Guido Pickert - Investor Relations and Corporate Communications Martin Goetzeler - President and Chief Executive Officer Bernd Schulte - Chief Operating Officer

Adrian Pehl - Equinet Bank Sandeep Deshpande - JPMorgan Guenther Hollfelder - Baader Helvea Youssef Essaegh - Barclays Uwe Schupp - Deutsche Bank Janardan Menon - Liberum David Lewis - Generation Mark Heller - CLSA

Ladies and gentlemen and welcome to AIXTRON’s Q2 2015 Results Conference Call. Please note that today’s call is being recorded. Let me now hand you over to Mr. Guido Pickert, Director of Investor Relations at AIXTRON, for opening remarks and introductions.

Thank you, operator. Let me start by welcoming you all to AIXTRON’s Q2 2015 results conference call. Thank you for attending this call. My name is Guido Pickert, as said, Director of Investor Relations at AIXTRON SE. I would like to welcome our CEO Martin Goetzeler, as well as our COO, Dr. Bernd Schulte. As the operator indicated, this call is being recorded by AIXTRON and is considered copyright material. As such, it cannot be re-recorded or rebroadcast without expressed permission. Your participation in this call implies your consent to this recording. As with previous results conference calls, I trust that all participants have our results presentation slides, page two of which contains the usual Safe Harbor statement. I will therefore not read it out loud, but would like to point out that it applies throughout the conference call. You may also wish to have a look at our latest IR presentation, which includes additional information on AIXTRON’s markets and its technologies and is available on our website as well. This call is not being immediately presented via webcast or any other medium. However, we would place an audio file of the recording or a transcript on our website at some point after the call. I would now like to hand you over to Martin Goetzeler, AIXTRON’s CEO for opening remarks. Martin?

Thanks a lot Guido, and warm welcome to you all on behalf of AIXTRON's executive board to the presentation of our Q2 2015 results. I am going to start the presentation by giving you an overview of our Q2 financial and operational performance. Bernd will then expand on particular points of interest such as the uptake of our new AIXTRON R6 MOCVD tool in the market. I will close the presentation with a summary of some broader business issues we are addressing and how we see our business prospects going forward. As you will see, Q2 was a challenging quarter having been influenced by the ongoing qualification processes of our AIXA R6 with the respective effects on our margin. Nevertheless, we expect the growth necessary to achieve our guidance in the second half. Let me now take you through our numbers for Q2 starting with slide three. During the second quarter of 2015, we generated €40.4 million in revenues, which was 13% lower than the €46.2 million we generated in the same quarter last year, and more or less in line with the €40.3 million generated in the first quarter. On a half yearly basis, H1 2015 revenues at €80.6 million were down by 10% from the previous year's €90.1 million. The weak revenue numbers are a clear reflection of not only the cautious investment behavior of our customers, but also of the AIXTRON R6 qualification process, which has caused potential buyers to wait and see how the product performs other than buying the whole generation of equipment. However, total order intake for the second quarter at €52.5 million was 6% up year-on-year and 7% up on the previous quarter. At the end of Q2, our equipment order backlog was €91.2 million, which was 37% up on the same point last year and 15% ahead of the previous quarter and gives us good visibility to our revenues for the later part of the year, as the majority of the backlog is shippable in 2015. In terms of revenue breakdown, our largest market remains Asia. Some 79% of total revenues in H1 2015 were generated by sales to customers in this region, which is more or less in line with the first half of last year. In addition, 11% of revenues were generated in Europe with remainder coming from the United States. Equipment revenues in the first half of 2015 were €57.9 million representing 72% of the total revenues, which was in line with what we have come to expect over the last years. Turning to slide four, in Q2 2015, gross margin was very weak, 9%, which was lower than the 22% we generated in Q1 and considerably lower than the 25% we have generated in Q2 last year. This drop in gross margin was mainly due to costs from the ongoing production qualification process at various manufacturers for the AIXTRON R6 tool and the resulting inefficiencies resulting from these processes. The gross margin excluding these effects would have been slightly higher than in the first quarter. Operational expenses for the quarter came in at €21.5 million, which was below the same quarter last year when our expenses totaled €23.2 million, but above the previous quarter's €17.6 million. There were two reasons for this; first and foremost, we increased R&D expenditures by 13% on a sequential basis to €14.6 million, which reflects our order activities including the acquisition of PlasmaSi, Inc. in April as well as our work around our new generation of MOCVD equipment. The second point is positive currency impact. In Q1 2015, we recorded a positive currency effect of €2.7 million, which did not repeat in the second quarter. So, overall, we recorded a net operating income of €0.3 million in Q2 as opposed to an income of €3 million in the first quarter. Our OpEx for the first half of 2015 totaled €39.1 million, compared to €44 million a year ago being close to our current target. In Q2 2015, the operational result was minus €17.9 million, which was below the previous quarter. Moving to slide five, you can see our cash flow statement. On a positive note, we generated a positive operating cash flow of €33.7 million in the second quarter as opposed negative outflows in the previous quarter and the same quarter last year. This is largely due to advanced payments from customers, which increased by €15.5 million, compared to the previous quarter. In Q2 2015, we achieved an almost neutral free cash flow with minus €1 million. Let's now move to slide six, which shows our balance sheet with a solid equity ratio of 74%, cash and cash equivalents totaling of €255.4 million and no bank borrowings. There has been no major changes to our balance sheet as compared to the previous quarter except for goodwill, which is now €77.1 million at the end of the quarter, up from €65.7 million at the end of Q1. This increase was due to the acquisition of PlasmaSi in April and to exchange rate fluctuations. In summary, although we had a slow quarter in terms of revenues and earnings, our backlog supports our positive view on the second half of the year. Now, let me hand you over to Bernd, who will talk about our AIXTRON R6 Showerhead MOCVD tool. Bernd?

