Axcelis Technologies Q2 2023 Earnings Call Transcript

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August 3, 2023

There are 10 speakers on the call.

Operator

Day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the company's results for the Q2. My name is Shannon McLean, and I will be your coordinator for today. At this time, all participants are in listen only mode. We will be facilitating a question and answer session towards the end of this conference. I would now like to turn the presentation over to your host For today's call, Doug Lawson, Executive Vice President of Corporate Marketing and Strategy.

Operator

Please proceed.

Speaker 1

Thank you, operator. This is Doug Lawson, Executive Vice President of Corporate Marketing and Strategy. And with me today is Russell Lowe, President and CEO and Kevin Breuer, 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 also be available on our website as described in our press release.

Speaker 1

Please note that comments made today about our expectations 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 ks 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.

Speaker 1

Now I'll turn the call over to President and CEO, Russell Lau.

Speaker 2

Good morning and thank you for joining us for our Q2 2023 earnings call. Demand for Purion product family continues to be extremely strong, especially in the high growth Silicon Carbide Power segment. Revenue for the Q2 was $274,000,000 with earnings per share of $1.86 Backlog remained high at $1,200,000,000 with quarterly systems bookings of $193,000,000 also driven by pure in demand and strength in the power market. For the Q3 of 2023, We expect revenue of approximately $280,000,000 gross margin of roughly 44%, operating profit of around $64,000,000 And earnings per share of approximately $1.72 We are raising our forecasted 2023 revenue by $70,000,000 To greater than $1,100,000,000 this represents year over year revenue growth of approximately 20% In a year in which overall WFE is expected to decrease by 20% to 30%, we also believe it's Possible to achieve $1,300,000,000 in revenue in the next 1 or 2 years depending on market conditions. The mature process technology market continues to be an area of strength for Axcelis with 93% of 2nd quarter system shipments Going to mature foundry logic customers and 7% to memory customers composed entirely of DRAM.

Speaker 2

The geographic mix of our system shipments The Q2 was China 56%, the U. S. 13%, Korea 10%, Europe, 9% Taiwan, 2% Japan, 2% and the rest of the world, 8%. As has been the case since the beginning of this downturn, the power device segment and in particular silicon carbide continues to drive our growth. We are actively engaged with all our customers in this high growth market segment, winning business from new customers and Spanning our footprint in existing customers, we now expect approximately 60% of our Ship system revenue In 2023 to come from this segment with around 35% of total ship system revenue coming from silicon carbide applications.

Speaker 2

We're seeing increased adoption of Purin H200 Silicon Carbide and Purin XE Silicon Carbide Systems And now have 3 Purin H200 Silicon Carbide evaluations underway with customers in multiple geographies. 2 of these systems are 150 millimeter and 1 is a 200 millimeter system. These evaluation units give our customers a head start qualifying Productivity limiting residues as they ramp to high volumes. It also enables the customer to conduct optimization work on the devices utilizing the high energy and dose capabilities of Pure NH200 Silicon Carbide. In 2023, we expect revenue from silicon carbide customers to be spread relatively evenly across the Pure Empower series product family.

Speaker 2

Axcelis is the only ion implantation company that can deliver complete recipe coverage for all power device applications. We are considered to be 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. Axcelis places significant value in enabling our customers to succeed in this exciting market by providing differentiated product performance and a high level of customer satisfaction. As the industry downturn continues, We now estimate that memory will account for less than 10% of our shipped systems revenue and weighted towards DRAM.

Speaker 2

We expect the PC market will lead the industry out of this downturn beginning the second half of twenty twenty four With 2025 returning to a healthy level of growth in consumer electronics, advanced logic and memory. While our memory and advanced logic customers are experiencing this downturn, Axcelis remains close to them, supporting their installed base and working with them On their future technology and manufacturing needs, it is during downturns that there is an increased ability to collaborate with our customers to expand opportunities for We have multiple evaluation systems in these markets and many customer engagements designed to increase our footprint in these segments. As the industry exits this downturn, ExelterGas will return to healthy growth in these markets. This combined with continued strength in the Power segment will drive Exelis to our $1,300,000,000 model and beyond. Now I'd like to turn it over to Kevin.

