Good day, ladies and gentlemen, and thank you for standing by. Welcome to the ACM Research Second Quarter 2022 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 will call - I will turn the call over to Gary Dvorchak, Managing Director of the Blueshirt Group. Mr. Dvorchak, you may begin.

Thanks, Harman, and good morning, everyone. Thank you for joining us on today's call to discuss second quarter 2022 results. We released results before the U.S. market opened today. The release is available on our website, as well as through newswire services. There's also a supplemental slide deck posted to the investor portion of our website that we'll reference during our prepared remarks. On the call with me today are our CEO, Dr. David Wang; our CFO, Mark McKechnie; and Lisa Feng, the 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 to differ materially. Those risks are described under 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 the financial results that we provide on this call will be on a non-GAAP basis, which excludes stock-based compensation and an unrealized gain or loss in trading securities. For our GAAP results and reconciliations between GAAP and non-GAAP amounts, you should refer to our earnings release, which is posted on the IR or website. With that, let me now turn the call over to David Wang, who will begin with Slide 3. David?

Thanks, Gary, and good afternoon, everyone, and welcome the ACM Research second quarter 2022 earnings conference call. Please turn to Slide 3. Our second quarter results represent a solid recovery following the Shanghai COVID restriction in the spring. We delivered strong revenue and profit profitability as our facility returned to normal operations As we had expected on the Q1 call, the restriction turned out to be temporary. The Chanana facility was reopened on the closed loop production process in later April. As of July 1, operations in Shanghai were largely back to normal. I want to sincerely thank our employees, business partners and the customers for their dedication, as we navigated the COVID pandemic. Let me share some financial highlights for the quarter. Revenue of $104 million was up 9%. Revenue include shipments of tools in the second quarter that could not be delivered in the first quarter due to the later March restriction in Shanghai. A strong product cycle from ECP and incremental business from new customers also contribute to their growth. Shipments were $112 million compared to $82 million last year. Gross margin was 42.4% within our normal range of 40% to 45%. Operating margin was 21.1%. We ended the quarter with $469 million of cash, equivalents and time deposit. For the first half of the year, revenues grew by 50%., cleaning tools grew 27%, while ECP to grow 490% and contributed 20% of the sales. Demand from our top China customer remains strong. We believe many of our customers are in the early to middle stage of multiyear expansion plans, and we see good growth of opportunity for the next several years. We had a growth share of the China market with our chamber cleaning tools based on our technology, good execution and new products. We had…

Thank you, David, and good day, everyone. Please turn to Slide 5. Unless I note otherwise, I will refer to non-GAAP financial measures, which excludes stock-based compensation and unrealized loss on trading securities. Reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. Before I provide the normal review, I want to address the impact of the COVID restrictions in Shanghai on our business. As a result of the restrictions for the first half of the year, we experienced a negative impact on revenue and shipments and overall results were below the original book, the original plan established prior to the restrictions. In addition, 13 tools that could be not shipped - could not be shipped to customers in the first quarter were subsequently shift in the second quarter. To quantify these 13 tools amounted to $24 million in shipments and $12.9 million in revenue. Qualitatively, we had higher operational costs and some inefficiencies across different groups during the registration. The restrictions did also impact our operating cash flow, primarily with the relatively high percentage of shipments in the latter half of the quarter our accounts receivables. With the easing of restrictions, we are now focused on delivering tools to meet the demand of our customers. I'll now provide financial highlights for the second quarter. Revenue for the second quarter of 2022 was $104.4 million, up 93.8% in the second quarter of 2021. Total shipments were $112 million versus $82 million in the year ago period. Revenue for single wafer cleaning tools, which include SAPS, TEBO, Tahoe and Semi-Critical cleaning was $72.6 million, up 59.7%. Cleaning mix as the percentage of total revenue was 69.5% versus 84.4% last year. Revenues for ECP, furnace and other technologies is $20.5 million or 19.6% of sales compared to…

Hey, guys, congratulations on the nice results and the strong recovery in the June quarter. David or Mark, just wanted to ask my first question around the 2022 guidance. I know you're keeping it unchanged to 3.65 to 4.05. But it sounded like you said that part of the reason you're keeping it unchanged was due to supply chain constraints. So I guess my question is, do you have the demand that could actually lead to upside and you're not changing it because of the supply chain? Or did I miss hear your comment.

