ACM Research - Q2 2024
August 7, 2024
Transcript
Operator (participant)
Good day, ladies and gentlemen. Thank you for standing by, and welcome to the ACM Research Fiscal Second Quarter 2024 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I'll turn the call over to Mr. Steven Pelayo, Managing Director of the Blueshirt Group. Mr. Pelayo, please go ahead.
Steven Pelayo (Managing Director)
Thank you, Desmond. Good day, everyone. Thank you for joining us to discuss second quarter of 2024 results, which we released before the U.S. market opened today. The release is available on our website as well as from Newswire Services. There is also a supplemental slide deck posted to the investor section of our website that we will reference during our prepared remarks. On the call with me today are our CEO, David Wang, our CFO, Mark McKechnie, and Lisa Feng, our CFO of our operating subsidiary, ACM Shanghai. Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ACM's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially.
Those risks are described under the risk factors and elsewhere in ACM's filings with the Securities and Exchange Commission. Please do not place undue reliance on these forward-looking statements, which reflect ACM's opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward-looking statements. Certain of these financial results that we provide on this call will be on a non-GAAP basis, which include. Which excludes stock-based compensation and an unrealized gain or loss on short-term investments. For our GAAP results and a reconciliation between GAAP and non-GAAP amounts, you should refer to our slides, or pardon me, you should refer to our earnings release, which is posted on the IR section of our website and to Slide 12. Let me now turn the call over to David Wang, who will begin with Slide 3. David?
David Wang (CEO)
Thanks, Steven. Hello, everyone, and welcome to ACM Research second quarter 2024 earnings conference call. Please turn to Slide 3. For the second quarter, revenue was $202.5 million, up 40%. Shipments were $203 million, up 32%. Profitability was good, with a gross margin of 48.2% and operating margin of 25.6%. And we ended the quarter with approximately $367 million of cash and time deposit, with a positive cash flow from operation for the quarter. Revenue for the first half of the year was $354.7 million, up 62%. We believe this growth rate is higher than the growth rate of China WFE, and it demonstrates market share gain for ACM and the contribution from new product cycles.
Now, I will provide detail on product. Please turn to Slide 4. Revenue from single wafer cleaning, Tahoe, and the semi-critical cleaning product grew 36% in Q2, and represented 76% of total revenue. ACM offer what we believe is among the industry's most comprehensive cleaning portfolio. We estimate the global total available market, or TAM, for cleaning is close to $6 billion, and ACM produce product supporting 90% of all cleaning process steps in both memory and the logic. During the last earnings call, we highlight the sulfuric peroxide, or SPM, portion of their cleaning market, which has been a relatively small contributor to our business, but represented 25%-30% of the total front-end cleaning market. ACM now offer a full product line of SPM tool across all temperature range.
We have already been shipped Tahoe and the single wafer tools for lower and middle temperature SPM steps. We now have a differentiated high temperature SPM tool that we believe position us to gain market share from the current market leader. We currently have more than 10 SPM customer in production or evaluation, and look forward to increase contribution to shipment or revenue as we ramp in production in the next 12-24 months. We also expect our bevel etcher cleaning tool to contribute in more revenue in 2024, and we are on track to complete evaluation of a supercritical CO2 dry cleaning tool this year, and the revenues in 2025. We believe ACM cleaning portfolio, including SAPS, TEBO, Tahoe, Semi-Critical, together with the SPM and Supercritical CO2 dry, has achieved world-class status.
We see good opportunity for continued market share gain in mainland China, and we are confident we have what it takes to acquire major customer in the international markets. Revenue from ECP, Furnace, and other technology grow 104% in Q2, and represent 19% of total revenue. We achieved another quarterly record in this category with nearly $39 million in revenue in Q2. In plating, we are seeing strong demand for both front-end wafer processing and back-end packaging. We have a major new product announcement today, the Ultra ECP ap-p plating tool for the next generation fan-out panel level packaging, or FOPLP. We believe this is a game-changing that position ACM to participate in growing demand for AI solutions. Our proprietary design employ a horizontal plating method that delivers film uniformity and the precision across the entire panel.
