KULICKE & SOFFA INDUSTRIES INC Q4 FY2024 earnings call

• Fusen Chen discussed the anticipation of return to capacity growth in core Ball, Wedge, and APS segments in fiscal 2025, with recent wins in FTC and TCB technologies. • Lester Wong mentioned revenue of $181.3 million in Q4, net income tax benefit of $2 million, approval for fifth-consecutive dividend raise, authorization of new share repurchase program, and repurchased 10.3 million shares over prior three fiscal years. • Announced customer reimbursement for a significant portion of Project W impairment charges booked in Q2.

In the fourth quarter, revenue was $181.3 million. For the December quarter, revenue is expected to be approximately $165 million, plus or minus $10 million, with gross margins of 47%. General Semiconductor saw sequential growth in the September quarter, with excluding TCB, general semiconductor increasing by 11% sequentially. Automotive/Industrial demand is improving after a challenging year, with the company participating in emerging transitions driven by electric vehicles and sustainability trends. LED remained soft in Ball Bonding. Memory market shows strength with capacity additions and technology change, including vertical wire application in next-generation DRAM and NAND packages.

• For the December quarter, revenue is expected to be approximately $165 million, plus or minus $10 million, with gross margins of 47%. • Non-GAAP operating expenses anticipated to be $70.5 million, plus or minus 2%. • GAAP EPS expected to be $1.45 per share and non-GAAP EPS $0.28 per share, including customer reimbursements related to Project W cancellation. • Continues to focus on driving market adoption of solutions and enhancing long-term EPS growth via repurchase strategy.

Q: In terms of general semiconductor end-market, utilization rates at OSAT customers; did reach high 70% range in September quarter and thoughts on 80% utilization as trigger for capacity addition?

A: Lester Wong said utilization rate differs by region, e.g., China over 80%, rest mid-70s, and 80% is threshold for capacity addition.

Q: Regarding Foundry customer win for TCB-APTURATM tool, is it at major timeline foundry and opportunity for sales next year?

A: Fusen Chen said recent win is for near-term production, expects upside next year and onward but will provide more update early next year.

Q: For FTC win, sole supplier or sharing with peer?

A: Fusen Chen said confident in capability and opportunity for next couple of years but didn't comment on sharing with peers.

Q: On general semi business, recovery in fiscal '24 and projections for fiscal '25?

A: Fusen Chen said general semiconductor revenue growth in '25 driven by AI, automotive, IoT, AI-edge devices, and Ball Bonder expected to recover with China capacity addition.

Q: Recovery from Project W in first fiscal quarter, comparison to total charge-off?

A: Lester Wong said reached agreement for customer to reimburse significant part of impairment charges, $105 million charge in Q2, reimbursement recognized in Q1 and in guidance.

Q: Initial read on TCB foundry application, chip-on-wafer or wafer on substrate?

A: Fusen Chen said application is chip-to-wafer level for fluxless qualification, with numerous opportunities.

Q: TCB for mobile or high-performance compute AI applications?

A: Fusen Chen said most advanced TCB process for very high-end products, likely for high-performance compute AI applications.

Q: Signs Q1 might be depressed unusually and Q2 stronger?

A: Fusen Chen said Q1 is typically weakest quarter, seasonally down 10% past three years, Q2 expected better due to customer schedules.

Q: Auto and industrial pickup linearity into next year?

A: Fusen Chen said Wedge Bonder recovering, but linearity not easy, but Wedge Bonder expected to do well in 2025.

Q: TCB order production status and technical reasons for transition to TCB, large die angle?

A: Fusen Chen said current order is for production, fluxless technology uses chemical clean forming essence, and capable of handling large die.

Q: High bandwidth memory TCB progress?

A: Fusen Chen said focus on memory with vertical wire for low-power DDR, preliminary low volume production end of 2025, and HBM as priority in FY '25 with more updates in next quarters.