Ramy Langer: First of all, from FRT, definitely, this is something that is proceeding on track. Specifically on the question of this specific application, I don’t have the answer right off the bat. This is something that, I can look into it and we can have a follow-on call, and I’ll give you the answer, Gus.
Gus Richard: Thanks. And then the last one for me is, clearly, HPC is very strong and driving a lot of demand. However, the move of system and package to client has been somewhat less — slower than I would have expected, I think, due to cost or potentially yield. And I’m just wondering or it could be capacity constraints. And I’m just wondering, what you’re seeing from your customers in terms of demand from the client side of chiplets in particular?
Ramy Langer: No, no. I think the — obviously, there’s been a lot of discussions on the yield and you know how good the known good dies are. Now I think we’re getting very strong demand indication from our customers that they’re going to ramp and run further. And I think that from the technical side, I think the industry has solutions for it. And I think there was no concern on the HBM side, but I believe that all the players today are on track to resolve those issues. That’s at least what we are hearing on our side. But as you know, this kind of information is very confidential.
Gus Richard: Got it. All right. That’s it for me. Thank you so much.
Ramy Langer: Thank you. Gus, we’ll have a follow-on to just answer the question you read. I’m not able to answer now.
Gus Richard: Fair enough.
Kenny Green: Our next question will be from William Levy of Barclays. William, you may go ahead.
William Levy: Hi, guys. Thanks so much for taking my question. My first question has to do is with just HBM and the general time frame you’re seeing. Now most of the large — the two large HBM 3E players are sold out through 2025. Are your conversations focused now beyond that and further capacity ramps?
Ramy Langer: Look, the conversations still go this way. They are talking in general and give you a — first of all, when you talk it’s usually — and when we talk about purchase orders, it’s usually for the same year or, as Rafi mentioned, up to 12 months ahead. And — but the indications are from people that we speak that they see this segment continuing to grow. And let’s say, the sense and the trend and what we hear, we believe that the HBM and chiplet growth will continue into 2025.Definitely, we don’t have the picture of what will happen beyond except from the understanding where these markets go. And just to give you a sense, today, the HBM it’s about around 6% of the entire DRAM business. So the indications are that these numbers would be much, much larger in a few years.
So from understanding where this market is going to and the potential application, definitely the growth should be beyond 2025, and should be in the foreseeable future. But this is something that it’s really too early to say and understand because this industry is very dynamic and many things can happen in between now and 2025. So to give you something very specific and concrete, obviously, we can’t. Understanding where this market, understanding the technology and the trend, definitely, this is something that we believe will grow — continue to grow in the foreseeable future.
Rafi Amit: And from time to time, we can see customers that really start with construction and infrastructure in order to expand their fab capacity to meet the demand for the next few years. So it’s also a good indication.
William Levy: Thanks, guys. Just a quick follow-on to refresh my memory. When you ship one of these products, how long will it take the customers to ramp and make your machine a fraud-like — fully functional in their fabs?
Ramy Langer: I would say the shipments these days because everything is shipped by air. And from the time it enters the facility until it starts to run, it’s questions of very few weeks. It can be one, two weeks and it will start to run the product. And then it depends per the customers sometimes a little longer, but it’s a very short time.
William Levy: Great. Thanks.
Kenny Green: Thanks, William. [Operator Instructions] Our next question will be from Dakson Yang [ph]. Please go ahead.
Unidentified Analyst: Thanks for taking my question. I’m on behalf of Vivek. Just one on your target model. A while back, you gave out a model of $400 million at the high-end in sales. And alongside that, you said 52% to 53% gross margin. So given we’re reaching that $400 million in sales this year, is that gross margin level achievable or have things changed?
Moshe Eisenberg: In general, this is achievable. We gave a range, and I believe that the range is a little bit wider 51% to 53%. And this is definitely a very achievable range. We are on the verge of this range, and we are pretty much at the run rate of $400 million at the moment. So — and as I said, there is room for further improvement on the gross margin side as well as on the OpEx side. So this is still a valid range for the company.
