Thank you, operator. This is Doug Lawson, Executive Vice President of Corporate Marketing and Strategy and with me today is Russell Low, President and CEO; and Jamie Coogan, Executive Vice President and CFO.

If you have not seen a copy of our press release issued yesterday, it is available on our website. Playback service will be also available on our website as described in our press release.

Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC Safe Harbor provision. These forward-looking statements are based on management’s current expectations and are subject to the risks inherent in our business.

These risks are described in detail in our Form 10-K annual report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations.

We do not assume any obligation to update these forward-looking statements. Now I’ll turn the call over to President and CEO, Russell Low.

Good morning and thank you for joining us for our first quarter 2024 earnings call. We are off to a strong start to the year with first quarter financial results exceeding our forecast.

Our revenue came in at $252.4 million. On the bottom line, our earnings per diluted share were $1.57, which increased 10% from $1.43 in the year ago period.

Higher earnings were primarily driven by more than a 500 basis point improvement in gross margin as a result of the product mix shipped during the period, partially offset by higher selling costs, R&D and taxes. Continued execution by the Axcelis team combined with strength in the implant intensive silicon carbide power devices segment and strong customer shipments to China enabled Axcelis to achieve this performance.

Based on current booking levels and quoting activity, we expect these two trends to continue for the foreseeable future. Looking forward, our goal is to extend our lead in the power market and establish a position in advanced logic.

We have focused R&D sales and marketing efforts in key areas critical to the next phase of growth. These include joint development engagements and the use of evaluation systems to help grow our market share.

Currently, we have evaluations at customers across nearly all market segments and multiple technical customer engagements designed to improve capabilities and increase our footprint. We have the Purion Dragon, our most advanced high current implanter, and a leading European research institute focused on our advanced logic process development.

We also have a second Purion Dragon under evaluation with a leading advanced logic customer. These tools and the associated technical collaboration will be critical to the customers’ development of the next generation logic technology.

In Japan, we continue to experience success in the power market due to the strength of the Purion Power Series, and we are engaged with multiple Japanese customers in additional market segments. Turning to our systems revenue breakdown in the quarter and beginning geographically, China represented 59% of sales, U.S.

17%, Japan 7%, Europe 4%, Korea 4%, and the rest of the world at 9%. By market segment, mature nodes, which include power devices, comprised 99% of shipped systems revenue in the first quarter with only 1% of shipments to DRAM.

Comparing this to the first quarter of 2023 where we saw 89% of systems shipped revenue to mature nodes and 11% to DRAM. Breaking down the mature nodes in more detail, power continued to lead systems shipments with 55% of total systems revenue.

The other general mature segment was 41% and image sensors contributed 3%. Breaking down total revenue in power a little further, of the 55% recognized in the quarter, silicon carbide and silicon IGBTs were split 76% and 24%, respectively.

We continue to monitor the recovery in our end markets, specifically memory and other general mature process technologies. The exact timing of this recovery is difficult to predict.

We expect revenue levels to increase in the second half of 2024 over our expected performance in the first half with power continuing to be an area of strength. We anticipate silicon carbide and silicon IGBTs will combine to represent approximately 60% of our system shipments for the second consecutive year.

Our other markets are expected to strengthen the second half depending upon economic conditions. This will be underscored by a long-term trend for increasing demand as mature technologies are utilized in Internet of Things, connected devices, consumer electronics, and our growing advanced electronics market.

The timing of a DRAM recovery is now expected later in the year than our previous expectations, and NAND is not expected to recover until 2025, when DRAM and NAND are forecast to have a strong year. We expect China to represent 40% to 60% of our quarterly systems revenue, with the remaining revenue spread relatively evenly across the other geographies.

In the power segment, in particular silicon carbide, we have developed a large and diverse customer base and we continue to win business globally from our customers as well as expanding our product footprint with existing customers. The full portfolio of Purion Power Series products is valued by these customers, allowing them flexibility at both 150 millimeter and 200 millimeter to ramp their fabs in the most productive and cost effective manner.

Fabs will often start up by establishing a core of Purion M silicon carbide tool and then adopt the use of the Purion H200 silicon carbide and Purion XE silicon carbide systems to improve productivity, cost of ownership, and device performance. As a result, we have seen a significant increase in the adoptions of Purion H200 and Purion XE silicon carbide systems.

Axcelis is the only ion implantation company that can deliver complete recipe coverage for all power device applications. We are considered the technology leader and the supplier of choice, providing the best product family and manufacturing capabilities.

