Sino-American Silicon Products Inc. (5483) Earnings Call Transcript & Summary

Good day, and welcome, everyone, to the Sino-American Silicon Products, Inc., FY 2021 Earnings Call. My name is Matt, and I will be your operator today. [Operator Instructions]. And with that, let me hand it over to Sunny Lin. Sunny, please go ahead.

Good afternoon and good morning, everyone. I'm Sunny Lin, semiconductor analyst at UBS. It's our pleasure to host SAS management today for their fourth quarter 2021 earnings conference. Now let me hand over the call to Mr. C.W. Lee, the spokesperson of SAS, for opening remarks.

Thank you, Sunny. Hello, everyone. Welcome for joining SAS 2021 Earnings Conference Call. I'm C.W. Lee, SAS Vice President as well as company's Spokesman. We also have Doris Hsu, Chairperson and CEO of SAS, in this call. Doris will give us the executive comments later, and then I will present industry overview and 2021 whole year financial performance. The final Q&A session will be hosted by Doris as well. For today's presentation file, we have uploaded onto our website. If you do not have the file on hand, please access our website for most of this file. Please note that some information during our discussion today will consist of forward-looking statements, which are applied throughout the call and this presentation. These are subject to significant risks and uncertainties. Actual results or trends could differ materially from our forecast. Please refer to the safe harbor notice in our presentation, Page 1 disclaimer. Now I would like to turn the call over to Doris for Page 2 to Page 8 executive comments, and I will report to you our 2021 operational performance later. Doris, please?

