ACM Research Inc (ACMR) Q2 2025 Earnings Call Transcript

ACM Research Inc (NASDAQ: ACMR) Q2 2025 Earnings Call dated Aug. 06, 2025

Corporate Participants:

Unidentified Speaker

Steven Pileo — Managing Director, Blue Shirt Group

David Wong — Chief Executive Officer

Mark McKechnie — Chief Financial Officer

Analysts:

Unidentified Participant

Charles Hsieh — Analyst

Mark Miller — Analyst

Suji Desilva — Analyst

Edison Lee — Analyst

Matt Cook — Analyst

Jimmy Heng — Analyst

Yongwei Lei — Analyst

Presentation:

operator

Good day ladies and gentlemen. Thank you for standing by and welcome to the ACM Research second quarter 2025 earnings conference call. Currently, all participants are in listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, we’re recording today’s call. If you have any objections, you may disconnect at this time. Now I will turn the call over to Mr. Steven Paleo, managing Director of the Blue Shirt Group. Stephen, please go ahead.

Steven Pileo — Managing Director, Blue Shirt Group

Good day everyone. Thank you for joining US to discuss second quarter 2025 results which we released before the US market opened today. The release is available on our website as well as from our Newswire services. There is also a supplemental slide deck posted in the Investors section of our website that we will reference during our prepared remarks today. On the call with me today are our CEO David Wang, our CFO Mark McKechnie and Lisa Feng, our CFO of our operating subsidiary ACM Shanghai. Before we continue, please turn to slide 2. Let me remind you that the remarks made during this call may include predictions, estimates or other information that might be considered forward looking.

These forward looking statements represent ACM’s current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under Risk Factors and elsewhere in ACM’s filings with the securities and Exchange Commission. Please do not place undue reliance on these forward looking statements which reflect ACM’s opinions only as of the date of this call. ACM is not obliged to update you on any revisions to these forward looking statements. Certain of the financial results that we provide on this call will be on a non GAAP basis which excludes stock based compensation and unrealized gain loss on short term investments.

For our GAAP results and reconciliation between GAAP and non GAAP amounts, you should refer to our earnings release which is posted on the IR section of our website and to slide 13. Also, unless otherwise noted, the following figures refer to the second quarter of 2025 and comparisons are with the second quarter of 2024. I will now turn the call over to David Wang.

David Wong — Chief Executive Officer

David thanks Steven. Hello everyone and welcome to ACM Research second quarter Earning Conference call. We delivered another quarter of good results with strong sequential growth in both revenue and achievement reflecting continued progress across our expanding product portfolio. We saw momentum from our SBM Tahoe plating and furnace tool which are helping expand our addressable market and gain market share. We also continue to make progress with new platform including Trac PCBD and panel level packaging tools which represent important long term growth drivers. We recently announced major upgrade to our Ultra CWD Wet Bench cleaning tool. The technology integrates ACM patent pending nitrogen bubbling technology to generate a large size bubble with good bubble density uniformity and enhance the etching rate uniformity in a 3D structure across the wafer.

I’m happy to announce that we have received repeat orders for the new OC WB Wet Bench tool with our proprietary M2 Bobbin technology. We expect good achievements for this tool this year and next. The technology is also adaptable to our OTC Tahoe platform with a significant application potential for manufacturing advanced 3D, NAT3D, DRAM3D logic devices. We believe this new technology is Another example of ACM’s leadership in cleaning tools that would be good for our customers and support our growth initiatives. Our Nitrogen bubbling technology tool adds to early breakthrough for Tahoe and other recent products launching such as our high temperature SPM tool and panel level packaging tool for Flux Clean and the Bevel Etcher Taker.

Together these developments reinforce ACM differentiated leadership in wafer cleaning and give us confidence that we will continue to gain share in a critical segment. We remain committed to deliver innovative new products such as this to enable our customer to meet next generation of semiconductor manufacturing challenges as demand by the artificial intelligence transformation. Now onto our business result. Please turn to slide 3. For the second quarter of 2025 we believe revenue of 215 million upper 25% sequential and 6% year over year shipment were 206 million upper 32% sequential up 2% year over year. Gross margin was 48.7% exceeding our targeted range of 42 to 48.

We ended the quarter with net cash 2 or 6 million. Now I will provide a detail on product. Please turn to Slide 4. Revenue from single Wafer cleaning, Tahoe and semi critical cleaning tools grow 1% and represent 72% of total revenue. We believe our top to bottom cleaning portfolio put us in a strong position. We continue to make a technical improvement in the customer progress with our SPM tool. Our high temperature SPM system features ACM proprietary nozzle design which prevent both liquid SPM and acid mist spat out of the chamber during SPM process. This improving particle performance reduce chamber preventative maintenance cleaning frequency and enhances system uptime.

