We are an equipment supplier mainly to the semiconductor manufacturing industry. We design, manufacture, and sell equipment and services to our customers for the production of semiconductor devices, or integrated circuits. The semiconductor capital equipment market is composed of three major market segments: wafer-processing equipment, assembly and packaging equipment, and test equipment. Through our Front-end business, we are active in the wafer processing segment. Additionally, as per December 31, 2017, we have a 25.18% stake in ASM Pacific Technology (ASMPT), which is a leading supplier of assembly and packaging equipment to the semiconductor, LED, and electronics markets.
We conduct our Front-end business through wholly-owned subsidiaries, the most significant being ASM Front-End Manufacturing Singapore Pte Ltd (FEMS), located in Singapore, ASM Europe BV (ASM Europe), located in the Netherlands, ASM America Inc (ASM America), located in the United States, ASM Japan KK (ASM Japan), located in Japan, and ASM Korea Ltd (ASM Korea), located in South Korea. The locations of our facilities allow us to interact closely with customers in the world’s major geographical market segments: Europe, United States, and Asia.
Our wafer processing business supplies equipment to the leading semiconductor manufacturers in the logic, foundry and memory markets, primarily for the deposition of thin films. The logic market is made up of manufacturers who create chips that are used to process data; the foundry market consists of businesses that operate semiconductor fabrication plants to manufacture the designs of other semiconductor companies; and the memory market covers manufacturers who make chips that store information either temporarily or permanently, such as random access memory (RAM). We also supply equipment to leading manufacturers of analog semiconductor devices.
The principal markets that we address in wafer processing are selected segments of the deposition equipment market. The total deposition equipment market was estimated to be US$11.5 billion in 2017 (VLSI Research, February 2018). Within this market we focus on the following segments: vertical furnaces, epitaxy, PECVD, and ALD. ALD is an advanced technology that deposits atomic layers one at a time on wafers. This process is used to create ultra-thin films of exceptional quality and flatness. Plasma is sometimes used to enhance the process further (Plasma Enhanced ALD, or PEALD) and enables the deposition at reduced process temperature.
Our investment in ASM Pacific Technology represents the Back-end business. The Back-end operations are conducted through facilities in Hong Kong, the People's Republic of China, Singapore, Malaysia, and Germany. On March 15, 2013, we reduced our shareholding in ASMPT from 52% to around 40%. The sale of the 12% stake in ASMPT caused and required the deconsolidation of ASMPT. Since that date, our share of the net result of ASMPT is reported on the line share in income of investments in associates. In April 2017, we sold a stake of 4.9% and in November 2017 we sold a stake of 9.1% in ASMPT. Our current shareholding in ASMPT is 25.18%.
A key driver in the semiconductor industry is the continuous demand for smaller, faster, and cheaper semiconductor components. Through technology advances in the manufacturing process, semiconductor manufacturers are continuously scaling chips to smaller dimensions. This enables more transistors to fit in the same physical space, thereby reducing the costs and increasing the speed and performance of a device. Another trend is towards vertical or 3D transistors. This trend also helps to keep the industry on track with Moore’s Law (processor speeds, or overall processing power for computers, will double every two years).
The manufacture of ever-smaller and more complex devices requires more advanced and precise deposit techniques. ALD offers the precision needed to deposit ultra-thin and highly conformal films, even on challenging 3D surfaces. Our portfolio of ALD products is an enabling technology for our customers, helping them to manufacture semiconductor devices at smaller line widths with new materials and 3D architectures. Our technologies support our customers in their roadmap towards chips with a higher performance and reduced energy consumption, which in turn enable the introduction of new and more advanced products ranging from high-end servers to smartphones, wearable devices, and automotive electronics.
Our strategic objective is to realize profitable, sustainable growth by capitalizing on our innovative strength in deposition technologies and our strong relationships with key customers. We act as a responsible citizen in achieving this.
The broader semiconductor wafer fab equipment (WFE) market showed a strong performance with approximately 30% year-over-year growth in 2017. The growth in WFE spending was particularly driven by the memory segment while the logic/foundry segment was relatively stable. Within memory capital spending the growth was highest in the NAND Flash segment, predominantly in the area of 3D-NAND. WFE spending in the DRAM segment also increased following the drop in 2016. The single wafer ALD market showed a clear improvement in 2017 following the drop in 2016. The single wafer ALD market was particularly driven by strong increases in memory, while the logic/foundry remained relatively stable at a strong level. The recovery in the DRAM patterning part of the single-wafer ALD was held back by reuse of existing equipment as customer focused on investments within existing facilities.