Thanks, Martin. Let me start by talking about the AIXTRON R6 Showerhead tool, our latest generation of MOCVD equipment, which is not only important to all our overall financial performance in this year, but also to the long-term positioning of AIXTRON within the LED market. The good news is that we have had the AIX R6 production qualified at one LED manufacturer. Including this customer, we have secured orders from now 8 different customers up from 7 in the previous quarter. We are also getting additional inbound enquiries and interests from customers. However, we should not hide the fact together with our major customers that it has taken longer than we would have liked to get the AIX R6 to the production stage. Based on detailed programs regarding hardware and process, we are closely collaborating with our customers to support their qualification targets. Besides that, we have seen stronger demand for our planetary reactor MOCVD technology for different applications, which will lead to an increased revenue contribution from this reactor platform in the second half of this year. All this applications are taking the benefit of the very high deposition uniformity on the wafer as well as wafer to wafer with planetary reactor particularly on wafer sizes of 6 inch and larger. Certain customers could drive this feature to the stage where a chip level binning became obsolete. This is very good news for our customers and therefore also for us. Going forward, we remain fully committed to building upon our position around LEDs, but also in other areas such as power electronics, true fab on silicon, highly pure atomic materials, and OLEDs. With regard to the letter [ph] we made further progress. Earlier this year, we acquired a California-based OLEDs encapsulation company, PlasmaSi Incorporated. We strongly believe that their technology would give our customers the opportunity to reduce the cost of manufacturing of flexible and rigid OLEDs and we should be able to report on first orders within this year. Additionally, our colleagues have achieved the first encouraging results on the way to making our Gen 8 demo tool ready to present the capabilities of our technology and to enable efficient large area deposition of organic films. With those words, let me hand back to Martin.