Thank you very much, C.W. Good morning, good afternoon, ladies and gentlemen, thank you very much for joining Sino-American earnings call for 2021 financial results. For solar business, I think the major headwind in 2021 is no doubt the cost escalation, which soared throughout the production -- the whole production chain, starting from polysilicon in the upstream, to aluminum for the solar panel and other equipment in downstream. The explosion in Xinjiang poly factory early last year resulted in poly shortage and the industry is further borne by global inflation in transportation system. At the same time, the impact from extreme weather events worsened drastically as regions -- at regions that were previously not considered to be on the front line of the climate change, so unprecedented weather events destroyed homes and claimed lives such as German flooding in July and U.S. Kentucky tornado in December 2021, which is the largest tornado outbreak in the U.S. history. Not to mention the worst drought over half a century in Taiwan in the first half 2021. So 2021 was regarded as pivotal in the global effort to take action on climate change, yet every cloud has a silver lining. While the losses are divesting, people are realizing decarbonization is the true solution, is a true way to battle the climate change. And many nations now have already legislated green policies and climate goals to adopt renewable energy, so does Taiwan. In 2021, SAS, we not only surmounted all the obstacles I just mentioned, but also we contributed a very solid result under such a very tough circumstances. I think we can call 2021 as a year of record-breaking for SAS. We reached a lot of new record on our financial index. I will share more details later on. So let's start from the financial highlights. 2021 actually is a record-breaking year for us. SAS has achieved many best evers. Our outstanding performance include the following: the first one is that our Q4 -- our 2021 Q4 -- SAS 2021 Q4 revenue was the best ever, and it -- which grows for 7 quarters conversely; and the second one is 2021, the full year revenue is the second highest for SAS. That is a very good result, which is just very close to our all-time high; and the third item is Q4 gross margin. SAS Q4 gross margin was high at 38%. This is our new record high. And this is the 4th consecutive quarters of growth on gross margin; and the fourth new record is that 2021 full year gross margin is increasing for 6 years and hit the record high again. That's our 2021 results for the full year. And next one is that 2021, full year EPS which is TWD 11.62. This is our all-time high, from day 1 of SAS's average. So it means that this is all time the best in the past 41 years. And 2021 EPS is TWD 11.62, this is the best effort. But actually, this already included a reserve -- GlobalWafers to reserve for the EUR 50 million termination fee due to its unfulfillment of Siltronic deal. So if there was no this termination fee reservation -- reserve in 2021, SAS 2021 full year revenue could have achieved TWD 12.99. So this is definitely a record high for us as well. But of course, we -- GWC has reserved this EUR 50 million termination fee in Q4. So SAS consolidated financial results for 2021 becomes TWD 11.62. This is still the best ever result. So these are very good results. 2021 is a record-breaking year for SAS. We made a lot of very good new records on financial results. That's the most important thing I want to share with everyone. And next is Page 3, some reinvestments. I think SAS has already successfully explored a very unique way to reinvest, made a lot of investments on some different companies in which those companies, most of them are semiconductor related. So I'm not going to go through all the details of those reinvestment companies. But I will just introduce 2 new companies among all of our 5 reinvestment company. The first one is TSC, Taiwan Specialty Chemicals Corporation, TSC. TSC is one of the major specialty gas vendors in semiconductor industry, not only in Taiwan, but also worldwide. Its main products include disilane and trisilane with proximity to serving local semiconductor ecosystem. TSC is beneficial for customers' BCP, business continuity plan. So local supply also mitigates macro uncertainties. So TSC is doing pretty well in 2021 and TSC plans to be listed in emerging stock market by end of this year and they will go IPO in 2023. Let me share a little bit more update of TSC. TSC 2021 revenue grew 24% compared with 2020. And what's more important than the revenue is that TSC 2021 is the very first time for TSC to turn around, make profit for the very first time, and they reach EPS -- for the very first time making profit and their EPS has reached TWD 1.37 per share. So that's TSC overall performance. And the second reinvestment company I would like to introduce a little bit is an American company, which we just announced to invest, that's Transphorm. This is the first time we could formally introduce our -- this strategic partner, Transphorm. Transphorm manufactures high-performance and high-reliability gallium nitride semiconductor products for high-voltage power conversion applications and some RF applications and power devices. SAS invest some -- invest up to now, we have already invested USD 15 million equity into Transphorm. So we have close relationship with Transphorm and we have some special synergies. Let me introduce a little bit about our synergy with Transphorm. Transphorm's