Q3 2022 Kulicke and Soffa Industries Inc Earnings Call
[music].
Greetings and welcome to the Q looking south of 2022 third fiscal quarter results call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder.
This conference is being recorded.
My pleasure to introduce your host Joseph <unk> Senior Vice President Senior Director Investor Relations for T. Looking sulfur Joseph you may begin thank.
Thank you and welcome everyone to cool can solve this fiscal third quarter 2022 conference call Susan.
Susan Chen President and Chief Executive Officer, and Lester Wong Chief Financial Officer are both also joining on today's call.
For those of you who have not received a copy of todays results the release as well as our supplemental earnings presentation are both available in the Investor Relations section of our website at Investor Doc and I stuck out.
In addition to historical statements today's remarks will contain statements relating to future events and our future results. These statements are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, our actual results and financial condition may differ materially from what is indicated in those forward looking statements for a complete discussion of the risks.
David was killed itself that could affect our future results and financial condition. Please refer to our recent SEC filings specifically the 10-K for the year ended October 2nd 2021, and the 8-K filed yesterday.
With that said I would now like to turn the call over to Susan Chen for the business overview. Please go ahead Susan.
Thank you Joel.
I would like to provide an update on the progress and the status of our key growth initiatives.
That's the best packaging that's.
That's the best display electronic assembly and the automotive.
These initiatives are progressing well and the upside potential to our long term financial targets.
Before discussing these gross specific opportunities I wanted to step back and discuss the broader medical and the industrial environment.
As we have discussed last quarter as the industry continues to be constrained by supply chain challenges.
These are long wafer capacity, which suffered.
Great All semiconductor assembly expansion.
In addition to this no industrial challenge, which we have expressed.
He gets cold.
We also face an increasingly dynamic macro environment.
Original Covid Lockdowns and the logistical challenge are continuing it Robert.
Well, I think inflation consumer confidence trends and the wafer fabrication equipment forecast.
No also impacting our near term outlook.
Hello, not unique to candace consumption of consumers.
Such as smartphone P C.
And the general electronics.
Michigan law impacting semiconductor growth rate in the near term.
Why don't we do not yet have clear visibility into fiscal 'twenty or 'twenty one.
We intend on providing additional detail.
Our longer term outlook Julien all upcoming November earnings call.
Okay.
During today's call. They still will provide additional commentary that highlights our cash flow and the profitability improvement over the past few years and the expectation over the coming quarters.
At this point I would like to provide an update to our strategic execution and the progress supporting the broader trend in advanced packaging.
Advanced display.
Assembly and automotive.
At the high table, all global research development fulfillment and the business team continued to be very engaged supporting several exciting opportunity with top customers.
We have the best several in every system and our growing base of customer engagement. So that's a testament to our call.
Competitiveness, which can provide upside to our long term financial expectations.
We didn't advance packaging.
<unk> solutions are currently as long as 35% of that high up for FY 'twenty to the expectations you named all the Investor day.
Specifically, our somewhat competition, it's just a very unique and the future leach relative to alternatives.
I'm pleased to announce we have secure purchase order totaling approximately $18 million.
If you have already paid over the coming 18 buses.
And it is important to note that our lead in similar competition solutions are being adopted by a process of customers, including integrated device manufacturers.
Oh, yes.
And also Oems.
As explained in detail with us.
Okay.
Attunity gold next generation heterogeneous applications.
Similar competition is also being adopted in key market such as the mobile sensing.
Mobile application processor and the Silicon photonics.
We remain very focused and are continuing to aggressively textures and that your increased presence we didn't just growing opportunity set.
Additionally, a material portion.
High volume Assembly solution are also benefiting from broad adoption of multi chip module and the system in package applications.
The application is once you pull back greater transistor density and the package Diebold, Inc.
Increasing that kept the intensity of assembly.
I'll give you the impact in the long term growth rate of the whole wage and the Aps businesses.
As a reminder, more than the which bonding continue to represent nearly 80% of total semiconductor packages.
And to offer a competing production benefit that's supported by the increasing value of.
