BE Semiconductor Industries (Euronext:BESI) Q2 2026 Earnings Call

0:00 Good morning, good afternoon, ladies and gentlemen, and welcome to BESI's quarterly conference call and audio webcast to discuss the company's twenty twenty six second quarter and first half year results. You can register for the conference call or log in to the audio webcast via BESI's website, www.besey.com. Joining us today are Mr. Richard Lichtman, chief executive officer and missus Andrea Cobb, senior vice president, finance. Currently, all participants are in a listen only mode. And later, we will conduct a question and answer session. Instructions will follow at that time. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission from the company.

0:54 I would now like to turn the call over to Mr. Richard Ligman. Thank you. Thank you all for joining the call today. I'd like to remind everyone that on today's call, management will be making forward looking statements. All statements other than statements of historical facts may be forward looking statements. Forward looking statements reflect BESI's current views and assumptions regarding future events, many of which are, by nature, inherently uncertain and beyond BESI's control. Actual results may differ materially from those in the forward looking statements due to various risks and uncertainties, including, but not limited to, factors that are discussed in the company's most recent periodic and current reports filed with the AFM.

1:48 Such forward looking statements, including guidance provided during today's call speak only as of this date. BESI does not intend to update them in light of new information or future developments nor does BESI undertake any obligation to update the forward looking statements. For today's call, we'd like to review the key highlights of our second quarter, six months ended 06/30/2026, and update you on the market, our strategy and the outlook. First, some overall thoughts on the second quarter and first half twenty twenty six. BESI reported strong second quarter and first half year twenty twenty six results as favorable order momentum continued for both our traditional and wafer level assembly systems.

2:41 Revenue of EUR 2 and 49,900,000 increased by 68.735.2% versus the second quarter last year and Q1 twenty twenty six, respectively. Growth versus the second quarter last year was primarily due to increased AI spending for photonics, data center and hybrid applications as well as increased demand for mobile applications. Additional hybrid orders were received in the second quarter this year from two repeat customers and one new hyperscaler customer. Similarly, orders of EUR 292,900,000 rose by 128.8% versus the second quarter last year and 8.6% versus the first quarter of this year.

3:38 Of note, BEZ's orders for the last twelve months increased to a record of EUR 9 and 87,600,000. Q2 net income of €89,000,000 increased by 177.3% versus the second quarter last year and 72.5% versus Q1 twenty twenty six as gross margins improved and operating expense growth was limited despite increased spending for development and customer support activities. Similarly, net margins increased to 35.6% versus 21.6% in the second quarter last year. For the first half year, BESIY's revenue amounted to EUR 4 and 34,700,000, and net income of €140,600,000 increased by 48.8121.1%, respectively, versus the first half of twenty twenty five, primarily due to significantly expanded AI infrastructure spending, a modest recovery in traditional mobile and industrial markets and disciplined overhead management.

4:57 Similarly, net margins increased from 21.7% in the first half of twenty twenty five to 32.3% in the first half of twenty twenty six, aided by improved gross margins and significant operating leverage in our business model as baseline operating expenses reduced from 30% of revenue in Q2 last year to 18.9% in Q2 twenty six. H1 orders rose to EUR 5 and 62,600,000, an increase of EUR 302,700,000 or 116.5 percent versus the first half of last year due to broad based growth across all BESI end user markets and products.

5:48 Order growth was strong for Photonics and data center applications and hybrid bonding capacity expansion for both current and next generation AI devices. We also received new orders for AI power management applications in the second quarter this year from multiple customers. Overall, we estimate that system orders for AI applications rose to approximately 60% in the first half of this year versus approximately 50% in the first half of 25% last year. In addition, we saw renewed growth for high end smartphone applications in the first half of this year versus cyclical lows reached in 2025 due primarily to incremental capacity purchases and new product introductions planned for 2026.