The following table shows the operating performance for 2017, versus 2016:
| (EUR million) | 2016 | 2017 | Change | |||
| New orders | 622.3 | 773.6 | 24% | |||
| Backlog | 156.7 | 176.3 | 13% | |||
| Book-to-bill | 1.0 | 1.0 | ||||
| Net sales | 597.9 | 737.4 | 23% | |||
| Gross profit | 264.5 | 305.9 | 16% | |||
| Gross profit margin % | 44.2% | 41.5% | ||||
| Selling, general and administrative expenses | (91.1) | (99.9) | 10% | |||
| Research and development expenses | (87.6) | (88.4) | 1% | |||
| Impairment charges property, plant and equipment and other intangible assets | (3.6) | (4.3) | 19% | |||
| Operating result | 82.2 | 113.2 | 38% | |||
| Operating margin % | 13.8% | 15.3% | ||||
| Financing income / (expense) | 15.0 | (30.7) | (45.7) | |||
| Income taxes | (2.3) | (4.6) | (2.3) | |||
| Net earnings before share in income of investments in associates | 95.0 | 77.9 | (17.1) | |||
| Share in income of investments in associates | 40.5 | 89.6 | 49.1 | |||
| Result from sale ASMPT shares | – | 284.9 | n/a | |||
| Net earnings | 135.5 | 452.4 | 316.9 | |||
| Net earnings per share, diluted | €2.21 | €7.63 | €5.42 | |||
| Net earnings per share excluding effects from the sale of ASMPT shares | €2.65 | €3.21 | €0.56 |
The following table shows certain Consolidated statement of profit or loss data as a percentage of net sales for our operations for 2016 and 2017:
| 2016 | 2017 | |||
| Net sales | 100.0% | 100.0% | ||
| Cost of sales | (55.8%) | (58.5%) | ||
| Gross profit | 44.2% | 41.5% | ||
| Selling, general and administrative expenses | (15.2%) | (13.6%) | ||
| Research and development expenses | (14.6%) | (12.0%) | ||
| Impairment charges | (0.6%) | (0.6%) | ||
| Operating result | 13.8% | 15.3% | ||
| Net interest income (expense) | 0.3% | (0.0%) | ||
| Foreign currency exchange gains (losses) | 2.2% | (4.1%) | ||
| Share in income of investments in associates | 6.8% | 12.2% | ||
| Result from sale ASMPT shares | 0.0% | 38.6% | ||
| Earnings before income taxes | 23.0% | 62.0% | ||
| Income taxes | (0.4%) | (0.6%) | ||
| Net earnings from operations | 22.7% | 61.4% |
The sales cycle from quotation to shipment for our Front-end equipment generally takes several months, depending on capacity utilization and the urgency of the order. Usually, acceptance is within four months after shipment. The sales cycle is longer for equipment that is installed at the customer’s site for evaluation prior to sale. The typical trial period ranges from six months to one year after installation.
Our sales are concentrated in the United States, Europe and Asia. The following table shows the geographic distribution of our net sales for 2016 and 2017:
| Year ended December 31, | ||||||||
| (EUR million) | 2016 | 2017 | ||||||
| United States | €145.1 | 24.3% | €199.5 | 27.1% | ||||
| Europe | 113.8 | 19.0% | 106.7 | 14.5% | ||||
| Taiwan | 182.8 | 30.6% | 164.0 | 22.2% | ||||
| Japan | 60.2 | 10.1% | 112.7 | 15.3% | ||||
| South Korea | 46.8 | 7.8% | 102.9 | 14.0% | ||||
| Other Asia | 49.2 | 8.2% | 51.7 | 7.0% | ||||
| €597.9 | 100.0% | €737.4 | 100.0% | |||||
A substantial portion of our sales is for equipping new or upgraded fabrication plants where device manufacturers are installing complete fabrication equipment. As a result, our sales in this segment tend to be uneven across customers and financial periods. Sales to our ten largest customers accounted for 78.5% and 83.1% of net sales in 2016 and 2017, respectively. The composition of our ten largest Front-end customers changes from year to year. The largest customer accounted for more than 10% of Front-end net sales in 2016 and 2017.