revenue from January to December last year have already reached 21.5%. And they also achieved 8 quarters consecutively growth of record product revenue up to Q4 last year, already 8 quarters consecutively record revenue increase. And Transphorm is -- will grow -- will keep growing across multiple segments, including consumer products, data centers, automotive and some epi industrial products. So that's overall Transphorm performance. And Transphorm now is listed in NASDAQ, which is starting from February this year, so last month. Now Transphorm has become a NASDAQ-listed company, so that's the overall Transphorm performance. And another synergy or strategic synergy with Transphorm is that by this investment, GWC now is a production partner with Transphorm. That means that GWC works together with Transphorm. We supply gallium nitride and silicon products or production service to Transphorm as well. That being said, GWC will also benefit from more business from Transphorm. So that's my -- some quick update for these 2 reinvestment companies, Transphorm and TSC. Page 4 is about our expansion. We have some expansion in 2021 and also which will be continued in 2022 as well. Two main expansions. One is the solar sale expansion. This is the first time in the past 4 years, we restarted our expansion on solar sales. And this time, we are going to increase -- not only increase our capacity, but also we will have new -- much higher efficiency, higher output solution for a sale. And this production is in Taiwan. And another expansion is in Germany -- Prenzlau, Germany, which is our German module -- solar module production site named Aleo. This time, in Germany, we will not only increase our capacity but also by this expansion, we upgrade our capability as well. So after expansion, Aleo will be capable to supply much higher output solar module. The output can be as high as 450 watts per module based on 60 sales module, which is much higher than current industry level around 350, 360 watts per module. So these are the expansion program of SAS. Okay. And the next, Page 5, let me make some quick update of GlobalWafers' overall performance in 2021. GlobalWafers' overall revenue in 2021, that's record high as well. Q4 revenue and also 2021 full year revenue, both of these two hit the record high. What's more important is that GlobalWafers have been growing for 9 consecutive quarters up to Q4 last year, and this will continue. Gross margin-wise, Q4 2021, GlobalWafers gross margin -- gross profit margin hit 41.3%. This is growing for 4 consecutive quarters, and this reached record high again. And the full -- 2021 full year gross profit margin reached 38.1%. This is the second highest in the history. And EPS-wise, 2021 GlobalWafers EPS amounted to TWD 27.27. This is due -- because of the unfulfillment of Siltronic deal. So GlobalWafers is obligated to recognize EUR 50 million termination fee in Q4. So if they -- if we exclude this termination fee, GlobalWafers 2021 EPS would amount to -- Q4 would amount to TWD 8.37 or the whole year could amount to TWD 30.77. But we -- because we didn't fulfill the deal on January 31, so we have to recognize this termination fee in Q4. So that was why that GlobalWafers 2021 EPS amounted to TWD 27.27. The next update about GlobalWafers is their prepayment status. As of end of 2021, GlobalWafers have already received the prepayment. The net prepayment balance amount totaled at TWD 28.6 billion or USD 1 billion. This is increased by TWD 6.2 billion in Q4 only. So we keep increasing. We see more and more LTAs finalized and receive more and more prepayment every month. So we see some increase in January and February this year as well. That's our quick update of the prepayment status. And as we announced in early February, GWC now is working on some expansion for both brownfield and greenfield expansion. And last but not the least, I would like to make a very quick update about the Russian and Ukraine war impact to our solar business. Regarding to the Russia-Ukraine war, because Russia supplies nearly around 40% of the gas that European countries use for heat and electricity, the heavy reliance reveals that the diversification of the energy supply is very critical. So national energy policy is literally national security policy. This is coming true in every country. So it's under -- it's anticipated that most countries will accelerate the move towards the energy independence, augmenting the usage of renewable energy, and it is positive for solar development. Nonetheless, the war now is also worsening the shipping now and with impassable shipping lines and very limited air capacity, freight rates are skyrocketing and the double whammy is that the bulkiness of our solar panel. So that makes the whole logistics more difficult. So for our solar business, we don't really see any direct impact on our material supply due to the Russia-Ukraine war, but we see quite a lot of impact from the freight and the availability of the transportation. Also from -- for GlobalWafers, up to now, we don't see any direct impact from the Russia-Ukraine war for GlobalWafers or semiconductor business, but we do see a big increase on our energy cost for the semiconductor industry as well. So that's our quick update for our overall business and that is the comment. So I will have C.W. to make further details of the industry trend and our overall detailed financial numbers and ESG highlights to everyone. Thank you very much, everyone. And C.W., please.