6:42 Our net cash position at the end of the second quarter twenty twenty six increased by 58.8% versus March thirty one of this year to reach EUR 164,000,000. Growth was primarily due to the conversion into equity of BESIY's EUR 175,000,000 of convertible notes due 2029 and strong cash flow from operations, which offset the payment of EUR 125,400,000 for the annual dividend paid out in the second quarter of this year. Next, I'd like to discuss the current market environment and an update on our strategy. Overall, we see favorable industry conditions this year due to the ongoing AI infrastructure build, capacity shortages, particularly in memory and in coals and coals like and renewed unit growth for both AI and traditional mainstream end markets.

7:46 Similarly, we see ongoing improvement in assembly equipment market conditions as the impact of AI spending and the recovery in traditional mobile industrial applications becomes more apparent. The latest Tech N Sites forecast calls for 53% market growth between 2025 and 2028. We expect to significantly exceed such projected growth rates given our leadership position in 2.5D and three d advanced packaging and wafer level assembly. We continue to execute well on our strategic plan presented last year for both revenue and cost initiatives.

8:31 Orders have already exceeded peak levels from the last cycle, and disciplined expense management has enhanced our profit potential. We are adjusting our operating model, supply chain and service support activities accordingly. Progress also continued on our wafer level assembly agenda this year. Hybrid bonding customers adoption increased from 15 at year end 2025 to twenty twenty one at the end of Q2 twenty twenty six. Use cases increased for logic, memory, co package optics and consumer applications and orders increased material versus the first half of twenty twenty five as significant new capacity was added.

9:17 In addition, there were multiple new product announcements made this year related to data center and consumer CPU applications utilizing hybrid bonding. Progress also was made on our TC Next agenda with increased revenue and customer adoption versus the first half of last year. Now a few words about our guidance. We see order momentum continuing in the third quarter of this year due to ongoing demand strength for current and future AI applications as well as improvement in Besi's traditional mainstream end user markets. Customers indicate that we are in a multiyear AI CapEx cycle, further supported by increased demand for agentic AI applications, which are driving increased demand for data center CPUs and many of our advanced packaging systems.

10:17 BESI's strategy is currently focused on expanding our opportunities in wafer level assembly, increasing our penetration of COLs, COPALS and Photonics markets and ramping our supply chain and service support capabilities in alignment with market conditions. Based on our backlog and feedback from customers, we anticipate that BEZY's third quarter twenty twenty six revenue will increase by 10% to 15% versus the second quarter of this year. In addition, gross margins are anticipated to decrease to a range between 6365% due to a less favorable product mix than we had in the second quarter of twenty twenty six.

11:04 Operating expenses are anticipated to be flat to up 5% due primarily to increased development spending. That ends my prepared remarks. I would like to open the call for questions. Operator? Our first question comes from Vijay Samama from Bank of America. Please go ahead. Yes, good afternoon. I hope you're well. Just wanted to ask you a quick question on the Q4 bookings outlook, Richard.

11:50 If you could tell us a little bit more about the contribution to your confidence about the strength of that order intake momentum? Is that also driven by memory? And if you could give us an update on your thoughts on the adoption for HBM4E, that would be great. UNIDENTIFIED Excellent DDA. By the way, you asked Q4, but let me focus on Q3 first. Sorry, meant Q3. I meant Q3, sorry. No problem. We as we indicated, we see continued momentum for the business for the second quarter.

12:39 But your question is very important from the, let's say, aspect of how that will develop for the different applications. And we certainly expect in the third quarter continued orders for hybrid bonding. And as we have said on the previous quarter calls, whether that was February or, also end of April, we're in a very interesting, exciting moment in time for the adoption of hybrid bonding for HBM applications, whether that is HBM 4E or even HBM three.

13:26 As we speak, evaluations are going on at one of the major one of the three memory companies in our industry. Also, we've indicated that another one is starting the evaluation currently. So it will be exciting to see the outcome in the third quarter, but also into the fourth quarter, how much and which application then will be using the hybrid bonding technology. There's a lot of, let's say, views of, how this will develop in the industry currently. Some are voicing that it may delay. Others are forcing that it is imminent.

14:17 So in that exciting landscape, BESI with its hybrid bonding technology, together with applied materials in, automated line concepts, is at the forefront of this technology being used in the memory. As we indicated in the prepared notes, we see continued adoption in the logic arena. We've added three more customers this quarter, one being in hyperscaler. That is for the use of the future glasses. But there are many other applications which are developed and in test applications currently using this hybrid technology.