Okay, Quinn. Hello?

Yes.

Okay. As we said that, you know, everybody where that is the supply chain [ph] still continue, I should say, still very tidy. That's the reason even we have very strong demand and ROI from customer because uncertainty of this supply chain, that's why we're still keeping 365 and 405 of our projection for this year.

But it sounds like maybe you might have actual demand that could - would allow you to achieve that, but you're keeping the annual target mostly because of concerns around the supply chain.

Well, I said if supply chain it's really get better or if we have a lending [ph] item can we deliver as we expected and probably can reach high sight of our projections, right? And so it's really this moment - we still have some surprising, right? Sometimes they say they can deliver next month. But when the time comes in is a delay. So there's a certain part holding us for this way. That's why we're still keeping this number, no change.

Got it. Understood. David, second question for me. You've got a number of new platforms coming out in the second half. You've announced two of those, which are the supercritical dry in the ALD furnace tool and then the complete new platforms. Can you talk to us, you introduced those tools? When do you think you'd actually be able to start to rev rec those tools, could the supercritical dry and ALD furnace rev rec in 2023? Or do you think the evaluations for those tools, as well as the new platforms that you haven't announced yet. Do you think this rev rec on those platforms really are going to start to kick in for you and more in 2024? Just trying to think about the timing of these additional growth drivers? Thank you.

Yeah, great. Actually, those tool, as I mentioned, will come in second half of this year. So normally, like furnace ARD, also, we have the supercritical CO2 dry including auto, so two new category products. And when we put in the customer side normally it take about a year, 1.5 years, right, the full qualification. So I should say, we're probably expecting real revenue come out in 2024.

Understood. Thank you, David. Thank you, Mark.

Thank you.

One moment for our next question, please. Our next question comes from Suji Desilva with Roth Capital. Please go ahead.

Hi, David. Hi, Mark. Congratulations on the execution, challenging…

Hi, Suji.

Yeah. So just to kind of maybe elaborate on Quinn's question a little differently. I want to ask about the visibility in the sense that you have backlog you were catching up from in the first quarter that show up in the second quarter. Does any of that still remains for the third quarter? Or have you kind of worked through the tools you couldn't ship during the COVID lockdown?

Okay. Mark, do you want to cover that?

Yeah, sure. Hi, Suji. So there were two factors, right, for the first half of the year. I mean one is you know, we had - so - and we did deliver all the tools we couldn't deliver in Q1, we delivered in Q2. But certainly, in the first half of the year, our overall production output was impacted. You know, so no, we have not caught up with all the demand for the tools that we have from our customers. The lead times for our deliveries are longer than normal. And so really, if you look at the back half of the year, it's going to be about our execution on the supply chain side and our suppliers, yeah.

Okay. Thanks, Mark. That helps to paint a picture there. And then David, perhaps, the foundries in China, SMIC and some others are starting to be able to deliver leading-edge nodes, maybe with or without EV and they have obviously a mix of trailing and leading edge or trying to grow into. Is there an uplift potential for your addressable market as the foundries in China try to target the leading edges more? Or is that kind of nascent and maybe less of an opportunity versus what you're shipping today?

Yeah. And obviously, actually, you know, that – the media energy product, right? And at this moment, I think we're really focused on their 28-nano and above h right, a lot of products. We’re still right now is 45 and 28-nano, and put this way, as a larger market exists in China here, you can still use 45-nano and 28-nano technology to make the product. So we see that the potential is still tremendous, right? It's including cover our cleaning product. For example, we announced about bench that's mostly using for the 45 not above and obviously, 28-nano [indiscernible] right. So I still see the potential going in there. And the you know, if there are products you can be keep growing as this fab build up and for those 28-nano and above.