We have achieved better particle control over average particle count less than 10 at its 26 nanoparticle size. We also believe it will show better performance than competitors offering at a particle size smaller than 17 and 15 nanometer in Q2 we deliver SPM and Tahoe tools to several more customers as we continue to gain market share in SPM space. Revenue from ECP furnace and other technologies grow 23% and represent 22% of total revenue. ECM recently delivered a ECB tool to a customer which included company’s 1500 electroplating chamber shipped. We are seeing a strong momentum for ECB tool in advanced packaging driving by demand for both front and back end plating system.

We are also seeing growth interest in our new era Ultra ECP App Panel level Horizontal plating system as the industry shifts from wafer to panel level packaging to support the next generation AI chips. Our unique horizontal plating approach which delivers superior uniformity than vertical panel plating solution has attracted attention from the major players. Our furnace products are building momentum supported by strong customer interest and expanded pipeline of evaluation and engagement. We see good demand across multiple applications including high temperature NEO, especially our 1200 50°C degree version high temperature NEO furnace and and also lp, CVD Oxidation and ald.

We believe ACM differentiated design position us to capture meaningful market share. Revenue from advanced packaging which excludes ECP but including service and spell was up 20% and represent 6% of revenue. We are making good progress with our new TRACK and PCBD platform. Our proprietary TCVD platform with three chucks for Chamber gives flexibility to support a wide range of process with the same hardware. We feel good about our positioning with a plan to deliver more beta tool to a handful of customers this year and look for revenue contribution 2026 and beyond for track. We’re in the final development phase of our 300 wafer per hour inline kf tool and we expect to deliver the beta tool to a key customer in the current quarter.

To close on product, our roadmap including incremental contribution from Tahoe, SPM and furnace tool in 2025 with the panel level packaging track and PCVD tool expected to drive growth in 2026 and beyond. Please turn to Slide 6. Our first half result reflect solid execution across our product portfolio. We remain confident in the year and our long term opportunity in China. As a result, we have increased our long term revenue target for mainland China to 2.5 billion versus our previous target of 1.5 billion. The increase is based on two main factors. First, we now assuming a long term China WFE market size of 40 billion US dollar versus our prior assumption of 30 billion US dollar.

This is based on updated by third party global market Forecast and also our view of the China semiconductor industry. Second, we have adjusted our market share targets for product group as follows. We have raised our market share target for both cleaning and plating to 60% versus 55% prior. This is the result of our current assessment of customer traction and increased confidence for sheer gain for new product for furnace PSV then track. However, we’re keeping our target at 15%, 15% and 10% level. Of course we aspire to achieve better result but need more time in the market before we will formally adjust the target.

Moving to the bottom of the chart, we maintain our revenue target for the rest of the world at 1.5 billion. We believe ACM focuses on differentiated world class product combine. Our global sales and service team will deliver results with our global customer. As an example, we have a plan to deliver a server tool to the U.S. in the third quarter. We remain engaged with our major U.S. customer with active validation across a range of the cleaning process step as we continue to work towards our global goal for production orders. Bottom line, we have reached our long term revenue target to 4 billion versus our prior target of 3 billion.

Now I will provide Update on ACM Shanghai’s Proposed Capital Raise in China ACM Shanghai recently received approval from the CSRC to proceed with its proposed follow on offering on the stock market to raise up to US$620 million by selling less than 10% of the total share. The capital raising leadership is intended to help accelerate our updated revenue targets and add to the long term foundation to support our effort to scale our product to major global customers. As the majority shareholder, we view the proposed transaction as an important step in strengthening our position in the China market and it demonstrates the long term value of our ownership stacks.

Next let me provide the update on our production facility. First is Lingang. Please turn to slide 8. As I discussed last quarter, our state of art Lingang Production and Army center is nearly completed. The site including two production buildings with the first now in production and the second available for future expansion. Each of the two production building can support up to 1.5 billion of annual production capacity combined. We believe we can eventually support 3 billion of production at Lingang for the summer 2 manufacturer building. Next our Oregon facility pretend to slide 9 recall. We approached the 40,000 sq ft facility last year.

We made good progress during the second quarter and we have began upgrade on our customer Demo R and D lab. We believe this will help our effort with the customer in the region as it will let them test wafer locally on ACM tool. We also are moving forward with a plan to add production capacity to Oregon facility We target the middle 2026 for the Devonlab and production to commerce operations. Our investment Ningan and Oregon are key enable of our growth strategy, expanding our capacity, strengthen customer support and prepare us to scale globally. Now I will provide our outlook for the full year 2025.