Speaker 3

Thank you, Russell, and good morning. We are pleased with our Q2 2023 financial results And are excited about full year revenue, which is now expected to exceed $1,100,000,000 and represents year over year growth of approximately Looking at our 2nd quarter, revenue and earnings per share finished well above guidance due to solid execution and continued strong demand for Purion. Q2 revenue was $274,000,000 With system revenue at $215,200,000 and CS and I at 58,800,000 Q2 earnings per share of $1.86 was significantly above guidance due to higher than expected revenues, gross margin and favorable spending. We also benefited from a much lower effective tax rate this quarter, driven by tax deduction associated with stock compensation. Strong bookings and quoting activity for Systems in the Power segment continued in the quarter, which supports our expectation that approximately 60% of systems revenue shipped will come from this market in 2023.

Speaker 3

CS and I revenue will fluctuate quarter to quarter, With shipping model at approximately $248,000,000 for 2023 $300,000,000 for our $1,300,000,000 revenue model. Q2 gross margin finished at 43.7 percent and 170 basis points above guidance, driven by lower costs and deferrals and a slightly improved mix. We expect Q3 gross margin to come in higher at approximately 40 and forecast further gross margin improvements in Q4. Key functions across the business remain laser focused There are numerous initiatives underway to lower the cost of goods and drive higher sales of Purion product extensions, Which allows us to model gross margin at approximately 45% in the $1,300,000,000 revenue model. Turning to operating expenses.

Speaker 3

The 2nd quarter ended at 20.4% of revenue and better than our guidance. We expect OpEx in the 3rd quarter to be approximately 21%. As always, we will continue to tightly control spending, While investing in areas of the business that support business growth, solidify our technology advantage in the specialty markets And increased our footprint in the memory and advanced logic markets. Additionally, we will continue to invest in our employees and infrastructure Sure. Required to achieve our financial models.

Speaker 3

One example of infrastructure investment is our new state of the art logistics center in Beverly, Mass, Located just a short walk from our headquarters, the facility will open this month and is expected to be fully operational during Q4. We also plan to further ramp our Beverly and Korean operations as capacity needs grow And I'm comfortable that we have initiatives in place that support our $1,300,000,000 revenue model. We entered Q2 with $452,900,000 of cash, cash equivalents and short term investments and generated $32,700,000 of cash from operations. Cash in the quarter was impacted by higher inventory required to support the expected increase in second half revenue. In the quarter, we repurchased $12,500,000 stock and have returned over $157,000,000 of cash to shareholders since 2019 through our share repurchase programs.

Speaker 3

Exelis has the rare opportunity to grow revenue and profitability during significant industry downturn. This is a result of strong product positioning in a power device market and continued strong execution in a challenging environment. We also look forward to continued growth in memory and advanced logic as the overall semiconductor market recovers. Once again, I want to thank the entire Axcelis team for their continuing outstanding performance. I also want to thank our supply chain partners for their hard work supporting Axcelis and our customers for their confidence in our ability to deliver.

Speaker 3

I will now turn the call back to Russell for his closing comments.

Speaker 2

Thank you, Kevin. Xelliss to achieve revenue of greater than $1,100,000,000 in 2023 $1,300,000,000 over the next 1 or 2 years. This growth is achievable due to the following factors. 1st, the implant TAM has more than doubled in the last few years And is expected to grow between 10% 15% annually with mature market segments representing greater than 60% of the total TAM. 2nd, how devices and image sensors are highly implant intensive and the general mature nodes have increasing implant intensity peaking at 3rd, 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.

Speaker 2

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 cultural desire to win by making our customers successful. I want to thank our employees, suppliers, customers and investors for your continued support. With that, I'd like to open it up for questions.

Operator

Please standby while we compile the Q and A roster. Our first question comes from Craig Ellis from B. Riley Securities. Please proceed with your question.

Speaker 4

Hi, this is Ethan Wiedell calling in for Craig Ellis. Thanks for taking my questions and congrats on the quarter. So the surge in margins was a nice surprise. Does this impact your confidence in hitting 44.5% by 4th quarter and 44% overall for the full year.

Speaker 3

Hi, Ethan. Yes, this is Kevin. It was a nice surprise in Q2 and part of it came from better costs as well as a little bit better mix And on some of the deferrals, I think on the last call we had talked about the second half becoming much stronger than the first half to get towards That full year target of about 44%. And we're on that. We're probably a little bit of the strength in Q2 took away from Q3 a little bit, but we still think Q3 is up from Q3 or up from Q2.

Speaker 3

And then In Q4, I expect to see further improvement off of that Q3 number of approximately 44%. So yes, so we're still We'll still anticipate in being in that 44% range for the full year.

Speaker 4

Okay. Thank you. And then Are you seeing signs that the high bandwidth memory strength that SK InaX and for the Micron are driving higher Purion Dragon demand. Yes?