Assembly process.
We have a career dealership Parisian iqos this sizable growing market, especially within the most complex applications.
Ultimately this growing and kept the U S to U.
Is it a new era of technology, driven growth and also increase the need for new product feature and capability, which will continue to enhance profitability.
Oh progress studies and the ability to enhance gross margin highlight all value contribution we didn't you Bobby in semiconductor market.
Next I wanted to also provide an update to our growing opportunities within the emerging advanced display market.
It's probably 17, we have the backing every innovation, which extended the power efficiency.
In the midst hedging costs also in these key emerging display technologies.
But the rest is spread is a meaningful high growth market opportunity.
Well, we continue to be very engaged with several key customers.
They continue to pursue a multi pronged approach supporting new application, we didn't like lighting, but also within that that review and Michael.
Opportunity.
We continue to expand at the best display installed base.
Pursue multiple rooms next to engage them is why I'm, making ongoing progress across several customer initiatives.
Yes.
We have already demonstrated a clear leadership in the first mobile policing and advanced displays.
I engage with approximately 10 high potential customers and therefore to outperforming our long term target.
Ongoing customer engagement.
Vacation and I suppose you met all key priority area over the next couple of months.
In addition June intimate involvement in this long kind of a technology transition, which expand our semiconductor and display opportunity.
We are also extending our Christmas in both electronics Assembly and the automotive market.
Turning to electronic Assembly.
So I'll just total addressable market opportunity all competitive solution currently support high reliability automotive system in package and the memory application well Hello.
Only a small portion of our total addressable market.
Yes.
Skinny African prospective market opportunity, which we have.
We have been pursuing through development of a disruptive S. M P system.
Which is expected to ramp towards the end of our fiscal 'twenty. It honestly and the Wolf a survey share again over the coming years.
Finally, we.
We continue to expand our solutions supporting the electric.
Lots of vehicle transition.
Our growing base of OEM customers.
Kenneth it's a lowest types of pollution, we didnt several automotive market and we remain very involved in this exciting long term market evolution.
So all told transition driving electric and autonomous adoption of demanding more power control power distribution and the power storage application, which directly benefits our competitive wage electronic assembly and the battery Assembly solution.
Thank you Jim for the business as a result.
Which is a record revenue of $372.1 million, and then I'll get a share of $2 and a nice things.
Ancillary equipment remains flat at 87% of total revenue.
Yeah.
We experienced strong demand across end market Union the June quarters.
The increase roughly 10% sequentially due to stress in that which applications.
Also demand strengthened sequentially well I'll, let David give you the best.
So including similar temperature wafer.
Wafer level bumped it you saw coffee system.
Similar to last quarter over 80% of it or what you see is supporting our growing at the best opportunity.
And at this point, we are confident the body weight in all four years expectation at the bus display contribution and go forward to growing this business.
Over the coming yes.
Auto and industrial remain very strong across all product lines and scratch restrained center, we didn't all growing power semiconductor applications.
As mentioned earlier, we remain very focused and our policing weird to support the long term growth opportunity.
Multi market.
Finally memory is strong for our core NIM based solution, which we support across all major memory customers.
We are also very focused on delivering new assembly solution over the coming years.
Yeah, sorry.
I'll focus on new growth initiatives and the customer engagement remains on track and provide upside to our long term financial target.
Efforts to expand our self market, what everybody participating in the fundamental technology change.
Hi, I, Oregon.
Okay.
Okay.
As stated earlier.
Additional medical and the industrial release, we did not previously.
Obviously anticipate and expect to provide greater detail I'll I'll look over the coming quarters.
Our ability to associates in development and the customer engagement near term what it has all been into physical 2000, Twenty's fleet, while providing upside potential.
Do you see the long term financial target.
We look forward to demonstrating progress over the coming with us.
With that said I will now turn the call over to Lester will discuss <unk> financial performance.
Thank you Sue said my remarks today will refer to GAAP results unless noted as Suzanne mentioned, we continue to remain very focused on mid and long term growth prospects by executing on our internal development goals, maintaining a pace of customer development engagement, while actively returning value directly to shareholders.