Please turn to Slide 10. We are maintaining our 2025 revenue outlook in the range of $850 million to 950 million this implying 15% year over year growth. At the middle point in close our focusing remains on delivering differentiated enabling technology that solve our global customer most critical process challenges. Now let me turn the call over to our CFO Mark who will reveal details our second quarter results.

Mark McKechnie — Chief Financial Officer

Mark please yes, thanks David Good day everybody. Please turn to slide 11. Unless I note otherwise, I’ll refer to non GAAP financial measures which exclude stock based compensation, unrealized gained loss on short term investments. Reconciliation of these non GAAP measures to comparable GAAP measures is included in our earnings release. Also, unless otherwise noted, the following figures Refer to the second quarter of 2025. Comparisons are with the second quarter of 2024. I’ll now provide the financial highlights. Revenue was 215.4 million up 6.4%. Total shipments were 206 million versus 202 million in Q2 24 and 157 million in Q1 of 2025.

Strong sequential rebound in Q2 shipments led to a return of positive year over year. Shipment growth for the quarter. Gross margin was 48.7% versus 48.2%. This exceeded our long term business model target range of 42 to 48%. We expect gross margin to vary from period to period due to a variety of factors including sales volume, product mix and currency impacts. Operating expenses were 63.4 million up 38.8%. R&D was 14.5% of sales, sales and marketing was 9.3% of sales and GNA was 5.6% of sales for 2025. We now plan for R&D in the 14 to 16% range.

This is an increase versus last quarter’s plan due to ACM’s continued focus on proprietary R and D programs. We plan for sales and marketing in the 8% range and GNA in the 5 to 6% range. Operating income is $41.5 million down 20.2%. Operating margin was 19.3% versus 25.6%. Income tax expense was $1.9 million versus $9.3 million for 2025. We expect our effective tax rate in the 10% range Net income attributable to ACM Research was $36.8 million versus $37.5 million. Net income for diluted share was $0.54 versus $0.55. Our non GAAP net income excluded $9.8 million in stock based compensation expense for the second quarter.

I will now review selected balance sheet and cash flow items. Cash, cash equivalents, restricted cash and time deposits for 483.9 million at quarter end versus 498.4 million at the end of the first quarter. Net cash, which excludes short term and long term debt was $205.8 million versus 271.0 million at the end of the first quarter. Total inventory net was 648.3 million versus 609.6 million at the end of the first Quarter. Raw materials was 285.6 million, up 45.7 million. Quarter on quarter. We made strategic purchases to support production plans and to mitigate any potential supply chain risk. Work in progress was 60.7 million, down 10.2 million. Quarter on quarter. Finished goods inventory was 302 million, up 2.2 million. Quarter on quarter. Finished goods inventory primarily consists of first tools under evaluation at our customer sites along with finished goods located at ACM facilities. Cash flow used by operations for the first half of 2025 was 39.6 million versus 51.9 million. Cash flow provided by operations in the year ago period. Capital expenditures were 32.2 million for the first half of 2025 versus 39.7 million in the year ago period. For the full year 2025, we expect to spend about $70 million in capital expenditures. That includes our prepared remarks. Now let’s open the call for any questions that you may have.

Operator, please go ahead.

Questions and Answers:

operator

Thank you. To ask a question, you’ll need to press Star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile our Q and A roster. Your first question comes from the line of Charles Shih with Needham and Company. Your line is now open.

Charles Hsieh

Good evening, David. Mark. First question on shipment. I noticed that the shipment was up, but only up slightly on a year on year basis. I recall you guys previously said the full year 25 shipment should be, I mean should grow, maybe not necessarily growing faster than revenue this year, but that should grow. But it looks to me that in second half of the year you have a good amount of catch up to do for shipment to be Flattish versus last year’s level, is it still the right target to think about shipment? Or maybe the full year number may actually come down a little bit on a year to year basis.

David Wong

Thank you. Hey Charles. And our 2024 shipment was very strong, right? You recall about over 2023 is 63% of their increased rate. So then we also have a lot of new product and this year we’re contributing to their shim this year. So I want to say the first second half year obviously much stronger than the first half of the year we’re expecting still growing for 25. I mean 2025 and growth is still achievable. Got it.

Charles Hsieh

So relative to let’s say 90 days ago, the expectation for shipment for this year, do you see actually its shipment growth may be stronger than you thought 90 days ago or flattish or weaker any direction or color you can provide the reason why I ask this. Maybe it’s good to get your thoughts as well. Your US peers who have reported so far ahead of you have been seeing China wfe upside especially for the second half of the year. Wonder if you are seeing the same thing or not.

David Wong

Thank you. Yeah, I should say our Q3 is very strong. Right. We see the Q4 and there’s still some slot we’re going to fill in. And so I still see the regular and outlook look for Q4. So I was compelled. Like you said 90 days ago, we see that the market situation going to improve. Got it.

