Kulicke & Soffa Industries (KLIC) 7 Aug 24 2024 Q3 Earnings call transcript

Kulicke and Soffa's 2024 third quarter earnings call, led by Director of Investor Relations Joseph Elgindy and executives Fusen Chen and Lester Wong, offered a comprehensive update on the company's performance and strategic outlook. The discussion focused on advanced packaging initiatives, market trends, and revenue recovery, providing valuable insights into Kulicke and Soffa's position in the semiconductor industry.

Advanced Packaging and Industry Trends

Fusen Chen, President and CEO, highlighted the company's significant progress in advanced packaging, particularly in thermocompression bonding (TCB), which has experienced a 10x growth over the past four years. The formation of the U.S.-Joint semiconductor consortium and successful demonstration of the fluxless thermocompression (FTC) system are key milestones that underscore Kulicke and Soffa's innovative capabilities and strategic alignment with industry trends.

Chen also emphasized the company's focus on hybrid bonding and chip-to-wafer applications, positioning Kulicke and Soffa as a leader in the growing market for chiplet-based architectures. The company's TCB-enabled hybrid bonding process, which offers lower capital-intensive path to chiplet assembly, is expected to further expand its long-term chiplet and heterogeneous opportunities.

Financial Performance and Market Outlook

Lester Wong, CFO, reported a revenue of $181.7 million for the third quarter, with a 46.6% gross margin. Despite headwinds in certain end markets, such as automotive and industrial, there are signs of improvement, particularly in general semiconductor and memory markets. Wong also highlighted the company's operational focus, which has led to slightly higher non-GAAP EPS than anticipated.

Looking ahead, Kulicke and Soffa anticipates a revenue of approximately $180 million for the September quarter, with a gross margin of 47%. The company remains optimistic about the broader multi-market recovery and the potential for a more robust 2025 recovery.

Key Investor and Analyst Interactions

During the Q&A session, key analysts raised questions about the company's revenue outlook, advanced packaging strategies, and market dynamics. Fusen Chen's responses provided insights into Kulicke and Soffa's growth prospects, particularly in advanced packaging and memory markets.

Conclusion

Kulicke and Soffa's third quarter earnings call painted a positive picture of the company's strategic positioning and financial performance. The focus on advanced packaging, particularly TCB and hybrid bonding, underscores Kulicke and Soffa's commitment to innovation and market leadership. With a solid financial foundation and a clear roadmap for growth, Kulicke and Soffa is well-positioned to navigate the evolving semiconductor landscape and capitalize on emerging opportunities in advanced packaging and memory markets.