Thank you, Doris. So let me continue the presentation. Please turn to Page 10. Company group structure. This is SAS Group company structure. SAS now is a diversified business group consisting of solar business, semiconductor business as well as strategic business like specialty gas, semiconductor-related business, et cetera. On the left-hand side, solar business group, we have Aleo, SAS Sunrise, SPW, Silfab here. Product including solar module sale product and the solar power plant investment. On the right-hand side, the semiconductor business group, including GlobalWafers, owns 51.17% for semiconductor wafer; Taiwan Specialty Chemicals, owns 30.93%, for specialty gas, disilane, trisilane, et cetera; Crystalwise, owns 35.24%, for supply of new products, LT or LN, under development; AWSC, owns 22.9%, gallium arsenide foundry hub; Actron, owns 22.75%, automotive diode IC manufacturer; and Transphorm, owns 5.62%, gallium nitride power product manufacturer, headquarter located in California, USA. The strength from this partnership are the cost effective and reliable mainstream manufacturing process technology, broad technologies and extensive experience in traditional semiconductor IC, wireless optoelectronics automotive applications and compound materials, et cetera. Next page, on Page 11. This is the revenue trend of semiconductor business and the non-semiconductor business in past 8 years. Our revenue from GlobalWafers semiconductor business has contributed to 89% in 2021. Semiconductor business growth is faster and stable. The share increased a lot from 57% in 2014 to 89% in 2021. Total SAS group revenue will continue growth going forward. Next is industry overview. Please refer to Pages 13 to 16. On Page 13, this slide shows renewable electricity growth trend. The renewable capacity growth is forecasted to accelerate in the next 5 years through 2026, accounting 95% of the increase of total global power capacity. In 2021, 290 gigawatts renewable power has been commissioned and will increase to 330 gigawatt or 453 gigawatt, as accelerated case forecast in 2026. Next page, on Page 14. This page presents renewable power constituent elements, mainly including solar PV followed by wind and hydro power. Based on IEA analysis, even with surge in commodity prices increasing manufacturing costs for solar PV, its capacity additions are forecasted to grow by 17% in 2021. Solar PV is expected to account 60% of renewable capacity additions through 2026. On Page 15. This page is the renewable power scale. On left hand side is the global government clean energy stimulus. As of October 2021, total scale had reached USD 480 billion, renewable power come for 11%. On the right hand side, also estimate almost 400 gigawatts of additional renewable projects led by solar and wind could be deployed from approved government spending. Next page, Page 16. According to IEA report, Europe has strong policy support to drive renewable energy growth. On the left hand side is divided by country's total reached 400 gigawatt renewable capacity additions in Europe during 2021 to 2026, with the Germany leads renewal expansion, with SAS, was through our 100% subsidiary in Germany, named Aleo Solar, the professional solar panel manufacturer, uses proximity to augment its advantage in local operational scale. Right hand side graph also indicates solar products still position or demand technology in renewable energy field. Now let's move to 2021 financial results. Please turn to Page 18. This page is SAS financial highlights in 2021 versus 2020. In 2021, full year revenue reached TWD 68.8 billion, Y-o-Y increase of 12%, second highest record, as Doris mentioned earlier. Gross margin was 35.6%, Y-o-Y increase of 1.2%. EPS, TWD 11.62 per share, Y-o-Y increase of TWD 0.8 per share, both hit a record high. Operating profit, TWD 18 billion, Y-o-Y increase of 21%. EBITDA, TWD 23.9 billion, Y-o-Y increase of 7.5%. All items increased a lot. Net profit, TWD 12.6 billion, Y-o-Y reduce of 0.8%, was because Siltronic termination fee, one-off loss provision valuation. ROE result, 24.8%, was 1.1% lower than last year with the same reason. On Page 19. This page is Q4 '21 results versus Q3 '21 and Q4 '20. As Doris explained earlier, SAS had the 7th revenue consecutive quarter growth from Q2 '20 to Q4 '21. In Q4 '21, revenue was TWD 18 billion, Y-o-Y 15% increase, record high. Gross margin, 38%, fourth consecutive quarters of growth and hit record high as well. Net profit, EPS, EBITDA and ROE reduced in Q4 '21 due to one-off loss provision of Siltronic termination fee and valuation loss as we explained in previous slide. Page 20 to 24 are the summary trend of revenue, gross profit, operating profit, net profit and EPS. The results showing a big improvement in past 5 years. On Page 24 is EPS trend. 2021's amount TWD 11.62 per share is 20x compared with the 2013's results. If we remove the impact of Siltronic termination fee loss factor, EPS becomes TWD 12.99 per share in 2021. Page 25 to 26 are brief income statements and balance sheet. On the sheet, you can find 2021 results performed well. Shareholder equity reached to TWD 52.2 billion, 2.6x versus the year 2013 results. Page 28 to 32 are ESG highlights. SAS aims at being at the forefront of global responsibility in the aspects of environment, health and safety and corporate governance. On Page 28, energy management. On the left hand side chart is SAS' cumulative installation for grid connected capacity, which reached 139-megawatt in 2021, equivalent to reducing CO2 emissions 55,000 tons and planting 5 million trees. On the right hand side is the renewable energy education for rural camp for kids project. SAS is dedicated to renewable energy for many years by installing PV system in many schools, rooftop. We also are aiming to bring the knowledge to our next generation, especially the knowledge of renewable energy to rural schools. The purpose is to educate our children. Solar energy is set as affordable and sustainable as clean resources, stands for SAS as well. Up to now, we have successfully completed activities in 4 schools, total 74 students, and planning improvements to another 6 schools this year. Page 29 is the environment protection activity. SAS and its subsidiary, GlobalWafers, total 123 employees held a beach cleaning event in Zhunan Longfeng Port, [indiscernible] to raise awareness in marine pollution, total cleared out 500 kilograms of waste successfully in this event. Page 30 is social concerns. SAS holds charity events covering 4 aspects: education, children, disability and volunteer to foster a belief about sharing and giving back to the society. Page 31 is employee welfare. SAS always target to provide better welfare to employees by approaching 4 aspects: workplace, life resources, health and welfare, with generous benefits to increase the economic security of the employees for stronger motivation. Next page, on Page 32, it's corporate governance. SAS is awarded top 5 corporate governance among all listed companies for 7 consecutive years. Besides gender, tenure and expertise diversity as well as the independence of the Board of Directors are the guidance for SAS to nimbly navigate in the competitive industry. Pages 34 to 39, our subsidiary, GlobalWafers' financial results highlights, including 2021 financial results versus 2020 comparison table; revenue and gross margin trend in the past 5 years; EBITDA and EPS trends since 2013; income statement; balance sheet brief summary for your reference. Above is my presentation. Thank you. Next, I would like to hand over to Doris for Q&A session. Doris, please.