Through our growing dividend and aggressively purchase programs.
It's also very important to remind callers today that all financial performance has already improved dramatically due to several technology changes, which should reduce our reliance on annual capacity expansion.
In parallel we have continued to strategically expand our served market.
During the June quarter, we generated revenues of $372 $1 billion and very strong gross margins of 51.2% up by over 500 basis points year on year.
Strong gross margin performance highlights, our consistent operational efficiency and improving product mix and also highlights an incremental value add to the industry.
non-GAAP operating expenses during the quarter came in better than expectations due to a $4 $5 million foreign exchange gain.
Tax expense for the quarter came in at $5 $2 million significantly better than expectations.
This favorable benefit was driven by a partial release of a valuation allowance previously recorded against a net deferred tax asset.
This favorable benefit is directly related to the success and outlook of our advanced display solutions.
non-GAAP net income for the June quarter was $125 1 million, representing a very strong non-GAAP net margin of 33, 6% and non-GAAP EPS of $2.09.
Turning to the balance sheet days of accounts receivable decreased slightly from 86 to 85 days days of inventory increased 104 to 107 days and days of accounts payable remained flat at 49 days.
Over the past four quarters, we have generated $380 million of free cash flow highlighting our longer term potential.
During the June quarter alone, we generated free cash flow of $99 $7 million and closed the quarter with a net cash balance of $471 $7 million.
During the recent March quarter, we announced the accelerated repurchase program and deployed $146 $2 million in repurchases.
During the June quarter, we complete the accelerated repurchase program and we initiated our open market program, we deploy a total of $61 $1 million to both programs in the June quarter.
At the end of the June quarter, we had just over $300 million remaining under our repurchase authorization and continue to manage an active price dependent open market approach.
This remaining repurchase authorization combined with our growing dividend yield provide consistency and value creation opportunities at the share level.
For the September quarter in line with Susan's comments regarding softening macro and industry environment, we anticipate revenue of approximately $280 million plus or minus $20 million.
Gross margins I expect to reduce the 47% plus or minus 50 basis points due to additional expediting fees near term facility resizing effects and also higher than expected inflation.
non-GAAP operating expenses is anticipated to be approximately 70 million plus or minus 2% and non-GAAP EPS to be 93, plus or minus 10%.
While we do not yet have comprehensive visibility into fiscal year 'twenty 'twenty three we expect the September quarter guide should be comparable to our average quarterly run rate through fiscal 2023.
This level non-GAAP EPS of over $3.50 is achievable.
As a comparison this would represent approximately seven five times the non-GAAP G. P. S E T S generated during fiscal year 2019.
As the industry recovers and we expand our served available market beyond fiscal 'twenty 'twenty three we expect to exceed our recent fiscal 2021 and 2022 performance.
It remains a very exciting time for the company as we have significantly broadened our market access and remain intimately involved with fundamental technology changes across the semiconductor advanced display electronic assembly and automotive markets.
Our core business evolve in a very positive way over the prior two years, increasing our resilience the industry cyclicality significantly near.
Near term the entire organization remains extremely focused on executing a multifaceted growth strategy and maintaining our emerging leadership position within these high growth technology driven opportunities.
Over the near term expanding customer engagement, when he qualifications and recognizing revenue our top priorities for the team.
Our ability to execute on these priorities over the coming quarters is critical to enhancing our longer term visibility and financial outlook.
Well there are some near term challenges due to macro economic environment. We strongly believe we are well positioned to take advantage of major technology changes, which will start to pay dividends in the second half of fiscal 'twenty three and beyond.
This concludes our prepared comments operator, please open the call for questions.
Certainly it will now be conducting a question and answer session.
If you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one.
One moment, please while we poll for questions. Our first question is coming from Christian Carr from Cowen. Your line is now live.
Yeah, Hi, Thanks for taking my question I actually had a few of them first one Leslie I just wanted to.
Clarify did you say.
FY 'twenty three quarters should be similar to September quarter revenue run rate.
