Aug 26, 2026 earnings call — High-end IC recovery and capacity investments
Photronics reported fiscal Q3 revenue of $216 million and record high-end share of 44% of IC's $155 million revenue.
Revenue $0.2B (est $0.2B) · EPS $0.50 (est $0.40) · Next-quarter revenue outlook $0.2B–$0.2B
Key quotes
"Over the past several years, we have been leveraging partnerships with industry leaders to supply EUV R&D masks and solutions to customers while the full turnkey EUV merchant market develops."
"At our Allen facility, we continue to target initial revenue late this fiscal quarter with its geographical diversification contribution reflected in fiscal 2027 revenue and beyond."
"We are updating our fiscal 2026 CapEx guidance to a range of between $255 million and $305 million."
Analyst Q&A 4
EUV partnerships and Allen facility capacity
Q (Christian Schwab · Craig-Hallum): He asked what partnerships will help with lower-node (EUV) work and when EUV would be fully ramped. He also asked the revenue capacity of the Allen, Texas facility when fully utilized.
A: Management said the partnerships they mean are specific to EUV. They are monitoring the merchant market and using industry partnerships now, and will report more later. They would not disclose a dollar capacity for Allen but said Allen expands capacity beyond historical levels to capture more midrange high-end work and let Boise focus on the high end.
"So we're not going to get into details as to how much revenue capacity we have there other than to say that we are expanding our capacity beyond what we historically have had, particularly in the higher end of the mainstream." — Eric Rivera (CFO)
Design releases and EUV capex
Q (Maxwell Michaelis · Lake Street Capital): He asked if delayed design releases are now fully caught up. He also asked why the company is focusing on EUV now and whether extra CapEx beyond the $255 million to $305 million range is expected.
A: Management said many design releases that missed Q2 did come through in Q3, but the underlying market conditions from Q2 remain. On EUV, they are waiting for the merchant market to develop before making significant investments for a full turnkey capability and are using partnerships now because full EUV would require significant CapEx and they want to ensure the returns.
"We're waiting for the merchant market to develop on EUV before we make significant investments for a full turnkey, we call it internally, which means we'll be able to process every aspect of an EUV mask internally." — Eric Rivera (CFO)
Allen revenue mix, China competition, mask sets, margins
Q (Gowshihan Sriharan · Singular): He asked whether Allen's Q4 revenue is from new customers or moved from Boise and how much is incremental. He also asked whether the China decline was in mainstream or high end, whether mainstream orders are full mask sets or partial, and what caused gross margin compression.
A: Management said the customers are largely the same and Allen provides incremental capacity while helping Boise grow on the high end. They said the China market is competitive mainly on the mainstream, local mask houses compete there, and the company has been focusing on the high end. They said mainstream orders are usually complete mask sets, and margin compression was driven by volumes and mix, including geographical mix.
"Usually it's complete market sets, complete mask sets rather." — Eric Rivera (CFO)
Wide Q4 guide and CapEx timing shift
Q (Danial Yermakhan · Freedom Broker): He asked why the Q4 revenue guidance has a wide range around $20 million and whether visibility is lower. He also asked if the peak of end-of-life tool upgrades might shift to next year.
A: Management said visibility is limited because market conditions from Q2 remain, including high fab utilization, high memory costs, and geopolitical issues. They added that a single high-end mask set can swing a few million dollars, making results choppier. They also said some CapEx is expected to shift into fiscal year 2027 due to ordering patterns and vendor delivery, so the peak may be in 2027 instead of 2026.
"There's some of our CapEx is expected to shift on to fiscal year 2027 as a result of ordering pattern as well as delivery from our vendors." — Eric Rivera (CFO)