Speaker 1

Yes. Hey, Ethan. This is Doug. So You broke up a little bit, but I think you're asking about the high bandwidth memory. So for implant, The implant content is similar for any of the DRAM, whether it's HBM or other types.

Speaker 1

So what we see as far as sort of the goodness of the HBM ramp is, it starts to utilize Right. Bring up the capacity utilization of the memory fabs. That's the first step in getting back to a good CapEx cycle. Then we see PC refresh cycle kicking in, as we said, sometime next year, and that will really start to drive memory CapEx Spending towards the second half of next year and create a healthy 2025.

Speaker 3

Got it. Thank you.

Operator

Thank you. Please stand by. Our next question comes from Jed Dorsheimer from William Blair. Please proceed with your question.

Speaker 5

Hi. Thanks for taking my question. And Russell, strong one out of the gate. So congratulations on the quarter. I guess, first question just around your thought process In terms of the guide and if demand is causing the Pull in, if you will.

Speaker 5

I'm just wondering what's your greatest areas of concern that would limit your ability To kind of take up that 2 to 3 year type target, specifically, how are you monitoring the health In the channels with respect to globally, but specific to China that we don't see a return A healthy used market, which seems to be pretty lean right now. And then I have a follow-up.

Speaker 1

Okay. Jed, this is Doug. So I think right now, Our guidance, our optimism in terms of raising the full year to $1,100,000,000 and pulling in the 1 point 3, model to 1 or 2 years from now. The strength is in the power market for us. That's where we're seeing the biggest drivers.

Speaker 1

We are beginning, as I was saying Ethan, on the last question, I think we're starting to see the memory guys start to increase their utilization as a result Some of the strength in the AI activity. The PC refresh cycle is going to be key there. So we're monitoring that. And then consumer electronics are probably the next big driver in terms of the mature markets as a whole for mature foundry, logic type of Products and we're watching that and expect that to be a 2024 type of event. So So that's what gives us the confidence to pull that $1,300,000,000 model in.

Speaker 1

But this year, the $1,100,000,000 model, It's very heavily being driven by the strength in Empower and especially in silicon carbide.

Speaker 5

Great. And then just as a follow-up on silicon carbide specifically. Major announcement by Infineon in terms of the $6,000,000,000 investment in Coolum. I guess my question for you is, Trench is obviously more capital intensive than Publicly, they've noted the 200 millimeter. And so my question around your silicon carbide offering or offerings.

Speaker 5

Does 150 offer a is it a different Tooling or what changes within your tool in terms of field upgradable versus 200? And I'm assuming none of that or we haven't seen the Malaysia spend. So Yes. I guess just 150 versus 200 would be helpful. Thanks.

Speaker 2

Hi, Jed. It's Russell. So 150 versus 200. So we still have the complete Purion platform for PowerSeries. So the XC2 carbide, the M2 carbide and each 200 2nd carbide are all available, 150200.

Speaker 2

And essentially, it's a field upgradable kit That allows you to go between 150200. So it's essentially the same machine, but obviously the way for handling the Scanning needs to be modified slightly for the larger substrate and like I say that's an upgradable a field upgradable kit.

Speaker 5

Great. Thank you. Thanks, Jay.

Operator

Thank you. Please stand by. Our next question comes from Tom Diffely from D. A. Davidson, please proceed with your question.

Speaker 6

Yes, good morning. Thank you for the questions. Maybe a couple more on the silicon carbide side. So with some of the recent ebbs and flows in the EV end markets, have you Seeing any changes or any modifications to the new fab construction plans that are expected over the next couple of years?

Speaker 1

Yes. Thanks for the question, Tom. No, actually, it continues to accelerate. I mean, at this point, silicon carbide is still supply constrained. And so there's quite a bit of activity.

Speaker 1

And one of the things we often note when we talk to U. S. Investors There's a little bit of a not being mean here, but a little bit of a parochial view of the EV market. Globally, the EV market is growing Quite rapidly. And so I think that's driving the silicon carbide investment and We expect that to continue.

Speaker 1

We're seeing no signs of that changing.

Speaker 6

Okay, great. Thanks, Doug. And then also, I guess when you're thinking about the end product, does it matter to you if the companies are creating discrete Or modules? Is there a difference in the eye implant?

Speaker 2

Well,

Speaker 1

We're only involved in the discrete in the silicon carbide wafer fab side of things. So after they package that, then they would it in the module. There's no impact in the module manufacturing.