Thank you, Bernd. Before we give over to you for questions, I would like to summarize the operational points we've presented to you and then give you our perspective on the broader business issues we are addressing over the next quarters. Firstly, as communicated, despite our disappointing recent financial performance, we remain positive about future prospects of our business as well as confident about our positioning in the markets we currently serve and want to serve. We believe in particular that our opportunity in LEDs, memory and logic, power electronics and OLEDs is promising and substantial. Secondly, we confirm our guidance for the year with revenues of €220 million to €250 million supported by our increased backlog and the positive EBITDA within the second half. Our second-half expectations are based on current U.S. dollar/euro exchange rates and include shipments of AIXTRON R6 systems. Those are in particular dependent on successfully reaching individually agreed milestones within ongoing customer specific production qualification processes. In the LED space, our business environment for the second half is developing as expected allowing for the announced growth in shipments compared to the first half of this year. Besides the LED driven demand, we are expecting strong contributions from our other product groups such as power and memory and logic both of which will show a year-on-year increase growth in 2015. We are also seeing increased interest for our planetary reactor MOCVD platform for LED laser and telecommunications applications, which we believe is very encouraging. Thirdly, we will remain vigilant and disciplined when it comes to our cost structure and cash flow as we have shown in the first half. In terms of risks, the greatest one is the successful positioning of the new AIXTRON R6 tool on the market. We already had ramped up delays at customers. We have the AIXTRON R6 fully qualified with one producer and we have roadmaps for the others. As mentioned in previous calls, it’s all about executing the ongoing qualification projects and delivering on the growth opportunities of the other technology areas. This is what we focus on. Ladies and gentlemen, this concludes our Q2 2015 results presentation and thank you for your attention. Bernd and I are now available to answer your questions.

Thank you, Martin and Bernd. Before we take questions, could I ask everyone as always to limit your questions to a maximum of two each time. This will allow everyone a chance to have their questions answered. Thank you. Operator, we will now take the questions.

[Operator Instructions] The first question comes from Mr. Adrian Pehl from Equinet Bank.

Yes. Hi, gentlemen. Good afternoon. Actually, first of all, I was wondering whether you could share with us the status of the OLED tool as obviously it appears to be somewhat delayed? I mean, is it already finished in the way that you are producing in [indiscernible] for the customers from an evaluation point of view? And secondly, well, I was wondering whether you could add some flavor on the status of the Sanan order, maybe you could share with us what is the problem here in relation to competitive tools, when should we expect deliveries or what kind of final decision actually, when the orders should progress as planned? And then I might have a follow-up, thank you.

Okay, thank you, Mr. Pehl. And Bernd will answer the question on LED first and then I will answer on OLED.

Yeah, Mr. Pehl, the status of the Sanan order is that we, as I mentioned in my earlier speech, we are in process of qualifying the tool with [indiscernible] of the customer and this status is ongoing and will probably lead still end of the year. And we still expect to ship some systems this year, but we currently assume that a majority of shipments will be going into next year.

Regarding the OLED question, I would like to elaborate a little bit. First of all, we have two lab tools here, the first lap tool is so-called plaster tool where we produce one OLED, so complete OLEDs by the way new to us because in the past we've just had the [indiscernible] process, but in this case we produce complete OLED. So it’s all [indiscernible], not just the deposition, but also areas like encapsulation. So what we do there is basically we produce demos for our customers in order to achieve such specifications. And this is going on as we speak particularly with the large customers we are addressing in the Asian region. Secondly, we have a Gen 8 tool, which demonstrate to the customer who very successfully demonstrated the technology that it is scalable. So it can basically prove that the same also works for Gen 8 technology. And that’s going on also, we have started now because this tool was basically finalized, the hardwares are finalized, and last steps in software are finalized as we speak. So it was down over the last couple of months. And so we are doing internal test ride now and we want to start with most of our customers also later this quarter. Regarding business and sales, we have until now only shipped R&D tools. We had actually two customers in the past who are using the tool more broadly, but currently it was the latest developments we have. We shipped this year one tool for qualification, but it’s still clearly all for R&D purposes and the focus for the demos is to a large – is now really to get into this – into the volume business and that’s happening basically based on the demos we do and also on the qualification of the devices of our customers.