15:10 So broadening the applications is a fact to 21 customers so far. So anyway, a bit longer answer to your question. It will be, very exciting to see how the third quarter will pan out. Okay. Very clear, Richard. And for my follow-up, I wanted to ask you a little bit about how you're thinking about mobile. So one, you said that, we have seen or you have seen some improvement in the mobile business from a very depressed level. As we move into the second half, and in particular, Q4 and Q1, normally, the order intake is dominated by the refresh of high end smartphones.

15:56 So any thoughts around that? And also related to high end smartphones, what are your thoughts on the adoption of hybrid bonding in high end smartphones over the course of 2027 and 2028? Well, first of all, we made the comment because we have received significantly more orders so far this year compared to last year, as we called last year sort of a cyclical trough. And that is always driven by new features or updated features, like, for instance, new cameras. But also other components in those high end smartphones are, in a way, cyclical because of new designs in next generations.

16:50 And as we indicated, we have enjoyed a significant improvement in orders in that front. At the same time, we mentioned three months ago that we saw the first adoption of hybrid bonding, hybrid bonded device, the M5, into, high end, laptops, and they should find a way at some point into the high end smartphones. Not yet we have seen, those orders, but if you look at the simply the plan for capacity expansion in Taiwan, as we have started now to fill the AP7 with the first systems, which is publicly informed to the world.

17:41 We should see in the next quarters how that capacity is also expanded for other applications than for logic devices so far in the high end compute. So data centers, that was the first. So that's well on track. Okay. Perfect. And maybe my last question relates to the HBM again adoption. So the JDAC body has sort of loosened up the thickness requirement for HBM4E. And so I just wondered whether you think that has got any impact on the adoption curve of hybrid bonding in HBM4, 4E or five Because there seems to be a lot of confusion around that in the market.

18:41 Well, we saw the first increase now, over two years ago, which, in a way, stopped the market saying, well, we don't need hybrid bonding anymore. But we have seen the contrary in development. And as just explained, the year 2026, all three are preparing to adopt at some point hybrid bonding for the very simple reason that the performance of the device is significantly better, we are told, and at the same time, it produces far less heat. Many numbers are publicly shared by some of the memory producers, which, simply indicate whether you allow an increase in height in stacking, that does not improve the performance or the heat characteristics.

19:44 So the technology, moves on. One of the reasons we hear is simply because there's huge shortage in, the memory market as we speak and allowing a higher and, let's say, package height is simply offering the industry more devices, albeit at performance levels, which are different from that using a hybrid bonding solution. So the amount of development is only increasing, and the end markets simply require the best solutions for performance and other characteristics like heat.

20:32 So again, my message is that the heat or the height does not change that characteristic. Yeah. Perfect. Yeah. Thank you so much, Richard. Thanks, The next question comes from Charles Shi from Needham and Company. Please go ahead. Hi. Hey. Thanks for taking my question. Richard, I I have a the first thing I wanna start is on HPM qualification now. All top three HPM customers have your tools. And I think you mentioned a little bit, but can you kinda talk through, hopefully, one by one that where the qualification status is and what are maybe the some of the major hurdles you are seeing in terms of getting hybrid funding qualified at each one of the customers?

21:37 And maybe I have a couple more questions afterwards. Thank you. The major hurdles are simply cost and yield. If you look at any technology in this industry, but also other industries, any major change requires a qualification, and that always starts with yield issues. You have material issues. You have different processes. So if you look at the entire production process of such a device, bonding is one step in that. Preparation is very critical. So all these processes need to be, simply qualified.

22:26 At the same time, because the process is more advanced in terms of accuracy, also because of the nature of the process that all requires, and if you take simply as a reference how long it took for Taiwan, the major customer, to have the logic application up and running, it took us over three years. And finally, it has met those yield and cost challenges and is only expanding from here. The same in The US. After a long time of qualification at the major US logic customer, we are finally in the stage that this is becoming a mainstream application.

