Photronics (PLAB) Q3 2026 Earnings Call Transcript

Good morning, everyone. The President and Chief Financial Officer, Eric Rivera, joined by George Macricostas, Chairman and Chief Executive Officer, provided an update on Photronics' fiscal third quarter 2026 financial results. Total revenue for the quarter reached $216 million, marking a 3% increase year-over-year, surpassing the target range.

The growth was attributed to the recovery of some delayed semiconductor design releases that had been postponed into the third quarter. This gradual improvement was first observed in May and continued throughout the quarter. Factors such as high fab utilization rates, memory constraints, and geopolitical uncertainty contributed to initial delays in new design releases.

However, some of these releases began production as semiconductor wafer utilization remained high, with fabs prioritizing higher profitability projects and expanding capacity at advanced technology nodes. The high-end IC business recorded a record 44% of the $155 million in IC revenue, driven by node migration and sequential improvements in high-end business conditions.

The company's regional investments in the U.S. and Korea remained on track, with initial revenue at the Allen facility expected later in the fiscal quarter. In Korea, clean room preparations for the expansion to 8-nanometer were substantially completed, with the timetable for planned installations remaining on schedule. The company aims to benefit from node migration and regionalization trends by diversifying geographically and expanding capabilities at the faster-growing high-end portion of the market.

The focus is on EUV, customer partnerships, and other mask technologies, with the company leveraging partnerships to supply EUV R&D masks and solutions while the full turnkey EUV merchant market develops. This strategy should expand the addressable market at the high end, and the company intends to manage the EUV investment cycle by gradually introducing new EUV capabilities as business opportunities emerge.