Our revenue increased by 23% in 2017 to a new record high of €737 million. The impact of currency changes on revenue was a decrease of 2%. Next to strong traction in new product areas in epitaxy and PECVD we benefited from a clear improvement in the single wafer ALD market in 2017. Our revenue growth was particularly driven by customers' investments in new ALD applications for the manufacturing of advanced generations of 3D-NAND devices. After the strong growth we recorded in 2016 especially in the foundry segment, our ALD sales in the overall logic/foundry segment remained relatively stable in 2017 and were driven by continued capacity investments in the 10-nanometer technology node as well as the first investment in the next 7-nanometer technology. In the DRAM segment our sales remained at a relatively low level following the drop in 2016.
By industry segment, the revenue stream in 2017 was led by foundry, followed by memory and then logic. Within memory, sales were predominantly related to 3D-NAND. In 2016, sales were led by foundry, followed by logic.
In addition to an overall increase in our ALD product line, we achieved strong growth in our epitaxy and PECVD product lines. In epitaxy sales growth was primarily driven by a tool win that we announced in April 2017. This win was from a leading foundry customer that selected our newly-launched Intrepid ES systems for an advanced CMOS application in high volume manufacturing. In PECVD we also recorded a strong increase in our sales in 2017 following a new application win in the 3D-NAND segment.
In 2017, we again made further progress, in cooperation with our customers, to expand the number of ALD process steps and applications for the most advanced technology nodes. ALD is now firmly established as a key enabling technology. In logic, foundry, and memory, the leading customers have already ramped several technology generations based on our ALD equipment.
Our ALD equipment is an enabling technology for spacer-defined multiple patterning, which is used by leading customers in DRAM memory and the logic and foundry market. In addition, ALD is a core technology for high-k metal gate and advanced FinFET applications in the logic and foundry sectors. In the memory market ALD is also increasingly being used for critical process steps in next-generation 3D-NAND devices.
In recent years, we have further broadened our customer base and strengthened relationships with key customers.
We recorded strong growth in epitaxy and PECVD and the contribution to our equipment sales of both product lines increased in 2017. Following several years of steady growth in customer deployment and the development of new applications, ALD continues to be a key growth driver for our company. In 2017 we benefited from a clear recovery in the single wafer ALD market. Our ALD product lines continued to account for clearly more than half of total equipment revenue in 2017.
The following table shows the level of new orders for the full year 2017 and the backlog for the same period over 2016:
| YEAR ENDED DECEMBER 31, | ||||||
| (EUR million) | 2016 | 2017 | % Change | |||
| Backlog at the beginning of the year | 127.8 | 156.7 | 23% | |||
| New orders | 622.3 | 773.6 | 24% | |||
| Net sales | (597.9) | (737.4) | 23% | |||
| FX-effect | 4.5 | (16.6) | ||||
| Backlog as per reporting date | 156.7 | 176.3 | 13% | |||
| Book-to-bill ratio (new orders divided by net sales) | 1.0 | 1.0 | ||||
The backlog includes orders for which purchase orders or letters of intent have been accepted, typically for up to one year. Historically, orders have been subject to cancellation or rescheduling by customers. In addition, orders have been subject to price negotiations and changes in specifications as a result of changes in customers’ requirements. Due to possible customer changes in delivery schedules and requirements, and to cancellations of orders, our backlog at any particular date is not necessarily indicative of actual sales for any subsequent period.
For the year in total, our new bookings increased by 24% in 2017 to €774 million. The book-to-bill as measured by orders divided by sales remained on the same level (1.0 in 2016 and 1.0 in 2017). Equipment bookings in 2017 for ASMI as a whole were led by the foundry segment, followed by logic, and memory.
Bookings increased to record highs in the first half of 2017 with a level of more than €200 million in both the first and second quarter. Bookings moderated to €160 million in the third quarter and then increased again to €203 million in the fourth quarter of 2017.
We finished the year with an order backlog of €176 million, an increase of 13% compared to the end of 2016.
Total gross profit developed as follows:
| YEAR ENDED DECEMBER 31, | ||||||||||
| Gross profit | Gross profit margin | Increase (decrease) percentage points | ||||||||
| (EUR million) | 2016 | 2017 | 2016 | 2017 | ||||||
| Front-end | 264.5 | 305.9 | 44.2% | 41.5% | (27) ppt | |||||
The gross profit margin decreased to 41.5% in 2017 compared to 44.2% in 2016.
