Q3 2023 Kulicke and Soffa Industries Inc Earnings Call
Greetings and welcome to the Kulicke on so far 2023 third quarter results. 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 it is now my pleasure to introduce your host Joe Elkind Senior director of Investor Relations. Thank you Sir you may begin.
Thank you.
Welcome everyone to cool can surface fiscal third quarter 2023 conference call.
Susan Chen President and Chief Executive Officer, and Lester Wong Chief Financial Officer are also joining 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 complete GAAP to non-GAAP reconciliation tables are available within the recently filed earnings release as well as our earnings presentation.
This information in addition to our prepared remarks for today's call are available at Investor Doc can ask dot com.
Beginning with the June quarter, 10-Q filing we have amended our segment reporting and will provide additional segmentation details of her previous capital equipment Reportable segment. This change has no effect on the composition of our E. P. S reportable segment or our end market disclosures.
During this revision a material weakness was identified over internal controls related to segment reporting and seek only triggered the filing of the amended 10-K for fiscal year 2022 yesterday evening. Please note there was no impact on any reported amounts of the primary financial statements to previous.
Reported periods associated with this amendment.
Additional details are available within the 10-K, a filed yesterday evening.
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 associated with fuel can solve that could affect our future results and financial condition. Please refer to our recent SEC filings specifically the amended 10-K for the year ended October 1st 2022, and the 8-K filed yesterday.
With that said I will now turn the call over to Susan Chen for the business overview. Please go ahead Susan.
Thank you Joel.
We continue to make progress closely abreast of girls initiative.
June quarter, we deliver new boat and the waste solution supporting a high volume semiconductor application.
The bus take against the Louisiana supporting heterogeneous integration.
And to reach new milestones, we used our emerging.
Great prospects.
We also maintained an aggressive pest asked you about in a minute.
And our brother and I want to get out and get them in several areas.
Additionally.
Oh cool market continued to improve due to a technology trend incremental capacity needs.
And and ongoing product refresh cycle.
We continue to see gradual improvements are closer to the bull by the market and anticipate more meaningful demand recovery.
The main clicking bottleneck improve and the inventory is digesting sue.
Well, it's funny that you churn.
The longer term, we continue to anticipate nearly 10% semiconductor unit growth in calendar year, 'twenty 'twenty, four and anticipate unit growth will remain about a breach in 'twenty to 'twenty five.
In the near term, we remain focused on TD body, New you know vision once your attrition long term technology driven growth opportunities in both our coal and the emerging equipment businesses.
I wanted to spend a few minutes to all my siblings specific initiatives in old Bowl wage device display and packaging prospect not increasing the value add of our assembly solution.
First.
We have begun the ball down the equipment flow that'd be fresh.
With our recently introduced Paul column, and the poll next ball Bonder platform.
Your system.
Have been well received by customers as they pull back new capabilities for high volume system in package applications.
They also enable a imprudent by shifting to a particular ratio.
Each pool by customer.
Once you implement and great to see all the ways.
What are your flexibility.
Over the coming quarters, we expect will be the addition of ball bonding solution. Once you won't come pretty old portfolio refresh.
We are excited to pull back and you were able of value to customers and look forward to additional margin and the cash flow benefit to invest over a long time.
It has a big how could you not all coal how you bought in the semiconductor market has increasingly become more complex.
The need for more but the best solution and the best feature.
Gordon convexity needs have already improved ball bonding gross margin by over 300 basis point since <unk> and we anticipate additional improvement going forward.
Next.
More efficient pole council, and a fast growing and battery market, creating new technology opportunities and the support higher goes really well.
What's your bundled play forms.
Sustainable energy.
It actually the vehicles and the more efficient consumer devices are driving demand for compound semiconductor test.
Silicon carbide, and then giving them nicely.
And also creating new technology, driven demand for more complex module based power devices.
Yes, multi chip module basic policy you bet, she is driving a transition from alumina.
Aluminum copper interconnect.
Given that you go through a couple of times you shouldn't we know that we didnt I bought in ball bonding.
This shift in policy semiconductor requires new capabilities, such as our high power interconnect or X P I solution, which we or Navy recently announced.
That's P I extend our existing technology leadership, which bonding and has provided new opportunities with the leading customers who aren't there because he is supporting policies and the electric vehicles transitions.
