Edward Yang

Edward Yang questioned the level of conservatism embedded in Qnity's 2026 revenue guidance of approximately 6.5% growth, especially given the 10% growth in 2025 and the implied mid-teens year-over-year growth for Q1 2026. He sought additional color to reconcile these figures. For his follow-up, Mr. Yang asked about Qnity's leverage to the memory cycle, specifically if the base scenario assumes no offsets from a higher memory cycle, but potential impacts are conservatively baked into the guidance.

Answer

CEO Jon Kemp reiterated that the midpoint of the 2026 guidance is anchored on mid-single-digit MSI and PCB market expectations, plus anticipated outperformance. He attributed conservatism to the contingency on incremental capacity for advanced technologies and the evolving memory market dynamics, adopting a 'wait-and-see' approach for the second half. Interim CFO Mike Goss added that the guidance aligns with Qnity's midterm framework of 6-7% sales growth, expecting margin expansion from volume, product mix, and the transformation program. Mr. Kemp clarified that Qnity benefits from memory chips regardless of their end destination (consumer or data centers), with data centers potentially offering higher content and margin, positioning the diversified portfolio to capture premium content growth.

Edward Yang asked about the level of conservatism embedded in the 2026 revenue guide of 6.5% (midpoint), given 10% growth in 2025 and Q1 guidance implying mid-teens year-over-year growth, and sought clarification on Qnity's leverage to the memory cycle and potential offsets.

Answer

CEO Jon Kemp reiterated the 2026 midpoint is anchored to mid-single-digit MSI/PCB growth plus Qnity's outperformance, with some conservatism due to memory market dynamics and the need for incremental capacity. Interim CFO Mike Goss noted the guidance aligns with the 6%-7% midterm framework. CEO Jon Kemp clarified that Qnity's diversified portfolio positions it to capture demand whether memory chips go to consumer electronics or data centers, with data centers potentially offering higher content and margin.

Edward Yang followed up on the gross margin assumption for Q1 2026, questioning why more operating leverage wasn't anticipated and seeking more detail on the product mix issue observed in Q4. He also asked for insights into the memory cycle's strength and duration, including key parameters to monitor for the upcycle's slope and longevity.

Answer

CEO James Xiao explained that increasing utilization rates (currently 65%) and disciplined operational expenditure would drive margin expansion, especially as demand grows quarter-over-quarter. Chief Accounting Officer Brian Harding clarified that Q3 had a favorable product mix that did not repeat in Q4, impacting margins, and reiterated that Q1 margins would be similar to Q4 before sequential expansion. James described the memory cycle as a multi-year upturn, driven by HBM demand, NAND upgrades (2xx to 3xx/4xx layers), and significant investment in AI-specific memory, with some customers projecting shortages until 2028.

Edward Yang followed up on the Q1 2026 gross margin assumption, questioning why more operating leverage isn't expected and seeking details on the product mix issue in Q4 2025. He also asked for James Xiao's outlook on the memory cycle's duration and strength, particularly given the significant upside potential for UCT's memory business.

Answer

CEO James Xiao explained that increased utilization rates, especially in Asian manufacturing, and disciplined operational cadence would drive margin expansion, with demand growing quarter by quarter. Chief Accounting Officer Brian E. Harding clarified that Q3 had a favorable product mix that didn't repeat in Q4, impacting margins, but sequential expansion is expected from Q2 2026. James Xiao described the memory cycle as a multi-year upturn, citing customer comments about shortages lasting until 2028, HBM's impact on DRAM capacity, and NAND upgrades, with AI-specific memory growing 2-3x faster than regular memory.

Edward Yang of Oppenheimer & Co. Inc. asked for a ranked order of the factors driving optimism for Q4, sought clarification on the tariff reimbursement delays, and inquired about the reason for the goodwill impairment charge.

Answer

Chairman & Interim CEO Clarence Granger identified the new business win as the most tangible positive factor, followed by confidence in the China situation. He expressed the most frustration with tariff reimbursements, noting customers are slow to pay despite verbal commitments. CFO Sheri Savage explained the goodwill impairment was a non-cash charge triggered by a decline in the company's market capitalization, which fell below the carrying value of the goodwill on the books.