Speaker 6

Okay. Thanks. And then a question for Kevin on the logistics center. Maybe just a little more color on the impact of both your capacity and potentially margins over time with the new center opening up.

Speaker 3

Yes. Hi, Tom. Yes, so the new center is going to handle all of our incoming material in bidding. Essentially right now, we've got probably about 10 different locations we're pulling the material from. So that's going to improve overall efficiency.

Speaker 3

We're not going to trucks running all over between the two cities surrounding us grabbing material. Also, if required, we could Clear out additional space in that facility to put some manufacturing, but what's really happening at this point, as we remove some of the remaining Stockroom out of the Beverly headquarters that frees up more manufacturing space in Beverly. So we've got from an infrastructure point of view, From a bricks and mortar point of view, we're pretty much done now with what we need to do. We have a lot of additional capacity we can add 2nd and third shift. Our manufacturing team when I say done, our manufacturing team continues to use Kaizen process to drive improvement.

Speaker 3

And there are a number of Kaizen. But again, in terms of more buildings between the Korea operation, the Beverly site and this new logistics center, We I'm very comfortable with our capacity to hit the 1.3 and potentially beyond that. And we've got Very good supply chain partners too. Worst case, if we need to put some contract manufacturing capacity in place Down the road, that's another option. So long and short of it, I feel very good about where we're at this point.

Speaker 6

Great. Well, thank you all for your time today.

Speaker 3

Thanks, John. Thanks. Thanks.

Operator

Thank you, Al. Our next question comes from Nicholas Doyle from Needham. Please proceed with your question.

Speaker 7

Hey, guys. Nick Doyle on for Quinn Bolton. Thanks for taking my questions. It looks like book to bill was Slightly below 1 for the first time in a couple of quarters. Is this an anomaly or a function of the extended system backlog?

Speaker 7

And then also what are you seeing on the bookings front looking into the second half? How far out are bookings being placed? Thanks.

Speaker 3

Hi, Nicholas. This is Kevin. So let me answer that. So I'll start off by saying, I mean, we're going to see Booked to bill fluctuate a little bit. I think until there's really a much broader based industry recovery.

Speaker 3

And we were down a little bit on Looking this quarter at $193,000,000 compared to last quarter, which was about $100,000,000 higher. But if you go back to the prior quarter, it was down probably $100,000,000 from the last quarter. So This thing is kind of up and down, but I think the real key here is we have a very strong backlog still. $1,200,000,000 is a very large backlog for the company. And in terms of bookings and backlog both, I mean, we're taking orders out into 2025 right now.

Speaker 3

It doesn't mean that all our capacity is necessarily sold in 2024, but we're pretty full. But we're going out into 2025. So I don't I'm not worried about this book to bill because I think a couple of quarters ago we were under 1 and then we popped back up and under 1 Again, with such a strong backlog, that systems backlog, if you consider we have a $250,000,000 of CS and I business sitting on top of that, I mean, there is more enough revenue to get you quite a bit down the road without ever booking another tool. So again, I think we'll see it bounce around a little bit until there is this broader base industry recovery. Power segment is very strong still.

Speaker 3

I think we now believe that 60% of the year's bookings have come from Power. I think on the last call, we might have said 55%. So we're seeing additional strength coming through power right now.

Speaker 7

That's great. Thanks for that.

Speaker 1

Nick, let me just this is Doug. Let me just add one more comment. The other indicator we watch Is the quote activity and our quote activity remains very high. And it's exceptionally good in the silicon carbide side. And these guys are planning factories out over the next couple of years.

Speaker 1

So it's that's another good indicator in terms of continued strength.

Speaker 7

Great. And for my follow-up, and you kind of you touched on these points in the call, but more directly, What is the company's expectation for them? For a memory recovery in 2024, it sounds like you're thinking 2nd half driven by PCs, maybe you can touch on what you're seeing in terms of the PC strength coming back, where you're seeing that? And can the company hit the $1,300,000,000 model without the recovery in the memory market? Thanks.

Speaker 2

Hey, Nick, it's Russell. Thanks for the question. So regarding what we see with memory. So naturally, we stay very close To our memory customers, we've historically been very strong in the memory market. And once the market starts to recover, We're expecting to see a lot of benefit from that.