Okay. Thank you very much, C.W. So before we open the Q&A section to all of the investors, I think I will -- as always, I think I will quickly reply some questions we received by e-mail with everyone. I think the question we received the most is the question I'm talking about that because everyone knows that GlobalWafers' overall performance is very good, so we've been asked by so many different investors and analysts, they ask is, okay, if we deduct GlobalWafers, how about SAS alone? Is SAS making profit at all? Here is the answer. Yes, SAS has reached positive gross margin, operating income and also cash in 2021. So SAS, even without GlobalWafers, SAS stand-alone -- SAS is profitable company -- is a growing and profitable company. Of course, SAS -- without semiconductors, SAS, its revenue just accounts for around 11% of the consolidated revenue, still 89% of the revenue is from GWC. That's true. But even without GWC, SAS itself is a very profitable company. That's the first one I will share with everyone. And the second point is that I was asked by analysts that -- to share some overall outlook for 2022. I think -- I'm talking about solar renewable energy. I think renewable energy=wise, renewable energy growth is increasing. 2022 -- matter of fact, the 2022 and several years beyond, I think the whole solar or renewable energy worldwide market will keep growing for the following reasons. The first reason is that because we see a lot of energy cost increase in many countries. It's not only because of the Russia-Ukraine war but also for a lot of supply issues. So the first reason is because of the high price increase of renewable energy -- of the energy cost. And the second reason is because that now worldwide awareness of carbon emission cuts, this ESG issue is getting more and more important for the whole industry, the worldwide. So almost every country is -- almost every country, including Taiwan, has already set a target that when -- in which year the country will reach RE100 or net-zero. So many countries and many companies have already set very aggressive goals to cut down the carbon emission. So because of these 2 reasons, right now, renewable energy, we see a very strong start -- very strong growth starting from this year and also the next several years. So we are, I think, 2022 is very positive from demand-wise. But also, we see some concerns as well. For example, polysilicon price keep increasing and some raw material keep increasing in the freight. Like what I said earlier, the whole solar product, especially the module, it's very bulky. So when the shipment cost is so high right now, that's definitely some headwinds for our solar industry. So in summary, SAS -- our view is that 2022 overall solar business will be still very strong. And next is, I was asked that how about U.S. -- American because Trump stepped down and now new President, Joe Biden, how about the President Biden's U.S. policy for renewable energy? Is U.S. still supporting the clean energy or not? Here is our view, our answer that in U.S., the proposed legislation to extend the investment, ITC, investment credit tax (sic) [ investment tax credit ] to encourage the deployment of clean energy could power 44% boost in solar deployment. So it's still -- in the U.S., I think solar -- or all the renewable solutions can receive a lot of support from U.S. policy as well. So that's our view that solar, U.S. is still very strong. Okay. And next item is, the price has gone up a lot in the next -- in the last year, 2021. This is talking about the solar product price increased a lot in 2021. So how about the trend for the further upside in the pricing for renewable solar products? Up to now, Q1, we do see the price keep going up. But the cost -- so the cost will increase, but also I think the selling price is increased as well. But part of the main reason of this selling price -- ASP increase for solar product is because of the demand, but there are some other factors to make the ASP increase. One of the issue is that the overall cost structure -- cost is increased, and raw material costs and especially poly costs remain very high. And another question, another concern is, because of the overall global inflation, the macroeconomic reason. And so that's some of the questions. Okay. And also another question was about the -- our dividend policy -- our payout ratio, dividend policy. I think we -- from company policy -- per company policy, actually, we didn't set a fixed ratio that the -- fixed payout ratio for dividend. But usually, in the past, we will always keep our dividend payout ratio pretty high, way higher than the average payout ratio in Taiwan. But this year, as I explained earlier that we had some expansion plans for solar sale and also for module. And also, we have some reinvestment for some semiconductor related products, which are all very strategic. So maybe this year, the overall payout ratio will be a little bit lower. It's not finalized yet. But because of the overall EPS is still very strong, so even the payout ratio is a little bit lower, but I think that the dividend will be still pretty high. We haven't finalized our payout, our dividend yet. We will make a decision very soon in our next Board meeting. So we will share this news very soon. But basically, I think our dividend will be pretty stable. So this is our dividend policy. Okay. That's pretty much all I prepared for the questions, and I would like to open for -- to receive the questions. Thank you very much.