All right. And then actually, I take from your answer that probably the increase in prepayments is probably not related to the Sanan order I presume, but I was wondering whether you could share with us, which customers are spending behind this increase?

So, you are right. The Xenon advance payments we issued in Q4 so it's based, advanced payments we received in Q2 are related to different technologies planned but also to our six customers. So it is a broader range.

Alright, thank you.

The next question comes from Mr. Sandeep Deshpande from JPMorgan.

Yes. If I may ask a question, firstly on the qualification of your R6, you’ve had some costs associated with that in this quarter and they have taken delays, maybe can you highlight some of the issues that you have had, can you compare them with some of the issues that were there on the generation five tool and whether some of these issues which are preventing the qualification or are there some modifications to customers have decided desired on the tool which are delaying the qualification? And my second question is on the end markets, if you look at your end markets in the first half of the year, silicon is a very large percentage of your equipment end market, never been in this very high percentage of your end market before, possibly reaction to the weak LED market, but have you won more wins in the silicon market and is this going to broaden or is this just a factor associated with the weak LED market?

Okay, I will answer first the question to the silicon end market Sandeep and then turn to also elaborate on the questions - on the question on AIXTRON R6. So currently, we are evaluating and it is still ongoing at two other customers our technology and we expect that this will be finalized end of this year and maybe one of them also move into next year. So we are not yet qualified second customer so we are basically working for was this one customer, but now also on different applications and that also helps us to grow here. I also would like to re-emphasize that in Q1, we also recorded an order for our Three-Five-On-Silicon business which also is now part of our backlog. So overall, I will say we have a good development in Silicon this year and if you wanted to say we still wait for the shipments in LED then I can say it is true, but on the other side I would also would like to point out that in the second half of the year besides the R6, we also will see a couple of shipments of LED application that was our planet tied to. So there is also significant interest as Bernd pointed out in his speech that we for that technology because the planet here might not have the highest throughput and may be the lowest cost of ownership, but it has a very high uniformity level, so that even you can avoid binning as we mentioned and therefore we also see some good development in this area. Maybe, Bernd on the question on R6.

Yes, Sandeep. On your question regarding the cost and the qualification for R6, it is mainly driven that we have with us I mentioned we have basically sort of seven. We are working on qualification program specifically what's customers expect that you as a supplier carry, the consumable cost, they have the consumable cost during this period and that is the majority of the cost we report and certainly we have the manpower, we have our people on site who are also part of that cost and then of course we have with each customer, not each but most of the our customer we have to certain degree some customizations we do with the tool, but these are on minor level but this also together basically the core of the cost you see in our results.

Is these eight customers broad-based as you had in terms of customers in your previous generations of tools?

Yes.

Okay, thank you.

The next question comes from Mr. Guenther Hollfelder from Baader Helvea.

Hello just to, the first one, what's the future of your planetary reactor in terms of generations. Do we have to expect your also sort of next-generation product or is this more like an evolution on going here? And the second question, with your AIX R6, are there any customers also targeting high power LEDs so this basically your mainly mid power? Thanks.

So I would say as the primary application for AIXTRON R6 today is the mainstream product and this is a mid power range and it is really about getting the cost to the right levels and having the productivity achieved and this is what we are working on. Regarding your question on planetary, I would like to first of all I think we have over the last year's made significant additions to this tool. So we brought in an automation of cassette to cassette so we made it basically ready for the silicon industry. We also created productivity by via our in-situ cleaning process. So there are a couple of additions which we did to this technology and we are continuously also and really continue to sell these products at a very good level and also at very good margins. One of the next steps clearly is to also evaluate what can we do as the next generation here and what does the customer really requesting as in today because of the technology which is very much also favoring large wafer sizes. It is really for many tool of choice, nevertheless we have to see if there is something which we can further add in order to increase further the productivity.