We believe ACM is among the first to employ horizontal plating for panel application, and it will strengthen the market, enabling advanced packaging with some micron feature on large panel. This technology is especially applicable to GPU and a high density, high bandwidth memory HBM. We see a large opportunity as several major semiconductor leader have a choosing panel for their AI chip packaging solution. We continue to make good progress with our furnace product, which address more process step, ranging from oxidation, anneal, to LPCVD and ALD. As noted in prior call, our furnace product cycle is about 18 months behind the plating. We believe our furnace product portfolio will benefit from increasing capacity for both memory and logic. Overall, we expect to have more than 60 furnace customer by end of this year, compared to the 9 at the end of our 2023.
Revenue from advanced packaging, which excluding ECP, but including service and spare, declined by 20% for Q2, but was up 13.5% for the first half of the year. This category includes a range of packaging tools, such as Coater, Developer, Scrubber, PR stripper, and wet etchers, and also service and spare parts. We are exploring new product and technology to participate in the next generation of advanced packaging. We believe ACM is one of the only company that offers full set of wet tool, polish tool, and a copper plating tool for advanced packaging. Last week, we announced the Ultra C vac-p flux cleaning tool for fan-out panel level packaging. This is a companion tool to the ECP AP-P, which I mentioned earlier, and extending ACM product portfolio to the panel space.
In July, we shipped our first Ultra C vac-p flux tool to a new China packaging manufacturer. Putting together, we believe those two panel tool, including plating and cleaning, mark a strong offering by ACM to address a fan-out panel level packaging market. We believe ACM is among the first to applying horizontal plating technology into panel packaging application. And we believe our technology will help accelerate ACM's global market share gain, as interest in panel level packaging is growing rapidly at the foundry, IDM, and the OSAT in the U.S., Korea, Taiwan, and mainland China. Finish up on product. We are making good progress with our track and PECVD platform. We believe our proprietary approach positioning both tool for success for mainland China and the global customer. We shipped our beta version of PECVD tool in July to a logical customer.
The innovative platform is capable of handling a wide variety of the PECVD process. We expect multiple evaluations this year and a number of our local customer in foundry, logic, memory, and other areas. We are moving forward in the development of our track tool, which has a differentiated design with a focus on high throughput and low maintenance. In addition to ArF evaluation tool and a major Chinese foundry, we are also engaging with several customers for i-line and KrF-line based lithography. We expect a good progress for both PECVD and track over the next year, with revenue likely in later 2025 and more notable contribution in 2026 and beyond. Moving on to customer, please turn to slide seven. In Q2, we saw broader demand from foundry, logic, power and memory, both NAND and DRAM.
For the second quarter of 2024, we had a 40% customer representing 58% of the revenue versus three customers representing 52% in the second quarter of 2023. In China, we have a leading position in cleaning with significant room to grow. We believe we have become a world-class multi-product company with competitive product in market for plating and furnace. And we have a solid evaluation pipeline for track and PECVD. Overall, we believe our China growth is being driven by the market share gain, new product, and increased localization. In the US, we delivered an Ultra C b backside cleaning and a bevel edge tool in the second quarter of 2024 to a large US manufacturer that qualified as the first steps cleaning tool for revenue later last year.
This demonstrate a deepened relationship, which we believe can lead to a production order across multiple product line. Today, I'm pleased to announce we have received an order from U.S.-based wafer-level packaging house for a coater developer tool. We expect to deliver this tool to the U.S. facility in the first half of 2025. Last month, we have a great week at the SEMICON West trade show in San Francisco. We had several days of a solid meeting with a number of U.S. chip maker with fabs in U.S. and abroad. With good interest in our SETF, TEBO, Tahoe, Supercritical CO2 dry, plating, and our wet edge tools. In Europe, we are in the final stage of our qualification of Ultra C SAPS V cleaning tool and a major global semiconductor manufacturer.
In Korea, we engage with multiple customers for both front-end and packaging tool, including single wafer and a batch clean. Tahoe, ECP, Furnace, ALD, PECVD, and Track. We see an opportunity for our tool with the SK Hynix high bandwidth memory capacity product. To support growth, we made a progress on our facility expansion in China and other regions. Please turn to slide 8. In China, our Lingang production and R&D center is nearly complete. We expect our initial production to begin in the second half of this year. In Korea, we believe a strong commitment can improve our relation with the key Korean customers. Our resources in Korea can also providing another basis to support international customers. We continue investing our Oregon site to add our service, support, and demonstration capability for R&D and customer activity in the US and Europe.