Sure. Thank you very, Doris and C.W. Now let's begin the Q&A session. Operator, could you provide the instructions to raise questions?

[Operator Instructions] And we already have our first question, and it is coming from [ Donny Tang ].

So my first question is regarding to the solar business. So it looks like first quarter last year, the solar business or non-semi wafer business gross margin declined a little bit from 18% to 16%. So just curious if that was mainly due to the high material cost or any other reason?

You are exactly right that our Q4, we suffered a lot from the polysilicon cost increase. Actually, it was not only the polysilicon price issue, but also freight. We paid extremely high freight, especially in Q4. So those are the main reasons for us. And that's why the gross margin was lower compared to previous quarter. And another minor reason for the lower gross margin in Q4 was product mix. I think we have some new products under -- new products -- a small portion of our revenue is from that new products and the gross margin for that one is a little bit lower.

Okay. Got it. So do you have any idea about the gross margin trend for solar business in 2022? I know the material cost having ups and downs from time to time. So just curious if you have any color on the gross margin for solar business.

I think -- for solar itself, I think the gross margin should be pretty flat around second half last year, about that level, meaning that maybe somewhere around 16% to 18%. That's our view. The uncertainty part is that right now, for polys, which is the major material costs for our solar product. And that material cost now for us is it's not like GlobalWafers for semiconductor polysilicon. We have long-term agreement or 1-year PO with our customers. So it's -- the price is very predictable, very stable. But for solar -- for SAS' solar product, polysilicon, you just negotiate the price every -- some of them are every month, some of them every quarter. So it's very hard to predict. And right now because of the energy cost increase for almost everywhere, so that and energy cost is also one of very -- one of the important cost for polysilicon as well. So we have a little bit concern that maybe polysilicon price will be -- remain very strong this year. We don't know yet. But maybe starting from second half or starting from -- starting from second half, I think the polysilicon price should drop because some new capacity will be available. So I think that maybe the supply will be a little bit better. That's our view. But in general, I think that the gross margin for solar will be around same as last year -- second half of last year.