We are also closely engaged with our strategic customer on the most critical and demanding semiconductor assembly application, which is support space exploration and the satellite communications.
To summarize.
The opportunity we have a show and tell me like He's 30, 40 fund, which has more than doubled all which led to a revenue since plenty plenty.
We continue to support the most clear vertical.
Dominion policy in Kentucky, and then she didn't show called battery application and we the men very optimistic for future growth as we are closer to engage with a customer who are in every niche market.
Next we have the balance display we have reached new milestones for our portfolio of solution.
Waste trace knowlton.
You missed your opportunity I imagine, new mini and micro Assembly solutions.
You mean, the CDR and the September quarters, we have reached new technology milestone with Illumina X and we will prepare to support higher volume demand.
As the market grows we recently announced a collaboration they we can't do mean next technology with a D. D. S N people by the.
Celebrate the adoption of advanced display technology in both big lighting and the initial application.
They're doing the next system is designed for Muni Adobe deal opportunities for larger format initiatives play and also for the high volume display transition to make lighting.
We have met significant progress with our lunar next system.
So Paul.
Final place less throughput of 140, <unk> sold N type Oh, with a yield of 99.9% with even higher throughput and the yes expect it as we continue to develop these solutions.
We have demonstrated the ability to accurately predict.
Michael.
So I stopped at the Fort Mac lung disease to come up.
While we have seen early adopting customers using traditional attached your equipment to support initial big lighting applications overtime like deep exercise what continues to shrink and we anticipate demand for almost a decade.
Highest throughput high accuracy lumina system well assorted.
Additionally, we continue to make progress on projects and expect to provide additional visibility into projects Wi Fi visco.
Please go hunting for Libya expectation over the coming quarters.
Hi.
Why don't we no provide even more value in the high you bought in this important market.
While about getting become more and more complex. We are also actively expanding our market is just in leading edge logic and the optical applications, which is our competitive similar companies in the portfolio.
Yeah.
Recently, we have appreciate the increased customer interest and the peer commentary regarding the longer term.
Contribution of similar completion technology can put back to support rapid there'd be a bubble in there.
Heterogeneous credit.
We have work aggressively to expand our engagement to eat more commercial customers and also global technology consortium.
We also recently announced an expanded partnership with the center.
Center for heterogeneous integration and the pro forma scanning.
Also no S UCLA chips.
Together, we look forward to extending TCE peach to below five microns.
In addition to this expanded technologies relationship. We recently shipped a record number of trucks. It is teaching the system to a broadening group of commercial customers who are still Hagen.
To that end the heterogeneous integration.
I'll stress in TSB has centered around high volume opportunities supporting the application processor, Swedish central and the Silicon Photonics, which all transitioning to T. C. Before technical reasons, such as smaller phone sector seen a substrate and the input yes.
We have also already grown almost got chip to substrate PCB for heterogeneous application in production.
In addition to this pullback in the market. When we are pleased to also announce our active engagement in several chip to wafer evaluation, which can materially accelerate growth of all the banks would take your loan portfolio over the long term.
Turning to our June quarter results, we generated $119.9 million revenue and a 55 cents or not get E. P. S above prior expectations due to continuing stringent cost control O&M critical matters and the discrete tax items.
Moving to our end market discussion.
79% of total revenues stemming from capital equipment, and the improved 13% sequentially supported by utilization improvement in general semiconductor and the memory end market.
We didn't generally semiconductor ball bonding equipment sales increased sequentially by 45% largely due to increased.
Utilization rate and a stronger demand of all high Tech performance, maybe she does.
We also reached a new record quarters for all somewhat compression business and the book revenue for several fronts.
And I'll, let Dave He's GCB praful.
We didn't have a D. We.
We have also seen utilization rates improve which supported demand for our process system.
And so August one last week, the United State has implemented the anticipated been all income Vincent label in favor of more efficient and OLED lighting.
We anticipate utilization rate will continue to improve.
And the September quarters for Hyatt right it'll be like.
Like in applications.
Next automotive and the industrial.
That'd be softened alone remain quite strong for us.
Historic standpoint.
He left for policy, although there continues to be robust due to our contribution to the broader E V transfusion and the increase wont content of silicon content per vehicle.
We also look forward to chicken news regarding Oh, a battery assembly opportunity over the coming quarters.