Charles Hsieh

Lastly, I think Mark, you mentioned some strategic purchase you made over the last quarter. I think the news flow did suggest that the US may be working on something in terms of export control at the subsystem level. Wonder what’s the ACM assessment? Let’s say supply chain risks maybe for the reasons of potential new export controls and how the company has prepared to mitigate that risk. And any thoughts on that front would be great.

Mark McKechnie

Thank you. Yeah, David, do you want to take that first and I can add or do you want me to go ahead? Yeah, go ahead.

David Wong

And obviously now we are doing their multi source of the components, right. And we’re definitely looking for the new components and supplier in the other country and then the US and also we have also looking for the local supplier in mainland China. And I want to say there is a certain challenging however and I think we can overcome that with the multi source alternative source supplier for our key components in the tool. So Mark, you want to add on that?

Mark McKechnie

Yeah Charlie, the only thing I’d add, I think it’s a Good question. It’s something that we look at a lot. I mean, it’s, we have a pretty good solid balance sheet. We have a good forecast for our shipments. So we thought it was the right thing to do to kind of increase some of our strategic supplies of some key components. So we might even do a little bit more here in the second quarter. Yeah, I’m sorry, in the third quarter.

Charles Hsieh

Yeah. Maybe just a quick follow up. Because the strategic purchase, it could be. For preparing for a higher demand in coming quarters or it can be more for mitigating supply chain risks, especially, let’s say maybe some of the components you are sourcing currently from the US. Which. One is it more. To do that? Yeah, yeah. I mean, as of December or, sorry, January 1st, you can’t get parts from the U.S. right. So, so yeah, these are strategic purchase, probably from other regions. And I won’t really break out how much of it is to mitigate the risk or just kind of based on our forecast, but it’s a combination of those.

Mark McKechnie

Charlie. Yes. Yeah.

Charles Hsieh

Thank you, Mark. I really appreciate the insights.

David Wong

Thanks. Yep, you bet. You bet. Thank you.

operator

Thank you. Your next question comes to the line of Mark Miller with the benchmark company. Your line is now open.

Mark Miller

I had a question about long term borrowings. They’re up significantly over the last six months. I’m just wondering what’s going on there.

Mark McKechnie

Yeah, I can hit on that a bit. And then we got Lisa here in the background. But long term borrowing, we did step. Things up a bit.

David Wong

You know, there’s controls over how we can use some of our capital from the China capital raise and what have you. Of course we have that coming along. So we did step up our long term borrowing a bit here in the first half of the year. Lisa, did you want to add something? Yeah.

operator

In addition to that, the interest rate for deposits much higher than borrowing in China. So we’re trying to, you know, using that kind of leverage to maximize the return.

Mark McKechnie

Good opportunity to kind of take the, take the lower interest rate down. Yep.

Mark Miller

Thanks, Mark.

David Wong

Yep. Okay, thank you. Next question please. Operator.

operator

Yeah. Yes, thank you. The next question comes from Suji De Silva with Roth Capital. Your line is now open.

Suji Desilva

Hi, David. Mark. Lisa, congrats to the progress here. So milestone wise, can you talk about the customer traction outside China and what some of the milestones we would look for here? Update on those on the customer base across different parts of the world.

David Wong

Yeah. Yes. Hey, Suji. And I think we’re continually working with a key customer in Korea and also in The US and this moment I want to say the it takes a little more time. However, we’re really working closely with key customer evaluate our differentiated cleaning technology and our micronic cleaning and we are reaching a very encouraging result.

Also we’re working with a Korean customer for their copper plating product and that also made progress and continually we’re also exploring new customer in both US and Taiwan. And I think especially all I want. To say our. Panel level and packaging tool made a very strong attraction from Taiwan customer too. So I want to say with our continual innovation and technology we’re providing the market and we’re going to have our you know expand our sales revenue outside China especially we’re now building our army center in Oregon and also their you know manufacturing and those army center will really make easier and for our cleaning, cover plating demo and for the customer outside China and also manufacturing we’re doing right now prepare for the Oregon and that’s really give us a strong position and to really minimize impact of any tariff situation.

So we believe our strategy building our R and D manufacturing center in China, in Korea and US will further strengthen our position in the global market. And we’re fully confident with our new differential product. And also I want to say a lot of new future AI chip request a lot of new technology which is even today nobody offer in the market. And those new demand for the technology driving will really put ACM’s product in the differential or their position. So we believe with our innovation continuous going on and we’ll continue again attraction from the key customer in cleaning in cover plating and panel and also other new products we’re planning too.