No I didn't say that what I said was as Susan indicated Krish you know given the volatility uncertainty into the market right. Now are we we are not in a position to clarify twenty-three will provide more details in our November call. What I did say is that yes, FY 'twenty three was at the.
Same run rate as Q4, we would generate EPS of $3 50, which shows the company is actually very powerful even at a lower revenue level much more profitable than the last down cycle.
Got it got it that's very helpful.
Couple of other questions I just wanted to check I know you guys highlighted the weakness due to macro concerns.
B semiconductor highlighted that some of the Chinese coal that's what also Lloyd.
Kind of curious have you seen any weakness in China, and what doesn't give seems with China.
Yeah.
So krish are you asking you are all set in China also slowing down yeah, and what you've seen so you is from China.
Okay. So I think Oh, I think it was a win on that.
Banco electric Victor impacting our consumer.
The man.
And like Costar show Puerile overcapacity that attrition for some of our customers and of course, Oh said is a big part of that.
On top of that I think are the China, Italy also slowing so these are two area.
We are seeing a slowing down and maybe lots of area is are we still she's buddy.
Supply chain challenge that caused a bottleneck for all customer I.
Ive.
Ah the weakness I think in this area and the capacity digestion period of time for US. We are seeing you know maybe about two quarters.
The young that.
We are quite optimistic about the strengths coming back a second half of 'twenty three.
In the meantime, we also anticipate with generally strong cash flow.
Even together with the lease up.
Very shapiro of our southern peers.
Got it thanks, Chris did you ask what they end up.
Percentage of our revenue in China was yeah yeah.
It's 52% same as previous quarter.
Got it and then just two quick housekeeping questions Lester.
You guys didn't mention a backlog can you just tell us what the backlog is and what is the lead time for wild bond is today.
Well, Chris I actually you know, we we actually don't think backlog is that it's a very good indicator for our investors in terms of debt looking forward in terms of different forward, particularly now that we give long term guidance. The reason is that backlog can be a little bit confusing because different people use different definition of backlog.
For example, a lot of people use backlog.
In terms of just the P. O. They have our definition of backlog is actually the appeals we have with a specific determined delivery date. We also have P. O as all of us that do not have a specific delivery day, which we don't put into backlog. So we don't think backlog is actually a very good metric a fast and in any event.
For the backlog the backlog has been pretty consistent in terms of the variation over the last four quarters or so each quarter quarter on quarter has probably reduced about 10%. So again, we don't think backlog is a is.
It's a great indicator and that's why we didn't include any more I think are also the final point is that a lot as you know crash a lot of our U S listed peers don't use provide backlog information all that they only do it at their annual report on the K level Dan.
To your question lead times now is a little bit over three months.
Got it thank you very much and thank you.
Thank you.
The next question is coming from Craig Ellis from B Riley Securities. Your line is not a lot.
Yeah. Thanks for taking the question and in Houston I really appreciate the deep dive on the market expansion initiatives to kick things off so I wanted to follow up just on some of the order dynamics and and the implications are for the business given what you're seeing in the order book. So it looks like though the business is returning to.
More typical seasonality with with revenues being down meaningfully in fiscal fourth quarter. The question is this as you look beyond that to.
For the fiscal first quarter one.
What is the historic range poor seasonal performance of the business end and related to that how would investors are reasonably expect the business to perform versus historic seasonality. This year.
So actually I.
I.
Don sink its a seasonality issue.
Think about what we are facing is that the whole industry are the customers' demand actually.
Is it impact you.
I make whole global medical issue right you can see from.
<unk> phone and a lot of our customer products actually this is sort of don't look so good is quite dramatic.
In recent months is.
So it might not be seasonality I think it's.
Southern is.
The capacity digestion.
Actually you actually took effect.
Oh this a demand issue and we do believe this properly.
We lost about two quarters.
It makes them a straight quarters.
In the second half we expect the buckets you pick up you know globally, you know for the whole industry.
Got it and then.
Excuse me just a clarification with regard to the very strong gross margin performance in the quarter and another about guidance resolved luster.
