管理層發言
Greetings. Welcome to Kulicke & Soffa Third Quarter 2026 Conference Call Results. Please note, this conference is being recorded. I will now turn the conference over to Joe Elgindy, Senior Director, Investor Relations. Thank you. You may begin.
Thank you. Welcome, everyone, to Kulicke & Soffa's Fiscal Third Quarter 2026 Conference Call. Lester Wong, Interim Chief Executive Officer and Chief Financial Officer, also joins me on today's call. Non-GAAP financial measures referenced today should be considered in addition to, not as a substitute for or in isolation from our GAAP financial information. GAAP to non-GAAP reconciliation tables are included within our latest earnings release and earnings presentation. Both are available at investor.kns.com, along with prepared remarks for today's call. In addition to historical statements, today's discussion contains forward-looking statements regarding our future performance and outlook. These statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that may cause actual results to differ materially. For a complete discussion of the risks associated with Kulicke & Soffa that could affect our future results and financial condition, please refer to our latest Form 10-K and upcoming SEC filings for additional information. With that said, I would now like to turn the call over to Lester Wong for the business, market and financial overview. Please go ahead, Lester.
Thank you, Joe. Good morning, everyone. Demand continues to improve at a faster pace than previously expected, and our operational teams are aggressively ramping production to support customer capacity and technology requirements. Our capacity expansion plan here in Singapore also remains on track. This new production space will support the growth of our Advanced Solutions segment over the coming years. We were able to support our customers' near-term needs by ramping our flexible production capacity and driving a 36% sequential revenue increase during the fiscal third quarter. Overall market strength continued to be led by general semiconductor and memory applications, although we are pleased to note that utilization rates have improved sequentially in all regions and in all end markets. Growth in artificial intelligence applications remains the driving factor behind data center expansion. This growing data center opportunity, in turn, drives meaningful increases in demand for both our thermal compression and wire bonding solutions. It is increasingly evident that most performance-oriented logic and memory applications will continue to adopt more complex heterogeneous integration approaches. Adoption of more complex assembly approaches directly benefits our current thermal compression business and steers our investments in R&D and production capacity. While emerging AI applications are a clear catalyst to accelerate high-volume growth of new advanced packaging and heterogeneous assembly approaches, we expect we are still in the early stages of this much longer-term technology transition. We continue to anticipate this More-than-Moore driven, technology-centric transition will continue to advance semiconductor assembly and benefit K&S well beyond this current cycle. In addition to the needs of most performance-oriented applications, data center expansion also requires new and increased capacity for established assembly technologies, which support networking, communications, power management and storage requirements. We estimate that the data center market relies on wire bonding technology at least as much as, if not more than, traditional semiconductor markets such as smartphones and PCs. As the leader in wire bonding technology, we are primed to support this growth. In addition to our involvement to support data center-related technology and capacity needs, we are also encouraged to see positive momentum continuing within the automotive and industrial markets, which has recently increased demand for our wedge products as well. During the June quarter, company revenue increased by 36.2% sequentially through focused global coordination and operational execution. While we are not immune from global supply chain constraints and macroeconomic conditions, we again exceeded expectations as we ramped production aggressively this quarter. Revenue recognized for our Advanced Solutions segment, which includes our leading Fluxless Thermo-Compression solutions, exceeded last quarter's record revenue by 20%. In addition to supporting customers' emerging production requirements, our advanced solutions teams remain focused on driving innovation in both panel level and hybrid bonding platforms with a heightened emphasis on increasing our production capacity for our advanced solution offerings. We are maintaining our target of over $100 million in Advanced Solutions segment revenue for fiscal 2026 and continue to prepare for significant sequential growth in fiscal 2027. This growth is supported by performance and process readiness of our flexible, highly capable thermal compression platform provided to customers. We remain closely engaged with a broad base of IDM, OSAT and foundry customers as heterogeneous packaging approaches become mainstream. While AI applications are accelerating the transition to more complex assembly today, we're still in the relatively early stages of this advanced packaging transition. Today, emerging packaging solutions such as FTC, vertical wire, direct copper-to-copper, hybrid and panel-based architectures will be critically necessary for a much wider array of semiconductor production over the coming years. Through our technical leadership, ongoing investment in R&D and manufacturing expansion plan, we continue to build a strong foundation that directly supports these new advanced packaging approaches. Our capital expansion initiative here in Singapore is progressing well and remains on track. This new production space will allow us to support the growing capacity and technology needs of customers over the long term. We continue to target completion by the first fiscal half of 2027. Our post-engagement, technology leadership and growing production footprint all enable us to contribute to a higher level of process value across served markets. Our wire bonding teams in both ball and wedge are also aggressively scaling production to meet strong customer demand and continue to develop and release new packaging solutions to a wide base of memory and power semiconductor customers. Turning to the end market review. General semiconductor revenue increased by 52.6% sequentially to $227.2 million, driven by higher capacity and technology requirements for both