So we still have very strong confidence we’re getting to the global market. I still want to say every customer in the world they demand for the best technology. As this meeting announced, we have an intel bubbling technology with generator large size into bubble with uniformity across the entire wafer in the past. So we believe that’s what really driving their innovation requirement for both 3D NAT and 3D DRAM in the future. Probably also the 3D logic down the road. So that’s another word I look at our innovation technology or bring to the market. Okay, Mark, you want anything add on that?

Mark McKechnie

Yeah, no David, I think that was a good answer. I mean we’re working really hard with our big US customers. We got some additional tools that are going to different organizations here in Q3 to the US so our team is pretty active in Oregon. We’re pretty focused on getting our demo room up and Running and being ready to produce tools in the U.S.

Charles Hsieh

Hi, Asuji.

operator

Yes, thank you. The next question comes from Edison Lee with Jefferies. Your line is now open.

Edison Lee

Hey, David and Mark, how are you? Can I maybe ask you two questions? Number one is for the 2Q growth at the revenue level is 6% which is actually below the growth rate that you are guiding for the full year. So what was actually driving that slower growth in the second quarter? And then for three kill, you said that the outlook is very strong. Can you share the growth drivers coming from logic, memory, power and advanced packaging. So which areas actually you are seeing the strongest growth, in which area you are seeing the slowest growth. Thank you.

David Wong

Yeah, you know, I mean revenue can be lumpy. Right. And we’re still expecting, you know, 15% and middle point growth for the year.

And also, you know, we’re. You’re asking the Q3 driving force, I want to say still are cleaning and copper plating is still the major driving there. And also certain product, you know, customer requests were, you know, shipping turn to a Q2 Q3. Right. I want to say over the year, we still have a whole year. It’s expecting growth better than the Q2.

Edison Lee

Right. So in China, can you talk about the growth that you are seeing from memory versus logic?

David Wong

I would say there we both are tools sell to the memory and the logic customer. Right.

But you would say which is grow fast. I don’t have a real number right now. Putting my hand, I want to say both, you know, if you look in the long run, I want to say memory is still very strong, both the 3D NAND and also, you know, this DRAM business. And of course there’s logic and people still building, you know, fabs and both for mature nodes and other advanced nodes. And so I want to say that looking the next really a few years those market is very solid still there. Okay, great. Thanks, David. Thank you.

Charles Hsieh

Thanks, Edison. Yeah, thank you.

operator

As a reminder to ask a question, you’ll need to press Star 11 on your telephone and wait for your name to be announced. Next. Your next question comes from the line of Matt Cook with Portento. Your line is now open.

Matt Cook

Hey, David. Hey, Mark. How’s it going? Can you hear me okay?

David Wong

Hey, Matt.

Matt Cook

Yes, good. Great. So I just wanted to ask ACM Shanghai reported its results about 60 minutes ago. Now I know that there are different accounting standards, but their numbers look a lot better than yours. Like the difference is bigger than we’re kind of used to. So revenue was $270 million compared to 215 million for ACMR, adjusted net income was $62 million, compared to about 37 that you just reported. So Mark, could you just help understand what’s caused the difference? I know there are different recognitions on revenue and timing. That’s the first question, why the results are so much better there.

And if there could be some kind of like, you know, if that’s, that could swing the other way in Q3. And then the second question is, are shipment numbers different for ACM Shanghai? And if so, what are they in dollars?

David Wong

That would be great. Thank you.

Mark McKechnie

Yeah, David, I can go ahead and hit that and you can add if you want. So in reverse order. Yeah. I mean simply the shipments are the same for both. They’re measured the same. The difference is rev rec. And so under China gaap, the China Organization recognizes revenue upon installation. And of course us GAAP is 606.

David Wong

Right. Where we take revenue on repeat shipments or upon acceptance when it’s a first tool shipments. So just a timing difference in the rev rec standards. And this quarter was a little bigger than it had been in the past. I think it could be kind of a result of some of the bigger shipments that we had last year that it took a little longer the timing of the installations here in Shanghai. And we won’t really guide how that’s going to change for the back half of the year Q3 and Q4. I don’t think we’re going to give any specific details on that.

Matt Cook

Yeah, I want to add on that, you look at the long run, this two numbers should be matching. Right. But looking at quarterly quarterly base, do you get sometimes US is higher, sometimes, you know, Shanghai is higher. So that’s as I, you know, Mark mentioned different recognition of the revenue. So I want to say overall, like you said, Shanghai number looks good, but that’s only quarterly quarterly base. Right. And I want to say a whole year or long run, this number is very matching.

Mark McKechnie

Hey Matt, one other thing I could bring out that I think will be important is that the US GAAP and the R and D side, we don’t capitalize anything. Right. So it’s all expensed. And so there is some capitalization of R and D. I don’t know if they give out the exact mix, but that’s the big differences on the operating expenses.