This means that using Axcelis tools provides the lowest risk path to high volume manufacturing required to support aggressive fab ramp plans. Looking ahead, we’re even more excited about the upcoming several years.

We will discuss this in more detail at our July 11th Investor Day, but here is a quick summary of how our future growth will be driven by several fundamental industry trends. First, rapidly growing electrical power requirements for transportation, industrial and overall energy needs would demand a significant increase in semiconductor power device capacity.

Silicon carbide, silicon and gallium nitride chips will be used in high volume applications such as EVs, various forms of hybrid automobiles and their charging support, energy generation, transmission and storage applications, including the global adoption of solar and wind and AI data center power requirements, including generation, storage, distribution, cooling and servers. Remember that power chips are one of the most implant intensive semiconductor devices to manufacture, making this a strong growth driver for Axcelis.

The second significant industry trend is AI. This trend will impact every device segment in the industry.

First, the GPU requirements will drive advanced logic processes and require significant manufacturing capacity additions. Second, in addition to high bandwidth memory associated with each GPU, AI will drive DRAM demand beyond the AI data center, including increased PC and phone requirements.

Third, AI will generate data that will drive storage demand, including NAND requirements. And finally, AI will also drive a third wave of IoT using the sensors and connected devices as a primary source of data.

This will drive capacity in image sensors, analog chips, and mature logic process nodes. AI will drive fab capacity growth in all segments, including implant intensive memory and IoT types of chips.

At Axcelis, we are excited to play a significant role in the next wave of technical change and expected to drive our growth for several years. Now, I’d like to turn it over to Jamie.

Thank you, Russell, and good morning everyone. We are pleased with our financial results for the first quarter and look forward to a solid 2024.

We are guiding second quarter revenue of approximately $245 million with gross margins of around 43.5%, operating income of approximately $47 million, and earnings per diluted share of $1.30. Looking to the remainder of the year, power is expected to remain solid throughout the year, and as Russell noted, we are monitoring the expected recovery in the other mature markets and memory.

Although the timing of the recovery is difficult to predict, we continue to expect revenue levels to increase in the second half of the year over our expected performance in the first half. Looking at our first quarter, revenue and earnings per diluted share finished above our guidance due to solid execution and continued demand for Purion, especially in the silicon carbide power market.

Q1 revenue was $252.4 million with system revenue at $195.4 million and CS&I at $56.9 million. These revenue levels reflect flat system volume and a modest decline of CS&I compared to the prior year.

Q1 earnings per diluted share of $1.57 was driven by higher than expected revenues and gross margin, as well as lower overall operating expenses. This compares to earnings per diluted share of $1.43 in the prior year, which marks an increase of 10% driven primarily by mix.

For the first quarter, systems bookings totaled $107 million and we ended the period with systems backlog of $1.1 billion. The general mature market and memory markets remained soft, but bookings and quoting activity for systems in the power segment remains solid and continue to support our revenue expectations.

As a reminder, neither our bookings figures or our backlog reflect orders associated with the CS&I portion of our business. CS&I revenue was down quarter-over-quarter due to lower tool utilization.

Given this lower fab utilization, we are revising our expectations for CS&I revenue for the year to approximately $250 million. Q1 gross margin finished at 46% driven by product mix, exhibiting proof that achievement of these margin levels is well within Axcelis’ abilities.

In 2024, we expect to see a year-over-year improvement in gross margin. However, quarterly gross margins will fluctuate based on product mix.

We expect Q2 gross margins to moderate from the levels we saw in Q1, given the product mix for the period and the anticipated closure of several evaluation systems in the period, which typically have lower gross margins due to costs incurred during the evaluation period. We remain laser-focused on margin improvement and we are using 2024 to implement a number of actions designed to improve operational efficiency specifically focused on gross margins.

One such action is a retirement incentive program with the realization of cost savings beginning in the second half of the year. It is the continued execution on these types of initiatives, the use of flexible labor by operations teams, and most importantly, our drive to reduce the cost of supplied components that provide us the confidence to model gross margin at greater than 45% over the long-term.

Turning to our operating expenses, the first quarter ended at 23.6% of sales. We expect OpEx as a percentage of sales in the second quarter of 2024 to be flat with the first quarter and will improve as revenue increases during the second half of the year.

Investments in R&D for the first quarter were 10.2% and are expected to be between 9% and 10% of revenue for the year. The incremental funding of R&D will be focused on the continued development of our Purion product extensions and upgrades to strengthen our position in power and to grow our position in Japan in advanced logic.