23:18 And that qualification process is identical with the two, Korean customers, also with, The US customer. So we're at the very beginning of, this technology moving from the development stage, proving all of its performance characteristics in every way, defining the material specs, etcetera. And we are step by step coming closer to a mainstream market application, so between development and operations. Development is always completely different in terms of organization and companies as compared to operations.

24:04 Operations is only interested in throughput and yield and ultimately the cost of the device. So as we have indicated in previous quarter updates and also at the Capital Markets Day, our Investor Day, we are making significant progress at all three. One is currently driving the bus the fastest, and we all know that, who is also announcing that publicly. So we will shortly find out, do we pass the test for full production, at this moment or does it take a bit more time? The other two also have stepped up simply their engagement and testing and finding mainstream end applications.

24:55 And so in the second half of this year, it will become more clear, will there be inroads into HVM 4E or even HVM three? Because there are different end applications which require a better performance and especially less heat. So all those developments are going on currently, and and that's the landscape. Thanks. Did I answer your question, Charles? Yeah. Yes. Very clear. I have a follow-up on the h hyperbonding orders you got in the past quarter.

25:40 Sounds like it's all logic applications, two repeat customers, one hyperscaler. Can you provide a little bit more context, especially around the hyperscaler order? Because it's it's it's interesting because we are we are not expecting a hyperscaler actually go in to buy tools. Can you tell us what is this all about? Thank you. Well well, what we know, and and it's not always clear, There's a lot of development, as we have indicated on the longer term picture, on applications which are in, let's say, wearable products, glasses, for instance, it may well be for that application, but that's not unique. There are many customers or many, several in that arena. We know and all of us know very well that the next step in wearables is those glasses.

26:53 It can also be for other applications. But then as you rightfully said, it's logic is expanding, if you may call it logic, in many ways. Also co package optics, but that's not the hyperscaler, but co package optics is an application which we expect to grow significantly in the years to come. And you need the hybrid bonding technology to connect that into the device. And and there are other chiplet architecture devices, which are also developed using hybrid technology. Thanks. Maybe last question from me, Richard.

27:43 Your q three guidance, I found this is pretty unusual from a seasonality perspective. The seasonality we're familiar with the BESIY is, like, q three are down. It can be 10 to 25 in some like, a downturn years. And q four, minus 5% sequential. But you're now guiding q three up 10 to 15. A bit unusual from a seasonality perspective, and I think you mentioned about order momentum. You all you mentioned about maybe even some recovery in the in the mainstream part of the market. Do you see maybe looking out a little bit further into q four or maybe a little bit beyond, is this, I mean, above the seasonal pattern lasting a little bit longer this year? And what do you see, especially in the mainstream part of the market?

28:45 Thank you. Excellent. Well, if you we have this lovely slide in the deck going back to 2006, where you see the quarterly development in the past two decades. And you're absolutely right. We're usually first half year loaded, as it is called. But that was always because of consumer end market characteristics. So if you take two years, three years ago, the major part was always communication devices, high end smartphones. In the last two years, that has changed into compute AI data center applications. So that has a different characteristic in terms of seasonality as we were used to.

29:39 That that is one. The second one is is the pattern as discussed in expanding hybrid technology capacity in the world, both in logic and also, if all goes well, in certain early capacity for HBM. So that may well change the order pattern. But to go to the revenue pattern, and that's nicely depicted in that slide, usually, we have in a strong year a revenue a higher revenue in Q3 than in Q2.

30:26 So usually then the orders come down, but as we indicated, we have continued order momentum, but with a different mix. So that's in a, let's say, in a way you you can understand that guidance. Thanks. That will be all for me. Thank you. Thanks, Charles. Ladies and gentlemen, we kindly remind you to limit your questions to one question and a follow-up. The following question comes from Martin Mardon Cardian from Auto BHF. Please go ahead. Hi, Martin.