Edward Yang asked for an updated view on Wafer Fab Equipment (WFE) growth for 2025, inquired if the company had seen any demand pull-ins related to tariffs, and requested an update on the ongoing CEO search.

Answer

VP of Marketing Cheryl Knepfler addressed the WFE outlook, stating that the 2025 forecast is unlikely to increase and faces more downside risk than upside potential. Interim CEO Clarence Granger stated that the company has not seen any significant demand pull-ins due to tariffs. Regarding the CEO search, Granger reported that a search firm has been hired and the process is expected to conclude in another three to four months, aligning with the original six-month timeline.

Edward Yang of Oppenheimer & Co. Inc. requested details on management's "balance sheet alternatives" comment, the sustainability of the China revenue run rate into the first half of 2025, and the company's updated outlook for WFE growth and its own outperformance.

Answer

CFO Sheri Brumm clarified that "balance sheet alternatives" involves reviewing the capital structure for flexibility, potential M&A, and improved cash flow. She projected the China revenue run rate would be slightly lower than Q4's level through the first half of 2025. She also stated UCT sees 2025 WFE growth around 5% and maintains its goal of outperforming the market by 5-10%, contingent on product mix.

Edward Yang asked for the reasons behind UCT growing faster than its customers, questioning if it was due to outsourcing, win rates, or technology exposure, and also inquired about the slight sequential dip in China revenue.

Answer

CEO James Scholhamer attributed the outperformance to a historical pattern of increased customer outsourcing during market upturns, market share gains in lithography, and customers utilizing UCT's low-cost Malaysia facility. Regarding China, he explained the slight sequential revenue dip was due to customer-specific lumpiness and not indicative of a negative long-term trend.

Edward Yang sought clarification on the $240 million HBM Volume Purchase Agreement (VPA), comparing its size to Onto Innovation's total AI packaging revenue in 2025, and asked about the VPA's timing/cadence and expectations for additional VPAs.

Answer

Michael Plisinski (CEO) confirmed expectations for additional VPAs with other customers. He clarified that the announced VPA is a two-year agreement extending into 2027, initially weighted more towards 2027 (2/3, 1/3), but now seeing acceleration towards a 50/50 split. Edward Yang also inquired about the status of the G5 (new high-resolution Dragonfly® platform) discussions with a major foundry customer, including qualification progress, timing, and pricing. Michael Plisinski (CEO) stated that the tone from many customers has been positive, with progress aligning with or exceeding expectations. He reiterated that accelerated evaluations are expected to conclude in Q1/Q2, with ramps anticipated in the second half of the year.

Edward Yang asked for clarification on the $240 million HBM VPA, its size relative to Onto Innovation's 2025 AI packaging revenue, the timing and cadence of its recognition, and the potential for additional VPAs. He also asked for an update on discussions regarding the G5 Dragonfly platform with a major foundry customer.

Answer

CEO Michael Plisinski confirmed expectations for additional VPAs, noting that the announced VPA is a two-year agreement, initially 2027-weighted but accelerating towards a 50/50 split. Regarding the G5 platform, Mr. Plisinski stated that discussions are progressing as expected, with accelerated evaluations anticipated to conclude in Q1/Q2, leading to potential ramps in the second half of the year.

Edward Yang of Oppenheimer & Co. Inc. inquired about the Semi Lab acquisition, asking why the asset was available, its expected growth rate, and the rationale for the cash-heavy deal structure. He also asked if the 3DI metrology wins involved displacing incumbents.

Answer

CEO Michael Plisinski explained that Onto Innovation preferred a more cash-heavy structure for the Semi Lab deal as its stock price adjusted, and Semi Lab agreed while retaining some equity for upside. He projected the acquired business would have "above average growth" for Onto. Plisinski confirmed that the 3DI wins in memory, logic, OSATs, and co-packaged optics were competitive displacements of incumbents, while a key 2.5D logic win was a unique solution where other technologies had failed.