As you would expect, we will continue to tightly manage spending while continuing to support the future growth of the business by solidifying our technology advantage in the specialty markets, increasing our footprint in the memory and advanced logic markets, and most importantly, continuing to invest in our employees and infrastructure to ensure we have the necessary skills, equipment and facilities required to achieve our financial models. Moving to our balance sheet and cash flow, we ended Q1 with $530.2 million of available cash and generated $42.2 million of cash from operations in the period.

We continue to execute against our share repurchase program, buying back $15 million of stock in the quarter and have $175 million remaining on our $200 million authorization. In total, we returned over $200 million of cash to shareholders since 2019 through our various share repurchase programs.

We have a very active calendar of investor events in the coming months, including attendance at 11 conferences through the end of the year, the details of which are on our website. As a reminder, we intend to host an Investor Day on the morning of July 11 in San Francisco.

At this event, we will provide our next long range financial model and we look forward to seeing many of you there. With that, I will now turn the call back to Russell for his closing comments.

Thank you, Jamie. Axcelis is off to a good start in 2024 and our long-term growth is achievable due to the same factors discussed last quarter.

First, the implant TAM has more than doubled in the last few years and is expected to continue to grow with mature market segments representing greater than 60% of the total TAM. Second, power devices, especially silicon carbide devices, are highly implant intensive and the general mature nodes have increasing implant intensity peaking at 28 nanometers.

Third, high value Purion product extensions were designed to optimize power and image sensor device manufacturing, making Axcelis the only company with a product line capable of covering all implant recipes in these key markets. This uniquely positions Axcelis to benefit from high growth in the mature process technology markets.

And finally, Axcelis has strong long-term customer relationships and a fundamental culture desire to win by making our customers successful. In closing, I want to thank our employees, suppliers, customers and investors for your continued support and look forward to seeing you in our up conference in our Investor Day.

With that, I’d like to open it up for questions.

Hi, good morning. Thanks for taking the question and nice job in the quarter, guys.

I wanted to start just with a higher level question to get better insight into some of the near-term dynamics you’re seeing and I’ll put it this way, if we rewind the clock three months, we had seen a very strong fourth quarter order profile. But early 1Q shipments that saw some push outs, and in early 2Q we’ve seen softer 1Q orders.

And I am hoping you can give us some insight into what’s happening with order activity as it stabilizes. There is still a little bit more movement.

And then related to that as we look at the potential for a rise in second half sales, any color on linearity, not looking for specific 3Q or 4Q guidance, but linearity color would be helpful.

So, hey Craig, it’s Russell.

Good morning.

Good morning. We are currently running at a $1 billion run rate in the first half.

We are expecting a stronger second half. While we’re not actually providing the full year guidance, basically, as you know, it’s just coming down to the timing and magnitude of the coming upturn, which is dependent upon the market conditions.

We have seen an increase in the Q1 quoting activity over Q4. We have seen a slowing of customer push outs and a couple a small uptick in pull ins and we are fortunate to have our $1.1 billion of backlog, which as Jamie mentioned, that systems only.

So we are expecting a second – a stronger second half with the continued improvement in the end markets that we serve.

Yes. And when we think about the linearity of the second half recovery, it is going to be a little bit weighted towards the fourth quarter, Craig.

But that is supported by strong order bookings that we already have in the ledger today. Our expectations for CS&I revenue load and we are seeing some positive indicators in the underlying markets, as Russell noted, as the sort of pace of customer requests for shipment changes has shifted from push out to more, a little bit pull in.

And we know that’s sort of overly anecdotal, but those are the types of indicators that we are looking at along with the quoting activity that provide us that confidence in the uptick we’re seeing in the second half.

That’s really helpful, guys. And then I will ask the follow-up question to Jamie before I hop back in the queue.

Jamie, you mentioned that the company was pursuing some gross margin optimization initiatives and you gave one specific example. Can you just talk about the magnitude and the income statement impact timing of those items that investors should look for?

Yes. So on the early retirement incentive, or retirement incentive, I guess I should call it that we’ve offered to folks here, is going to be a second quarter event for us.

Current estimates, it is not overly significant in terms of costs, approximately $1.5 million or so is where we are triangulating that as we speak right now. The benefit of that will accrue to us over the back half of 2024.

And then ultimately, right now that’s been primarily focused in our operations team. So we would expect some benefits to accrue, modest benefits through the SG&A, with majority of that coming in through our cost of sales line items.