Okay. Great. Maybe if I could sneak in one last quick question. On your U.S.-based semi cap equipment partner. Any updates there on the, I guess, the development effort you are working with? Thanks.

Yeah. As we said, we have Q2 has been delivered, right to their - one of the major U.S. customers and we're re-expecting those two tools and will be qualified probably by end of this year, and which also are needing additional PO, also additional other kind of product that interest. And meanwhile, we're also working closely with other customers in the U.S. and also in Europe, right? I think our goal is really a global market and is our target. So with our differentiated product you know, in the [indiscernible] in capability and also in the future furnace, right, especially ARD were developed right now. So we see still a lot of potential market you know, get our differential product and to be penetrated into the global market.

Okay. Thanks, David. Thanks, Mark. Congrats, again.

Thanks, Suji.

One moment for our next question, please. Our next question comes from Donnie Teng with Nomura. Please go ahead.

Hi, David and Mark. Thank you for taking my question. Can you hear me?

Yes.

Congrats on the strong results. I think the first question is still regarding to the second quarter results. I think previously, our impression is like the second quarter sales may be less than US$100 million or not as high as today. Could you elaborate more on - it was mainly due to just the tours, shipment being postponed from first quarter to second quarter, and we probably miscalculated couple of tours in the second quarter? Or it's because of like some customers will want to put in first in the second quarter. I just want to have an idea what's the mismatch in the second quarter sales result in the previous impression? Thank you.

Mark, do you want to cover or…

Yes, I can cover that, David. Yeah. Thanks, Donnie, for the question. So really, the - the upside in Q2, I'd characterize that as just good execution by our factory. It really - as we discussed earlier, its the customers' demand for our tools was pretty high. So we quantify how much move that we couldn't ship in Q1 into Q2. But we had that, we have pretty good output and also on the customer acceptance side, the combination of that drove the upside for Q2.

Understood. So sounds like its mainly due to demand driven rather than just – rather than like pull-in or…

No. Yeah, Donnie, it really was - the demand was there and it's there for the back half of the year. So to be clear, it was really the execution of our factory and we watching…

Yeah, let me add on the Donnie, your comment, actually went up [indiscernible] we're still not there, we will meet our demand in Q2 from our customers. Some of this product we deliver in Q3. That's the status. Because you know, we still lost almost April and even back to the 2.19 production in May, as a lot of restrictions to happen for the logistic deliver and also the clearance of the customer of the import parts. So anyway, that's the real still impact our Q2 revenue and the shipments.

Understood. And can I have a follow-up on the full year guidance again. So it looks like we are facing some supply chain constraint or supply chain uncertainties. Does it mainly refer to our component supply or the customer’s capacity expansion uncertainties? Just want to have a more clear view on what exactly mean the supply chain uncertainties to have some constraints to our full year guidance?

Yeah. Well, actually, our customer demand still very strong, right? And we can see that RPO has paid up this year and some GEO [ph] go to the Q1, Q2 next year. Really, this moment is I think their factor [indiscernible] is secure some shorting or long-leading parts. Of course, we're ramping our production and we still need to training our staffing and manufacture people to increase our efficiency and then deliver to, right? So that's the major constraint for our revenue. I call their, you know, realization.

On the circa to [ph] let us know what kind of components we are facing, maybe have a much longer lead time. Could you give us some examples?

Well, I don't really touch the detail, right? I will say, you know, I have a vendor, right, supply. If I mention on the product, they maybe not happy. Anyway, not a lot, a few of them and so we're still lacking a quarter secured or they are full production capacity either, right? I think there also you know, supply other customers, too. So it's really a shortage. So we're still working very close with them. And also, we are also working on second source. Even at some time, we have changed our design and changing the components, and that's the strategy we're taking right now.