We need memory, we did come at a better than expected improvement in utilization rate and a pickup in demand for O&M Assembly solution.
Historically, we have enjoyed I'm gonna policing in the assembly and have continued to expand our market reach into DRAM applications.
This will go until fiscal of 'twenty 'twenty four we are excited about prospects such as a political thing I'll also known as a V. F O which is expected to further expand always shifts in high density applications and they can pull by significant cost.
Implement all but yes, we based approaches used in applications such as high recent memory.
I look forward to sharing more details on this exciting opportunity over the coming quarters.
To summarize we remain actively engaged with multiple customers, who are enabling technology transition in automotive semiconductor and display opportunities.
All of the investment you Brendan.
Engineering capabilities, and the new market opportunities enhance our fundamental strengths.
The increase all evaluate and then sorry, if I keep it up to our long term growth strategy.
We are currently progressing several apparel.
Qualification and evaluation and we look forward to providing a more detailed outlook over the coming for this.
We didn't our cole capital equipment market, we have seen.
Improvement and a forecast of what utilization there to further improve through the September quarters.
Looking into the next few years, we continue to anticipate about a b's semiconductor unit growth and also anticipate thinking just in new market.
We look forward to delivering a steady pace of a new system and a feature and also announcing new customer and a technological way over the coming quarters.
What does that say I wouldnt know pinnacle over to Lester who will discuss our financial performance and outlook.
Thank you for my.
My remarks today will refer to GAAP results unless noted.
Before commenting on our June quarter financial performance I wanted to address two specific items related to our June quarter performance.
During the June quarter, we booked impairment charges of $21 $5 million associated with our 2017 acquisition of <unk> B V. And then minority equity security investments related to a technology asset now.
Neither of these noncash impairment charges have a material impact on the near term outlook and we continue to support the market opportunities. These investments have previously provided.
To add context since our acquisition of <unk> B V. We have deployed over $1 billion towards capital expenditure acquisitions and shareholder returns.
This cumulative deployment approximately 75% was returned to shareholders through the company, increasing dividend and opportunistic repurchase programs.
Next I also Wanna say clear expectations regarding our order intake and backlog activity over the coming quarters.
We continue to hold a sizeable amount of order backlog roughly four times the size of our third quarter fiscal 2019 backlog.
This excess backlog will reduce the book to bill ratio and ultimately land at roughly three to four months of revenue, which is in line with our average lead times.
In addition, some of our anticipated incremental opportunity in fiscal 'twenty 'twenty four are not included in the current backlog.
With that said it remains a very exciting time for the company with ongoing near and long term improvements within our core markets and ongoing execution across a variety of end market applications.
As an update our capacity expansion investments are continuing on track to provide critical operational capacity to support the growing demand of our advanced packaging and advanced display offerings.
During the June quarter, we generated $199 million of revenue 47, 2% gross margin and 55 of non-GAAP EPS.
Gross margins came in just below expectations, largely due to mix stemming from a rebound and hi, Brite L. E D. The man and also an increase in higher volume orders.
non-GAAP operating expenses came in at $66 million below our prior expectations due to the shift in discretionary spending and ongoing cost controls.
Finally tax expense for the quarter was $148000 lower than anticipated due to the reduction in profit before tax mainly from the impairment charges and a discrete item related to the reversal of uncertain tax positions.
Turning to the balance sheet working capital days decreased from 517 to 465 days in the June quarter, primarily due to the sequential improvement in revenue and relatively flat working capital.
Our repurchase program remain opportunistic and we have increased our repurchase activity by 71% sequentially to $8 $5 million during the June quarter.
Looking ahead to the September quarter, we anticipate revenue of approximately $200 million, plus or minus $20 million with gross margins of 48%.
non-GAAP operating expenses are anticipated to be approximately 75 million plus or minus 2% due to additional general and R&D investments, we remain focused on controlling and limiting any noncritical activities and have maintained a very cautious need space hiring approach.
Collective cost control efforts have reduced our June quarter operating expenses by approximately $4 $5 million from our original budget.
non-GAAP net income for the September quarter is expected to be approximately 24 million with non-GAAP earnings per share of approximately 42 sets.
It remains a very interesting period of time I can't S. At the value of semiconductor assembly is rapidly increasing.
