be increased data center CPU demands to support the growth in AI influencing needs, in particular maybe agentic AI down the road. The emergence of this inferencing or agentic AI is driving a shift from GPU centric design towards a more balanced CPU to GPU configurations.

49:10 Basically increasing CPU content per AI would load. So as agentic AI requires more autonomous planning, continuous background processing and so forth, and execution of complex local models, we believe the demand for high performance CPUs and greater memory bandwidth and capacity is accelerating. So this will contribute to more TCB demand down the road basically with an increase in the number of CPUs that need to be packaged. Now I think alongside this you can imagine we believe the HBM volume will also increase alongside you know this kind of development.

50:03 Now the second reason we can think of is we see increased logic packaging requirements for COWAS as well in the years to come. And last but not least panel packaging including embedded and even elevated bridge tie kind of solutions where we are participating will also contribute to the increased intent for TCB by 2028. Now we also, last but not least, we also believe this expansion is expected in spite of the industry wide phenomena from continuous improvement in HBMTCBUPH.

50:54 So I think this sort of gives you a color, Kevin, of why the that the TCP can expand beyond US1.6 billion dollars by the time we hit 2028. Great. Thank you, Robin. My second question is actually I want to go back to hybrid bonding. Just wondering for our Gen two tool, is it mainly for wafer to wafer or die to wafer capable? Going forward, I know that we I think we are expecting inflection point probably sometime 2029 or 2030. What do we see could drive the demand higher if that will point the demand a bit earlier than the time we expected?

51:47 Now is that wafer? You're talking about wafer to wafer bonding we do not have the capability or solution in house. Now in terms of infection point, it all depends because the other side of the coin is really TCB, right? So you know that the TCB in terms of technology we have been advancing TCB technology together with our customers as well. So it depends how TCB advance and also the market development in terms of HBM in particular. Now as I mentioned earlier for HBM if there is a relaxation of the stachyde then there's possibility that we could continue to extend the use of THP beyond HPAN four into HPAN five and that potentially can push back the adoption of hybrid bonding for HPMVF-one This is of course our view.

52:52 So I hope I sort of give you an indication why we continue to say that the HP, we believe the HP adoption will probably come in the current timeframe. Thank you, Kevin. Thank you for your questions. And next I would like to invite Tracy to unmute to raise your question. Thanks for the opportunity to raise questions and thanks Robin for your leadership and wish you all the best ahead. My first question is about the PCB. So in China markets, we see both advanced logic and the memory capacities are having fast expansion. So just wondering what is the revenue order scale of your TCV business in China currently and how you expect its growth?

53:42 Thank you. Tracy, I think I mentioned earlier, but it's probably worth repeating as well. Yes, I think China, in terms of advanced packaging, China is relatively smaller than the rest of the world at this point in time. But we believe with all this advancement in terms of advanced packaging in China, we believe that the trajectory for AP in China looks interesting in the years to come. Okay, I got it. So maybe my second question is about your bookings guidance for the next two quarters. Are there any split between semi business and the S and P business for your bookings outlook?

54:34 Let me give you for Q3, April, you mean Q3, right? So bookings for Q3 this year is expected to grow as high single digit sequentially, mainly driven by semi products, TCP and photonics in particular. Of course we just announced this morning that we won more than 50 TCB C2S tools from OSAT customers and that would certainly contribute to the increase in terms of Q3 bookings Q on Q for semi. Now S and T bookings on the other hand are likely to moderate or decrease Q on Q due to a very high base already effect in Q2 but certainly we still believe it's at an elevated level.

55:29 So on a year on year basis, ASMVT booking would still be higher driven by strong demand from AI service. Thank you Tracy. I think we have time for just one final question. Oh no sorry, there's no more raised hand. So I think that will be it for our Q and A session and I will pass the time back to Robin for his closing remarks. So thank you all for all your well wishes. Before we end let me capture some key takeaways from today's discussion. First ASMVT continued experience strong revenue and bookings driven by AI and traditional mainstream applications. Following a very strong Q2 financial performance, Q3 revenue guidance is above market consensus.

56:22 Second, advanced packaging remains a strong growth engine with TCB, SMT High Precision and photonic solutions the largest contributor within the 3P portfolio. In particular, photonics represents compelling growth opportunity for us. Overall, we are well positioned as we enter second half of twenty twenty six. So ladies and gentlemen, this concludes my last earnings call at ASMVT. This is my twenty fifth such call and it feels like a nice number to sign off. As I enter the next phase of my personal journey in a couple of weeks, I hope that you will continue to support ASMVT. I look forward to catching up with you or some of you in the smaller group meetings on this trip. So thank you once again for joining us today. Goodbye.