Edward Yang asked whether the 2.5D packaging issue was due to equipment underperformance or changing customer specifications, and inquired about the competitive risks and opportunities related to this new platform.

Answer

CEO Michael Plisinski explained that customer requirements evolved faster than the existing platform's capabilities, even after performance was doubled. He acknowledged a competitor was selected for this specific application in the short term. However, he highlighted the long-term positive, stating the new, more capable platform will command higher ASPs and open up the front-end inspection market, a significant new opportunity for Onto.

Edward Yang asked if the 180% growth in AI packaging revenue for 2023 exceeded targets and requested an estimate of the revenue pickup from HBM demand expected in the second half of 2025.

Answer

CEO Michael Plisinski confirmed the growth likely exceeded his earlier 'over 160%' comment. Regarding the future HBM revenue, he stated the exact amount is still being determined but will be concentrated in the second half of the year, with potential upside as customers finalize their inspection and metrology needs for new ramps.

Edward Yang sought more detail on the 2025 growth outlook, the relevance of a foundry's packaging deal with an OSAT, whether facility space is still a bottleneck for customers, and if Q3 operating expenses represent a good run rate.

Answer

CEO Michael Plisinski anticipates growth in 2025 driven by an acceleration in advanced nodes (GAA and DRAM) and sustained strength in power semis, though not necessarily accelerating beyond 2024's ~20% growth rate. He noted that capacity bottlenecks are loosening. CFO Mark Slicer added that the goal is to hold total OpEx flat or better than Q3's level, aiming to offset the costs of recent tuck-in acquisitions.

Edward Yang, Stock Analyst at Oppenheimer, asked about specific timeframes, decision points, or catalysts related to Camtek's strategy for maintaining and expanding market share, including any systems currently under qualification. He also inquired about Camtek's perspective on the diverging WFE growth forecasts for 2026 from other industry players.

Answer

COO Ramy Langer stated that while he couldn't disclose exact timeframes, Camtek has confirmed several steps with different customers and is shipping or will ship machines for those. He expressed confidence in increasing market share and penetrating additional steps in 2026. Regarding WFE growth, Langer reiterated that it's too early to quantify a specific number for 2026, preferring to assess progress quarter by quarter.

Edward Yang (Oppenheimer) asked about specific timeframes or catalysts for Camtek's market share expansion and its stance on the diverging WFE growth views for 2026.

Answer

Ramy Langer (COO, Camtek) stated that while he couldn't disclose exact timeframes, several steps with different customers are confirmed, and Camtek is confident in increasing market share and penetrating additional steps in 2026 based on validated work. Regarding WFE growth, he reiterated it's too early to quantify a specific number for 2026, preferring to assess progress quarter by quarter.

Edward Yang asked if the previously mentioned high shipping costs had moderated and requested quantification of the Q2 impact. He also inquired about potential Q4 seasonality and the rationale behind the Street's relatively conservative 7% growth model for 2026.

Answer

CFO Moshe Eisenberg confirmed that the exceptionally high shipping costs related to regional conflict have returned to normal levels, and the impact in Q2 was over half a million dollars. COO Ramy Langer reiterated positive momentum for the second half but stated it was too early to provide specific Q4 guidance or comment on 2026 growth percentages, though he maintained that 2026 should be another growth year in a positive market.

Edward Yang asked for Entegris's ballpark total revenue exposure to the memory market and its potential in an upcycle. He also sought clarification on the trade-off between layer count benefit versus wafer counts, particularly for products like CMP. Additionally, he inquired if Entegris's go-to-market approach for winning new PORs has changed, specifically regarding increased cross-selling between Material Solutions and Advanced Purity Solutions divisions.