Charles Hsieh

That’s one. And then of course acmr, the global operation, you know, we’ve got our cost of being a public company and then we also have our sales and marketing effort that are incremental Expenses.

David Wong

Yeah. Helpful. Thanks very much. You bet. Thanks, Matt. Yeah, thank you. Next question. Operator, please.

operator

Yep. Operator, next question please. I think we lost the operator here. Charles, are you able. Do you have a live line? Charles? I think Charles Scheer is live as a Q and A. Yes. Excuse me. Your next question comes online of Charles Shi with Needham and Company. Your line is now open.

Charles Hsieh

Yeah. Hey, can you hear me?

David Wong

Yes, Charles, I can hear you.

Charles Hsieh

Yeah. I feel obligated to ask a question about the long term target. I think it’s important update but I. Have a really question. The mainland China portion of the long term projection there. I think One key change versus your prior target was the mainland China WFE market size. You kind of raised it from 30 billion to 40 billion. It does match with where China WFE numbers were trending over the last couple of years. Last year I believe it’s slightly above 40 billion. This year, maybe around 40 billion. But I think my question is would there be any concern, I mean by. The team maybe you are a little. Bit extrapolating the peak China WFE number there from the last year’s peak run rate level into the future or where’s the confidence China WFE maintaining at this 40 billion level over the long term?

David Wong

Thank you. Okay, Charles, obviously you know, year over year can be, can be kind of a changing, right. Maybe 5, 10% up and down. And I want to say our long term revenue is not for next year, right? It’s like five year or timeline we’ll talk about or beyond. So we believe that year China WFA market will be 40 billion. That’s what we talk about long run of the goal. And you look in the expanding in China of either memory or the logic, including igbt. It’s a lot of demand here. So that’s our confidence. We believe that the market 40 billion, you know, you look in the five year down the road should be in a number.

Of course there are global market growth too. So there’s a 40 billion we think is a reasonable target we put there. And second one I want to see that is we do have also a new product coming and we are through last three, four years R& D, our furnace, PCBD and the track or including our latest, you know, panel level packaging tool getting into their, you know, market and or start to, you know, generate revenue either this year and also next year. Second I want to mention that is we just get approved right from CSRC and we’ll cover, you know, second fund raising more than $600 million.

Those fundraising that will help ACM to accelerating the target R and D. And so that will be another big factor. Third one I want to mention that is ACM has been really in China market insists order differentiation innovated technology into the market. And so I believe Chinese the customer still like the best technology with IP protection. So that really put ACM very unique position. And this moment we have not found any local Chinese company copy our ip infringe our ip. So we have very confidence ACM can maintain our differential product margin. And also as said customer locally we are designing the best technology which is we are providing a differential solution.

So we’re much better than those people provide their similar product as since I said we’re providing differentiation, that’s what’s solving the future needs and you know, for the customer. So with all three automation. So we’re very confident that’s why we raised in this, you know, China China market from 1.5 billion to 2.5 billion. Thanks.

Charles Hsieh

Thank you. I appreciate the wonderful color. Glad I asked.

operator

Thank you. Next question comes to the line of Jimmy Hang with JP Morgan. Your line is now open.

Jimmy Heng

Yeah, hi David, can you hear me?

David Wong

Yes, please.

Jimmy Heng

Yeah, thank you. So I want to ask about whether you have any sold over the BRD into 2026 and actually can you also share about your estimates on the China WSE for 2526 either absolute numbers or Y comparison. Thank you.

David Wong

Yeah, well, I mean looking at 25 and they’re obviously, you know, different report. Right. Show different result and looking at gardener they’re pretty like in lower but you have another IC semi there. Try also, you know, show their very, I won’t say, you know, different result. In other words is better than, you know, the gardener. I mean you look in 25, 26, you know, I’m still hard to predict there may be, you know, I mean 10% up and down. Right. But there for our feeling is doesn’t matter as I said China market still exists. They already reach about either 30 or 35% of a global number already.

So with our differential technology, with a new product come out and even the flat of the revenue or the WFP spending in China, we’re still expecting our growth and also high growth. As I said our new product PCBD and we have a few customer, you know, hands of customer coming to their evaluation this year. We also put 300 wfe wafer per hour kif line which is in line with the scanner where they ship out very soon probably in Q3 and also added a new technology As I mentioned panel level packaging attraction and plus we have just high temperature annealing 1250 degrees C and that really can really shorten the anneal time for the IGBT also other critical application.

So as I said all this new product put in the market will give us a strong confidence where we have a growing fast even with the flat or you know Chinese WA market. As I mentioned just in I asked Charlie is we offer China Market with a real differentiated product and we feel confident we can protect our IP and therefore we can have our I want to say margin maintained and give the customer best of choice. And so we’re not getting into that kind of similar product in price competition. As I said the Chinese customer is still demanding and for the best performance.

