CCMP
#Thanks, <UNK>.
Thanks, <UNK>.
So let me start it, it's probably parts of both.
So if you look at how we're positioned in China, we've historically had a very strong position in that region both with the domestic and international players.
So for the folks as you mentioned that the Intel, the Samsung, TSMCs, SK Hynix, in many cases what they'll do is when they build a fab in China, they'll transfer existing processes to the facilities in China, so to the extent that we're ---+ the incumbent, we get transferred over.
And that's for the domestic players like the SMICs.
We also had very strong relationship with them because I think they really appreciate the support that we provide the experience that we bring and for them, really it's knowing that we're bringing proven technology and products that are proven in HVM or high-volume manufacturing, so it reduces the risk for them.
So when we talk about China growth, it was really broad-based and across all of our segments, and as we mentioned ---+ and I know as you're following, there is a lot of developments happening in China, so we definitely think this is a growth opportunity for us and we look forward to continue to grow in China.
I think if you look at ---+ I mean if you look at our value proposition for our pads, it's not to go in at a lower price point versus the incumbent.
What we've demonstrated our customers as we have a very significant deep activity advantage; in some cases that translates to improved yield and then for our customers, what they're showing is that the technology since it's also thermoset is much easier to qualify.
So as we mention six months, we're seeing qualifications complete in the six months versus 18.
And then, from a cost of ownership perspective, we're competitive.
So I would say that in general we're going ---+ and again back to the reason, why we really found the NexPlanar technology so appealing is that it's very complementary to how we position ourselves with slurry, which is really on value and performance rather than on price.
So we're seeing that validated in the market today.
Thanks.
Thank you.
Yes, so our gross margin this quarter was 48.1% and then if you exclude NexPlanar amortization expense 49.2%.
Since the NexPlanar acquisition ---+ NexPlanar has been your gross margin headwind and we've said that from the start that adds gross margins are lower than the Company average.
So it could be ---+ it would be somewhat dilutive, but it's a large adjacent market and a lot of growth opportunities, so a lot of growth margin dollars available, even if it's at a lower gross margin percentage.
So that was one factor, and that'll continue to be a factor I think.
In addition, we mentioned higher material cost based on some contracts we're absorbing some higher prices in abrasive particle, a legacy abrasive particle we use and we'll continue to see that as a headwind.
But we did see the benefit of higher sales volume quarter-to-quarter with the higher revenue, higher sales volume, there is some better absorption of fixed costs.
One other factor like I mentioned in the comments on operating expense was lower incentive compensation cost also had an effect on gross margin.
But as you look going forward, three important initiatives for the Company are growing pads, Tungsten growth with 3D NAND and FinFet and then dielectrics our transformation from older lower-performing products to new higher-performing colloidal silica and ceria-based products.
Now two out of three of those would be beneficial to gross margin, so Tungsten will be positive.
The transformation of the dielectric would be positive and then like I mentioned, pads is likely lower gross margin product.
Even within pads though, we have a lot of opportunities for operational improvements, efficiencies and in fact, right now, we're investing in additional capabilities in supply chain quality systems, things like that to improve yields and performance in the pad business.
So I think we would expect to see improving yields within pads and then the benefits of Tungsten growth and the dielectrics transformation providing some additional tailwinds.
Overall, for the full fiscal year, we set guidance now at around 49% and then next quarter, we would give some update on outlook for fiscal 2017.
Yes, thanks.
So when we talked about both the colloidal and ceria, this is our efforts to transform our portfolio over an extended period of time and so for example, for ceria, we've had products in the market for a while.
The colloidal-based products are newer family of products that we introduced in the last summer.
And what we talked about in the past is just for the colloidal-based products we think they can target up to a $100 million of business opportunity and we're just getting started, so we're seeing a lot of traction, a lot of qualifications ongoing and we are certainly seeing revenue from that.
From a ceria perspective, we've had products in the market for a while.
These are primarily for memory manufacturers.
And so, we've had products with commercial sales for a while, but what we're really encouraged by is the overall progress on transforming the portfolio, one that was really based on a lower margin, older fumed silica-based technology into these two new particles and technologies that we've developed, and customer adoption seems to be going very well.