31:23 It seems Martin might have some trouble. I suggest, you signal pound key five again. We'll move on to the following question. This is from Martin Youngbliesch from BNP Paribas. Maybe coming back to the hybrid bonding orders in the quarter. In the press release, you mentioned hybrid bonding orders from two repeat customers. First of all, can you disclose if these repeat orders were for CPO, logic, memory or even R and D application? And what is your view on the order cadence here from your big Taiwanese customer? There were some news that this customer may actually accelerate cohorts in favor of SOIC.

32:14 I'm just wondering if you see potentially this customer kind of slowing down order momentum in the short term here. That's the first question. Well, to start with the last comment, we don't see that currently. We only see continued, let's say, efforts and pressure on us to, expand the capacity. So but there's many, as we said earlier, there are many views, shared by different sources, but we don't see any slowdown in that. On the orders received from those three customers, as I answered earlier question, the hyperscaler is probably for wearables.

33:10 The other two are one is related to co package optics, and the other one is simply logic. Great. No, that makes sense. And then the other question is on IDMs. I mean, IDM rated orders were up €30,000,000 versus Q1. Can you just disclose if was that hybrid bonding? Or was that maybe the mainstream kind of AI power related application that you were talking about in the press release? The mainstream. That was not hybrid related. It was very much our other products, flip chip, also MMA, also conventional, so very strong orders as we explained, in the press release, but also in the comments across the board. The only part which is still not very much improving is automotive.

34:13 Okay. Interesting. And and the power segment, is that some, I guess, new new segment for for your year that you would potentially see increasing over the next couple of quarters as you saw the 800 volt architectures ramp up? Yes. That although power is, of course, for us, long time part of our business, but we see increased and also a lot of development in applications, which has to do with data center, compute modules. And that is, let's say, becoming a much stronger business segment compared to a year and two years ago.

34:59 It's a bit in line with, the increased overall demand for data center compute. Yep. No. That makes sense. Thanks a lot. The following question comes from Sandeep Deshpande from JPMorgan. Please go ahead. Hi. Thanks for letting me on. Richard, I have two questions on your products. Firstly, on I believe that you have broken into the COWAS market. And how do you see that has that been part of the orders in Q2, both in terms of CoWoS L as well as the original CoWoS at some of the ODM or rather the contract manufacturers who are doing CoWoS now. So how do you see that having trended in terms of the orders? Or is this something which is going to happen in terms of your order book in future quarters?

35:59 No, no. That's already a significant part of the orders. We always call that cohorts like. And that is that already started, you can say, in Q4, Q1, Q2 and should continue to expand. Understood. And then what about TC NEXT? I mean, how do you see TC NEXT? I mean, is this already a part of the order book? Or this is still being tested by the clients that who have bought the lease tools and that this will ramp up later in the year or next year? No. As we commented, the customer base is expanding.

36:46 The amount of qualifications is significant. The industry is moving to applications below 20 micron bump at pitch. And as you know, our system is designed for that segment, so between ten and twenty, also fluxless. And you see increasing engagement in qualifications, but also systems ordered, single systems, not yet major volume. There's one who has several, but that is early days with ever more clear future demand. And in terms of timing, on when do you expect the volume ramp here as well as what products are you looking at the volume ramp like you talked about on hybrid bonding where your demand is coming from?

37:43 Combination, logic. It's in first instance, it's very, yeah, similar to hybrid. So the the critical thing about BomPET pitches below 10 microns, to do that with a reflow process, and you would also like to do that with fluxes, That is the most intended application. But already, pretty soon, it also found its way into the development of HBM with smaller geometries. And that are both drivers, where the system is very much suited and also offering superior cost of ownership results.

38:32 Thank you, Richard. The following question comes from Nabil Basis from Rothschild and Co, Redburn. Please go ahead. Good afternoon, Richard. Thanks for taking the question. I was just thinking about, the cadence of hybrid bonder shipments through 2026. I was just thinking, should we expect half on half increase in hybrid bonding installations, particularly with AP seven investments ramping? Thanks. Well, that's a good question. If all goes according to plan, that may well happen in that sequence. As we know, the, let's say, published total capacity should be roughly double that of AP six. When AP six, they're about 60 bonus, so that still has some way to go to double that.