In Q3, we entered into an agreement to purchase a 40,000 sq ft R&D facility in Oregon with a fully functional 5,000 sq ft clean room. The purchase is scheduled to close in Q4. This new facility demonstrates a strong commitment to the U.S. market, allows us to conduct R&D and demonstration of ACM technology near major semiconductor producers. Several years ago, we set a long-term revenue target of $1 billion. We are now close to this level, and we have made good progress with new products and international marketing. As a result, I'm happy to report that today, we have set a new long-term revenue target of $3 billion. Please turn to slide 6. Key reasons for increase include, first, we have scaled our business in Mainland China and also Korea.
We now ship a cleaning, plating, and advanced packaging tool to nearly all the major and the smaller semiconductor manufacturers. We are among the top one or two local producer for each category. Second, we believe our product are world-class. This including our current offering and our new product roadmap. We are committed to innovation, and we believe we can compete head-to-head with the top-tier player, both in China and international market. At a high level, we believe a market share shift to AI is moving the market towards ACM technology whereas. We have been investing in key technology for years, and we are now seeing good interest to apply key technology to several industrial trends. Let me highlight a few.
The shift of 3D structure for NAND, DRAM, and logic is driving demand for our vertical cleaning solution, including TEBO and Supercritical CO2 dry, and also our proprietary furnace ALD design. Next, HBM require a driving demand for our TSV plating and 2.5D advanced packaging solutions. For PECVD, ACM has a very unique approach, including one chamber with three tracks that allow our customers to address multiple process with the same platform. For track, ACM differentiate the platform is designed for high throughput and no maintenance tool scanner. And therefore, panel plating, as we announced today, we believe ACM new Ultra ECP AP-P is a game changer that will support future AI chip packaging at the panel level. Third, with our product line improving at a scale in China and Korea, we are seeing good traction with our global customers.
We have multiple tools on the evaluation at several major customers in the U.S., Europe, Korea, and Southeast Asia. We are confident those can lead to volume production orders, and in the longer term, we expect up to half our business in markets beyond Mainland China. Bringing it all together, our $3 billion target, assuming that China will account for about $1.5 billion revenue, and the rest of the world, which is 2x-3x larger than China, will account for the other $1.5 billion. I will now provide our outlook. Please turn to slide nine. We have raised our 2024 revenue outlook to a new to be in the range of $695 million-$735 million, versus prior outlook of $650 million-$725 million.
At the middle point, our new outlook represent 28% year-over-year growth, compared to 23% previously. We expect a shipment in the second half of the year to grow, with the full year shipment growth rate outpacing revenue growth rate. We note our visibility for the year is largely driven by our current order book, anticipate the new orders and the qualification or customer acceptance of their previous shipped evaluation tool to a range of the customers. We believe WFE spending in Mainland China will remain stable as the country continue to, on its goal to match the production capacity with end market consumption. We are focused on gaining market share in the Mainland China, ranking our new product and expanding our business to new customer in the U.S., Korea, Taiwan, Europe, and other Southeast Asia market.
Now, let me turn the call over to our CFO, Mark, who will reveal details of our second quarter result. Mark, please.
Mark McKechnie (CFO)
Thank you, David. Good day, everyone. Please turn to slide 10. Unless I note otherwise, I'll refer to non-GAAP financial measures, which exclude stock-based compensation, unrealized gain loss on short-term investments. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Unless otherwise noted, the following figures refer to the second quarter of 2024, and comparisons are with the second quarter of 2023. I will now provide financial highlights for the second quarter of 2024. Revenue was $202.5 million, up 40%. Revenue for single wafer cleaning, Tahoe, and semi-critical cleaning was $153.2 million, up 36.2%. Revenue for ECP, front-end packaging, furnace, and other technologies was $39.0 million, up 103.8%.
Revenue for advanced packaging, excluding ECP, services and spares, was $10.3 million for the second quarter, down 20.4%, but for the first half, it grew by 13.5%. Total shipments were $203 million, up 32%. Gross margin was 48.2% versus 47.6%. This exceeded our long-term gross margin target of 40%-45%. For the full year, we now expect our gross margins to be above the high end of the range. This is due to gross margins above the range for the first half and our expectations for gross margin at the upper end of our target range for Q3 and Q4.