As our core business continues to strengthen we remain focused on expanding our long term market access well competitive advanced packaging advanced display and automotive solutions.
We look forward to sharing our progress over the coming quarters.
This concludes our prepared comments operator, please open the call for questions.
Okay.
Yeah.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing sarkies one moment. Please while we poll for question.
Our first question comes from Craig Ellis with B Riley Securities. Please proceed with your question.
Yeah. Thanks for taking the question and thank you for all the information this morning.
You said I wanted to start off following up on one of your earlier points about.
The view on calendar 'twenty for industry growth at <unk>.
10% year on year, I think that was a prime.
Assuming that's on a unit basis. The question is that surround that.
That level of industry growth, how would you expect Canada to perform.
Given the growth initiatives that you've outlined in the improved positioning and some of your larger end markets like general semi.
Hmm.
Okay. So oh do we believe are 24 will be a better year for us than 'twenty three are above a beach you know right know yourself forecast, but we do also get a feedback from our customer, but what would be the final number.
They're really dependent on the macro environment you know.
At this moment, it's still a little bit dynamic, but we feel like a 10% probably is a good number.
So when we said Lisa assumption I think we will see improvement in all of our ball Bonder Shimon.
Particularly you know are we subject. She grows we believe that bolt on to <unk> or even a mall and not only Shimon I think we will see the gross margin expansion.
So other then move on to the.
The wish bone to Ah you missed your strong I think due to our policy of me and the EV and in addition, we will put a new capability to us, but which banda.
<unk> for the AP Zynga, we wall.
She had a gross ICR.
Is it integration.
We have oh.
T G b in now.
Lung heterogeneous full because in.
Our volumes semi and our focus on our multiple applications such as she held photonics suite essentially in a processor.
And also have a heterogeneous integration, we believe up particularly in a heterogeneous integration Oh, we can show the growth and you know we also hope to see.
The extra D gross.
Each player.
In the W project and also.
In alumina next so.
We probably won't have a baked her reading about the industry recover maybe by in November .
Maybe if I remember you know when you will have a beta.
If he didn't about rail recovery, so 10% right now it's a lumber from the industry and also for us and really dependent on the next couple of months.
Industries to keep it simple cost okay. So I hope I answered your questions.
Yeah, that's really helpful. A few cents and then combining that commentary with a point estimate about.
Higher backlog levels than 2019, but I think if I heard you right luster the.
The likelihood that backlog does decline over the next few quarters can you talk about the visibility that you have into that fiscal or first quarter of the year end and if we look beyond the the guidance for the fiscal fourth quarter can you talk about some of the nearer term Gibson takes for what is typically a seasonally softer part of the business.
Yes, sure Craig Yeah, I did say, our I mean, we still have a very very healthy backlog just just below about $500 million. So we will we do expect that backlog to come down overtime.
And.
Over the next couple of quarters, so as far as near term visibility as Susan mentioned right. It is pretty dynamic at this point, we believe that will probably be some more seasonality this year than during 'twenty, one 'twenty two during the ramp up.
Also I think for FY 'twenty for as Susan indicated we believe it'll be a much better year than twenty-three. However, you know when I think the first half may not be as strong as the second half, but again, there's a lot of moving pieces right now, but we feel pretty good about 24 as compared to 23.
Yeah.
Got it guys. Thanks for the help and I'll hop back in the queue.
Our next question comes from David Duley with Steelhead Securities.
Please proceed with your question.
Yes, thanks for taking my question.
I was wondering.
As far as.
The improvement you're seeing in your overall revenue and both.
The June quarter in the September quarter, you just guided to what segments are showing improvements.
Sequentially.
Well, Dave I think.
Ball Bonder is is the main business unit that is showing improvement.
Wedge Bonder has remained relatively strong throughout the last couple of quarters, but I think we are seeing a ball bonder becomes stronger I think this is tied to seeing utilization rates going up.
And so I think that's basically are the are the increases over quarter to quarter.
And as well as as Suzanne mentioned, we shipped a record.
<unk> Flex is T C b this quarter as well as a record TCP revenue for.
The quarter that just ended.
Okay, and then as a follow up on on the thermal compression bonding market could you. Just you know perhaps articulate you know what you think your position there is how big the market is what percentage of that market. You think you're currently capturing and you know there seems to be a little bit of.