Unidentified Analyst: Got it. And then as a follow-up, I think a while back, you also mentioned that these HBM advanced packaging tools have roughly 50% ASP upside than the non-HBM tools. Is that continuing to grow from, say, 8-Hi HBMs to 12-Hi and then from less of those advanced chiplets to more advanced. Are we still seeing ASP upsides going forward? Thank you.
Moshe Eisenberg: First of all, when we talked and we go back, I think somebody asked a similar question. So first of all, moving from 8 to 12 doesn’t change our business or our machines don’t read — it don’t care, because we scan wafers. Those wafers have been diced and then assembled either 8 or 12. So from our point of view, it really doesn’t matter whether it will be an 8 stack or a 12 stack. And there is no difference, not from the performance point of view and not from every aspect. The machines are identical. So is there here any upside for ASP improvement? No, there isn’t. Unfortunately, from our machines it won’t — it will not matter to them.
Unidentified Analyst: Understood. Thank you.
Kenny Green: Thanks. Next question will be from Alon Last of Meitav Dash. Alon, you may go ahead and ask your question.
Alon Last: Can you hear me?
Kenny Green: Alon, we can hear you?
Alon Last: Hi. One of the question is about efficiency in the HBM manufacturing? You spoke about it a bit in previous quarters mentioning that the efficiency is currently very low, and there is a risk on behalf of Camtek that if efficiency grow, demand for the inspection tools is less than what could be potential. Can you speak about it a little bit? Mention what kind of efficiency rate you see at the moment in the industry, and what is the projection about it — the improvement in efficiency?
Rafi Amit: Alon, let me answer for that. First of all, we are not — we cannot share such confidential information. And even our customers do not share it with us. But from time to time, we try to double check it with customers. And definitely, I would say that the rumor in the market about the low efficiency, it’s not true. And most of our customers deny said, no, no it’s not like that, it’s much better. That is the only information we can share with you.
Alon Last: Okay. Thank you. Another question is about the gross margins. Currently, there is 60% in the chiplet and HBM, which means that, let’s say, the high-margin tools are a large portion of the current headquarter sales. What can drive additional improvement in the margins? Is it that the HBM and chiplet is going to be more than 60%? Or is it something else that might drive the improvement in gross margins going forward?
Moshe Eisenberg: So the potential improvement in gross margin comes from the new products and the new platforms that we alluded for earlier in the call by Ramy and Rafi. We are working on releasing new models and new platforms, and they will come with improved gross margin for the company.
Alon Last: And do you have any schedule for that? Or it’s too early to say?
Moshe Eisenberg: So we do not have a formal launch time for these product lines, but they will come in the near future, or they will have a positive contribution as they get to the market.
Kenny Green: Okay. Thank you very much. Thanks, Alon. Our next question will be from Jack Hsu of Eastspring Investments. Jack you may ahead and ask your question.
Unidentified Analyst: Yes. Thank you for giving chance to ask question. There are two questions. So my first question is about — it is because right now, your country has conflict with Naples. So will this conflict will impact your operation and order shipments? This is my first question.
Ramy Langer: Rafi, do you want to answer?
Rafi Amit: No, no, you can answer. It’s fine.
Ramy Langer: All right. So first of all, one, yes, it’s unfortunate the conflict we’re having. But from the operations point of view, Camtek is operating as usual. We have not missed any shipments. The government is supporting us and from shipments, air freights, the entire environment is working and supporting the Israeli industry, and we do not expect any issues? And so from point of view — from this point of view. Now furthermore, we have a few locations where we manufacture the machine here in Israel, actually three different locations with redundancy between the different places. And longer term, we are also thinking of establishing a manufacturing facility outside of Israel.
Unidentified Analyst: Got it. Thank you. That’s helpful. In the mind, that’s — the question is [ph] there are three major memory vendors. They are all announced they will provide HBM 3E products in the coming future. So I’m interested, which vendors we will collaborate with land further. All three customers — all the three vendors we are deeply cooperated with them.
