Financial Data and Key Metrics Changes - The company reported second quarter revenue of $1,510,000,000, representing a 14% sequential increase and a 3% year-on-year growth [5][18] - Gross profit for the second quarter was $182,000,000, with a gross margin of 12%, impacted by preparation costs and foreign currency headwinds [18][20] - Operating income was $92,000,000, with an operating income margin of 6.1%, including a non-routine benefit of $32,000,000 from a contingent payment [20] - Net income for the quarter was $54,000,000, resulting in an EPS of $0.22 [20] - The company ended the quarter with total liquidity of $3,100,000,000 and a debt to EBITDA ratio of 1.5 times [22] Business Line Data and Key Metrics Changes - Communications revenue grew 15% sequentially, driven by the iOS ecosystem, while Android revenue remained flat sequentially but increased 7% year-on-year [6][10] - Computing revenue increased 16% sequentially, supported by new product ramps in Personal Computing and growth in Memory [7][10] - Automotive and industrial markets saw an 11% sequential growth, with a notable 6% year-on-year growth after eight consecutive quarters of declines [9][10] - Consumer revenue increased 16% sequentially, attributed to market share gains in wearables and improved demand in traditional products [10] Market Data and Key Metrics Changes - The company expects strong third quarter growth driven by the launch of next-generation premium tier smartphones and continued demand in computing [7][24] - The automotive market is showing signs of stabilization, with low single-digit growth anticipated in the second half of the year [84] - The computing segment is projected to continue its growth trajectory, with an 18% year-on-year increase reported for 2025 [12][52] Company Strategy and Development Direction - The company is focused on delivering differentiated technology solutions and expanding its global footprint to support customer supply chains [11][16] - Strategic investments are being made in advanced packaging technologies and test solutions to enhance competitive advantages [13][14] - The company is rationalizing its manufacturing footprint, particularly in Japan, to align capacity with market conditions [23][72] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic operating environment, with ongoing monitoring of export controls and trade policies [6][9] - The company anticipates robust seasonal growth in communications and computing markets for the third quarter [24][90] - Management expressed optimism about long-term growth potential despite current challenges in the automotive sector [71][84] Other Important Information - The company replaced its $600,000,000 credit agreement with a new $1,000,000,000 revolver and executed a $500,000,000 term loan to strengthen its balance sheet [21][22] - The company is planning to break ground on a new U.S. manufacturing facility in the second half of 2025 [69] Q&A Session Summary Question: Can you provide more color on short-term gross margin and long-term expectations? - Management indicated that short-term gross margin is impacted by unfavorable product mix and transition in manufacturing, with long-term improvements expected as optimization occurs [30][35] Question: What is the expected ramp for the 2.5D program in volume terms this year? - Management noted that the 2.5D program is crucial and is expected to ramp up as trade restrictions ease, with significant opportunities anticipated [40][41] Question: Are there any signs of demand pull-ins from customers? - Management observed some last-minute spot orders indicating inventory levels reaching equilibrium, but no active pull-ins were noted [47][48] Question: How is the company addressing material cost increases? - Management is proactively working with suppliers to secure capacity needs and manage pricing arrangements due to potential constraints in high-end substrates [66] Question: What is the outlook for the automotive market? - Management sees a mixed outlook, with advanced packaging applications in high demand, while traditional segments are stabilizing with low single-digit growth expected [71][84]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $1,510 million, a sequential increase of 14% and a year-on-year growth of 3% [5][17] - Gross profit for Q2 was $182 million, with a gross margin of 12%, impacted by preparation costs and foreign currency headwinds [17][20] - Operating income was $92 million, with an operating income margin of 6.1%, including a non-routine benefit of $32 million from a contingent payment [20] - Net income for Q2 was $54 million, resulting in an EPS of $0.22, which included $16 million attributable to the contingent payment [20] - The company ended the quarter with cash and short-term investments of $2,000 million and total liquidity of $3,100 million [22] Business Line Data and Key Metrics Changes - Communications revenue grew 15% sequentially, driven by the iOS ecosystem, while Android revenue remained flat sequentially but increased 7% year-on-year [6] - Computing revenue increased 16% from Q1, driven by new product ramps in Personal Computing and growth in Memory [7] - Automotive and industrial markets saw an 11% sequential growth, driven by new product launches for ADAS applications [8] - Consumer revenue increased 16% sequentially, attributed to market share gains in wearables and demand improvement in traditional products [10] Market Data and Key Metrics Changes - The computing market experienced an 18% year-on-year growth, marking it as the fastest-growing end market for the company [12][52] - The automotive market is expected to see low single-digit growth in the second half of the year, with a focus on advanced packaging technologies [72][84] Company Strategy and Development Direction - The company is focused on delivering differentiating technology solutions and expanding its global footprint to support customer supply chains [11] - Strategic investments are being made in advanced packaging technologies and test solutions to enhance competitive advantages [14][68] - The company plans to rationalize its manufacturing footprint, particularly in Japan, to align capacity with market conditions [23][72] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic operating environment with ongoing monitoring of export controls and trade policies [5][6] - The company expects strong Q3 revenue growth driven by new product launches in the premium smartphone segment and continued demand for AI applications [7][24] - Management expressed optimism about the automotive market's recovery, particularly in advanced packaging applications [72][84] Other Important Information - The company replaced its $600 million credit agreement with a new $1 billion revolver and executed a $500 million term loan to strengthen its balance sheet [21] - CapEx forecast for 2025 remains unchanged at $850 million, focused on expanding capacity for leading-edge technology [25][69] Q&A Session Summary Question: Can you provide more color on the short-term gross margin and long-term expectations? - Management indicated that short-term gross margin is impacted by unfavorable product mix and transition in manufacturing, with long-term improvements expected as optimization occurs [28][35] Question: What is the expected ramp for the 2.5D program in volume terms this year? - Management noted that the 2.5D program is crucial and is expected to ramp up as trade restrictions ease, with significant opportunities anticipated [40][42] Question: Are there any signs of demand pull-ins from customers? - Management observed some last-minute spot orders indicating inventory levels are stabilizing, but no active pull-ins were noted [46][47] Question: How does the company view the automotive market's long-term prospects? - Management maintains a positive long-term view on the automotive market, particularly in advanced packaging, despite current challenges in Japan [71][72] Question: What is the status of the tester fleet upgrades? - Management confirmed that upgrades are ongoing, involving both existing platforms and new testers, to meet increased requirements [85][86]