Got it. Thanks, guys.

I will hop back in the queue.

Thank you.

Yes. Good morning.

Thank you for letting me ask a question here. Russell, I was wondering, you made a comment that the DRAM recovery was a little bit slower or projected to be a little bit delayed from what you thought previously.

And I am wondering if you are surprised by that, because we’re seeing a lot of silicon being used up with high-bandwidth memory now. And I thought that that was going to help accelerate the need for more, just general capacity.

Hey, Tom? Yes, thanks for the question.

So, yes, there is certainly a lot of news about the demand for high-bandwidth memory, regarding that, for us as an implant company, we really don’t see a change necessarily in the number of steps to process that memory. So it’s very much about the number of wafers processed in that case.

So we will see an improvement in the utilization of memory fabs, and then obviously we will see that will have an uptick in demand. But like I say, we are not a [indiscernible] person getting significant new steps with that particular architectural device.

And Tom, just to add to that in the press, there has been quite a bit of news from several of the memory companies in terms of the beginning plans for CapEx, for new expansions and new fabs.

Yes.

So we’re starting to see that kind of activity and that kind of interest in terms of the customers and the sales discussions. Yes, we are certainly going to stay very close to our customers, and we know from history that this particular market turns on a dime.

So we are ready should that occur. And we’ve been keeping very close to our customers.

Yes, just to kind of echo some of those sentiments on the preparedness of the organization, we are making some investments, incremental investments in inventory, in those sort of higher returning, kind of drop in orders that would come through from our memory customers, and maintaining a sufficient level of capacity not only to meet the expected recovery or potential recovery in the second half of the year here, but also for the growth that we see in 2025.

Okay. No, I think that’s helpful.

So, the recent news about softness in PCs and servers, I guess, is more apt than the longer term projections for high bandwidth memory ramps. So I guess this question is, when you look at the non-power part of the ion implant business, we spend so much time on silicon carbide and power, but in the other mature markets, it’s still a pretty significant level of revenue versus previous cycles.

Curious, what are the biggest end market drivers of that part of the business? And when you talk about a second half recovery from a pretty good level today, what are the end markets that are driving that?

So thanks, Tom. I think the long-term cycle remains intact.

We are in a data-driven connected world. So some of the items that are going to drive that general matures, the Internet of things is going to drive mature foundry, and obviously the logic market, data storage in 3D is going to drive NAND, data analytics, the AI is going to drive DRAM and Advanced Logic.

So outside of the power world, which we’ve talked a lot about, basically the general mature is going to be driven very much by the secular trends we see in the connected world.

Tom, just adding to that, our – many of our customers in that particular market are foundry based, and so they shift around depending on what’s active for their end markets. So really looking to what they’ve been talking about publicly recently, it’s been the beginning of some PC activity, the automotive kind of bouncing around on the bottom and industrials kind of hanging in there a little bit.

The expectation is we really need the consumer stuff to kick back in to really drive that market quite a bit.

Great. Well, thank you for your time.

Hey, good morning, Russell and Jamie. I want to ask a little bit more details by your various end markets, provided that your breakdown for the Q1 numbers.

If I compare with the full year 2023 numbers, it looks to me that silicon carbide does continue to be strong. It’s at a higher run rate, revenue run rate in Q1 compared with the full year 2023.

Silicon power devices is slightly lower in Q1, but mature foundry logic, which is not the power device, the mature general semis, looks like it’s tracking actually well above last year’s level. So these are the three most important end markets for Axcelis I believe.

Can you kind of walk us through what’s the trend through the rest of the year for these three markets? I did hear you, silicon carbide will continue to be strong, but what about silicon power devices?

Are you expecting a recovery? And the current run rate of mature general semi, do you think it’s sustainable through the rest of the year?

And I have follow-up. Thank you.

Thanks, Charles. This is Russell.

So, yes, you’re right. So if you looked at last year to this year, the power is about the same, but within side of that, you – yes, you’re right.

Silicon carbide has gone up by the same amount that silicon power has gone down. The one thing that you notice that last year we had sizable amount of DRAM in our business.

So this year, the reason why the global – sorry, the general mature has increased is because at the moment our memory is quite low. Regarding general mature, I think what is driving that?

I think we certainly see strong silicon carbide power in China. We see that to continue.

We have some visibility with our bookings. Regarding the general mature, I think Doug hit that one ahead.

Basically, it’s consumer spending. So when consumer spending picks back up, and obviously, we’d love memory to pick up as well.