Maybe if I may add to this Mr. Hollfelder, the planetary tool just remind us is basically the tool we position mainly as Mr. Goetzeler said for larger wafer sizes and whether you have these applications more, the main driver of the customer is the yield and the performance and that is why this tool is successful there. And if not so necessarily depending on how many wafers you can do but nevertheless we certainly speak to customers in particular in the power electronic area on next-generation and when next generation tools would be required in particular in order to reduce this cost of ownership but here it is little bit different than in the LED area. There are more to the cost of ownership in the power electronics than in the LED.

Maybe just one follow-up, I know you made a big progress with your latest Showerhead generation, but would you say at the end of the day your competitive position with the planetary in this area of the market is superior?

Can you repeat your question, what is superior?

That you have a stronger competitive position still on the planetary side in this segment of the market.

I would say we can use different applications for planetary and I mentioned today I think we talked about LED, we talked about telecommunication, we talked about laser, we also talked about power electronics and today we see here the planetary technology as a leading technology and therefore with this tool, with these technologies we make a difference in the market right now. We believe also in the future because we are continuously improving this technology.

Thank you.

The next question comes from Mr. Youssef Essaegh from Barclays.

Hello, thanks for letting me ask the question. I am going to do let everybody else focus on the R6 if you don't mind. So just understanding a little bit better what's going on with the delays, can you tell us if the delays that you are having right now, the issue that you are having for the qualifications are related to the core of the technology or to the specific customer customizations?

I think what is important maybe I answer this time, I think Bernd also worked on it. We have what we do is, basically we – it's all about at the end it's all about productivity; it is about process efficiency and quality that's clear. The work we do with the customers are milestone related, so we work with all these customers and they are normally in the first phase, they are focusing on hardware and process topics and in the second phase, they focus on productivity topics. And therefore it is not a fundamental question, but it is in order to – it’s basically to achieve the different specification targets for each of these - of the customers.

Okay. So let me explain what I had in mind when asked the question because I don't understand in detail all the phases and processes, but what I'm trying to understand is once you will have finished qualifying it with the customer number one does not mean that the qualification for customer number 2, 3, 4, 5, 6 is going to be very quick or is it going to be the same sort of lengthy process of going through everything and inserting it in however do it internally?

I think I would say that you have to do certain qualifications with each individual customers because of course our learning curve what we contributed to this process of qualification will be of course will be improving over time, but you know in this market the customers know it lies in this specific LED structure and know how to tune this structure with the new tool and that is something what learning curve which basically every customer has to go through individually.

Okay. And a quick follow-up, as these things are taking longer, do you see any change in your pricing power for this generation of tools? Basically did they ask you publicly to pay less for the machine given the time it takes to put them together?

I think for us it is important to qualify these tools. If the customers were still open, we already talked about one customer who is moving into production and having said that that will clearly, then also make sure that we achieve our price targets.

Okay. If I may one very last one. It is regarding the shape of the backlog. So I noticed that it keeps going up and up, and the order of [indiscernible] going up which is good news. But since the revenue is not picking up at the same time I was just wondering if you can tell us a little bit more detail on what is in the orders, is it part or is it services around the machines that already deployed or?

I will answer may be a question which you didn't ask because that might be interesting for all of our participants today. The question is, how can you achieve 91 million backlog basically achieves the guidance. And what we have to, first of all, I think clarify the backlog is at 125, this is our calculation. What we do secondly a significant part of this backlog will turn into sales and I will tell you what is not in the backlog and what will – we also expect as sales for example spares and services which we add to order intake as we go. Secondly, the R6 tools again we did not put in our backlog, but we will basically add it to the orders based on the qualification starters and on the shipments schedule, so that is another thing. And last but not least couple of silicon customers they order very, very close to the shipment date, so they ask us to basically produce in advance and that's also something which does not reflect in the order backlog. So there are several reasons why this number deviates maybe from the forecast we are doing.

Okay, is it – can you tell me again you said you're backlog, not the one that you report, but the one you think about internally, that 125 is that what you said?

The one which we report, the order intake and the backlog both numbers we calculate at a budget rate...

Okay, so the budget rate is 125.