Got it. And chairlady, another question related to solar is that I think it is exciting that we are going to expand capacity -- solar capacity for the first time, I think, since past few years. So wondering if you have any idea on what kind of capacity growth magnitude we can deliver after the capacity expansion?

If we're talking about total capacity expansion, it's not that much, but what's more important -- it's just about 20%, 25% total capacity increase. But what's more important is that the capacity itself. It's not only capacity, it's capability as well. So the new capacity efficiency will be higher than the old one. So we expect that the unit price ASP will be a little bit higher as well.

So does that mean that our solar business sales growth could be maybe higher than 20% easily in 2022?

No, because the new capacity will not be online until Q4 this year. And just start ramping up from Q4, October, a little bit in November and December, and Q1 next year will be fully loaded, fully online.

Okay. Okay. Got it. And chairlady, so second question is related to our semi wafer business. So I knew that we have announced the Japan earthquake impact, but just curious if you could elaborate more here. And also anything from your competitors in Japan as well.

Okay. Yes, the earthquake. We have 5 factories in Japan. And 4 out of 5 factories are in the North Japan. So it's very close to the earthquake area. 2 of our fabs, the earthquake magnitude was 4 -- Level 4, and 1 is Level 5 and 1 is Level 3. So actually, all those 4 were hit by the earthquake. But fortunately, we have very minimum impact. Basically, we just lost some tool hours, tool times -- several hours tool times and right now by noon, actually everything already resumed, except some InGa growing lines. It has nothing to do with the tool equipment damage or what. Basic tools, facility tools and buildings and our colleagues, our employees, all of them are okay. But some of the sensitive process such as InGa growing, we slow down or shut down part of the production for several more hours because we are worried about the aftershocks. So we think that we will just monitor and check the status of the aftershock. If pretty stable today, then maybe this evening, we will start the production. So that's the status. Basically, it's very mild for us. It's very minimum. And for the other -- we also checked that the other customers and the other vendors and the other silicon companies in Japan area, I think up to now, as far as we know, that most of the companies are doing -- are still pretty safe -- pretty same as our situation, they lost some tool times, maybe stopped their lines to check the condition of the tools and maybe some WIP, lock some WIP, so very minimal. Not only GWC, but also many other companies in Japan. I think this time pretty safe. But of course, some of our Japanese customers, they do have some damage, but they will make their own announcement. It's not very convenient for me to disclose our customer status.

Got it. My last question regarding to semi wafer is our capacity expansion, the TWD 1 billion (sic) [ TWD 100 billion ] investment. So wondering if you could update maybe the capital -- the CapEx investment distribution in 2021 to 2024. Last time I remember this slide, 10%, 40%, 50% in 2022 to 2024. So wondering if there is any change to the plan after this date?