The decrease in gross margin mainly reflects the negative impact from new product introductions and related initial costs in our epitaxy and PECVD activities. This negative impact was mainly reflected in the gross margin in the second half of the year as our sales in the third and fourth quarter included multiple tools of our Intrepid epitaxy system and PECVD tools for new applications. In the first half of 2017 the gross margin was still relatively steady at 43.6% but decreased to 39.6% in the second half.
Excluding the temporary impact from the new product introductions, our gross margin was stable in 2017. This reflects the impact from the programs that have been implemented in the recent years to further improve the efficiency and flexibility of our manufacturing and supply chain operations. These measures included new outsourcing initiatives, a stronger focus on sourcing of complete subassemblies and the migration of a major part of our supply base to Asia. Over time, these measures have contributed to a reduction in the fixed costs part of total costs of goods sold.
Currency changes led to a 2% decrease in gross profit compared to 2016.
Total selling, general and administrative expenses developed as follows:
| YEAR ENDED DECEMBER 31, | ||||||
| (EUR million) | 2016 | 2017 | % Change | |||
| Front-end | 91.1 | 99.9 | 10% | |||
Selling, general and administrative (SG&A) expenses increased by 10% in 2017 compared to the previous year. As a percentage of sales, SG&A expenses were 14% in 2017 and 15% in 2016. SG&A included restructuring expenses of €0.8 million in 2017.
The impact of currency changes on SG&A expenses resulted in a decrease of 1% year-over-year.
Total research and development (R&D) expenses, excluding impairment charges, increased by 2% in 2017 compared to the previous year, mainly driven by additional investments to fulfill customer requirements. As a percentage of sales, R&D expenses decreased to 13% compared to 15% in 2016. Currency changes resulted in a 2% decrease in R&D expenses year-over-year.
Total research and development expenses developed as follows:
| YEAR ENDED DECEMBER 31, | ||||||
| (EUR million) | 2016 | 2017 | % Change | |||
| Front-end: | ||||||
| Research and development expenses | 101.5 | 114.1 | 12% | |||
| Capitalization of development expenses | (26.5) | (38.6) | 46% | |||
| Research and development grants and credits | (0.8) | (0.3) | (63%) | |||
| Amortization of capitalized development expenses | 13.3 | 13.3 | 0% | |||
| 87.6 | 88.4 | 1% | ||||
| Impairment capitalized development expenses | 3.6 | 4.3 | 19% | |||
| Total | 91.1 | 92.7 | 2% | |||
Impairment of capitalized development expenses related primarily to the development of new technology that is now no longer in-demand from customers.
We continue to invest strongly in R&D. As part of our R&D activities, we are engaged in various development programs with customers and research institutes. These allow us to develop products that meet customer requirements and obtain access to new technology and expertise. The costs relating to prototypes and experimental models, which we may subsequently sell to customers, are charged to the cost of sales.
Our R&D operations in the Netherlands, Belgium, and the United States receive research and development grants and credits from various sources.
The operating result developed as follows:
| YEAR ENDED DECEMBER 31, | ||||||
| (EUR million) | 2016 | 2017 | % Change | |||
| Front-end: | ||||||
| Before special items | 90.7 | 118.3 | 30% | |||
| Impairment charges | (5.3) | (4.3) | (19%) | |||
| Restructuring expenses | (3.1) | (0.8) | n/a | |||
| Including special items | 82.2 | 113.2 | 38% | |||
Operating profit increased to €113.2 million from €82.2 million in 2016, and the operating profit margin increased to 15.3% from 13.8%.
Impairment charges in 2017 and 2016 related to capitalized development expenditures and assets.
Financing costs mainly reflect translation results. A substantial part of our cash position is denominated in US dollars.
Results from investments, which primarily reflects our shareholding in ASMPT, increased to €112.4 million from €67.7 million in 2016. These exclude the amortization of intangible assets related to ASMPT, as well as the book profit on the stake sales in 2017. During the year, we reduced our stake in ASMPT in two steps from approximately 39% to approximately 25%. ASMI's net earnings included a result of €285 million from the sale of the ASMPT stake.