Where the specific factors that cause gross margin to exceed initial guidance and in what was a relative contribution.
Well I think Craig, but what caused gross margin was very strong in the quarter is I think as usual is our product mix right. We had higher contribution from our advanced packaging business unit as well as a wedge bonder business, which did very well during that quarter. We also have.
For <unk>, we had the the the machine that the one sale, which was came in at very high margin because it's been expense before so I think its mainly product mix that.
Caused the margin to be higher than anticipated.
Got it and nice work on that thanks, guys appreciate it.
Yeah.
Thank you next question is coming from Charles <unk> from Needham <unk> Company. Your line is now live.
Hey, Hussein and lesser thank you for taking my questions.
Of course, I don't want to go back to your comment capacity digestion.
I hear you you think that's going to last about two quarters that the second half of your fiscal or calendar 'twenty three.
That demand is going to pick up and also tying to this same question I think in September last year, you were expecting 1.5, Valeant average revenue a 2020.
For 'twenty to 'twenty, five kind of forgot but.
What is the point in 'twenty three shaping up.
Relative to that 1.5 average revenue guide thank you.
Okay. So.
Charles I think I remember in the Investor day, that's what I always say.
I, Thank God, our 'twenty 'twenty 'twenty revenue was 632, if I remember correctly.
'twenty one.
Zynga is a in the middle of our Investor day, we kind of finished out yet, but I see it as a 1.52.
And we do see a 'twenty two we feel like it will be a split but it's good that means Uh huh.
Also to $1.5 billion and we also see a bridge over the next few years will be one 5 billion.
So at this moment I think what we see actually a medical a slowdown.
And our coastal AR inventory correction and the capacity digestion.
So these were lost maybe two to three quarters so with this.
Expected phenomena.
We do expect right now our first half.
Maybe it will be lower and a pickup in the second half.
And so to be two one points I probably will not.
You know.
Well not be you know.
B b quite possible, but we do believe.
24, we are looking for very very strong 24, with another new products and even though there's this moment, even though there's a correction happen as you know 24 event will push it even higher for the.
Copies of the business. So we still have a chance you know Q2 is always say.
Next a few years 'twenty one is the one point sorry, 'twenty. Two you know 25, a 1.5 and a next couple of years I think we can be still higher than 1.5, I hope I answer your questions.
Yeah. So thank you for the color. So maybe a second question Hum on this I understand that.
Oh, the wire Bonder business maybe.
The visibility is a little bit not as great as let's say three to six months ago because of macro.
The advanced display side.
I would assume it's are there things are more under your control because you have a lead in that market.
You probably customers, probably engaging with you over a longer time.
Any thoughts on what your advanced display outlook for fiscal 'twenty. Three are you going to exceed the level of a fiscal 'twenty, two and adding on top of that I don't want to see if you have any comment on recent market Chatters that bag war.
Pixar locks customer seems to be moving to all that or their premium product lines around 'twenty, 'twenty, four which could mean.
Maybe at this pace and are you hearing anything like that thank you.
Okay. So let me talk about our advanced display. So we entered this market in 2019, so up today I think cumulatively, we generate over $200 million.
The last is great and you said in FY 'twenty. Two you know we expect our revenue for the bus display is going to be oh higher than the $19 million. So for the 23.
Year, he claw qualification and adoption year for Illumina X and because.
Because of qualification we want it you know.
No high volume business, but we do expect in 'twenty three are over $100 million of sales as we continue to drive me next qualification.
Discrete revenue.
Through 'twenty three.
And we do expect a significant growth in <unk>.
Slide 24.
So I don't know if I answered your question Okay. The second question.
You saw all the computer to a micro immediately.
I can tell you I think.
A lot of people try to make them micro <unk> and many of them work and with a lot ever flown through all of the whole industry trend. The reason you said there are a lot of.
<unk> capacity is there and people realize they do onto a reuse it.
So ava easily over the coming months earlier forecasts I think isn't there and the growth rate I think that year by year.
By Ah NL.
I think is really US you show significant growth.