Yes. I think -- let me put it this way that our total TWD 100 billion CapEx, this TWD 100 billion CapEx, this is a total amount, but there are 2 components. One is for greenfield which is around TWD 55 billion and other part is brownfield which is around TWD 45 billion. Right now, we haven't kicked off our greenfield yet. We have all the design ready, and we have -- we are negotiating with the toolmakers. We have already started to place POs for tools, but we haven't started the construction of the building yet because we want to -- we are -- we haven't finalized which location, which country, where will be the location for this greenfield. So for the greenfield part, I think this one definitely will be a couple of months or a couple of quarters delayed. But right now, there is another index, which is macroeconomic status. We also monitor the macro situation very closely as well. If needed, we can definitely adjust the timetable based on -- I mean for the greenfield, we can adjust a little bit the scale or the timetable of our greenfield based on the impact of the macroeconomics and also our customers' commitment. So the greenfield overall spending will be a little bit late. But for brownfield, TWD 45 billion brownfield, this one is very firm. We have 9 factories in 6 countries are working on the brownfield. And every project is -- we just try to move everything in full speed for brownfield. So for brownfield part, it will be very similar to what I said, a 10%, 40%, 50%. But this one, 10%, 40%, 50%, we're talking about the payment schedule -- the CapEx spending schedule, it's not the CapEx amount. Because, for example, for building the depreciation time, the depreciation time is much longer than 6 or some of them can be 20 years. So building facility tools, their depreciation times duration are totally different. So the 10%, 40%, 50% is the payment -- the CapEx spending payout -- the ratio of the spending payout of brownfield. But for greenfield, maybe a couple -- a little bit delay. So I think maybe this will be couple of quarters delay and I will share more details next time when we really finalize the location. We will finalize our location of the greenfield in 2 months. So when we finalize the schedule, we will have -- we will immediately kick up the contractor and all the details plaining, then we will have much better schedule of our CapEx spending at that time. So definitely in our next earnings call, I will share more details on this part.

Congrats on the very good results.

There are no further questions in the queue.

Well, maybe let me follow up quickly on the greenfield comment. So Doris, you just said there may be several months or quarters of delay. So I think all this week, you said that the delay was because you are still reviewing all the possible reasons. So I think in February, your initial expectation was that the greenfield expansion may come sometime in 2024. So at this point, what would be your best guess that the greenfield may start to ramp?

No change. This part, no change. You know that we ordered tools everything on schedule and at least up to now, I think that we will still have big increase ARPU wise in 2024. We will have very good volume in 2024 from greenfield because we are working on the site selection, and we will be working on the construction and the tool ordering in parallel. So, so far, our schedule -- project schedule, no change. What I said that I will delay a little bit is the spending will delay. It's not the project will delay.

Got it. Got it. And then maybe second question on compound semis production by GlobalWafers. Any color you'd be able to share with us? How much capacity that you have for silicon carbide and gallium nitride? How much revenue contribution from compound semis for GlobalWafers? And how much growth should we be looking at into this year and 2023?

Yes. For silicon carbide right now, this is the first time we disclose our capacity, but it's already very firming. We already started the shipment now. So I think I can share a little bit about our silicon carbide capacity. Our capacity now is around 6-inch equivalent -- silicon carbide 6-inch equivalent is around 2,000 wafers a month. By end of the year, it will reach 5,000 wafers a month, by end of this year. And next year, we are planning to double the capacity. That means that by end of next year, we hope that we -- our goal is to reach 10,000 per month. And we will keep growing very rapidly in the next several years because it's a big part of the TWD 100 billion CapEx package as well. compound is a part that it's not only for 300-millimeter silicon wafer. We have some portion of the expansion for the CapEx for compound as well. For gallium nitride, it's a little bit more complicated for me to give you a firm number because it's very difficult to calculate because we have gallium nitride, we have aluminum nitride. We have gallium nitride on silicon, gallium nitride on silicon carbide. So we have several different products. So it's hard to give you a number that was our capacity now. But what I can tell you is that by -- in 12 months, by mid-next year -- by end of Q2 next year, I think our capacity will double for gallium nitride. In the next 12 months, the capacity will be higher than what we have today.

Got it. A quick follow-up. So for 2022, or maybe you could give us the number for 2021, how much revenue of GlobalWafers was coming from compound semis?

It's still very low. We didn't disclose the detail, but it's very low. It's still low single digit.

Got it. Sure. No problem. That's very helpful. So in the interest of time, let's wrap up here. Thank you all for joining the call, and thanks again to Doris and C.W. today. Thank you, and take care.

Thank you very much. Thank you, everyone. Thank you. Bye-bye.

Thank you so much, everyone. That is the end of your conference call for today. You may now disconnect. Thank you for joining, and enjoy the rest of your day.