Total sales as reported by ASMPT increased by 23% to US$2.2 billion in 2017. Sales of the Back-end equipment business increased 19% in 2017. This growth percentage was impacted by the LED market which contracted in 2017 as customers needed time to digest the new capacity installed in 2016. ASMPT performed very well in segments such as camera image sensors and 3D Sensing, advanced packaging and power management applications. Sales of SMT Solutions increased by a very strong 31% for the full year driven by automotive, industrial electronics and the latest upgrade cycle in the smartphone market.
ASMPT increased gross margins from 37.6% to 40.2% in 2017. On a 100% basis ASMPT increased net profits by 89%.
The income tax expense of €4.6 million (2016: €2.3 million) reflects an effective tax rate of 1.0% (2016: 1.7%). For further information on tax, see Note 20 to the Consolidated financial statements.
Net earnings developed as follows:
| YEAR ENDED DECEMBER 31, | ||||||
| (EUR million) | 2016 | 2017 | Change | |||
| Front-end: | ||||||
| Before special items | 103.4 | 83.0 | (20.4) | |||
| Impairment charges | (5.3) | (4.3) | 1.0 | |||
| Restructuring expenses | (3.1) | (0.8) | 2.3 | |||
| Total | 95.0 | 77.9 | (17.1) | |||
| Back-end: | ||||||
| Investment in ASMPT | 67.7 | 112.4 | 44.7 | |||
| Amortization other intangible assets from purchase price allocation | (27.2) | (22.8) | 4.4 | |||
| Result from sale of ASMPT stake | – | 284.9 | 284.9 | |||
| Total | 40.5 | 374.5 | 334.0 | |||
| Net result from continuing operations | 135.5 | 452.4 | 316.9 | |||
| Net result from operations | 135.5 | 452.4 | 316.9 | |||
The following table shows the cash flow statement:
| (EUR million) | 2016 | 2017 | ||
| Net earnings from operations | 135.5 | 452.4 | ||
| Adjustments to cash from operating activities: | ||||
| Depreciation, amortization and impairments | 51.7 | 52.1 | ||
| Income tax | 2.3 | 4.6 | ||
| Share in income of investments in associates | (40.5) | (89.6) | ||
| Gain on sale of ASMPT shares | – | (284.9) | ||
| Share-based compensation | 8.4 | 7.8 | ||
| Non-cash financing costs | (2.5) | 29.6 | ||
| Changes in other assets and liabilities: | ||||
| Accounts receivable | (43.4) | (37.9) | ||
| Inventories | (9.5) | (45.2) | ||
| Accounts payable and accrued expenses | 7.0 | 28.4 | ||
| Other assets and liabilities | (10.2) | 2.5 | ||
| Income tax paid | (7.4) | (3.9) | ||
| Net cash from operating activities | 91.4 | 116.1 | ||
| Capital expenditures (net) | (25.7) | (43.3) | ||
| Capitalized development expenditure | (27.3) | (38.6) | ||
| Purchase of intangible assets | (7.0) | (2.4) | ||
| Dividend received from associates | 22.1 | 36.5 | ||
| Proceeds from sales of ASMPT shares | – | 690.7 | ||
| Net cash from investing activities | (38.0) | 642.8 | ||
| Purchase treasury shares | (97.0) | (239.6) | ||
| Debt issuance fees paid | (0.8) | (0.1) | ||
| Proceeds from issuance of treasury shares | 14.7 | 13.3 | ||
| Dividend paid to shareholders ASMI | (42.7) | (41.5) | ||
| Net cash used in financing activities | (125.8) | (267.9) | ||
| Total net cash provided / (used) | (72.4) | 491.0 |
Working capital at December 31, 2017 was €180 million (2016: €157 million). Working capital consists of: inventories, accounts receivable, other current assets, accounts payable, provision for warranty and accrued expenses, and other payables. The number of outstanding days of working capital, measured against quarterly sales, decreased from 82 days at December 31, 2016 to 77 days at December 31, 2017.