Push and pull as to whether thermal compression bonding or hybrid bonding is going to be a bigger market. If you could just kind of talk about what.
Each technology would capture or you know just characterize how you think you're doing in this particular market.
Okay. So.
Dave I, we believe we have a price still a TCE product portfolio.
So actually I think I'd make a comment in Oh, GCB ER to ER market why is a full because all our high volume semiconductor and diesel for lung heterogeneous integration and we still are in the application such as a hum.
Our petition processor.
<unk> three D sensing.
And also silicon Photonics and extra day this year, a queen ores are quite well.
And other than that I think we have a lot of focus.
Oh actually a heterogeneous integration.
We are last year stuff on and last year. We believe we have very strong you know a parisian in extra heterogeneous integration in the sheet to ask chip to substrate.
And the customers are actually already in production.
And are we at this moment engaged with multiple customers.
In the sheets with W. And we do believe we are on our way to get the market shifts.
So oh Gee should be I think an awful because at this moment is working with multiple customers and IBM, except us what's that [noise] and also foundry.
Ooh pushy or GCB capability, you know to push you a technical documentation.
Two two to $2.
To the best and the.
Wishes of below 10 micron.
And it was all the information that we feel we actually see.
Hi, Steve.
About the direction, we are going so.
So when you hit a ball.
Oscar ball.
Oh for us it is T should be both of a hybrid.
So let me make a comment I think that is a woman.
These two market are not overlapping.
You know Oh, because highly bounding it has its own advantage.
Which is announced symbol actually you don't have a sheet you also don't have a stress.
So you know this.
This oh the vantage you know you know.
Our hybrid has and in the meantime, I think that he says a little bit a more expensive process.
So to ask how do we compare to a hybrid I think is a hub questions. I just wanted to tell you our mission actually used to push E D.
As far as possible below with him like loss.
So you know futures ICR.
When they might you know some some point to compete in a fight peach and of which one he bought a higher volume.
He's really a lot depends.
For Kenneth I see them doing it depends on our capability.
Our TCE hull far east kind of extend to a fine pitch.
And also a full hybrid bonding.
Oh, a cost effective and how much productivity is process can improve.
In addition to actually you know of course that they didn't know some on Australia.
The process actually is what he said is the robust.
Oh, So finally I think it depends.
It depends it depends on final.
Cosmos choice.
So we sure I answer your question I was gonna hybrid and the <unk> that is a woman.
<unk> is not competing.
And you know our mission is to preserve tissue b as far as possible. It's a place that we just described today.
Okay. So and then I just wanted to go back to you.
So it's all of it is I think this year our PCB, we are looking a little 60 some million dollars $60 million.
We saw total they'd be kidding.
You know a P.
$100 million.
So by 'twenty Italian fire.
We actually have a lot of opportunity. It's a you know but up to realize our market shares. We also wouldn't need to wait a little bit a couple of months for the high volume.
So, but we do believe by 27, if I, our TCP alone should be above $100 million.
Authenticate your AP, we are looking for.
For about $200 million.
Okay and then.
Hugh you mentioned some.
Some details about our high bandwidth memory.
I'm wondering what your exposure is there.
Do you are you currently in production are they using wire bonder and so for the stacks are so maybe just elaborate a little bit tough.
So actually we what can we saw actually not many actually I guess do you think that's the only a few but also we also with a few of memory customers. There's a publication by a major customer Wonderland.
Actually to use so while political while actually to be a tentative for TSB. So actually we are working with our customers I think next year. There's a possibility you know for one or two customer maybe in a small volume in all our pre production. So.
We are actually quite excited about this opportunity.
Thank you.
Yeah.
Our next question comes from Charles <unk> with Needham <unk> Company. Please proceed with your question.
Hi.
Good evening Pusan Lester Thanks for give me, giving me the opportunity to ask a couple of questions.
Wanted to start.
Again, a thermal compression bonding.
I think a year ago, we are now receiving roughly 80 million orders.
Ingo backlog too.
To ship by the end of three.
The 300 million accumulate to a play by the end up plenty of time to acquire so this is a two part question. So how many have been shipped so far out of that 80 million orders.
And.
How do you turn them more.
The opportunity beyond the initial 80 million more into that from 80 to 300 million opportunity into the backlog.
