Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $216 million, exceeding expectations and increasing 3% sequentially, but declining 3% year-over-year [4][13] - Non-GAAP diluted EPS was $0.60 per share, surpassing guidance [4][17] - Gross margin improved to 35%, and operating margin was 24%, both exceeding guidance [15][19] Business Line Data and Key Metrics Changes - Integrated Circuit (IC) revenue was $157 million, representing a 4% year-over-year decline, but high-end IC shipments reached a record 42% of total IC revenue [11][13] - Flat Panel Display (FPD) revenue was $58 million, declining 1% year-over-year due to order timing, but demand is expected to remain strong [12][14] Market Data and Key Metrics Changes - The high-end market remains strong, driven by investments in hyperscale data centers for AI rollouts, while the mainstream IC market is stabilizing but remains soft [10][11] - The company is experiencing strong demand in the U.S., which now represents 20% of total revenue, benefiting from reshoring efforts [13][11] Company Strategy and Development Direction - The company is executing strategic geographic expansions at existing facilities to enhance revenue contributions and diversify geographic revenue mix [5][6] - Investments are aligned with industry trends such as advanced node migration and regionalization, with a focus on higher-end nodes in the U.S. and Korea [6][8] - The company plans to increase capital expenditures to approximately $330 million in fiscal 2026 to drive future organic growth [19][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the high-end market's sustainability, supported by robust order patterns from existing core customers [10][58] - The company anticipates continued growth in high-end IC demand and is well-positioned to capitalize on outsourcing trends from captive manufacturers [50][49] Other Important Information - The company recognized a $16.8 million benefit from the reversal of a historical U.S. tax loss valuation allowance, reflecting improved performance and outlook [16][17] - Total cash and short-term investments increased to $588 million, including $422 million held in joint ventures [19] Q&A Session Summary Question: Market share relative to competitors - Management indicated that while a competitor has a larger market share in IC, Photronics is comparable in FPD, and they expect to capture more high-end shares due to growing U.S. demand [25][29] Question: Mainstream business and pricing competition - Management noted that the mainstream market in China is facing competition from local mask houses, but they are focusing on high-value product mixes to differentiate themselves [31][38] Question: G8.6 adoption in flat panel displays - Management expects gradual increases in G8.6 revenue contributions starting in fiscal 2026, as adoption expands in various applications [40][39] Question: Revenue potential from Allen, Texas facility - Management anticipates incremental revenue and profitability from the Allen facility, with revenue expected to start in the second half of fiscal 2026 [44][45] Question: Outsourcing trends from captive manufacturers - Management observed an increase in captives looking for outsourcing opportunities, which is expected to benefit Photronics due to its positioning in key regions [49][50]