The following table lists the total number of employees, exclusive of temporary workers:
| December 31, | ||||
| GEOGRAPHICAL LOCATION | 2016 | 2017 | ||
| Europe: | ||||
| - the Netherlands | 141 | 143 | ||
| - EMEA | 162 | 171 | ||
| United States | 535 | 555 | ||
| Japan | 212 | 228 | ||
| South Korea | 157 | 221 | ||
| Singapore | 340 | 395 | ||
| Asia, other | 123 | 187 | ||
| Total | 1,670 | 1,900 | ||
We had 1,900 employees as per December 31, 2017. The following table lists the number of employees per function:
| December 31, | ||||
| Function | 2016 | 2017 | ||
| Research and development | 447 | 497 | ||
| Manufacturing | 296 | 361 | ||
| Marketing and sales | 252 | 268 | ||
| Customer service | 506 | 597 | ||
| Finance and administration | 169 | 177 | ||
| Total | 1,670 | 1,900 | ||
Our Dutch operations, which employed 143 staff as per December 31, 2017, is subject to standardized industry bargaining under Dutch law, and is required to pay wages and meet conditions established as a result of negotiations between all Dutch employers in their industry and unions representing employees of those employers. As required by Dutch law, management in our Dutch facilities meet with a works council consisting of elected employee representatives to discuss working conditions and personnel policies, as well as to explain major corporate decisions and to solicit their advice on major issues.
The assembly and packaging segment, ASMPT, had 16,400 employees as per December 31, 2017 (December 31, 2016: 14,360).
Subsequent events were evaluated up to March 16, 2018, which is the issuance date of this Annual Report 2017. There are no subsequent events to report.
Our liquidity is affected by many factors, some of which are related to our ongoing operations while others are related to the semiconductor and semiconductor equipment industries, and to the economies of the countries in which we operate. Although our cash requirements fluctuate based on the timing and extent of these factors, we believe that cash generated by operations, together with the liquidity provided by our existing cash resources and our financing arrangements, will be sufficient to fund working capital, capital expenditures and other ongoing business requirements for at least the next twelve months.
On December 31, 2017, our principal sources of liquidity consisted of €836 million in cash and cash equivalents and €150 million in undrawn bank lines.
For the most part, our cash and cash equivalents are not guaranteed by any governmental agency. We place our cash and cash equivalents with high-quality financial institutions to limit our credit risk exposure.
We generated cash from operating activities of €116.1 million in 2017 (2016: €91.4 million). We generated cash from investing activities of €642.8 million (2016: €38.0 million used), and used €267.9 million (2016: €125.8 million) in financing activities.
We were debt-free as of December 31, 2017.
In December 2016, we finalized the renewal of our current standby revolving credit facility. The security of the previous credit agreement has been released. The maturity date of the new credit commitment of €150 million is December 16, 2021 with an extension option for up to two years. As per December 31, 2017, this facility was undrawn.
The credit facility of €150 million includes two financial covenants:
These financial covenants are measured twice each year, on June 30 and December 31. We were in compliance with these financial covenants as per December 31, 2017.
See Notes 10, 15, and 16 to the Consolidated financial statements for more on our funding, treasury policies and our long-term debt.
The assembly and packaging segment of our business is organized in ASM Pacific Technology Ltd (ASMPT). Net cash of our 25.18%-owned associate was €252 million on December 31, 2017. The cash resources and borrowing capacity of ASMPT are not available to our wafer processing equipment segment.
Although certain directors of ASMPT are directors of ASMI, ASMPT is under no obligation to declare dividends to shareholders or enter into transactions that are beneficial to us. As a substantial shareholder, we can participate in the shareholders' approval of the payment of dividends, but cannot compel their payment or size. Cash dividends received from ASMPT during 2016 and 2017 were €22.1 million and €36.5 million, respectively.
The market value of our 25.18% investment in ASMPT was approximately €1,197 million as per December 31, 2017.
We are exposed to market risks (including foreign exchange rate risk), credit risk, liquidity risk, and equity price risk. We may use forward exchange contracts to hedge foreign exchange risk. We do not enter into financial instrument transactions for trading or speculative purposes. See Note 16 to the Consolidated financial statements for financial risk factors.
We have developed forecasts and projections of cash flows and liquidity needs for the upcoming year. These take into account the current market conditions, reasonable possible changes in trading performance based on such conditions, and our ability to modify our cost structure as a result of changing economic conditions and sales levels. In the forecasts, we have also taken into account: the total cash balances amounting to €836 million on December 31, 2017; the ability to renew debt arrangements and to access additional indebtedness; and whether or not we will comply with our financial covenants. Based on this, we believe that our cash on hand at the end of 2017 is adequate to fund our operations, and our investments in capital expenditures and to fulfill our existing contractual obligations for the next twelve months.
We keep shrinking
dimensions by developing
new solutions to advance
Moore’s law.