Answer

CEO Dave Reeder stated that memory accounts for approximately 30% of total revenue, roughly split between NAND and DRAM. He noted DRAM's high utilization in 2025 and migration to HBM provides incremental content, though less than a full wafer start. NAND's ~85% utilization is being absorbed by incremental layer count more than MSI growth. Dave clarified that Entegris is relatively indifferent to layer vs. wafer for revenue, though a full wafer start might yield slightly more benefit. Regarding PORs, Dave confirmed a continued focus on selling the complete product portfolio, layering best-in-class filtration, purification, wafer handling, and fluid management into longer technology roadmaps like CMP, deposition, and etch processes.

Edward Yang inquired if Entegris's go-to-market approach for winning new PORs has changed, specifically regarding increased cross-selling between the Material Solutions and Advanced Purity Solutions divisions.

Answer

Dave Reeder (CEO, Entegris) confirmed that the company continues its strong sales focus on technology roadmaps and customer node transitions. He added that they are now more focused on selling the complete portfolio, layering in best-in-class filtration, purification, wafer handling, and fluid management with longer technology roadmaps (CMP, deposition, etch processes).

Edward Yang asked for clarification on the 5% AI exposure (Entegris vs. industry), Entegris' CMP positioning within HBM (including similar agreements), and whether the long-term outperformance target (3-6 points above market) from last year's analyst day still holds for 2026 given 5% MSI growth.

Answer

CEO Dave Reeder clarified that 5% refers to AI-driven wafer starts industry-wide, which represent 30% of revenue but a small volume. He discussed advanced packaging growth (25% CapEx growth, $100M revenue for Entegris in 2025) and noted CMP wins in HBM (up 100% YoY from a small base). He affirmed belief in significant market outperformance, citing strong performance in specific product areas, and will discuss details at Capital Markets Day.

Edward Yang asked for a reminder on the commercial space business's percentage of Ichor's total business and how its margins compare to the corporate average. He then inquired about CapEx expectations for 2026, specifically if it would grow from 2025 levels or moderate, and whether the company is past any additional restructuring accruals after significant actions in recent quarters.

Answer

CEO Phil Barros declined to specify commercial space margins but confirmed they are accretive to the general margin profile, noting it's currently a sub-5% customer with a medium-term goal to reach 10%. CFO Greg Swyt stated that CapEx for 2026 is expected to moderate down to around 3% of revenue from nearly 4% in 2025 ($36 million). He confirmed that while some activities remain for winding down realigned U.S. facilities, the majority of the $10 million restructuring effort in Q4 is complete, and future accruals won't be at the same magnitude.

Edward Yang asked about the commercial space business, specifically its current percentage of Ichor's total business and how its margins compare to the overall corporate margin profile. He also inquired about CapEx expectations for 2026, whether it will grow or moderate, and if Ichor is past any significant restructuring accruals.

Answer

CEO Phil Barros declined to specify commercial space margins but noted they are accretive to the overall profile. He stated that commercial space is currently sub-5% of revenue, with a medium-term goal to reach 10%, acknowledging the challenge due to the strong semi ramp. CFO Greg Swyt explained that CapEx for 2026 is expected to moderate to about 3% of revenue, down from nearly 4% in 2025, as major investments in the Malaysia facility are complete. He also confirmed that the majority of restructuring efforts are complete, with Q4 2025 seeing a significant accrual, and future activities will not be of the same magnitude.

Edward Yang asked for more detail on the comment that advanced packaging demand had 'plateaued,' questioning if it was market-driven or a share shift. He also asked about the competitive dynamic as a peer pursues a similar vertical integration strategy.

Answer

CEO Jeffrey Andreson clarified the plateau is market-driven, as capacity for the plating and cleaning tools they support is now coming online after two years of high growth, and it is not a share shift. Regarding competition, he noted that Ichor and its competitor already have a customer-supplier relationship for certain components and acknowledged that the competitor's strategy is aligning more with Ichor's branded product approach, which he sees as a market trend.

Edward Yang from Oppenheimer & Co. Inc. questioned the confidence in the stable deposition and etch outlook amid geopolitical uncertainty. He also asked if tariff and logistics issues are making customers more open to outsourcing components and subassemblies.