Yeah. Understood. And my second question is regarding to our progress with the customer. So it looks like we have quite - quite good progress in different type of equipment. But if we want to focus on the priority of these projects or these customers, could you maybe give us a more clear view on which new equipment or which customers that we are more confident in winning orders or to see a more meaningful sales contribution in the near term. Based on the prepared remarks, you mentioned about all these projects. Thank you.

Yeah. Okay. Well, obviously, you can see we have our first new customer, right? Obviously, this moment, [indiscernible] also have another second tier jump in [indiscernible] IGTV customer in China. And also have a bunch of second-tier customer, right, in there, that's probably - as also I can see they're growing and they are building the final line and also the pilot in the production too. So it's a lot of I call their demand there. But also, as I mentioned, that the top of the five customers taking roughly probably 65% of our total revenue.

Okay. Great. But just - I just want to maybe to see if you could prioritize all the new projects you've just mentioned in your prepared remarks, lots of names there right like IDM companies, Asia-based customers, et cetera. So just a little bit of distraction. I just want to see if you could kindly prioritize the importance of those projects or when exactly maybe by THE sales contribution timeframe, you know, ranked by the timeframe issue, if you could?

Yeah. Well, as I mentioned, the top customer, you know, take it – I just mentioned already, right? But at this moment, it's too early for us to tell you who is number one, number two, because so this is the only Q2 to timeline. I will say, by end of the year, we're going to publish what will be the number one, number two, right? But probably you know, changing in ranking by the five, I already mentioned to you, right? And I said, SMIC, 1TC, [indiscernible] as of the top, maybe top 5, top 6 mid-changing depend end of the year. So we have to give you the real number by probably the end of this year, which is Q1, early Q4, earning for next year.

Okay. Great. Thank you, David. Thank you, Mark.

Thank you.

Thanks, Donnie.

One moment for our next question, please. Our next question is from Edison Lee with Jefferies.

Hi, thank you. Hey, David and Mark congrats on the great results. I have two questions. Number one, just more about demand, particularly in light of the recent talk by the U.S. government to step up their export restrictions of SPE to China. What do you think is the impact is that step-up is going to materialize, particularly on, for example, DUV, which could impact not just 14-nanometer or below, but potentially 28, 40, 55. So that's my first question.

Okay. Well, it's - I should say, we're not adjusted by public information. We heard that is 40-nano and below, right? And anybody talk about 28-nano moment, right? So you're looking to in a nano and for those, I call the, they did not use any EUV, they're not using advance through there. So I think plenty of nano is still viable technology and for the - a lot of applications, right? And also, if you pair together with advanced packaging together as a lot of it product makes. So that's why I see a lot of fabs still build in China, and most of them is 28 and also 45 above. Also, that's our major revenue come from this moment. Of course, we have also penetrated the market outside China. And with that in mind, so we want our product, either cleaning, top of it, and also their furnace product, we're getting the more advance application in the market outside China.

But as far as you know, what do you think the Chinese customers, your Chinese customers have started doing in response to this risk of more difficulty in buying SP from the U.S. Have you seen any change in your customer strategy? Are they accelerating procurement or expanding faster? What have you seen from your customers?

Well, I mean, this is daily changing information. I really cannot comment customer right now, maybe too early to say anything right now, right? So yeah, its probably I have a real limited information to comment on my customer right now.

Okay. No problem. My second question is about rising cost of materials and components because obviously, given logistics issues, inflation, we think that a lot of components and material prices have been going up and your gross margin in the second quarter actually is higher than the first quarter. So we wonder if you haven't been able to pass on some of these material cost increases to your customers or how does that work, if the material and component costs totally shutoff

Sorry, as my sound here, not clear. Can you repeat the question?

Yeah. It's about material cost increases and component cost increases. As we think that because of the inflationary pressure and also because of logistical challenges, I think component costs start going up. So we wonder what you can pass on some of those cost increases to your customers? And how does the pricing work?