You’ll start to see a rise up in our business, not like – not unlike many others in our peer group. So really we have a strong underlying business.

We’re kind of waiting for some of our markets to recover, and we do expect to see that happening in the second half, which is why we’re forecasting the second half to be slightly ahead of the first half off.

And Charles, just adding a little bit more relative to the power, one of the things we like to make sure everyone understands is the broad base of customers we have in the power both in silicon carbide and in silicon. And so dependent on what the car companies all decide relative to their EV plug-in hybrid strategy and so forth.

We’re well-positioned across that supply base, and that’s geographical as well. So recently it’s been stronger in China.

A year ago, it was stronger in Europe. So it will move around depending on the end customers for those products.

And the last piece is, it’s not just automotive that’s using a lot of power. As Russell said in his prepared remarks, there’s a lot of activity for power devices in many other places, data centers and so forth.

Clean energy are just a couple of good examples.

If I can follow-up, well, maybe I should ask the question a little bit more directly. What I asked about the mature foundry logic, I mean, anything that’s standard CMOS that’s not the power devices, that’s not the silicon carbide.

Based on the breakdown you provided, looks like it was 41% of the Q1 revenue, right? That translates to roughly $100 million of the revenue, I think from that segment that the non-power, non-image sensor part of the mature nodes.

The total revenue last year was roughly $290 plus million, which means Q1 run rate from that particular segment is pretty high. So my question, if I may, really is about whether this is a one quarter phenomenon or do you expect the strength to continue throughout the rest of the year?

Because I do remember you were expecting the second half growth. Some of that second half growth will come from even stronger, mature, standard CMOS, foundry logic type of devices, the non-power, non-image sensor type.

I just really want to clarify that given the Q1 number. Thank you.

Yes. Thanks, Charles.

Sorry about that. So the answer is that market is beginning to recover.

If you look at all the reports from our customers and our customer customers over this quarter, all are indicating signs of recovery. So we would expect, and continue to expect that the mature markets as a whole are going to account for over 90% of our total systems revenue for the year.

So whether it stays exactly where it is this quarter, it’s likely to bounce around, but we would expect increasing trends into the recovery.

Thanks.

Thanks for taking my questions. I have a couple.

I get a lot of questions from investors about how the pivot from electric vehicles to hybrid might impact your business. So could you just talk a little bit about the difference in the number of steps and implant intensity for hybrid versus electric vehicles?

Yes, Dave, that’s a good question. So a lot of people don’t realize that hybrid vehicles have a significant amount of power chips and inverters in them dating back to the original players [ph].

And so it depends on the car, depends on the architecture, whether it’s silicon IGBT or whether it’s silicon carbide, there’s probably more use of silicon IGBT in hybrids today as costs come down, as performance requirements come up for hybrids, as car companies start to look at increased range in plug in hybrids and these kind of applications, then we would expect to see them looking at silicon carbide. But for Axcelis, keep in mind the implant intensity for all power devices, whether its silicon or silicon carbide is very high.

And so both markets are very good for implant and for Axcelis.

Okay. Great.

Okay. Just wanted to clarify that, thank you.

Also, I’ve been a little curious. We’re on the wave of the upgrade of all the data centers to more compute power AI servers.

And I read lots of articles about the amount of power they’re going to be going through all of these new servers that are being deployed in the cloud and enterprise level. How will that impact your implant business over the long-term?

I would think there’s a lot of power chips to control all this electricity flowing through these new AI servers. So maybe talk a little bit about how the growth in AI servers might impact the TAM of the implant market.

Hey Dave, it’s Russell. So actually that’s an area I’m quite excited about.

I was in China recently and that was something one of the CEO’s I was talking to was saying as a next opportunity. So its not – so clearly, there’s lots of concern about how much power these data centers are using up.

So it’s the generation of that power, it’s the storage that’s power of distribution that’s obviously all going to be power devices. But I’m actually interested in the cooling part and the servers themselves.

The wonderful thing about silicon carbide is you can run it hotter, it’s more efficient, it generates less heat. And so those things are really exciting.

But the crossover that we’re also seeing, and it’s been going on for a little while, but you might have seen yesterday in the news, Microsoft are going to invest $10 billion in renewables to supply these data centers. So if that goes in the direction of solar and wind, then again that’s going to all be inverters again, which will be all power devices, so lots of power in that particular application.

So that’s kind of like the backside, right, power generation for the data farms or for the cloud data centers could be a big market, but what about the AI servers themselves? Won’t they have a lot more power chips in them and therefore be more implant intensive?