We continue to expect gross margin to vary from period to period due to a variety of factors, such as sales volume, product mix, and currency impacts. Operating expenses were $45.6 million, up from $36.3 million. R&D was $21.8 million, versus $19.4 million. The year-over-year increase primarily reflects additional personnel expenses to support our product development pipeline. Sales and marketing was $14.1 million versus $11 million, and G&A was $9.8 million versus $6.0 million. For 2024, we plan for R&D in the 13%-15% range, sales and marketing in the 7%-8% range, and G&A in the 5%-6% range. Operating income was $51.9 million versus $32.4 million. Operating margin was 25.6% versus 22.4%.
We had no realized gain from the sale of short-term investments for the quarter, as compared to a gain of $3.9 million in the year ago period. Recall that the realized gains are included in our non-GAAP earnings. Income and income tax expense was $9.3 million versus $7.6 million. For the full year, we plan for an effective tax rate on non-GAAP pre-tax income in the 15%-20% range. Net income attributable to ACM Research was $37.3 million versus $31.3 million. Net income per diluted share was $0.55 versus $0.48. Our non-GAAP net income excluded $14.3 million, or 21%, $0.21 per share in stock-based compensation expense.
We note that due to the accelerated amortization for ACM Shanghai stock option grants, we do expect SBC expense to gradually roll off in the third quarter and beyond. I will now re-review selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash, and time deposits ended the second quarter at $366.8 million versus $288.3 million at the end of last quarter. Total inventory was $602.9 million, versus $581.1 million at the end of last quarter. This included raw materials and work in process of $324.0 million, and finished goods inventory of $278.9 million. Finished goods inventory mainly includes first tools under evaluation at our customers, also includes finished goods at ACM facilities.
Cash flow from operations was $61 million for the second quarter and $51.9 million for the first half of the year. Capital expenses were $13.6 million for the second quarter, $39.7 million for the first half of the year. For the full year 2024, we expect to spend about $100 million in capital expenditures. This primarily includes continued investments in our Lingang facilities, remodeling for the new headquarters for ACM Shanghai, and our investments in the Korea and the U.S., together with fixed asset in expenditures. That concludes our prepared remarks. Now let us open the call for any questions that you may have. Operator, please go ahead.
Operator (participant)
Thank you. We will now begin the question and answer session. To ask questions on the phone, please press star one one and wait for your name to be announced. If you'd like to cancel your request, please press star one one again. One moment for the first question. Our first question comes from the line of Suji Desilva from Roth Capital. Please go ahead.
Suji Desilva (Managing Director)
Hi, David, Mark, Lisa, congrats on the progress here and the up guidance. For the second half, your shipments appear to be increasing. Can you talk about maybe 1% or give us some sense of how much of that shipment base is outside of China versus China, and what that'll, how that'll increase in the mix over time?
Mark McKechnie (CFO)
Sure. Do you want to take that, David?
David Wang (CEO)
You want to take care of it, Mark, or?
Mark McKechnie (CFO)
Yeah, sure. Hey, Suji, thanks. Yeah, so you did, yeah, that, we expect our shipments to be a bit higher in the second half versus the first half of the year. You know, we'd expect shipments up, obviously, in the third quarter. In terms of the mix internationally, or outside of mainland China, Suji, I would say that the substantial majority of our shipments will still be within China. And so, we will have some shipments outside, but really, substantial majority is gonna be to the mainland China market in the back half of the year.
Suji Desilva (Managing Director)
Okay.
Mark McKechnie (CFO)
Yeah.
Suji Desilva (Managing Director)
Thanks, Mark. And then specifically for the Korea customers, I know you've been shipping into the China fabs for Korea customers, but are you already shipping into Korea fab for Korean customers? And if not, what's the timing of that starting? Because that sounds like something, newer as an opportunity I've heard versus kind of U.S. and Europe.