ball bonding and Advanced Solutions segments. While AI and data center has been the major driver, we are now also seeing broader-based recovery in traditional markets as well. Memory shipment increased by 8.8% sequentially to $34 million after strong sequential growth in the second fiscal quarter. Our memory business is currently focused on delivering NAND technology and capacity requirements. Based on our market understanding, data center is now currently the largest end application across global NAND production. Beyond NAND, our vertical wire team continues to work closely with memory customers as they develop new forms of stacked DRAM applications. Automotive and industrial demand improved by 9% sequentially to $24.2 million after strong improvement last quarter. We continue to see robust demand for high I/O and high-volume power and mixed-signal packaging, which tends to track with general semiconductor. Additionally, during our fiscal third quarter, demand for our high-current wedge solutions also increased. As many of you know, our wedge bonding suite is a critical part of our automotive and industrial offering. This market has faced industry-level headwinds for the past several years. Over this time, we continue to expand our portfolio and look forward to continued recovery. We are pleased to see this sequential improvement and remain well positioned to benefit from long-term share growth in battery and plug-in hybrids, which require new power semiconductor technology and capacity requirements over the long term. Aftermarket products and services also increased sequentially due to the higher level of production across our installed base. It remains an interesting and exciting time at the company and for our industry. We recently celebrated K&S's 75th anniversary and are proud of our legacy as a global leader and pioneer in semiconductor interconnect solutions. For three quarters of a century, our success has been grounded in the trust and strong partnership we have developed with customers, suppliers and business partners around the world. Looking ahead, we remain confident in our ability to extend our platform through ongoing investments in innovation to support the next generation of advanced packaging solutions. With that said, I will now provide a brief financial update. My remarks today will refer to GAAP results unless noted. We again delivered revenue above guidance and continue to execute an aggressive production ramp across served markets. During the June quarter, overall revenue increased by 123% over the same period last year. Close coordination by our business segments, R&D and supply chain teams remain essential to support our customers' immediate needs and also their future production requirements. Gross margins came in at 47.8% during the third fiscal quarter, and we delivered $1.07 of GAAP earnings and $1.20 of non-GAAP earnings. Total operating expenses came in at $89.7 million on a GAAP basis and $82.6 million on a non-GAAP basis. As explained last quarter, this sequential increase was anticipated and largely related to the increase in variable incentive compensation accruals throughout our second fiscal half. This variable expense was the primary driver, although we have also increased some fixed resources that support our growing base of opportunities. Tax expense came in at $15.3 million, and we anticipate our effective tax rate will remain slightly above 20% over the near term. For the September quarter, revenue is expected to increase by 13.5% sequentially to $375 million with gross margins of 48%. Non-GAAP operating expenses will temporarily increase to approximately $87.5 million. This sequential increase is temporary for the September quarter and is largely associated with the performance-oriented nature and quarterly accrual of our variable incentive compensation plan. We expect GAAP earnings per share to be $1.29 and non-GAAP earnings per share to be $1.42 for the fourth fiscal quarter. At this point, we remain opportunistic on both near-term and longer-term opportunities, and we continue to anticipate above-average demand will continue in fiscal 2027. This concludes our prepared comments. Operator, please open the call for questions.
分析師問答
Our first question is from Krish Sankar with TD Cowen.
Congrats on the really strong results and guidance. Lester, I had three quick questions. I'm just trying to understand, given the strong growth in September, are you seeing it across the board, like mid-teens growth for semiconductor, memory and automotive/industrial? Or is one better than the other?
Well, Krish, I think as we said, general semiconductor and memory are leading the way. I think automotive and industrial has improved. As you know, they faced quite a lot of headwinds over the last couple of quarters, but they're picking up a little bit. Still, it's generally general semiconductor and memory that's driving the ramp.
Got it. And then I think you also mentioned in the slide that the strength is expected to last into the fiscal first half. I'm kind of curious, as you get more data center, how should we think about the December and March quarters? In other words, should we see seasonality in March? Or do you think there won't be seasonality this time?
Well, Krish, our business is always a little bit seasonal in Q1, which is our December quarter. But I think based on what we see right now, utilization rates are extremely high. In China, it's over 95%. End markets, both memory and general semiconductor, are around 90%. We are also seeing a lot of inbound purchase orders extending into Q2. Usually, that doesn't happen for us; we usually don't have POs that go out that far. Also, in conversations and visits with customers, particularly in China, we are seeing them continue to build factories. So I think based on all those factors, we feel pretty confident that the strength in the traditional business is going to continue into the first half of fiscal '27. In addition, for our Advanced Solutions business we're engaged with foundries, OSATs and IDMs. So again, we feel pretty confident we can take advantage of a lot of those opportunities, particularly in heterogeneous integration around logic for our Fluxless TCB.
Got you. Very helpful. And then a quick follow-up, Lester, just on the Advanced Solutions thermal compression bonding business. You said over $100 million this fiscal year, which is the end of this quarter. If I just take what you did last quarter and extrapolate, that kind of implies close to $120 million next year, at least 20% growth. Is that the right way to think about it? Or do you think it actually accelerates next year?