If they’re choosing performance, what’s the price? Of course they’re choosing performance so that’s why our differential product can offer such a superior better result than those people provide a similar product. Right. So we think that will be our strong point.

Jimmy Heng

Thank you Dr. Wong.

Mark McKechnie

Yeah if you don’t mind I might just add a few things on that. Just you know obviously we’re not going to. We don’t give our guidance for 2026 until early in the year but you probably noticed our opex was pretty strong this year relative to our revenue. Even if we do we do the midpoint it’s still kind of we’re growing our OPEX this year and a big reason is we’re spending into the market opportunity. Right. I mean David mentioned a lot of the new R and D projects. We’re also spending more on sales and marketing but clearly that spending is kind of anticipating good growth ahead.

David Wong

Yeah, I want to add on that compared to the first tier guy they’re R&D probably 10 to 12%. Right. And we’ll spend 14 to 16%. That’s really show our having invested R and D also with our new product come out in a speed and we have more I call the product a new product common ratio compared to first year global guy. And that’s why it showed that our spend is higher. So that’s why we’re spending investing in R and D and also market sales marketing and that’s really supporting our next five year growth and we believe we spend this, I mean we spend this operation spending.

It’s very important and also supporting our long run growth. Yeah.

Jimmy Heng

Thank you Dr. Wang and Mark also want to ask about the tuning equipment market share target you red to 50% in the long run in China. Do you think in that case what will be the split of the remaining 40% share between other Chinese peers and international suppliers when you get 60% market share in China?

David Wong

Yeah. It’s hard to divide who is the second, who is third. Right. I mean again we’re. We’re trying to be number one in China. Of course. Right. Why I see that is our now product portfolio really almost can match 95% of the cleaning process. That so we’re probably the widest product in the world compared even the three big guy in global international. Right. And also as I said our product has a lot of differentiation and you know pothole tool and SAPS. You know maxonic TiVo and non violation or non damaging microsonic technology. And also continue adding this recent announced N2 bubbling with a special proprietary design generate a large bubble size with uniformity.

So we’re continuing really not just our product widespread also have a lot of innovative approach in the better than those top tier in the world. Especially on mention of spm. SPM as I mentioned we have new proprietary nozzle design can really limit all the liquid splash or you know acid mist out of chamber. And that really can improving and the small particle performance. And today as I said 26 nano we’re reaching average almost 5 you know in the particle. And we believe with improving the chamber environment and we should get a better result in the 15 nano semi nano which is real advanced, you know next step.

So particle. Anyway, I want to say you know where do our you know again differential approach and with IP protection and that’s the strong point. And we are saying we’re expanding China market and also we’re not facing any. As I said again you know we got a very strong IP portfolio in China globally. Also we do not expect that any local Chinese people can copy our tool. So that’s a real strong confidence we see there expanding in the China market. Of course with those differential product tests in the China market we’ll push to the global.

As you know the cleaning has been more and more important for their future AI chip manufacturing because of yield suffer. So this cleaning become more and more challenging for 3D NAND 3D. You know, I mean dram down the road and also 3D logic. Eventually people see that. So all the 3D cleaning we do have a product you know technology really for that. So we’re very, you know, we’re very exciting. We’re very you know and kind of see our technology you know going to spread out in other global market.

Jimmy Heng

Yeah, I see. Thank you Dr. Wang. Maybe I have my last Question. Can you talk more about your progress in Taiwan and Southeast Asia regions also for the pop planting? Because I think the industry now thinks that mass production of Taiwan Foundries FOP or we call CO OP will wait until 2029 or even 30. I think the development time for tech and manufacturing will be longer than expected. So how do you think about the mass production type of FOP or Co op with a fine line space? Yeah. Not the large lightspace for the done by the pendomakers. I mean for the managed process.

David Wong

Sure. Actually PLP this is a panel level packaging. We believe is the ready to go for the large size of their AI chip packaging. Right. As the people lay down and panel is 310 by 310 square versus circle their effective area increased more than 60, 60%. Right. It’s a bigger gain for the customer. Especially for large chip. Obviously other people get A no to 310 by 310 will probably very soon move into a large size panel. So we believe that’s really a strategic step and the Taiwan customer taking that direction. As to the acm, I feel we have very good product really for that product.

And we’re already putting the market for their, you know, low pressure cleaning, bevel cleaning. Also I want to mention that is our horizontal and rotational electroplating. It’s really a solution for this panel level. Right. And why is looking the 20 millimeter packaging, you know, used to be vertical and you go 300 millimeter wafer. Everybody turn to horizontal. And now you can see our, you know, panel level. We are probably the only guy providing this horizontal solution because our provider IP design. And this year, you know, March we got a reward get the technical award from the 3D IC inside in USA.