And if yes, how much have you received high return opportunity into backlog as up today. Thank you.
So this $80 million I've seen God remain they are Ah.
I would think maybe by.
The latest by Middle of next year with what competes and Charles I think you know when we look at the opportunity you know we have like you're engaging customers, but a lot of time I think Oh I can tell you the cosmo engage and have a high potential remain there.
But sometimes I think there opportunity near prostate integration architecture of my Havent Fine tuned you know so we actually as I mentioned I think quantify we probably more actually.
Above $100 million, but I think lepton and the.
You know it does $300 million, you say, including you said 18 million I forget actually exactly what I say, but I can tell you all of the opportunities are still there, but you know the customers are forecast at that time and also their process. The project you know the schedule.
My head with you this shift, but I can tell you I can't or a customer we engage are still very positive and oh, maybe at a forecast, but I'll leave it different so right now we are look at the.
The PCB I think up by 275 annual revenue will be greater than $100 million.
And Joel just for a point of reference over the last two quarters, we've shipped over $40 million worth of PCB.
You may physical Kt in Q3 right.
That's right fiscal Q2 and Q3, yeah, yeah. Thanks for the great color Hussein Alaska.
So on PCB are you you mentioned other than the IV <unk>.
<unk> chunky opportunities I wanted to ask you specifically about that sounds it definitely hurt some of your IBM Splunk Siem.
What they are doing in terms of evaluation.
So can you talk a little bit more about the engagement with a leading foundry.
C B.
What's the status there.
Yeah.
I mean, obviously.
This is a probably a beach hot.
But what's the first Oh pretty close to L. B.
Evaluation, we're engaging with them.
Does seem to us to adopt new or is it blocks with Clarksville plant close kind of application. Thank you.
Yeah. So oh, I think I mentioned that we have a multiple engagement, but I know in the sheets with W. We read the law, specifically talking about the customers.
At this moment are the sheets with W. A flux lease with.
With copper to copper content capability and that's what we do we are focused on and we have a multiple of land in all our ship Oakland to ship and a.
You know from this is another system E process are these.
This is a process. So Ah I think they are true purpose for <unk>.
Particularly in the sheets of W. One is to reduce defect rocks, reman, and which will impact the.
The year and he was a condemnation zero one I think coupled with copper contact are very important and not only come with a public context reliable cover contact is a reliable.
Really important I think we have our biggest space sure.
Actually.
The structures and the process to make a very reliable.
Coupled to a couple of come there and use it to come in and buy a menu customer we are engaging with.
Okay.
Thank you so as you know yeah yeah.
I'll go ahead, and Chinese families our thoughts.
Yeah.
No I think in terms of our you know application you know.
But we actually don't specially comment about customers up process, but I can tell you you know we have a multiple engagement and I think a sheet with W is a big area of focus.
Andrea.
Moment.
And we are quite excited about.
Thank you maybe one last question bigger short.
Do you have any preliminary view about the fiscal first quarter going into 2000 and for the December quarter in terms of thoughts are much sequential.
Is it gonna be a compound that fiscal fourth quarter. The September quarter. Thank you.
So Charles right as you know we don't we don't guide beyond the Florida as I think both suites and I said earlier, there will be some seasonality in our first fiscal quarter. Unlike in doing the ramp of 'twenty one 'twenty two.
We do continue we do believe that the business is continuing to improve that as well as far as the magnitude of I think again, there's a lot of uncertainty macros out there that will give further color.
Our Q4 earnings release.
Maybe I didn't it doesn't mean it won't come in I think we do feel you know.
24 will be a better year.
Uh huh.
I've seen how much bigger as you are.
I can tell you if you.
If we can call them the biggest opportunity I think is a really ball bonder and Alibaba in the region came down from a very high level.
So we are actually quiet piece, if you remember I think in Q1, we feel like.
Oh, Woe ball Bonder actually used to come to a trough in Q2 actually showed improvement.
Noticeable change from Q2 to Q3 excuse me. The Q Q4 is also a ball bonder and we have seen a short term capacity by and also some customer needs.
For the beta a couple of data bundles to handle more comprehensive stuff. Just so if you are asking me we feel better you know.
The opportunity I think our ball bonder can carry a really good growth for plentiful, but really how much. It's a much I think are.
Probably agree it depends on the recovery rate as you know we don't have it be the judge.