Yes. So it will depend on the design exactly, how they do their power distribution inside the servers.

So there certainly will be opportunity there. As Russell said, big piece of the opportunity comes from the full dataset power in the whole data center itself, and getting the clean energy there, getting the cooling that’s required for these facilities and so forth.

And so that’s a very big piece of the opportunity.

Yes. And Dave, just to kind of go on from that, so clearly, there’s the power chips inside of the servers, but the cooling is a significant component of the total power usage.

So whether it be gallium nitride or silicon carbide chips, they can certainly run in these applications more efficiently, generate less heat and tolerate more heat. So that’s an opportunity inside the actual data center itself.

Okay. I just had one clarification, you mentioned that the CS&I revenue now is going to be on a run rate of $250 million for 2024.

Could you just remind me what the run rate was before?

So it was – we estimated approximately $260 million. And what we’re seeing here is a little bit of moderation in utilization, which is driving that down slightly, although the team is out there working to kind of recover back to those higher numbers if possible.

Okay, thank you so much.

Hi, thank you for taking my question, and good morning. So it seems like the trough is pushed out a quarter or so.

Is that the right interpretation that Q2 is going to be the bottom and you’re going to see second half recovery? And alongside that in your – this quarter’s press release, we no longer see the comment that 2024 is going to be flattish year-over-year.

Is that also the right interpretation that it’s going to be lower incrementally?

Yes. No.

So again, as we kind of said in our prepared remarks here, we do continue to expect an uptick in the second half performance for 2024, as you noted. The timing and magnitude of that is going to be difficult to predict with a level of clarity and certainty.

Ultimately, we do have some second half drivers here that are going to benefit. This is the continued recovery that we’re seeing here in the general mature product technologies, and if that accelerates more, that’ll provide incremental opportunity upside, some degree of recovery in the memory.

And then ultimately, and this is probably the strongest signal we have now at the continuation of strength that we’re seeing in the power markets. However, despite these items potentially driving lower expected volume than what was relative to our previous expectations, we’ve been laser focused as we noted on the call in our prepared remarks on gross margins.

And so despite lower volume, we do anticipate having higher gross margins in the period as well. Although, we are making some higher investments to support those future growth initiatives, which will help to offset or not help to, but will offset some of those gross margin gains.

Russell noted, again, we’re on a run rate basis of about $1 billion coming out of the first half of the year is our expectation. With that second half uptick, we do see revenue levels increasing in that back half of the year, and then ultimately the split between that is probably a little bit more weighted towards the fourth quarter of the second half than it is the third.

Got it. Related to that, I think you answered in an earlier question that silicon carbide is actually seeing stronger demand than anticipated and China is doing well as well.

So then is this incremental weakness primarily outside of silicon carbide? Is it memory and silicon in general mature node?

Yes. So largely memory, right, is probably where we’re seeing a little bit of the – relative to our prior expectations, that’s where we’re seeing a little bit more weakness than what we had anticipated.

Your note on silicon carbide continue to be strong is accurate. That continues to be strong.

We expect that to be strong over the course of the year. It actually was a bright spot for us in our bookings in the first quarter was really driven largely by continued strength in the power side of the business.

And as we think look at our quoting activity, we’re seeing a nice uptick in quoting activity through the first quarter time frame, which we do expect to lead to future orders for the business in the both the second quarter and the second half of the year.

And Duksan, just on your memory part of that question and comment, signs are very strong for a good memory year coming up in 2025. Everything we see with HBM using up capacity as consumer starts to recover, PCs recover, we would expect that DRAM and NAND will see a very strong recovery, probably the strongest recovery.

Understood. And then a longer term question.

I know you’re going to have an Investor Day in July and potentially you’re going to update the numbers, but at least in the latest presentation, you’re still rooting for the $1.3 billion model in 2025. And that essentially assumes an 18%, 19% year-over-year growth, whereas mature node wafer fab equipment market, it’s likely going to be flattish.

So what would be the drivers of this outperformance? Thank you.

So we currently believe there’s a path to $1.3 billion in the 2025 timeframe. Again, it’s going to depend on the market conditions.

So continued strength in power in China combined with a memory – recovery in the mature markets in memory are some of the key factors that will impact this timing. But we have said in the past as the markets recover, there will be multiple paths through to achieving this goal.

So like you said, we’re going to give more of an update at for our long-term goals at the July 11 Investor Days. But what’s going on in the business, we are seeing higher demo activity, we are seeing multiple evaluation units in the field successfully completing, and there is a high demand for the Purion products.