So we believe our strong position in this horizontal plating will position AC in very strong position for this future AI PLP market. So we see that as recently we reach our horizontal plating uniformity less than 5%. And I want to say we’re trying next goal is less than 3%. So we’ll maintain equal performance panel square plating versus a circle same level. That’s really driving to the panel as you mentioned about 2029 or timing. I think that that’s really depend on technology driving. Right. And if customer can solving the oil issue, they can speed up. If they cannot solving maybe delay.

So really this is a you know market is driven by two manufacturer technology combined together. So I mean with our copper plating we definitely believe that’s what we speed up. Right. In the copper Plating process which is one of the major block and for the people moving from 300 millimeter wafer to the panel level. And we’re glad you know this technology offered to the customer enabling their production line and hopefully speed up their production. That’s our confidence and also we’re engaging with the customer in Taiwan.

Jimmy Heng

Yeah, I know that you have technology leadership, you have real products and it I feel like the issue is now the ecosystem is not ready so the customer might need to delay the co op mass production timeline. And meanwhile do you think that they’re facing towards the Python co op to co op. Will they still stick to the original Japanese and American supplier or they could adopt new supplier for co op for the payday market.

David Wong

I want to say, I mean wafer level we’re engaging, right. I mean then you’re looking at this panel level. I think we are much better superior product. Right. Wafer level probably will offer equal and this moment I want to see that. But for the real panel level as I mentioned, you know, I mean looks in the last 10 years nobody can do horizontal plating. Right. Where the first guy announced the product. We can do horizontal as I said even today we’re about 5% uniformity. Our next goal goes 3% I believe with a strong IP position we should offer the best panel plating tool in the world.

And again. Right. That’s really exciting for our headquarters penetrating the global market and is one of the key products we offer to enabling the technology for the customer. So we are very, you know I want to put effort on those project development plus we also prepare additional other differential product and also enabling the panel level. And we’re going to announce probably, you know, in the end of this year. Well, we’re working on the new product too and to further get into this market. So we’re very excited about this panel level. Right. It’s a way to do because all AI chip got a size bigger and bigger.

I mean we’re going to invest a lot in this product.

Jimmy Heng

I see. Thank you so much. Sorry I may have occupied too much time but thank you so much for the details.

Charles Hsieh

Thank you.

operator

Thank you. Your next question comes to the line of Yongwei Lei with UBS. Your line is now open.

Yongwei Lei

Hi David, can you hear us? Can you hear me?

David Wong

Yes, please.

Yongwei Lei

Thanks for taking my question. Just one quick one. Seems like your Q2 year over year growth even for Asia is still underperforming other like China peers. Any reason behind and probably due to different customer exposure. Thanks. Good question, David. I think the Question was the growth maybe of ACM Shanghai’s revenue or even ours versus some of the China peers? Maybe the it was, you know, what’s the reason for the difference between China. Within us or between other peer? Maybe between acmr both US and China and Shanghai versus other like China WSE peers.

David Wong

Thanks. Versus China peers. Oh, okay. I didn’t see the other result come out. You know, China peer. Obviously you look into Shanghai, our revenue grow, it still looks good, right? And so I want to say we’re confident and also this year, as I said, you know, we’re coming to the moment of the multi product and revenue will not much contribute this year but with next year we see our furnace PCVD track that contribution. Right. And also we have a new product with cleaning and you know, continue expanding copper painting. So I want to say we still have a very good, you know, confidence and also outlook for 2026 and this year and well, Q3, very, very busy and Q4 we have a couple slots open but we think we’ll be also, you know, filled out soon.

So in general we still have good confidence, you know, wherever, you know, good growth still this year.

Charles Hsieh

Thanks. Pretty clear. Thank you.

operator

Thank you. Seeing no more questions in the queue. Let me turn the call back to David Wang for closing remarks.

David Wong

Okay, thanks operator. And thank you for all participating on today’s call and for your support. Before we close, Stephen is going to mention our upcoming investor relations event. Steven, please.

Steven Pileo

Thanks, David. Before we conclude, I just want to give everyone a quick reminder. Our upcoming investor conference is on October 21st. We’re going to present at the 6th Annual Needham Virtual Semiconductor and Semicap One on One Conference. On August 25th, we will present at the Jeffrey Semiconductor IT Hardware and Communications Technology Summit at the Four Seasons Hotel in Chicago. On September 3rd, we’ll present at the Benchmark 2025PMT Conference in New York City. On October 7th, we’ll present at the 17th Annual CEO Summit in Phoenix, Arizona. Attendance at the conferences are by invitation only for interested investors.

operator

Please contact your respective sales representatives to register and schedule one on one meetings with the management team. This concludes the call and you may now disconnect. Take care. Yes, thank you.