39:36 That's always done in incremental steps. We explained the first round orders received in Q1. There may be another round in the second half. We don't know. With a lead time of about six months. That then explains the when it will become revenue. That's great. Very clear. And then just as a follow-up on COPOF. Could you talk about the what the move to panel level packaging could mean for the BESI business and what the kind of ramp profile you're expecting for COPOS over the next few years? Thank you.

40:23 Well, it's becoming ever more, clear that the industry is selecting a panel size three ten by three ten. There are also larger panel sizes, indicated five ten by five fifteen. But as we know, Taiwan has selected three ten by three ten, which also makes a lot of sense compared to a wafer size currently. Our systems are mostly prepared for panels size three ten by three ten. Also, we have, orders to that extent, same with packaging, by the way. So the industry is moving into that direction and, not for all applications, for for certain applications.

41:16 So that is definitely part of our our, let's say, market going forward. The following question comes from Martin Marancon Carlian from ODDO BHF. Sorry, sorry, I was on mute. For Yes, taking I'm my sorry about earlier. I had some problem with my phone. So in the press release, I wanted to understand better a statement. When you talk about increasing penetration of COWOS and COPUS, how should we understand in the are you talking more about flip chip bonding opportunities or even about, TCB there?

42:14 Both. It it, and and also hybrid. And don't forget that you may well see certain modules assembled in a panel format. So, depending upon the size, you can have a certain amount, and you would need those three technologies to build those devices. And in the Okay. Right. Yep. Investigate material, you you see some examples of that. And the most easy way to understand is if you have a round format, you lose corners.

42:59 If you have a square panel format, you use also those corners, and that increases the efficiency and, in the end, reduces the cost of ownership. Okay. Very helpful. And my second question is on TCB because you had this quite large order last year in memory. We didn't see really repeat orders since then. And I wanted to understand what's your understanding behind this. Do you think it's because the customer could hesitate with hybrid bending? Or is there another reason?

43:46 No. The reason is quite simple. Every customer is preparing for a next step in miniaturization of chip design. So that is always takes time. The development of the next generation can be two years, three years, four years. And in order to be fully prepared, that's how customers buy systems initially. I can explain in many details for many other customers, how that unfolds year after year after year, and the timing is often dependent on many other factors, end market factors, will they use the current technology, for for a next round? Can they stretch that, or do they need to change to smaller geometries?

44:56 That's always a trade off. So that's how you should see that development, but it's very important to be the process of reference at, an initial stage. Then if you do it well, you can have the largest opportunity once it becomes mainstream. The following question comes from Marc Hesselink from ING. My first question is on the AI AI power management, which you already addressed a bit.

45:45 Historically, whenever you start calling elements out in the press release, it typically was the start of a pretty strong period then. I think you discussed this already a bit at the at the Investor Day. Maybe a bit more more detail. Is it did you really make now a first real inroads with more significant volume than than the years before with with one client? Are there more clients to follow? How do you see this ramp better into the next few quarters? Well, as you rightfully concluded, we only mentioned when we feel with high certainty that, that could be a significant mainstream contribution to the total. So yes, there are more customers.

46:37 As I explained earlier, it's part of the total offering to this data center module end market, and power is a very critical part always. And and so that that is the background of of that statement. We don't mention specific customers, but I can say that it's more than only one customer. It's broader. So that like with photonics, the pluggables, or with the OS on substrate from COOS, same like chip on wafer, same story.

47:28 That all is is part of the road map of two and a half d, and that gives us a major opportunity. Same like photonics and co package optics. They're they're all focused on specific end markets, which are mainstream currently or in the future, like co package optics. Expectation is very high for that market in going into the future. So anyway, you have to see that comment in in that context. Yeah. Thanks. And second question is also coming back on an earlier answer. It's on the seasonality.

48:16 I think you already explained that now the biggest driver is not the communication anymore, but but and more the data center, which have a different seasonality. But then in the communication part, the memory part, there still the the the usual seasonality? And and the reason I'm asking is I also read some stories that maybe the cadence of introductions by by Apple might be also an introduction in the first half next year that maybe, therefore, also the communication's a bit more split out, or is that something you are seeing? Well, we've heard that many times in the past. The the the, let's say, it all depends on on judgment of end markets, and consumer markets are very difficult in that sense. So we also only hear at at the final moment, usually January, early February, what the decision is of the content change in the next generation to be launched in September time frame.