You mean what do I think TCB is going to do next year, Krish? I think actually TCB will grow significantly next year on a sequential basis. For this year, we think we're going to be at $100 million. For FY '27, for TCB, we are looking at somewhere in the region of $150 million to $200 million.
Our next question is from Charles Shi with Needham & Company.
Congrats on the nice results. I think one thing you said in the prepared remarks sounded very interesting. You said the data center relies on wire bonding as much as phones and PCs. This is something we may have discussed in the past, but can you elaborate a little bit which kinds of wire bonding packaging you are seeing the most in data center applications? One thing in particular I want to ask is we would think there's a bit more of power devices there that could drive wedge bonding, but wedge bonding looks like it's still more reliant on the traditional industry. You're seeing some sequential improvement, but a lot of what you consider data center demand seems to be driving ball bonding. So it's a little bit of an interesting comment and I wonder if you can provide more color.
Sure, Charles. So wire bonding in data center, in fact, is a majority of chips in the data center that are traditionally packaged using wire bonding. These are for applications like general infrastructure, networking, communication, power and storage. Storage is basically memory. As I said in the remarks, we're focused on NAND for now and 40% of the NAND market now goes towards data centers. So, obviously, we have exposure there as well. As far as wedge bonding in data center, you're correct: wedge bonding is still a little bit more focused on automotive; it's for high current. For power management in data centers, it's more ball bonding that is driving demand.
Got it. I think you mentioned NAND and mentioned POs are actually starting to fill up the second fiscal quarter and the first half of next fiscal year. I know it's hard to project out for the entire year next year because you don't really have the POs, but you must have customer conversations that provide at least some high-level forecast. Can you help us understand where you think next year's growth could potentially be? Specifically, people like to compare how high revenue could be next year versus prior cycles, for example 2021 and 2022 when you hit about $1.5 billion per year. Are you still thinking you're not going back to that level or might you actually return to or exceed that level?
Well, Charles, as you said, you've followed the industry for a long time. For us, visibility is usually not even as far out as what we have in the first half of fiscal '27. It's very volatile. So I think it's difficult for me to say what FY '27 would look like as a whole. But based on utilization rate, based on POs, based on customer conversations, we think the first half of '27 will be very strong. As far as whether we return to the '21-'22 levels, those were extreme levels during the global pandemic when growth was unusually high as people worked and played from home. That's a very high bar. We are pretty confident the first half of '27 will look good. In our November call, we'll probably give more color on what the second half looks like.
Our next question is from Dave Duley with Steelhead Securities. It’s difficult to say what the year will look like as a whole, but based on utilization rates, purchase orders, and conversations with customers, we think the first half of ’27 will be very strong. Returning to the 2021–2022 levels would be unlikely; those were extreme peaks during the global pandemic when growth was unusually high as people worked and played from home. That’s a very high bar. We are pretty confident the first half of ’27 will look good. In our November call, we’ll probably give more color on what the second half looks like.
Lester, I was just wondering if you could help us understand what your current total capacity is for the wire and wedge bonder business. You're running at pretty high run rates here with your guidance at $375 million a quarter. Perhaps just help us understand what your total capacity is and how much you're increasing the core business capacity at this time?
Thanks, Dave. We have significantly increased capacity for the traditional wire bonding business. From about two quarters ago, we have now increased capacity fourfold. We have a very flexible manufacturing model; we've been doing this for a long time. As I said in my remarks, this is our 75th anniversary. Our supply chain teams, operations team, logistics and engineering teams work very closely together to meet customers' near-term needs as well as midterm demands. We're very focused on not losing market share because of capacity issues, so we're pretty comfortable where we are.
Would you be able to support a $450 million quarterly run rate at this point?
Well, Dave, I don't see a $450 million run rate at this point. We don't guide beyond the quarter. But we have supported $400 million quarters before. If we need to, given our dynamic, flexible manufacturing model, and if demand requires it, we'll ramp more to make sure we take care of our customers.
Okay. And then a different topic. Could you talk a little more about your investments outside of thermal compression bonding in the advanced packaging area? I think you've mentioned hybrid bonding in the past and also panel level. Perhaps talk about what your opportunities are in those two areas.
Yes. We're seeing a lot of interest in panel from customers, both IDMs as well as foundries and OSATs; we are actively engaged with multiple customers on panel. Panel is the future given the geometry—you can place a lot more die in a rectangle than in a circle—so there is a lot of interest. We are investing significantly in our panel project. As far as hybrid bonding, we have been pretty active and accelerated the program over the last year. We think our hybrid bonder has some unique features that are not currently in the market. We are planning to deliver a hybrid bonding tool to a customer in the first half of fiscal '27.
And as far as the panel opportunity, remind us what you're going to do? Are you going to pick and place die and put them on the interposer? Or what exactly will be the application you're focused on there?
Right now, we're talking to customers and focusing on multiple applications at the panel level. As we develop the program, we'll provide more color in future calls.
There are no further questions at this time. I would like to turn the conference back over to Joe for closing remarks.
Thank you, Sherry, and thank you all for joining today's call. As always, please feel free to follow up directly with any additional questions. This concludes today's call. Have a great day, everyone.