So we are continuing to see at business be strong and continue to grow as well.

Got it. Thank you.

Hey guys. Thanks for taking the questions.

So for your strategic priorities over the past few quarters, you’ve mentioned expanding outside of ion implant. And I was just hoping to get a better idea of how you’re thinking about that situation.

So would this be the sort of thing where you’re looking to expand into a process step that kind of adds to your core strengths, like in the implant intensive markets like power and sensing? Or would it be potentially a way for you to kind of diversify your revenue base maybe into more advanced logic or memory or general boundary?

I know you mentioned some initiative to grow your share and advance logic. So I don’t know, maybe some additional color on whether that includes inorganic growth.

That would be helpful.

Yes. Jack, thanks for the question.

As we think about the inorganic strategy, we’re looking at a broad spectrum of potential opportunities for us to continue to find those other vectors of growth here to support our long-term initiatives. It’s always tricky commenting on those types of processes as we’re in the middle of going through doing our analysis and making decisions one way or another.

So probably not going to get into any real specifics here on this call. As we get closer to coming forward with opportunity sets, by all means, we’ll make the necessary and proper disclosures associated with that in due time.

But we do continue. What I can say is, we do continue to work through our evaluation process and trying to identify opportunities that will provide long-term value creating opportunities for Axcelis.

So we’re being very thoughtful, very deliberate as we undertake that. And then finally, there is still a very significant amount of opportunity for organic growth inside of the business.

And so we’re making the necessary investments, as we noted in our prepared remarks, and the people, technology, and our facilities to be able to capture those organic growth opportunities as well.

Got it. Okay, that makes sense.

And so it sounds like China is going to be the big contributor for power again, but it sounds like that mix might lean a bit more towards silicon carbide than silicon than it did last year. So are you seeing a slower build out of silicon power relative to where it was last year in China?

So this is Russell. So we are still seeing a lot of strength in China.

I think, as Doug mentioned, we have many customers in silicon carbide in China. We have actually a broad base, and a lot of these customers have in recent years moved through the pilot phase, the R&D phase into the higher volume phase.

You probably see, you’ve heard us talk a little bit about people start with a Purion M silicon carbide tool, and then as they move into high volume production, they start to take the Purion XE silicon carbide and the Purion H200 silicon carbide. And we’re seeing a good uptake of those tools as well as people going to high volume manufacturing.

And the great news is they’re highly specialized and they’re highly differentiated as well from our competition. So that’s actually, another big opportunity for Axcelis.

But, yes, very strong in China. They have many, many reasons to, want to continue to develop silicon carbide chips.

Got it. So the silicon side, though, I mean, because I know we’ve heard a lot of talk about the expansion of some of that lagging edge technology, maybe just in the general, the analog, the power side on that.

And so the silicon carbide, yes, that’s pretty strong. But is China’s – the silicon business for some of that lagging edge power that may be slowing down a bit?

Well, so overall, year-on-year, I think we kind of said that we are approximately flat on power year-on-year but the silicon carbide probably grew about 20%, and then you would have obviously seen the offsetting reduction silicon. So silicon power is certainly not nearly as strong as the silicon carbide power.

Yes. So, Jack, one thing to understand is that is being driven by our customers customer, and ultimately automakers and energy companies and so forth.

So Axcelis is very well positioned for both silicon and silicon carbide. So if they shift and there’s more need because of hybrids for silicon IGBT, Axcelis is very well positioned to take that.

If costs continue to come down on silicon carbide and that continues to be the dominant choice, then Axcelis is well positioned there.

Got it. Okay, thanks.

That’s helpful.

Hi. Thanks for squeezing me in.

So I guess first question, a lot have been answered, but first question, are bookings generally aligned with revenue from a geographic distribution?

Yes, they’re definitely aligned. Quote activity bookings and revenue are quite well aligned.

Yes. Okay.

And then you talk a lot about China, and I’m just curious, you haven’t highlighted Japan specifically for silicon carbide there’s large investments being made there. Historically, Tokyo Electron, I think, has been stronger as a local supplier in logic.

I’m just wondering, what are your – does silicon carbide change things for you in the Japanese market and what can you talk about in terms of activity there?

Hi, Jed, this is Russell. Good question.

So there are domestic suppliers of ion implantation equipment in Japan and as you probably know that the Japanese would prefer to buy locally if they can. So with the rise up in power, both silicon and silicon carbide, it’s actually given us the opportunity to – to penetrate a number of customers in Japan because we have a full portfolio that nobody else has.