Speaker 2

A lot of people looking for green shoots. I think at the moment, we're talking to our customers and thinking the second half of twenty twenty four, giving a pretty strong year in 2025 as far as memory goes, that's kind of what we are seeing. The question regarding our path to $1,300,000,000 So I think we've previously said that we'd be looking for a consumer spending recovery in order to propel us to the 1,300,000,000 And that would be obviously a recovery in memory and some of the other mature processes like image sensors. I think we are seeing Strength in our power business beyond what we expected, but I think with that strength in the power plus a recovery In the consumer spending, we see us getting to $1,300,000,000 like we say in the

Speaker 1

next 1 or 2 years. Yes. I think the bottom line Nick is that there's multiple paths to that $1,300,000,000 model. So that's why In the call, we said depending on market conditions. And so it really depends a lot of things on a bunch of different combinations.

Speaker 7

Great. Thanks.

Operator

Thank you. Please stand by. Our next question comes from David Duley from Steelhead Securities. Please proceed with your question.

Speaker 8

Good morning. Thanks for taking my question. A couple. I was just wondering, have you seen Recent adoption of silicon carbide in other markets besides the electric vehicle market And which markets would you expect to be early adopters outside of ED?

Speaker 1

Hey, David, it's Doug. Thanks for the question. So yes, I mean if you look at our customers' websites, their press releases and so forth, They're talking quite a bit about applications in energy, industrial applications. The thing with silicon carbide is, it's a tremendous benefit to automotive because of the savings it can provide in a module weight And heat generation and so forth as well as the performance of the devices. It's a little more costly.

Speaker 1

But as volumes increase, that cost comes down and that Opens it up to other markets, especially the energy and industrial markets where the weight and The heat on is important, but the performance would be nice to get. And so we expect that that will be another piece. I mean, the presentation, we show that there's a good growth area above EVs that's associated with silicon carbide. So yes, we definitely are hearing that from our customers. For us, we don't see it necessarily directly because Our customers would build the same devices using our Purion H, Purion XE and Purion M Silicon Carbide tools, Whether it's going into an EV or into an energy or industrial application.

Speaker 8

Okay. And then As far as lead times go, could you just help us understand where lead times are currently? And I guess you mentioned you're taking orders for 2025. How much manufacturing capacity do you have for 2024 or maybe another way to ask it is what is the current quarterly capacity Availability.

Speaker 3

Hey, David, it's Kevin. Yes, so I mean, I think as I said a little bit earlier, but There's plenty of capacity right now for the order rate that we're seeing and shipments that are required. And once this new logistics center comes online, that's going to help. And we also have, as I mentioned, there's Additional manufacturing kaizen that are ongoing right now as part of our normal process, we're a little bit more heavy with them right now as this logistics center It's getting filled up with material. So yes, we've got lead times.

Speaker 3

We're booking orders in the 2025, but our lead times are much shorter than that. In the past, what I would say is that we've always said that With the ship from cell process, assuming material is on hand, we can turn tools within the quarter if we need And we have that is the other piece of the supply chain. So I'll give a quick update on that. I mean, our supply chain has continued to improve. I think You don't hear about a lot right now within our peer group because we're still ramping and I think a lot of our peer group has not been ramping.

Speaker 3

So I'm not going to say things are perfect with supply chain, but our suppliers are keeping up with us and are allowing us to ramp and we're adding more capacity Almost daily with our supply chain. So our lead times are not a problem, I should say, with customers right now. I think For the most part, that's not preventing us from getting orders. And frankly, I think our lead times probably still It may be helping us because we've been able to I think execute pretty well for the last few years even when the pandemic was kind of Fully coming at us. So lots of things have been done over the last couple of years to add capacity and We're really almost over that big hump and now it's going to come down to hiring people And bringing up additional off shift capacity.

Speaker 3

We run 2nd and 3rd shifts. They're nowhere near as fully utilized as 1st shift. So we can hire. The hiring process has been It's been going okay for us. The market was really tougher while hiring.

Speaker 3

It's probably gotten a little bit better. And certainly that Korea So, so in Korea, when we brought that online, actually we were able to hire for capacity for that very quick. So again, I think at the end of the day, our lead times are assuming everything is there, we can get a we can for material, we can get a 2 a lot in the quarter, but it's not something that's an issue right now.

Speaker 8

Final question from me is regarding gross margin. I think I asked this question on the last conference call To hit the 44% target for the year, Q4 gross margins are going to spike up, I guess, 250 or 300 basis points, let's say right around 47%. And I guess if they're Exiting the year at 47%, why would they drop back down to 45%?

Speaker 3

Yes. Well, First thing I would say is we won't exit at 47% because part of that spike got taken out with Q2 coming at 43.7%. So, but you're absolutely right, David. When we're talking 42% in Q2, the math to get you there had A pretty big step up in the second half and we still have a step up. We're going to have 44% in Q3, which suggests we still need a stronger Q4 And the new math may bring it closer to 45%.