Customer can at a certain point you know are actually have a dual strategy, but I can tell you you know order customer. We are working on have really very strong come even older customer habits don't come to you man.
And these are many idea and I'm not going to do.
Yeah.
Thank you very much I'll go back to the queue. Thanks.
Thank you as a reminder, that star one to be placed in the question queue. Our next question is coming from Christian Schwab from Craig Hallum Capital Group. Your line is now live.
Hey, good morning, guys.
Just for a little bit further clarity you know are on the commentary of a two to three quarters of that digestion.
Do you believe the baseline of the business. During this digestion period, you know falls below the kind of the 'twenty. One you know baseline of 900 million you know over the course of.
You know the next year or do you, where do you where do you see a greater than that.
So.
Christian I think we are really confident on the long term growth prospect for the whole industry.
And since these are our capacity.
But the penetration.
And megawatt demand inflation only some make whole sector is really recently started to impact.
The whole industry, that's why I shouldn't go out listen to his is not assumption actually is an example, I think he is not unreasonable assumption seems up we are going to see.
First half is going to be lower.
Because they were compared to all previous few quarters.
This quarter is a law and we actually expect.
This will not bounce back a layer, where so we hope to quota.
And a mixed model, we think I used to sleep with us.
And compared to 1.5 a beach.
We think you know you pick up.
For a long way of course, it is not going to be a threat.
And if you use the lumber, we just guy and a long you know four quarters.
This of course will be between a one to one point fireeye. So that's why we.
And I'll try to be realistic I think at 1.5 part of it will be difficult, but we do believe our second half will pick up and we will still generate very healthy.
Cash for the company and thank you Mr.
Great and then what do you think you know utilization is at your leading those ads today.
And you know and and and what would it have to return to four more aggressive capacity additions.
Okay.
So Christian utilization right now is running pretty flat around 80%, but then you do have you know.
Pockets are both in terms of end market.
Honestly automotive strong end market and also in terms of regionally I think China because of the rolling Covid.
Issues are a little bit lower as far as what we needed to be I think you know historically, if it's above 80, and then mid Eighty's I think that that was when basically there's there's capacity expansion, but again. These are as you know very dynamic and volatile environment.
So right now I think everyone's trying to figure out exactly how the next couple of quarters going to play out, but we do believe is to sense that the second half of FY 'twenty two it would be much stronger.
Great. Thank you no other questions.
Thank you next question is coming from David Duley from Steelhead Securities. Your line is that right.
Yes, thanks for taking my questions.
Could you just update us on your <unk>.
Some pretty good detail about what's left in the buyback.
Going forward could you just detail you know what the plan is for the buyback in the September quarter, and going forward will you be adding to it.
That's the first question.
Okay. So Dave I think we have we indicated were about $309 million left at the end of the quarter and the authorization.
We did the ASR, we finished that and we re initiated Oh I'm a program I think we will continue to aggressively.
Aggressively.
Utilize out why my program up to support the stock because we believe it is undervalue. So again, we don't provide specific guidance, but I think going forward. We will continue to utilize that Walmart program.
And the guidance you gave for the September quarter, what would you guess would be the cash flow from operations based on that guidance.
I would say cash flow from that would be probably.
Similar to our EPS.
E P S.
Okay.
And then.
Susan you gave us a lot of detail about I think the.
The ramp up on the thermal compression bonder business.
Could you just review again, you mentioned I think three or four applications. It sounds like it's a pretty broad base ramp.
If you could just review some of the the bigger applications for the thermal compression bonder going forward.
Then.
If you guys remind us what your revenue targets are perhaps in this fiscal year and next fiscal year.
Sure sure sure.
So actually we are quite proud and and also show a lot of confidence on this product I think nicks a few years, we will see a significant growth.
Oh product actually address a variety of our customer and application user including three D sensing.
And Silicon Photonics, and also mobile cellphone mobile logic and also this chipset heterogeneous application.
So we cover a lot of.
