Chi-Tung Liu: Yes. And also, for both Intel and UMC are public-listed companies. Of course, this collaboration is more material, given our size relatively to Intel. Certainly, we will report the progress on a quarterly basis to our stakeholder. And as Jason mentioned, once we freeze the PDK and with customer engagement, hopefully, we will have some kind of customer announcement in between.
Operator: Next one, Charlie Chan from Morgan Stanley. Go ahead, please.
Charlie Chan : Hi, Jason and Chi-Tang. First of all, happy New Year and also truly congratulations for your partnership with Intel. I think, it should be a win-win situation. But maybe we kind of come back with some details. First of all is the long-term profitability with this Intel partnership. So maybe Chi-Tang or Jason. So, what was the kind of a estimated kind of gross margin or IRR, ROE compared to your own investments? Or to be your fully owned investment? What would be the difference in terms of gross margin and ROE?
Chi-Tung Liu : We agreed, I mean, both sides not to touch upon these numbers, because probably three years away and again, the material impact for both companies are relatively different. But what we can say is all the question you ask, we have internal performance or simulate numbers support our decision to go into this collaboration. And we do believe 12 nanometer is a multi-billion dollars market. And currently, is dominant by a few players with the collaboration and the setup of the contribution from both sides, we think we can offer a very competitive technology 12 nanometer solutions at the Western footprint to our existing customers as well as our potential customers. So, we do have high hope for this collaboration, including the P&L impact to our UMC.
Jason Wang : Yes, and Charlie, and first of all, thank you for having New Year to year two. I also like to add, the background of this 12 nanometer cooperation is very much aligned to our growth strategy that we have set up to do five year or five or six years ago, our growth strategy has always been to pursue a cost effect capacity expansion, and technology not advancement to continue our commitment to our customers, while enlarging our addressable market and increase our market relevance. And so, as such, we have always been exploring potential cooperation, this aligned with our strategic objectives. So, this actually fits that very well. Like she don’t say there’s many benefit about this 12 nanometer cooperation and we set up our goal and we’ll execute this, and we think at the end of the day, this will be a win, win, win scenario for our customer, intel, as well as ourselves.
Charlie Chan: Yes. Thanks, Jason and Chi-Tung. So, a follow up to that question. So, I think, you seems to imply the business is not just exceeding customers migration? It should be also some share again in this 12-nanometer foundry business. So, since you mentioned about a win, win, win for the customers use your industry peer? They would you be able to provide some T like process? The reason I’m asking is that, if you add the second source foundry, you probably need to spend some upfront cost for the mask et cetera. How do you justify that customers to use your 12 nanometer as a second source?
Jason Wang: I mean, first of all, in our view, the 12 nanometer, it is a competitive solution. And not only that, from a market standpoint, it’s a long-life node that address many of the high growth market, such as the mobile communication, infrastructure and networking. Now many of product actually just come to the 12, so they are not necessary to be a second source product. Many of the product pipeline actually arrived at this time. We are aligning our milestone with the end market demand. Now from a competitive standpoint, this 12 nanometer process will be a comparable industrial standard node and we utilize our executive process experience and the foundry know how and as well as the Intel, the FinTech transistor foundation. I think we will provide a very compelling and competitive solution to the customer.
Charlie Chan: I see. Thank you. And then also another question on this one. Yes, I’m wondering, if before 2027, there is some causes demand. Would you use your current 14 nanometer capacity in Taiwan for converts on the 28 nanometer to fulfill the demand before 2027?
Jason Wang: No. I mean, right now, we have evaluated all options. We believe this is the best option for us. Our primary reuse is this increment for the 12 nanometer production and we expect you will have required some of the conversion kits and limited new tools, which is going to be more efficient than we are producing in our facility. Overall, leveraging the existing equipment will tremendously reduce the upfront investment for this project.
Charlie Chan: Okay, thank you. And lastly, just on this Intel partnership, just two kind of logistic question. First of all, who will be in charge of the fab operation? I saw the news today, you suggest you will run the fab, but I feel like, it could be pretty challenging, right? I’m not sure, who is going to be in charge of the operation. Can you answer this one?
Jason Wang: No. I mean, we will have people that assist for the joint development on the proper development side. From the operation, Intel will operate that for sure.
Charlie Chan: And would that require additional government approval for this collaboration?
Jason Wang: We’ll file all the filings for any regulatory requirement and we will comply to that.
Charlie Chan: Okay. Thank you. And switch gear to near-term, I mean, the long-term dream is great, but back to near-term. Jason, do you think the fab utilization will have a second leg down this year? I noticed some of your customers’ inventory days is strong in pretty low, right? Can you give us some kind of observation about the cycle recovery for this year? Just a like query payment?