125. What I also said today that our guidance we are using now the current exchange rate.

Okay. That's great. Thank you.

But the guidance, we only do for sales, for revenue and EBITDA.

Alright. Thank you very much.

The next question comes from Mr. Uwe Schupp from Deutsche Bank.

Maybe, Uwe, just one more – just because my colleague just mentioned maybe we are talking about exchange rate 1.25, we are not talking about the backlog which is somewhere at €125 million. That was misunderstanding, sorry.

And that's what I understood, thank you very much.

All ready there.

Yes, you can go Mr. Schupp.

Okay. Hi guys. Martin, can you maybe talk a bit about next year when it comes to the non-LED opportunity or may be putting a bit more precisely. In the past, you frequently said that by 2016 realistically we should be seeing some serious revenue from applications outside of LEDs. Now we obviously in almost in August and so based on demos and customer enquiries you are seeing at this stage, can you maybe rank those technologies in terms of potential importance or revenue opportunity for 2016 just that we get a better feeling of where things might be heading to next year. Thank you.

Thanks, Uwe. First of all, I think the guidance we will do in February next year, what I would like to point out is, first of all, I think what we clearly stated on OLED that we want to have for our OLED technology, major order in mid of next year that might lead to revenue only one year later, but that is where this business should kick in. The good news I think on OLED is our PlasmaSi acquisition, where we expect a couple of OLEDs already this year which will turn into revenue the next year. We also believe that the power electronics business will continue to grow because I think we discussed this couple of times that customers move now really from pure R&D status more and more into production in the production and high-volume production phase, so that should trigger also orders in this area. We also, as I mentioned, assume that we will qualify on silicon at least one or two customers more, so we will see a chance also to have then additional opportunities in this area. And as we also discussed, I think clearly as we - since the qualification of our tool continues, we also think that also next year we should see again a more significant part of our revenue again in the LED area with our Showerhead technology. So I think quite a broad opportunity. The OLED as I mentioned might be revenue wise kick-in in 2017. However, PlasmaSi as obviously we see good interest in the market and it seems to be a very different, make a difference in the encapsulation and therefore customers of interest.

Is your PlasmaSi revenue opportunity for this year and whereas next year higher than when you acquired the business?

You know that we bought an R&D activity, so it was really at the beginning of the business. So I would say we stick to the business plan and that is what we want to execute.

That's very clear. Thank you.

You're welcome.

The next question comes from Mr. Janardan Menon from Liberum.

So just looking at what you said about the second half, your guidance and where you will get the revenue from, am I correct in assuming that you are not counting much on the R6 and the qualification process to be successful over the next six months for that revenue guidance and that not only from Xenon but even from many of the other customers you would expect most of that revenue to fall into 2016 rather than 2015 second half.

We expect to ship as I mentioned tools in the second half and definitely I think we can confirm that for Xenon, we expect that the majority of this order will move into next year. However, we still plan also tools in our forecast for this year.

I mean is there a risk that if the qualification of the other customers sort of takes more time than you could deviate materially from your guidance?

We have, I think we have diligently looked at this and took the highest probable number which we expect and that is what came out. If things don't materialize which we plan and where we work on where we have milestones where we have clear target for this, together with the customers that always can happen and that is something which we don't assume and that is why we put out the guidance as it is.

And I know you are not - you don’t want to say anything much about, sorry there is [indiscernible] on the line, sorry, just to talk about 2016 sitting where you are, do you have more confidence about the outlook into 2016 because you are getting a base of LED business and some of the other businesses kicking in?

I think the guidance for 2016, we were making in February next year, but as I pointed out also to Uwe's question, we have really a couple of technologies which now start to grow and where we see the growth coming and happening also this year, so we are building also on this opportunities and maybe one more point which I didn't go into detail when we talk to Uwe. We also have this business which we call Three-Five-On-Silicon which is MOCVD for the logic application where you might have read also over the last couple of months and we see we got an order here in the first quarter. We're seeing here good opportunities for our company so that end of this decade so 2019 if you take everything together like LED application, like the power electronics I talked about laser telecommunication but also the Three-Five of Silicon we see a market at the end of this quarter decade of $1 billion. So it is a significant market and we are continuing to invest and we will curtail our portfolio to the needs of our customers.

