Yahoo Finance Kulicke & Soffa Industries Inc (KLIC) Q2 2024 Earnings Call Transcript Highlights: ...
Revenue: $172.1 million for the March quarter.
Gross Margin: 9.6%, affected by unique charges; would have been similar to prior quarter without these charges.
Net Income: Impacted by pre-tax charges of $105.5 million due to Project W cancellation.
Earnings Per Share (EPS): GAAP EPS of $0.17 and non-GAAP EPS of $0.30 expected for the June quarter.
Free Cash Flow: Not explicitly mentioned.
Market Capitalization: Not discussed in the call.
Same-Store Sales: Not applicable.
Store Locations: Not applicable.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Kulicke & Soffa Industries Inc (NASDAQ:KLIC) is expanding its market position and driving new customer qualifications in key areas such as Thermocompression, VFO, and Advanced Dispense.
The company has received a significant purchase order for 1,000 RAPID Pro systems, indicating strong demand and customer confidence.
Revenue from Ball Bonder has increased by over 50% since the second fiscal quarter of 2023, showing robust growth in this segment.
Kulicke & Soffa Industries Inc (NASDAQ:KLIC) is actively engaging in new technology areas, expecting to expand its memory market access and customer base in the coming years.
The company anticipates a gradual market recovery through fiscal 2024 with greater technology and capacity opportunities expected in fiscal 2025.
Negative Points
Project W was canceled by the end customer, leading to an impairment charge that affected both GAAP and non-GAAP earnings.
The automotive and industrial markets continue to face near-term headwinds, impacting overall performance.
Memory revenue has sequentially reduced from a previous strong quarter, largely due to customer mix change.
There are ongoing industry challenges combined with macro factors that could potentially impact future projects and customer decisions.
The cancellation of Project W has led to restructuring and resource reallocation, which are necessary but could disrupt operations temporarily.
Q & A Highlights
Q: First one on your general semi core wire bonder business. It looks like that's kind of bouncing off the bottom. Fusen, do you think that, is this a cyclical recovery for the wire bonder business, i.e., utilization rates are going up for OSATs and you're beginning to see through and demand pull through? Or is this more bouncing off the bottom until visibility gets better? A: Fusen Ernie Chen - Kulicke and Soffa Industries, Inc. - President, CEO & Director: Well, Krish, I believe, in general, the recovery was not strong enough as expanded last quarter. Automotive, core semi and LED was the center of (inaudible) when we have general semiconductor recovery, right? But even with this, actually, second quarter are mitigated by stronger Ball Bonder improvement. In fact, Ball Bonder, has an increase in revenue by 55% in Q2 of '24 versus '23. So going to Q3, even general semi continued to go up, but the LED and the core semi and auto also increase -- incrementally also a bit weaker.
Q: Can you give us an update on your TCB qualification of the Taiwan foundry? I thought that you -- the call is expected to be done around this time where the end customer is going from hybrid warning to TCB. Can you give us an update there? A: Fusen Ernie Chen - Kulicke and Soffa Industries, Inc. - President, CEO & Director: Okay. Krish, let me first to tell you. I think the hybrid bonding and the TCB actually (inaudible) exists in this market. So (inaudible) -- Okay, I can tell you this, the foundry is one of several priority engagement for us at this moment. And we have actually engagement and qualification for multiple application with our new Fluxless technology layer, right? So it's not only a single project. As I mentioned, we are currently the first and only Fluxless technology provider in the mass production for the whole industry.
Q: I also have a follow-up on Thermocompression bonding. I guess one of your competitors had a conference call a few days ago talking about how they thought that all the memory guys are going to pursue kind of a dual strategy with both Thermocompression bonding and hybrid bonding. And I think they implied the Thermocompression bonding would be the kind of technology of choice for HBM3 and HBM4. I'm just wondering where we are at as far as working with the memory guys with Thermocompression bonding? And do you see TCB as the near-term solution for stacking these memory die? Or will they continue to use the current technology? A: Fusen Ernie Chen - Kulicke and Soffa Industries, Inc. - President, CEO & Director: Okay. So we actually believe TCB right now is a production tool and next generation will still be TCB. One of the reasons I think is capability. The other reason is really the cost. We are engaging a next generation of HBM. And our working together system probably potentially will be issued by end of this year, fiscal -- calendar year.
Q: On behalf of Charles Shi. So my question is, can you describe the significance of the 1,000 system order from this fast-growing assembly and test customer? What kind of ASP uplift should we be thinking about relative to your more standard Ball Bonder systems? A: Lester A. Wong - Kulicke and Soffa Industries, Inc. - Executive VP of Finance & IT and CFO: Well, Ross, I guess this is one of more advanced Ball Bonder system. It's a China-based customer. Again, it's about 1,000 machine order and again serve mostly the general semi applications, consumer, smartphones, PC. Again, this is some of our most leading technology. And again, the customer not only bought a significant amount of new bonders, they also upgraded their existing bonders with our new ProSuite, which is our advanced bonding looping software.
Q: What was the backlog like exiting the March quarter? Can you provide some directional color if you don't want to quantify it? A: Lester A. Wong - Kulicke and Soffa Industries, Inc. - Executive VP of Finance & IT and CFO: Sure. So I think the book-to-bill for the quarter was approximately about 1, which has -- pretty much the normalized level other than when you're in a ramp or in a trough cycle. So we have seen bookings improved, backlog has come down, as we said, as we burn down some of the orders that was -- that we received during the ramp. So I think it's much more at a normalized level now, similar to our lead times, which is about 8 to 12 weeks of Ball Bonder and about 12 to 16 for Wedge bonder.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