David Wang (CEO)
Okay. So we are definitely working with the Korean customer. And so this moment, we are now, I mean, Q2, we have no shipment go there, Korea, right now. However, you know, we do see the opportunity into including also RND tool and for their, you know, beyond the cleaning product, we're, we're heavily engaged with the, you know, our Korean customer. So, so we see that additional new, new product, you know, will hopefully can be shipping there, you know, second half of this year, which is really another bigger type other product for the HBM, you know, for action, right? That's where we're, we're looking for.
Suji Desilva (Managing Director)
Hmm. Outstanding. That's great. And then my last question's on the high bandwidth memory supply chain in Taiwan, which has been growing very strong. Can you talk about your opportunity there, if that's soon, and who the competition today is in, in that market? Because, you know, we know with AI, that's growing very fast.
David Wang (CEO)
Okay. You mean the panel, panel, panel-sided new product? Suji, you mean that? Is that correct?
Suji Desilva (Managing Director)
The high bandwidth memory opportunity, the supply chain, the end products, into that in China, Taiwan, rather.
David Wang (CEO)
Yeah. You mean our new panel product? You talk about our-
Suji Desilva (Managing Director)
Yes. Yeah, yeah. The right, the back end.
David Wang (CEO)
Oh, backs of packaging. Okay, I see. Well, for the backs and packaging, and, you know, we're engaging with the customer in Taiwan and also engaging with customer in the U.S., right? Which we announced we have received our first coater developer order from one of the U.S. advanced packaging house. And definitely, you know, we have a well set up there, this wet etcher tool for the advanced packaging. So we're having engaged with multiple customer in Taiwan. Meanwhile, we just announced this our panel low pressure cleaning for flux, and also announced this horizontal plating for the panel. And these are two new product we're definitely address the new trend, also, you know, needs of the this packaging requirement.
So we're engaging with multiple customer right now, and both, you know, in mainland China and also in the Taiwan and also in the U.S. So we believe that will bring another exciting market for our new panel product. And plus, we're still engaging also developer additional new type, other type of the, you know, panel product too. So we believe that will bring another our revenue growth potential, right, in this product portfolio.
Suji Desilva (Managing Director)
Okay. Sounds like great progress all around. Thanks, David. Thanks, guys.
David Wang (CEO)
Thank you, Suji.
Operator (participant)
Thank you for the questions. One moment for the next question. Our next question comes from the line of Charles Shi from Needham & Company. Please go ahead.
Charles Shi (Analyst)
Hi. A couple of questions. The first one looks like you are implying a half over half largely flat for second half of the year, but the shipment is probably higher in the second half. So just wanna also wanna clarify, when you say a shipment in the second half of the year to grow, hopefully that's a, that's a y- half over half comment, or that's a sequential quarter over quarter comment? That's the first question.
Mark McKechnie (CFO)
It's a half over half. Yeah, we'd expect shipments to be higher in the second half than they were in the first half.
Charles Shi (Analyst)
Yeah, but any thoughts on the implied revenue guide for second half being largely flat versus in the first half, and how should the people think about this?
David Wang (CEO)
Actually, revenue also second half is higher than first half, right? You look at our middle point of the new segments.
Charles Shi (Analyst)
Okay. Then the second question is about the capital allocation. Definitely, the ACM Shanghai is already paying a dividend to ACM Shanghai customers. I wonder, any thoughts on starting a dividend policy with the ACM Research investors, and especially when the ACM Shanghai probably going to see the lockup expiry pretty soon?
David Wang (CEO)
Yeah. Okay, good point. And we do have a dividend, right? And, last year, and probably will continue this dividend, distributing to all the investors of ACM Shanghai, you know, for, for, for near future. Then you talk about the lockup and of the, ACM U.S.A., you know, for their share in the in, in China, Shanghai. I think, in this moment, our still major business from Shanghai and, ACM USA definitely can sell their share. However, you know, you can see there are standard right now, we're keeping our share, right? The reason is that we do have a dividend, and also ACM U.S.A. have, you know, the cash going on, and there's no reason to sell our precious, you know, share inside of China.
Mark McKechnie (CFO)
Sorry, sorry, David. Just wanna clarify. When I say dividend, I mean the dividend, for ACM U.S.A. shareholders, not the ACM Shanghai shareholders.