Great. Okay. So we do see some in parts to increase price, right? Because of the – our supply side components, also their raw materials start changing. We do not, I should say, increase our pricing for the sale yet, okay? But for a certain portion of their product, if it's really increased a lot, we're talking to the customer right now, right, because the component increase pricing. So at this moment, I should say, our major component prices still not changing. You know, where import is, some parts on Japan, depreciation of Japanese yen and as we'll not include too much pricing of their parts. But we do see some parts from Europe and from U.S. got increased, right, because of their strong and dollar. Anyway, so we see minor - I mean, it's still a minor impact for us. It's not a real much significant to our cost.

Yeah. Hey, David, if you don't mind, I'd add something here. Edison, and David made a good point. The renminbi weakened about 5% during Q2. And so a lot of our tools are priced in dollars. So you don't see a big impact on revenue. And on COGS, the supply is something like as David noted, some of it is in yen, some of it comes from renminbi and then we get the Western currency, Europe and U.S. So there is that impact. But overall, you’d also - the weaker renminbi does help out in our operating expense, right? So certainly contributed a bit and big picture question at Shanghai operations looks cheaper in U.S. dollars, right, than it would have - if the expense was in dollars.

In that case and a follow-up by asking what percentage of your revenue for example, in 2Q – is 2Q a fair an example, is store-based?

Yeah, it's the substantial majority. I don't think we break out the exact amount. But David, I'd say the substantial majority, but we're not going to give a percentage, yeah.

All right. Okay. So basically, all your Chinese customers or the majority of the Chinese customers are basically buying things denominated in U.S. dollars from you guys?

Yes, that's correct.

Okay. Okay. That's great. Thanks a lot. That’s it from me.

Thank you. One moment for our next question, please. Comes from Chaolien Tseng with Credit Suisse. Please go ahead.

Thank you. This Jovian [ph] from Credit Suisse. I have one. This is a quick follow-up question to the question that Donnie asked. I'm curious what is that in the [indiscernible] to change some equipment design, partial design of the component, does they take more time for the customers to qualify than the usual case?

Hey, David, are you there? I think we might have - we might have lost David.

Okay.

I see David there. David…

Please unmute it. Please unmute.

Jovian, give me one second. I'll try to call David on the WeChat just to see if he is…

Is it better now?

Jovian, give me one second, I'll try to call David on the WeChat just to see if he is…

Is it better now?

Right. Better, David, yeah.

Okay. Can you Mark, repeat the question?

Go ahead, Jovian. Can you repeat your question?

Yes. Earlier, I think when you answering Donnie or someone's question, you mentioned that in some cases that the company may change a little bit of equipment design or some components inside the cost of the component shortage. My question is, in this case, would that take - will the customer need to get more time to re-qualify your tools with the new design component inside?

Yes…

Can you repeat your question?

Yes. Earlier, I think when you answering Donnie or someone's question, you mentioned that in some cases that the company may change a little bit of equipment design or some components inside the cost of the component shortage. My question is, in this case, would that take - will the customer need to get more time to re-qualify your tools with the new design component in sight?

Yes, good question. Actually, it depends on the components of what you're changing, right? If it is a very sensitive component, you have real re-qualify, but for say example some flow meter, you got different vendor, different manufacturer if the boast [ph] is a real well-known manufacturer, you can change the flow meter to another kind of flow meter, right? So it's not necessarily you're changing everyone. However, before you change it, you have to really talk to the customer. And also custom has also their experience about the components or this parts within change. So when we reach the agreement, then we're going to change it, right? That's the normal process we' doing.

So actually, before we change, we need to get there kind of upgrade?

Yes, we have the [indiscernible] of grant, we tell them, hey, if this component you want it, it takes more long time. And then if you give these components, we give you SPAC or the detail, I call it function, functionality or the description when we got the permission for a customer, then you can change it. Of course, we'll do some internal test first, too.

