Gokul Hariharan: Thank you. So, I think, a couple of years back, you had given us some numbers on specialty product mix. I think it was about 30%, 35%, if I remember two, three years back. Is there any update in terms of how much of your product mix is now specialty, and how much of it is single sourced in terms of the total business that you have?
Jason Wang: There’s for the specialty right now is in Q1 is in a high 50 range — high 50% range. So, the single source product is actually quite high. It’s higher than that. However, it is the — we also have to look in the end market competition. So, some of those product also considered as a commoditized area, and we are gradually moving out from that space.
Gokul Hariharan: Understood. Thank you. Last question on — how do you think about overall order visibility into the next few months? Are you starting to see customers come back or you think the customer stance is still a little bit more cautious given some of your other competitors have been starting to talk about utilization, bottoming out and growth kind of resuming? Any thoughts about how you expect growth to look like for the foundry industry this year and also for UMC?
Jason Wang : Sure. I mean, we start off on the maybe industry. We do expect the 2024, the semi-industry will grow, probably to a mid-single digit year-over-year. But for foundry, we project that it will grow in a high single digit range, and for the UMC, we will strive to grow in line with the foundry industry. Despite that our addressable market will probably remain flattish. As far as the demand outlook of course we start off with the inventory situation. And although we have observed healthier inventory level in PC and smartphone market segment in Q4 ‘23, the customer remain cautious after the Q1 ‘24 restocking of the mobile applications. For the alto and industrial segment, they will likely require more time to digest the inventory and return back to normal in the second half of the 2023.
So overall, the visibility of 2024 is relative limited due to macro uncertainties. And while there is a lingering inventory issue in auto and industrial segment, we are cautiously optimistic about the market demand, given the PC and mobile inventory have returned to a bit healthier level in Q4 ‘23 already. I think customer is behaving little bit cautious after the Q1 restocking, and then we will continue monitoring the market dynamics.
Operator: Next one, Bruce Lu of Goldman Sachs. Go ahead, please.
Bruce Lu : Hello, can you hear me?
Jason Wang : Yes.
Bruce Lu: Okay. So first of all, I want to double check about the foundry growth. You just mentioned that, you talk about like the foundry is going to grow about like 10%, and your addressable market is going to be flattish. I think this is meaningfully lower than what your peers were talking about like 20%, can you tell us where is the discrepancy? Why you are so much more conservative than your peers?
Jason Wang: I mean, I can’t really comment our peers, because I don’t know what data they are using on, but I’m sure, all of us are collecting the data from both the market and our customer in different market segment. Our data shows that, the 2024 on the foundry side, I mean, foundry market will probably grow to high single-digit and close to 10%. While the foundries, as it is within our addressable, will probably stay flattish, that’s what our data shows. Since I don’t have the our peers’ information, I can’t really comment about the discrepancy.
Bruce Lu: I see. I understand. The second thing is that regarding to the again, for the Intel collaborations. Can you provide us couple of milestone that we can check or follow-up, because I think the key for this strategy is all about the executions, right? I mean, how can we track the execution from both parties? For example, what timeframe you can complete your process development? What kind of timeframe you can develop for PayPal? What kind of timeframe customer can get by — we can recognize some revenue or profit? Can we have some timeframe for that? And also, is the collaboration only limited to 12 nanometers? What about like 10 nanometer or 7 nanometers or any other parts of development?
Jason Wang: First of all, this cooperation is focused on the 12 nanometer process. We look at these 12 nanometers, it represents a long-term commitment and the opportunity for both party. As far as the future opportunity, we hope there will be, but it probably going to be in the future. Once there is anything, we are glad to report that. For the milestone, you are right, there is a very comprehensive project milestones, under this joint development program. The major milestone is, we like to freeze our process in 2025 and get everything ready for customer engagement after that and hopefully the pilot at ’26 and the production in ’27, which is aligned to what we have reported, is production in ’27. We hope that we see a meaningful revenue contribution started from the year of 2027.
That’s probably in a very high level of a milestone. There are many, many details that we understand that, we are fully aware of it. We just have to executing it and we are putting a great attention to it. We believe this collaboration actually already been mitigated by leveraging the existing manufacturing footprint, without going through the complicated setup of a greenfield facility. We have mitigated some of the risk in terms of execution and we have seen the rest of it. We just have to execute and report it accordingly.