Probably in November , but we feel like are they couldn't really over.
Recover still nobody is strong so we do expect second half will be better than the first half I hope I did you say.
Yes, thanks for the abundant color of Hussein. Thank you.
Okay. Thank you I'll hop on that thank you. Thank you.
Our next question comes from Tom <unk> with D. A Davidson. Please proceed with your question.
Yes, good morning, Joe and good evening luster in Fusin.
Maybe first just following up on that last response, what are the utilization rates today and how long do they go a couple of quarters ago.
So maybe I'll answer that Paul.
So utilization rate right now is around 70% of the previous quarter was around 60% and I think the part for that it was it's about the same a little bit lower so we are seeing it.
Go up we also see Q4 utilization rate will also probably be higher than Q3. So we're seeing that nice trend as it heads towards the mid seventies.
Okay, No very helpful. I appreciate that Lester.
Wanted to dig in a little bit on the tool refresh that you're doing across your product lines. You mentioned, a couple of new ones in the market. How do you see that rolling out as a percentage of your sales or percentage of revenues or shipments.
This is a two to three quarter transition do you think a year from now you'll be largely with the new higher margin tools, just a little color on that would be great.
Yeah.
Oh I'm so.
Uh Huh I think are the first two are forward looking color.
And we have stay away with another one is a photo of high performance one.
And hopefully you will see us.
Maybe some marginal improvement in about two quarters, maybe two to three quarters.
So hope that helps.
Yeah, and Tom we expect most of the products that fusari virtue to be released by the first half of 'twenty four obviously as it release it takes a little bit of time to gain traction, but he said I think we expect the margin improvements starting in 'twenty four and definitely by the second half 'twenty four the increase particularly in ball Bonder margin should that should start hitting.
Okay No I appreciate that.
And I guess finally, maybe just a quick update on the project Debbie is still expected to start to ramp in the first half of 'twenty four.
No actually.
If you listen to me I think.
Actually you know this is tommy issue, but Ah.
We always off here. This is going to be plentiful will be off prototyping and of preproduction right. So I think beyond that.
Beyond that I think are the volume will be higher but next year I think oh, we all can.
Got it.
Together with our customers are just the only other pre production.
And also a prototyping yet.
Okay I apologize.
Oh no.
I think in the ball maybe two quarters.
Well, we probably have a more insight we always share with you in the short to show as a public.
Okay, and then final question maybe for last year.
Looking at the cash balance and the share repurchase your share repurchase levels, although up sequentially or well below where they were a few quarters ago.
<unk> been a different philosophy or change of thought as far as share repurchasing overtime.
No no.
Our philosophy always has been to be opportunistic right I mean, Susan always discuss with the board every quarter on our capital allocation. So.
We kind of slowed down for a while and we picked up a little bit but we are.
Believe that we will probably continue.
To the opposite let's take and I think that the volume will continue to grow.
Okay. Thank you.
Yeah.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad. Our next question comes from Christian Schwab with Craig Hallum. Please proceed with your question.
Hey, guys, except one quick question your commentary regarding memory that you saw better than expected improvement utilization rates pick up in demand in NAND.
Which we're.
We're not really seeing or hearing from anybody else, including the manufacturers of NAND other than possibly bothered me. So I'm just looking for greater clarity on that statement. Please.
Oh, well I think.
Oh, we actually you know nane, we actually have a quite a high market shares right and I think this quarter, we do get a business.
For.
Our NIM business, but you know at this moment.
Christian even though people expect you know memory to touch the bottom are we.
You see a recovery will be slow so overall I think our memory Oh expectations are.
You bet is the uptrend, we do believe are the best for the whole industry, probably can't go back to a 22, plus maybe about 10% so it doesn't.
And they're gonna come in as you know and then when you have a pretty good a market shares whenever capacity come and.
Our next focus for us and see if we can get the auto markets. You again you know.
In the 10 for DRAM.
Okay, great. Thank you no other questions.
Okay.
There are no further questions at this time I would now like to turn the floor back over to Joe for closing comments.
Thank you Maria and thank you all for joining today's call over the coming months, we will be presenting at several investor conferences as always please feel free to follow up directly with any additional questions. This concludes today's call have a great day everyone.
You may disconnect your lines at this time, thank you for your participation.
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