Thank you, David. And my next question is, I'm quite curious as for the second quarter finished goods. About how much for that is claim furnace versus ECBIP [ph]

You mean the components in the ease cleaning or ECB…

For the inventory finished good…

I see…

Took half already, but we have a program. I am just curious about how much for clean, furnace, ECP or others?

I think most of our inventory of finished goods is still most convenient tool, right? Almost closer percentage of revenue-wise, probably close to 70% is a cleaning product and also see 20% our ECP. Of course, they have 10% of our packaging, roughly exist. Of course, we have some other new products, which is furnace, right? We're not taking the revenue yet. So some portion were also into the finished goods inventory.

And David, yeah, my next question is on the furnace side because that something we've been quite looking for true since the last year, early this year. So first would you might share with us how many earnings there coupled [indiscernible] tools were shifted in the second quarter. And first, second half of this year about how many furnace tools would you expect to book in our revenue?

I probably cannot give that detailed number right now. But I think it was last year on the 20 driven to ship right? This year, I think we project total anywhere between 30, around 30 number range, total this year.

Okay. And by now, I know there's the COVID-19 lockdown, its impacting China. But I'm just curious that by now, because its kind of early August already. Do you feel the furnace co-brands with multiple customers are kind of on schedule within expectation? Or do you feel there's kind of a bit delay?

Hey, Mark. I am sorry, the sound is very low.

Yeah, Jovian, if I understood your question, we've answered that on a couple of the other previous questions. The demand is still some – there is some catch up for us, right? There's more demand that customers – so really we need to catch up on them too relative to the customer demand is we certainly didn't fully catch up in Q2 and so we've got more work to do.

Yes, Mark, I understand that. But I'm just curious on the funding side?

On the furnace side, please go ahead and ask your question again, Jovian, make sure we understand?

I am just asking about furnace or for the furnace qualification, asking a separate whatever with our memory or logic foundry customers. So I'm just curious for furnace, do you think so far everything is on schedule or do you feel there is a little bit of the delay with one or more customers?

I see. David, did you get the question? Just she is just asking me…

Yes. I think you're voice here, very weak. And I don't know, can you repeat the question?

I'll repeat if you can hear. Can you hear me, David?

I can hear you very well.

Okay. So what she asked, she asked if the restriction caused any delays on our - the qualification of our furnace tool?

You mean the restriction for the components?

No, no. The COVID related to Shanghai…

Okay. Actually, not really much because at this moment, our furnace and most portion was made in Korea and some portion made in China. So - and also volume not as big as coming into, right. So it's some impact, but not really much.

Maybe, David, I think really, she was asking about like just the evaluation, our ability to have our services team and our customers at our customers to help them with the evaluation of the furnace.

So you're saying, how we evaluate the tool?

Yes, as I understand, its she wanted to know the restrictions during Shanghai interrupted our ability or our customers' ability to evaluate…

[Technical Difficulty]

David, we lost your voice a little bit there. I'm sorry about that. Maybe Dave, could you answer again.

Okay, now its better?

That’s better.

Yeah. Now clear.

David, continue. I think that's it. But David, maybe just to answer her question one more time because your earlier answer didn't come through clearly.

Okay. I said during the COVID-19 recession period and our process and some engineer, another 3 travel rate from Shanghai and also some components we're going to ship from Shanghai, that's why it will impact some of the tool of furnace evaluation in housing side.

Got it. Great. Okay. That's fair. Operator, it looks like there's no more questions. If you want to pull one more time and…

Certainly. [Operator Instructions] We have a question from the line of Charlie Chan with Morgan Stanley. Your line is open.

Hi, David. Hi, Mark. And congrats for the strong recovery on not just the revenue but also the stock price. So my question is about your view about the future China CapEx sustainability. I know you have a very high backlog to digest, but some memory fab or foundry fabs to cut their CapEx recently, right? So do you expect your new bookings to slow down in the coming quarters? And what would that mean for your maybe coming year growth? That's the first question, okay.