And just a last follow-up, the Three-Five-On-Silicon opportunity, do you expect – is that really a sort of 2019 kind of a timeframe that when we can expect big volume there?

That's a little bit depends on the schedules of our customers. I think we will see first shipments next year and then we have to see how quickly it picks up. But that is always a little bit depending on the time, on the schedules of the customers.

Got it. Thanks a lot.

The next question comes from Mr. David Lewis from Generation.

Yes. Hi there, good afternoon. Just a quick question from me, I was wondering could you just talk us through the revenue decline that we saw first half on first half, so $19 million in the first half of 2014 and then $18 million in the first half of this year what were the principle sort of drivers in that in terms of shortfall versus what you might have sort of previously expected?

Thanks, David, for this question and the answer is quite simple. It is really the LED business which were we had last year still the prior generation our portfolio in which where we shipped the tools and where the R6 was actually supposed to kick in now in Q2. And as we mentioned, that is now delayed into the second half and that is the major reason for that deviation.

Got you. So principally down to the LED cycle?

Yes.

Alright. Okay. Thank you. And then can I ask just one follow-up on the OLED opportunity, when do you expect to announce sort of or how do you expect to announce further progress on the Gen 8 tool, how should we expect that to be articulated?

I think the only way, let's split this question on OLED, I think plasma is, we will see some initial orders as I mentioned and we will communicate those even I think in some case we might not be able to mention the customer and others we might. So that will happen over the next two quarters. On the OLED I think since we are working very closely with this customer, we have really to take to see how - to wait until they have qualified and when they start to order and I think then we can, that's the only proof that our concept really works and therefore we will I think see already progress quickly in the demos but communicating in a sense of that we achieved a milestone, the most important milestone will be the order.

Okay.

And that would be sometime, that could be next year or the year after.

We for the Gen 8 tool we expect, that is what we also announced in the annual report this year and this is valid. We expect mid-off next year an order.

Okay. Thank you.

The next question comes from Mr. Mark Heller from CLSA.

Thanks for taking my question. Bernd, I was wondering if you could confirm what was the LED related equipment revenues in Q2. Looking my math, it shows basically almost nothing so just want to confirm that and can you just talk about the general order environment obviously fundamentals in the LED sector right now are pretty weak. I’m just wondering if you are still seeing customers interested in ordering tools given the weakness.

So basically we had as you mentioned a very slow quarter on the six shipments in Q2 except for the qualification parts – for the qualification customers and that's why you see quite low number and that is what will change in the second half.

Okay. And any general comment on sort of the tellers for the LED industry right now and appetite for ordering equipment?

I think I would say what we see from the utilization let's may be answer from that side, it is, we see that if you take Taiwan and China, the customers run between 80% and 95% utilization rate. So we also hear that those who run to low end of this range now see improvements and increases again in the Q3. So we have to see all this now going forward will develop but I would say overall the LED trend and the move to LED and the opportunity in LED, also the latest OLED study. I don't know if you saw that came out this month confirms the opportunities and is still very valid. And therefore the trend as we said there will be a continued need to increase for tools is something which we would confirm.

Okay. And one more question if I could. How long do you expect the qualification related cost to impact the P&L, should we expect that to continue until the third quarter and potentially fourth quarter?

It is, what I can answer here is we have a detailed milestone plan now with key customers and that is something which we execute and which we also forecast for the next couple of months.

Thank you.

Gentlemen, there are no further questions.

Thank you very much and therefore we will conclude today’s Q2 earnings call. If you still have any question, please don't hesitate to either contact Andrea Su, our IR Manager in the U.S. or us here in Germany. Thanks again and see you all. Talk to you later. Bye-bye.