Answer

Executive Jeffrey Andreson attributed market caution to uncertainty around final tariff and export control decisions, but reiterated that they see no demand erosion beyond specific pockets like silicon carbide and still expect a strong 2026. Regarding outsourcing, he noted that while Ichor's global footprint offers flexibility, the core issue for customers is deeper in the supply chain, such as the sourcing of raw materials like steel into the U.S.

Edward Yang asked for an update on new product progress, specifically regarding the 50+ next-generation gas panels delivered in 2024, and inquired about any incremental impact from export controls or potential tariffs.

Answer

Executive Jeffrey Andreson confirmed that delivering over 50 next-gen gas panels was in line with expectations and that shipments for end-customer evaluation are treated as commercial. He stated that impacts from China export controls are already factored into their outlook. Regarding tariffs, he noted the rules are ambiguous but any potential costs related to their Mexico operations would likely be passed through to customers in their cost-plus business model.

Edward Yang inquired about the progress of proprietary product qualifications, whether customers were increasing outsourcing, and how the current recovery cycle compares to past cycles for Ichor.

Answer

Executive Jeffrey Andreson confirmed that qualification progress is on track and that while overall outsourcing strategies are stable, there are pockets of incremental demand. He distinguished this recovery from the post-2019 cycle, which included a large, non-recurring outsourcing gain. He stated the current goal is to outgrow WFE by about 5 percentage points, resulting in a different growth profile.

Edward Yang asked about KLA's outlook for foundry-related revenue opportunities outside the dominant Taiwanese customer, specifically if engagement is changing with other major foundries that historically underinvested in yield improvement tools. He also asked if the semiconductor industry is positioned to serve the scale of demand implied by recent half-trillion-dollar AI accelerator backlogs, or if projections are being discounted as aspirational.

Answer

CEO Rick Wallace confirmed encouraging broadening investment at the leading edge, with collaborative discussions with other advanced logic customers seeking KLA's advice on process control needs for new nodes and faster ramps. Regarding AI demand, he believes the semiconductor industry is being prudent in adding capacity, suggesting that not enough wafers will be available to meet objectives, which means it's unlikely to overheat, and that supply chain ramp-up takes longer than public announcements.

Edward Yang asked about KLA's outlook for foundry-related revenue opportunities outside the dominant Taiwanese customer, specifically if engagement is changing with other major foundries that historically underinvested in yield improvement tools. He also asked if the semiconductor industry is positioned to serve the scale of demand implied by recent AI accelerator company announcements and a half-trillion-dollar backlog, or if the ecosystem is discounting these projections.

Answer

CEO Rick Wallace stated that KLA is encouraged by the broadening investment at the leading edge and is having many conversations with other advanced logic foundries, offering advice on what they need to be successful. Regarding AI demand, Rick Wallace believes the semiconductor industry is being prudent in adding capacity, suggesting that not enough wafers will be available to meet all objectives in the stated timeframe. He views this as unlikely to overheat the market, as building new fabs takes longer than making investment announcements.

Edward Yang of Oppenheimer & Co. Inc. asked about the reasons for Lam's consistent outperformance versus guidance and inquired about the potential impact of a handset refresh cycle on Lam's business.

Answer

EVP and CFO Doug Bittinger attributed the quarterly beat to better-than-expected revenue, gross margin, and a lower tax rate. CEO Timothy Archer added that strong AI demand is driving outperformance in etch and deposition. Regarding mobile, CFO Bittinger noted that while unit growth is modest, the key driver for Lam is the increasing content of DRAM, NAND, and larger logic chips in new devices, which benefits their foundry, DRAM, and NAND customers.

Edward Yang asked about the factors driving Lam's consecutive quarters of strong results and guidance, and also inquired about the potential impact of a consumer handset refresh cycle on Lam's various business segments.

Answer

EVP and CFO Douglas Bittinger cited better-than-expected revenue, gross margin, and a lower tax rate for the strong results. President and CEO Timothy Archer added that strong AI demand is fueling outperformance. On mobile, Bittinger explained that the primary driver for Lam is not unit sales but the increasing semiconductor content per device, including more DRAM, NAND, and larger processors.