49:28 Sometimes you hear that that may change to to springtime, but we we have not seen that. But for us, it doesn't make much difference other than than planning of production capacity. So the typical machines use it use it used for, let's say, high end smartphones is, of course, flip chip, MMA for multimodule attach, cameras, is one of the key end products, and and you can expect a change in those cameras, which is also indicated. Then you have the whole five d, but also the power, the, all the critical components.

50:16 And and they all have, yeah, let's say, in in the supply chain for those end products. We have not seen a change in in structure yet. We've heard that, yes, but we haven't seen it yet. So the round we are now, let's say, emphasizing is a clear round, which has to do with a generation which will be introduced in September, October. And so orders for that we have received in first quarter, in early part of the second quarter. And maybe if that all is successful in adoption in the world, you may see additional orders in the third quarter.

51:09 So that's typically the pattern. Very clear. Thanks. I hope that helps. The final question comes from Robert Sanders from Deutsche Bank. Please go ahead. Hi, Richard. Thanks for taking my question. Maybe if we could just take a step back and talk a bit about the potential for overcapacity building up. I guess, in particular, 2.5 d, what worries you more about what you see today in terms of the potential for overcapacity building up? Is it the COWAS look alikes, or is it China? You've been through many cycles, so I'd be interested to sort of get a sense of what you see.

51:59 And then I have a follow-up. Well, first of all, thanks for this question. If you look at previous cycles in our industry, typically, an up cycle lasts six quarters, maybe eight, and then you are bound to have an overcapacity. As soon as you hear new fabs being built, new assembly sites, advanced packaging being built, and by different major customers and then also the whole subcontractor universe expanding capacities, UBOUND will see, at some point, an overcapacity.

52:48 So what we see in the market clearly reflects the statistical analysis of what has gone on in many cycles. There are many always other profits who are saying, no, this time it's different. It will last another super cycle, three years at the minimum, because of the overwhelming demand. We've also heard that before. So it's a very interesting question. But then if you look at BESIY, we can accelerate, decelerate. Look at our margins, our ramps and also DRAMs with increasing margins.

53:39 In this cyclical world, and it remains cyclical, you simply have to follow the demand cycles of the leader and customers. So are we heading into an overcapacity? Time will tell. We adjust our operations, our supply chains, long lead items three times a week, simply following exactly the demand patterns of those customers as said. We are suppliers to an industry, which today has major drivers. And of course, AI is a game changer in many ways.

54:26 Will that follow a continued growth path? Nobody knows. So I'm sorry, Rob. I can't give you a better answer. But do you think that this cycle is potentially more dangerous just because the OSATs, they make 18% gross margin, they can make 40% in co world look alikes? Doesn't that make it a little bit more dangerous, or you feel that's always the case that there's some attractive high margin market that they can go after? Well, that's that's the name of the game. So any high margins is bound to result. Well, take the memory market right now. Who would have thought two years ago that you would ever enter the memory market into a world with margins which we have right now?

55:18 So that's the danger in in this industry. But as a supplier, you simply have to be prepared. You have to to enjoy the demand as soon as it is offered, and that's what we do. And then if the tide goes out, simply be able to adjust your cost. Got it. And just one housekeeping question. I don't know if this was answered earlier on. I apologize if it was. But did you say how many hybrid bonding units were shipped in Q2? And how many booking numbers you took in units for Q2? Just out of interest, if you're willing to say. No, we haven't disclosed units. We did disclose the number of customers. We are now over twenty, twenty one customers.

56:09 And we updated in detail the progress in HBM adoption with a very clear message that it will be very interesting in the course of this quarter and also the fourth quarter, how much and which end application that will use hybrid bonding. I will now hand the word over to Mr. Richard Blickman for the closing remarks. Thank you all for listening in. And in case you have additional questions, don't hesitate to contact us.

56:59 Thank you again. Bye bye.