David Wang (CEO)
Okay, okay. So the dividend we got from ACM Shanghai, and will come to ACM U.S.A. So this money, I think, will be reinvest into our, you know, marketing sell and also potential supporting and R&D and, for all the purpose, right? So this moment, we believe the cash we got from dividend, the best interest for the investor U.S.A. is reinvest back to the business instead of, just, you know, distribute dividend to the, ACM U.S. investor. So we think that will be our major purpose for the dividends, you know, usage. Hey, Mark, anything you want to add on that?
Mark McKechnie (CFO)
Yeah, I mean, Charlie, Charles, I think it's a, it's an interesting question, but, you know, echoing what David says, we, we don't have any plans to pay a dividend, from the US. Yeah.
Operator (participant)
Thank you.
Mark McKechnie (CFO)
Yep.
Operator (participant)
Thank you for the questions. One moment for the next question. Our next question comes from the line of Mark Miller from The Benchmark Company. Please go ahead.
Mark Miller (Analyst)
Let me say congratulations. Another very good quarter, and again, you're probably the greatest growth stock that at least in my universe, and hopefully the investors will respond to that more aggressively in the future. Terms of your evals going on, especially outside of China, can you give a little more color in terms of evals, in terms of what type tools and what countries?
David Wang (CEO)
Okay, sure, Mark. At this moment, and we do have a cleaning tool, right? As the go-to U.S. customer, we do have a two type of tool. One is the SAPS, you know, cleaning, another one is really the backside and also vapor clean, right, in the same customer. And recently, we're receiving another order from quarter developer from U.S., you know, advanced packaging house. And also we do have also another evaluation tool or a still tool in there from the European customer in the evaluation. Also, meanwhile, we're heavily engaged with the Korean customer for copper plating, right, and tool. That's in the demo status. And you know, hopefully quickly we can ship to their production and for their final production evaluation.
And also we're talking with a few customers in Singapore and also, you know, in the U.S., and talk about our, our new cleaning capability, including TEBO and Tahoe, and also our supercritical CO2, which really we designed for advanced technology evaluation, especially for 3D clean and also for acidic clean. So that kind of also powerful cleaning tool. We're engaging with multiple customers right now.
Mark Miller (Analyst)
Okay. In terms of your margin guidance, and margins have been certainly above the target range. You're guiding the margins being at the top of the guiding range. I assume that implies that your backlog, the margins of the tools in the backlog are at or above your target range?
David Wang (CEO)
Mark, you want to answer that?
Mark McKechnie (CFO)
That's right, Mark. I mean, you know, we mentioned that, you know, for the year, our gross margins would be above the normal 40%-45% range. Really, because they were, you know, stronger above the range for the first half of the year, and the rest of the year, we're expecting them to be at the upper end of our range. And so, yeah, I mean, our visibility on the margin profile for the end of the year is pretty good.
Mark Miller (Analyst)
Thank you.
Operator (participant)
Thank you for the questions. Once again, to ask question, please press star one one and wait for your name to be announced. One moment for the next questions. Next question comes from the line of Robert McKay from Blue Lotus. Please go ahead.
Robert McKay (Analyst)
Hey there. Thanks for taking my question. Am I coming in clearly?
David Wang (CEO)
Yes, Robert, please.
Robert McKay (Analyst)
Oh, great. Okay, great. So I did have a bit of a touchy question, and, but I know, I think it might be important, is I was wondering if we've evaluated, if there's any... you know, there's been some discussion regarding some further restrictions, on, you know, Chinese companies. I was wondering if there might be, if we've evaluated, you know, what kind of impact there might be, if that unfortunately does come through, and, you know, what, what our thoughts are on that, and if there's anything we can talk about in that, in that respect.
David Wang (CEO)
You, you talk about this new, new rule for the, export control? Is that what you mean?
Robert McKay (Analyst)
Yes, exactly.
David Wang (CEO)
Okay. Well, I mean, again, right, we just heard some, you know, real market rumor. We're carefully, you know, I should say, you know, watch how the new rule come out, and where ACM definitely will follow the law, right? And the U.S.A. law and follow Chinese law with the international business. And, you know, we're carefully, I mean, at this moment, no speculation. But I will say that if something come out, it's not only ACM, right? A lot of U.S. companies got impacted too. So we just want to watch out what's going on, to, you know, do whatever adjustment based on the new regulatory come out.
