About Photronics

Photronics, Inc. and its subsidiaries operate as a manufacturer of photomasks, which are high precision photographic quartz or glass plates containing microscopic images of electronic circuits. Sales The company manufactures photomasks, which are used as masters to transfer circuit patterns onto semiconductor wafers and FPD substrates. The photomasks the company manufactures incorporate circuit designs provided to it on a confidential basis by its customers. The company conducts its sales and marketing activities primarily through a staff of full-time sales personnel and customer service representatives who work closely with the company's management and technical personnel. The company supports non-U.S. customers through both its domestic and foreign facilities and considers its presence in non-U.S. markets to be an important factor in attracting new customers, as it provides global solutions to its customers, minimizes delivery time, and allows the company to serve customers that utilize manufacturing foundries outside of the United States, principally in Asia. Markets Photomasks are manufactured by independent merchant manufacturers like the company and by semiconductor and FPD manufacturers that produce photomasks for their own use (captive manufacturers). The company supports customers across the full spectrum of IC (integrated circuit, or semiconductor) production and FPD technologies by manufacturing photomasks using electron beam or optical (laser-based) lithography systems. End markets served with IC photomasks include devices used for microprocessors, memory, telecommunications, the Internet of Things, crypto mining, and other applications. The company owns a number of both high-end and mature electron beam and laser-based lithography systems. The company sells its products primarily to leading semiconductor and FPD designers and manufacturers. These include integrated device manufacturers, fabless semiconductor companies, and 'pure-play' foundries. During 2023, the company sold its products to approximately 696 customers. Revenue from United Microelectronics Corp. Co., Ltd. accounted for approximately 14% of the company's total revenues in 2023. Revenue from Samsung Electronics Co., Ltd. accounted for approximately 10% of the company's total revenues in 2023. In addition, revenue from Semiconductor Manufacturing International Corporation accounted for approximately 13% of the company's total revenues in 2023. Revenues from the company's non-U.S. operations were approximately 86% of its total revenues in 2023. The company's five largest customers, in the aggregate, accounted for approximately 51% of its revenue in 2023. Competition The company's competitors include Compugraphics International, Ltd.; Dai Nippon Printing Co., Ltd (outside of Taiwan and China); Hoya Corporation; LG Innotek Co., Ltd.; Shenzhen Newway Photomask Making Co., Ltd.; Shenzhen Qingyi Photomask, Ltd.; SK-Electronics Co., Ltd.; Taiwan Mask Corporation; and Toppan Electronics Products Co., Ltd. Seasonality The company's business is typically impacted during the first quarter of its fiscal year (year ended October 2023) by the North American, European, and Asian holiday periods, as some customers reduce their development and buying activities during those periods. Research and Development For the year ended October 31, 2023, the company's research and development expenses were $13.7 million. Government Regulation The following is a list of major subjects of the regulations that pertain to the company's business: Regulations, such as those under the Foreign Corrupt practices Act that prohibit providing remuneration to government officials for the purpose of obtaining or securing business in the jurisdictions in which they serve; and Regulations pertaining to financial reporting, insider transactions, executive compensation, and other areas overseen by the Securities and Exchange Commission and governing bodies in other countries in which the company's operations are located. History The company, a Connecticut corporation, was founded in 1969. It was incorporated in 1969. The company was formerly known as Photronic Labs, Inc. and changed its name to Photronics, Inc. in 1990.