And more and more people actually come to us and we do believe a heterogeneous integration is going to grow significantly in the $18 million, we mentioned and it's not only appeal is appeal with the delivery date and continue to grow this $18 million allowed Judy will be.
We do not FY 'twenty three.
And our solution we have.
I think <unk> T C. B, we believe will be the mainstream interconnect.
For future heterogeneous integration it sounds we're hunting iPhone pitch right.
Of course, our smaller land 20 micron features they will be somewhat niche.
Product.
I'll keep pictures and also all of the technology, but we are quite bullish I think you know for the heterogeneous integration for our next.
Many many years I shouldn't Gulf Rockfish, PCB should have a high volume and.
We are working with more and more customers.
So.
I think.
I can probably give you a little bit.
About the total advanced packaging revenue so they go this quarter alone.
Thinking about <unk> I think a.
Given company, who is different definition of advanced packaging, but also educated about the packaging we're talking about.
Our PCB Biosimilar competition, and we also have a high accuracy flip chip is something we didn't talk about it but it's picking up momentum that you have up there for the next couple of quarters.
And also included the bunch display and a S. I P and also a T Premier I think I mentioned in my script, we talked about the political our wire to be place of TSB.
For the next couple of years.
And this is like a premier a frame all these together I think this quarter we are 60.
For $29 million.
<unk> did not include I caught with a bunch of bolt ons, including other banks were going to I think AR is.
Is about 150 minutes for this with us and I see this area is a growth area, we have to compensate your company.
Okay.
Okay, and then just as a clarification.
Weakness, you're seeing in the September quarter, what in markets.
Or product lines are you seeing weakness in in September versus June .
Okay, mainly I think it is.
Ah is a really a ball bonder and you probably if you hear the script I mentioned I think Eva you right. Now is about one trillion you know finished di fringe, a wafer and you cut it you know.
Oh, you had about one three and died.
And neither have a package.
Actually 80% of our total what is the once you get in di.
The the pictures you made so I think what.
Majority actually is a ball bonder. So this explain why I shouldn't go when the industry slowdown the ball Bonder was in Texas.
So actually.
And which part of it actually is very very strong because of our we actually will continue to be strong I think is auto related and also posted because of the also very very importantly, the right. So to answer your question I think a.
Very easy.
Do you mean, the capacity digestion period, I think of bolt ons or is it in fact, it and again you know when the industry would pick up the ball on that would be the first one.
So that's really the nature of the ball bonder, but we still see bolt on to a recycle all continue to grow because the easiest way to do it and they'll come back and this will represent the most high market shares for the whole semiconductor picketing Mesa right and we see the ball Bonder.
If you don't if you look at average every cycle, we do believe a recyclable bundle will continue to grow and we have seen the new use of our Boulder for example in the memory, we're working with.
Leading company to replace with TSV and we see the early adoption low volume production maybe in 2023.
And in the previous offer you a scream I talk about a multi chip and see somebody.
Our multi chip so Amy package you know.
The number of why a girlfriend and sorting through it to solar. So this is a market expansion in the capacity expansion.
And also I think there's a lot of.
Multiple bandwidth neither have a ball bonder to create 40 catch and the isolation to prevent the interference over next either.
So I.
I think on next week next quarter, maybe obtrusive Buda well.
Would be lower but Windsor pick up will also pick up very very fast.
Yeah.
Okay and then final question for me just curious you talked about a two quarter inventory correction or two quarters of weakness. What gives you confidence is that your customers telling you that or are you picking up on what TSMC has said on their conference call just kind of curious why you know that can be.
Monitor customers' level of inventory why do you think it's just two quarters.
Well they are from a two way one is of course I talked to you we actually Oh, it's just him and of course.
We also reach out to our customers and that was the indication you know to give us a high higher confidence that the second half will pick up and that's a first.
The second reason you know there are multiple multiple multiple mature node technology capacity is going to finish construction.
They will start to need to put you know.
The capacity to do enough package right.
I think Oh, just China alone. They are many I actually don't have the number I think.
I think oh close to a 30 mature node.
You know our capacity or come up and the first one they need is going to be a problem.