Actually, weekends [ph] daily impact this year, right? As I said, weaker some deal aiming for Q1, Q2 next year, even with that, I was still talking to their key customer in China and even the next year. So as I said, the key customer outcomes in China seem in the month expansion, probably they are another, as you say, they are in the middle, right, they become spot, this way. Of course, they have a timing, their technology make sure they're - their yield and their technologies amounts to the second point and expanding faster. But that expanding trend as you say, is not changing. So we would say, there is obvious cycle coming, right? We will talk about cycle, probably in our next or you know, start to decline. And what I should say, the policy cycle in China probably delays than a world cycle. So year or two, I feel still pretty comfortable given a year from now, right.

Okay. Thanks, David. I kind of agree because it's a local efficiency driven, right? But once that capacity or expansion plan gets completed. I think the cycle impact will still be there. But I agree with you, it would be 1 or 2 years later. And my next question is maybe to Mark, it should be similar. How soon can you be removed on the provision from U.S. I know you have changed the accountant, but I just want to make sure has to be the next of 10-Kk, 20-K or from the quarterly reporting you can be removed from the provision?

Yes. Thanks for asking. So as you know, we were put on the list, the conclusive list actually, following the filing of our 2021 10-K. And so we showed up on a list for the first time as a result of that. Now that we've appointed a U.S. based auditor PC of the compliant. And the - after Dave, we've completed our 10-K filing for 2022, and they're signed as the principal auditor. I guess the way it would work is we would not show up on the list again, in 2022. So we can't get removed from the list that were put on in 2021, but we wouldn't show up on the list for a second time. And that's the way it would play out. So we don't - we would not expect to be added to the list for a second time. And therefore, we don't expect our U.S. stock to be subject to the delisting that could occur if you're on the list for three consecutive times.

Okay. So that event will happen maybe next April or May when you report the 10-K?

That's right. It would be more likely, I guess, for us accelerated filer, we would review the 10-K and would expect to come out in March. And so the list would come out, folks will show up as a - second time on the list following that. So we just simply wouldn't show up the second time on the list.

Okay. Yes, maybe just a small follow-up about your new power line [ph]. Is that a post that CMP cleaning is the so-called the new power line or is just kind of an appendix over your current cleaning tool?

Yes. Actually, that's the tool, and [indiscernible] a substrate manufacturer company, right? I what to do that, normally we have CMP of wafer. And however, cleaning performance from the typical CNG machine is other studies by customer requirement. So what they do is they probably do their [indiscernible] so then further we clean the wafer mandate in dry box. That's a possibility. Obviously, we are also designed for the [indiscernible] that's our product, in the market.

So it doesn't belong to the two new power lines.

No, no, no. Not just expansion of our mini cohort…

Okay, great.

But particularly by customers, they are not CNG, only cleaning for their CNG mini applications, so it belongs to cleaning part.

Yes, just a wish, right? I mean management has been saying that in the second half, you announced a few new power lines, were literally in the second half. So do you think the next quarter results, meaning 3 months later, you will announce then or between you probably will announce the - at least one of the new power lines?

Yes. Well, I mean, we really have a lot of product, evolve, right, and I just make sure, so I couldn't - we have announced this first. But we have about [indiscernible] for the DRAM, I mean the capacity in process. And second one, ARD furnace, right, vertical. Then we also have two new category, as we – we’re not have keep name yet, but this market, they are adjustable market $8 million as a new complete new category products and that what is all sustain half of this year. So it's a real exciting moment.

Okay. Okay. We will be patient to that and also looking forward to the announcements. And I will leave that one detailed housekeeping staff in our follow-up call. So thanks for the time today. Thank you.

Thank you.

And thank you. And that will conclude the Q&A for today. I will turn the call back to David Wang for final remarks.

Okay. Thank you, operator, and thank you all for participating on today's call and for your support.

And with that, we conclude our conference. Thank you for participating, and you may now disconnect.