Speaker 3

So the thing that moves margins around The mix, that's a big piece of it. And the other thing is, as we continue to bring on Complete these gross margin initiatives, that's been one of the things driving gross margins over the years. So it's You know, I mean, I always talk about full year gross margins because quarter to quarter things can move around. But if you look at our kind of Our progress over the last many years for gross margins on a full year basis, we've been continuing to notch these things up. And based on expecting to end at 44% this year, that notches up a little bit more.

Speaker 3

Will we have quarters of Above 45%, yes. When we do our models, we're talking full year averages. So when you look at the $1,300,000,000 model, that's not 1 or 2 quarters of greatness. That's a full year when you look at something like that. So Yes.

Speaker 3

Hopefully, I answered your question.

Speaker 1

Hey, Kevin, let me just jump in with one thing. Just You said mix, but I want to make sure it's clear. There's 2 mixes we worry about or we look at. 1 There's the type of systems, the product extensions, high energy, have better margins than some of the standard products. And then the second is the systems versus CS and I.

Speaker 1

And as we move $1,300,000,000 a big piece of that growth comes in systems. And so that does put a little pressure On the margins because the percentage wise, it's still roughly the same for CS and I, but it's a much higher revenue gain in terms of the systems.

Speaker 3

Yes, that is a good point. I probably should have remembered to mention that. I mean, we always say that CS and I is accretive. Well, if you look at what takes us from the current run rate to $1,300,000,000 the majority of the increase is coming out of systems. And so that suggests that we are making progress on systems because if we weren't, our margins We'll be going backwards.

Speaker 3

So the fact that we're still making progress on putting a much bigger mix of systems in, which come in at lower margins of CS and I, That mix skew does impact things. So again, we're right where we want to be. The other piece of it too, which I Probably should have mentioned as well as I mean the product extensions is a big piece of as well. I mean that's helped quite a bit with the margins and That's part of the mix too. It's not just high energy versus high current.

Speaker 3

There's mix within the product segment. So There's a lot of moving pieces, but everything is moving in a positive direction. That's the goal to keep it going that way. And we have the initiatives Very detailed roadmaps in place that gets us to where we want to be.

Operator

Our next question comes from Mark Miller with The Benchmark Company. Please proceed with your question.

Speaker 9

Congrats again on another very good quarter. One of the companies that cover in the laser business was Indicated they were seeing some slowing in the EV market in China. I'm just wondering what you're seeing.

Speaker 1

Well, I think, Mark, from the device standpoint, we're not seeing any slowing. So we're not We're a couple of steps away from the actual cars. And so far, The silicon carbide demand is still very high and still supply constrained. So we're not necessarily seeing that or being impacted by that.

Speaker 9

You mentioned a number of evals underway both for So, I think, Carbide and Memory, I'm just wondering if you could quantify that.

Speaker 2

Yes. So, Mark, this is Russell. Right now, we have 9 EVALs in the field, I would say they're across all market segments and their products. And so we've got EVALs in memory, Image sensors, mature foundry and power. So 3 of the valves out there, I think we made a press release on this, are the H200 Shouldn't forget, we also have a twin dragon at an advanced logic R and D center, where we're looking to Basically get designed in from the start.

Speaker 2

So yes, we have all market segments and all products and we're looking obviously to work very close with our customers For continuing to grow our business in those areas.

Speaker 9

Just one housekeeping question. What was CapEx?

Speaker 4

I'm sorry, I

Speaker 3

was muted. It was $3,000,000 Mark in the quarter. Thank you.

Speaker 5

Thank you.

Speaker 3

Thanks, Mark.

Speaker 2

Thank you.

Operator

This concludes our Q and A portion of the Paul, I will now turn the call back over to Doug Lawson, who will make a few closing remarks.

Speaker 1

Thank you for joining us today. We have a very busy investor calendar in the coming months. We'll be at the 4th Annual Needham Virtual Semiconductor and SemiCap 1 on 1 conference on August 22 the Jefferies Semiconductor IT Hardware and Communications Technology Summit on August 29 in Chicago and the Benchmark 10th Annual Tech Media Telecom Conference on September 13 in New York City. We hope to see you at one of these events. Thank you.

Operator

This concludes the presentation. Thank you for your participation in today's conference and you may now disconnect. Have a good day.

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Earnings Conference Call
Axcelis Technologies Q2 2023
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