And also historically, we see the weakness of labov them to no more than four four.
And if you see I think Oh actually we show the pick probably two quarters ago. When we reach a $48 million actually is was it really not.
A beach real demand and I mentioned it was a loss of a customer need you know who reached full capacity. So actually we are quickly just a poorly. So there wasn't one quarter. We reached 481 quarter, we reach about 420 and actually you know after a lot.
Bob on the start you.
Dropped a little bit so but at this moment, we neighbours see ball bonder.
Northern pipe water for US right. So it was at least two we feel.
Some confidence.
In the second half.
The paper.
Okay. Thank you.
Thank you next question is coming from Hans Chung from D. A Davidson your line is that right.
Alright. Thank you for taking my question so first.
Well I was wondering what if any.
Good.
For this year.
Based on the September quarter.
Quarterly guidance.
And also what.
In 2023.
Yeah.
Sorry can you repeat that you broke up a little bit.
Sorry can you can't hear Baker.
Yes.
Yeah. So yeah. My first question is this.
Oh, what's the underlying assumption for semiconductor unit growth, but based on our September quarter guidance.
And then also what's your view on next year.
Yeah.
So far.
For the quarter for FY 'twenty, two I think we think it's about 10% unit growth for the year I think for 'twenty three based on what we see and based on our industry you.
You know our experts I think it would be closer to a normalized level normalized level was about six 5% unit growth.
Okay and then.
For the for the automotive segment.
So so during the quarter Y Y E revenue coming down a little beads.
Because I think and seeing across the industry.
Automotive has been pretty strong.
Yeah.
I mean, it's very.
From a supply chain either.
Semi company or equipment Guy. So I'm just curious what was the dynamic during the quarter.
For the automotive segment.
Well I think we came down just a little bit in the Almond segment, Hans and I think a lot of it is just customer schedules are I think we had a very strong automotive.
Business from our wedge Bonder business is to sense that and it still continues to be strong I think for the ball bonder part of the automotive business, there's been some a little bit of shifting maybe into into the next quarter. So I don't think the animal business is is soft I think it's just maybe it came down a little bit.
Got it and then last one just.
Do you have any update on the lumi next regarding.
Any customer feedback or any new clarification.
Going on or is it just any update on that would be next.
So we are actually engaging.
You know close to more than 10, a high potential customers.
And Oh, we ship a few system and adrenal qualification. So our goal in the next nine months to two months, we wanted to make sure. We have a few you know.
Street.
Two four.
We hope to finish off a clarification.
But for all you know this is probably the most productive system.
It's going to hit the market and.
If you know to move.
The display business, Great you know from one place to the other place you need to move about 25 million dies and our speed actually is a much much faster.
Foster.
Any computer can claim and can do so we are quite.
Quite optimistic.
The progress and we'd like to finish off.
The street quite because you're in exon 19, two months and we have a goal.
So advanced display it to ever go up more than $100 million and we believe it is attributable in 'twenty or 'twenty three.
So even though we do have 2023.
So our advanced displays business since we introduced.
This segment of business after 'twenty three it will be more than $300 million.
And we believe about 24 will be even bigger than that.
Yeah.
Okay. Okay.
Hum.
Median after Batesville don't agree.
Okay. So 2022, okay.
<unk> two actually is about $19 million, but up two days up two days is about $200 million right. So up two days or $200 million, including about 'twenty, two and 'twenty, two Isa, we target greater than $19 million.
We still have one quarter to go.
And.
So that's a $200 million two days.
And our accumulative.
Including the 23, we should be you know above are pretty hungry man.
Antonio plentiful, we believe Oh.
Display.
Sure.
Even grow.
Ah is a higher rate.
Got it.
Got it.
Thank you we reached end of our question and answer session I'd like to turn the floor back over to Joe for any further or closing comments.
Thanks, Kevin and thank you all for joining today's call over the coming months, we will be presenting at several virtual and in person investor conferences with D. A Davidson Needham and credit Suisse.
As always please feel free to follow up directly with any additional questions. This concludes today's call have a great day everyone.