Mark McKechnie (CFO)
Maybe the other, the other thing that I would add to that is, you know, we take a deep step back, and we look at the China WFE. You know, I think David's view, our view on WFE in China is that, you know, pretty stable for this year, and, you know, for the years to come, that, you know, the country will continue to invest in their production capacity. And so, you know, we'll, we'll, we'll—like David mentioned, we'll monitor the any of the new regulations. Of course, we'll follow the rules, but, you know, we generally anticipate WFE in China to remain pretty stable.
Robert McKay (Analyst)
Got it. Thanks. Thanks for the clarity. In terms of our supply chain then, is there any, you know, potential impact to supply chain, if any of these rumors do come to fruition?
David Wang (CEO)
Supply chain, this moment, I see they're, you know, pretty stable right now, right? Obviously, we're looking for all different kind of supply chain, you know, and, for mature product, we still buy U.S. components and but for whatever the amounts notes, we have using, you know, non-U.S.A. parts. And this moment, we're also looking for the multiple supply chain, those, you know, in the other country, also inside of China. We also qualify the local player of the components. So, we definitely have, you know, a plan to secure our supply chain, and, when any, you know, a new regulatory come out, we can, you know, quickly switch into other, other, alternative choice of the supply chain.
Robert McKay (Analyst)
Okay. Got it. That makes a lot of sense. So you have some backups. That's very good to hear. And then I had one more question, I think, is related to the private offering that we announced in January. I think we were going to do some private offering with our Shanghai shares. I was just wondering if we have any update in regards to that private offering, if there's any progress on that front, and when we-
David Wang (CEO)
Yes.
Robert McKay (Analyst)
to hear more about it? Yeah.
David Wang (CEO)
Yes. Actually, you know, we're, we're in the process to the final formal application, right? But we know that the approving process in the second offering in China will take time. We estimate probably 6-8 months, even longer. So our, you know, our permission, probably we're expecting middle of next year, we might be get it, and then within another 1 year of the permission we got, then we can, you know, probably releasing the second offering based on market situation. Now, obviously, I know we're expecting that time. We got our PECVD and the track system and also furnace, including our panel packaging tool, get in the market. So we're choosing the right time and, or rather, you know, pricing to raising our second bond.
Robert McKay (Analyst)
Okay, that makes a lot of sense. Thanks. And then I had one more question. It was just about if we have any, you know, new products that we can look forward to in the second half of this year or in early 2025, that, you know, that we can think about, or should we just wait until the announcement?
David Wang (CEO)
Well, obviously, we announced already, right? I mean, this Q2, we announced two product already. So, I want to say we'll continue, you know, exploring a new product, and obviously, like this, panel, right? We announced two. We're still working on the additional other type of the panel product, and for the, for this year, and probably we're gonna announce another, you know, new product when they, when we get it ready. Meanwhile, I still say we're still major focused on our EUV, what we're doing right now, you know, cleaning, cover plating, furnace, and especially the furnace ALD and track and the PECVD. So our new product probably is still, you know, along this major technology and, and also the, the product.
We're looking to develop other new, which is completely new, more than this category I mentioned.
Robert McKay (Analyst)
Got it. That, that's very clear. Thank you very much, and also great results, and sorry for the touchy questions, but thank you very much. Yeah.
David Wang (CEO)
Thank you, Robert.
Operator (participant)
Thank you for the question. Once again, to ask question, press star one nine. There are no questions at this time. I would like to turn to management for closing remarks.
David Wang (CEO)
Okay. Thank you, operator, and thank you all for participating on today's call and for your support. Before we close, Steven is going to mention our upcoming investor relation events. Steven, please.
Steven Pelayo (Managing Director)
Thanks, David. Before we conclude, I just want to give everyone a quick reminder on our upcoming investor conferences. On August 27th, we will present at Jefferies Semiconductor, IT, Hardware and Communications Technology Summit at the Four Seasons Hotel in Chicago, in the United States. On September 4th, we will present at Benchmark 2024 TMT conference in New York City. Attendance at the conference is by invitation only. For interested investors, please contact your representative, sales representatives to register and schedule one-on-one meetings with the management team. This concludes our call, and you may now disconnect. Bye-bye.