So the Purion Power Series has actually been very well accepted and we now have the full portfolio in Japan and we’re serving multiple customers. So I think this inflection point in requiring specialized equipment to go into volume production for silicon carbide and silicon power really has helped us because we’ve been investing in this market for a long time and we have the right product portfolio, as I mentioned, and we continue to invest in R&D to make sure we stay ahead.

That’s great. And then just last question.

So as you go into the Analyst Day at SEMICON West, and it sounds like visibility has weakened a little bit in terms of there’s more puts and takes in the business, what are you looking at? Is this just a function of trying to drill down with your sales team to get better confidence around where you’ll be providing a longer term outlook?

What are you looking for in terms of signals going into that Analyst Day?

Well, so in terms of the longer term, that’s not going to change based on a near-term discussion with the sales guys. It’s much more going to be around the products enhancements that we’ll be making to support our positions in current markets of strength, how we’ll penetrate other markets, in terms, that’s what’s going to drive a two to three-year old model.

In terms of, and updating any guidance for this year or things like that, we’ll be looking at close indicators as what’s happening with the customers. What we’re hearing as Russell and the rest of the executive team are with customers, we’ll be judging when they’re building.

The visibility right now is probably like any upturn as it’s about to happen. Everybody can sense its happening, you know, memory is going to turn.

You just don’t know which day, but you know, it’s going to happen on a day. And so that’s, all of that kind of activity is going on right now.

Sorry, one last question. You’ve mentioned memory several times, Doug.

Memory is relatively, like what do you – what could memory get to in a upturn? If I look historically, memory is still a relatively small component of the overall business.

So, and I know it’s maybe basing out now, but is there an expectation that that could get to a $200 million to $300 million business annually?

Yes. I mean, we’re not going to, we don’t know what exactly the memory upturn will look like and how big it is.

In the past we’ve talked about the fact there’s $180 million to $200 million worth of implant opportunity in 100,000 wafer start memory fab. So it kind of depends on the process flow they’re using at any given time and how big the fabs that they build and how much they add at any given time, that’s what’s going to determine.

We have a good content of the implant business in memory.

Got it. That’s helpful.

Thank you.

Thanks.

Great. I just have two quick questions.

First one is clarity. Are you implying that Q3 will be down quarter-over-quarter, and then Q4 will be ginormous?

No, no. What we’re suggesting is the second half uptick what weighted towards the fourth quarter, that’s all, but not with that level of specificity there, Christian.

Okay, perfect. And then a bigger picture question of getting to 1.3 next year.

So, I guess, listening you would expect sustainability of Chinese domestic spending, whether it be IGBT or silicon carbide, to remain at lofty levels again in calendar 2024 and then some memory pickup. Am I hearing everything you’re trying to convey correctly?

Yes. I think the other thing that’s there would be the general mature, so across the world, China included, the general mature markets have been soft.

We would expect those to pick up globally.

Okay. Okay.

Perfect, no other questions. Thank you.

Thanks, Christian.

Thank you for the question. You indicated that you’ll be closing a number of evals in the second – you have closed, and you will be closing evals in the second quarter.

In the second half of the year how many evals will you have in the field and what are they focused?

So, I think we’ve said that we’ve got like, upwards of about seven-evals in the field at this stage. We’re looking to close several of those by the mid-year.

So that will reduce us down to the two to three type number. Those – so as we stand today, Mark, we basically have evaluations across all segments of our business, pretty much.

So as these evals roll off, which actually we consider to be very successful, this builds a great relationship with the customer. It gets us qualified for a single application with a customer, and then we start to fan out.

But as these ones are completed, we do actually have a list of evaluations we’re looking to start into the second half of this year, so we continue to use evaluations as a really good strategic tool to build our business.

Okay. You mentioned the push outs were starting to ease up.

But in terms of the push outs you’ve seen recently, are they more related to the slow and in the EV market?

Sorry, Mark, what was the last part of that sentence?

Yes, the push outs you’ve seen, are they related to some slowdown in the EV market?

No. So I think the push outs have been typically general mature.

The pull ins – the small pull ins I’ve been talking about, those actually are the EV’s. We typically see silicon carbide tools getting pulled in because of the demand.

But like I said, mostly it’s the general mature stuff that Doug mentioned was soft, and a lot of that is people. Maybe it’s either fab timing or project timing that begin to slow that down a little bit.

Thank you.

Thank you.