Kulicke & Soffa(US:KLIC)2022-02-03 16:54Financial Data and Key Metrics Changes - The company achieved revenue of $460.9 million and a non-GAAP EPS of $2.19 for the quarter [16][23] - Gross margins were strong at 48.4%, benefiting from improvements in capital equipment and aftermarket products [22] - Non-GAAP operating expenses were $65.4 million, lower than expected due to delayed internal projects [23] Business Line Data and Key Metrics Changes - Capital equipment revenue was $408.6 million, with strong demand across all end markets [17] - General semiconductor revenue was over 50% higher than the same period last year, despite a sequential decline of 16% [17][18] - Advanced display revenue increased by 28%, representing 56% of total LED revenue, up from 40% in the previous quarter [18] - Automotive demand increased by 92% sequentially, driven by improvements in battery assembly and sensing solutions [19] Market Data and Key Metrics Changes - China accounted for approximately 70% of total revenue, with Taiwan being another strong market [40][98] - The company expects continued strong demand in the automotive sector, particularly in battery assembly and power distribution [19] Company Strategy and Development Direction - The company is focusing on expanding its market reach in advanced packaging, automotive, and advanced display sectors [6][21] - There is a strong emphasis on heterogeneous integration and Chiplet integration as long-term opportunities [8] - The company is actively engaging with multiple high-potential customers in the battery production market [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth of the semiconductor industry, anticipating above-average growth through fiscal 2023 [26] - The company is optimistic about overcoming current supply chain challenges and expects improvements in logistics and wafer production in the second half of the year [21][26] - The outlook for fiscal 2022 revenue is approximately $1.58 billion, with expectations for strong demand to continue [26][27] Other Important Information - The company increased its dividend by 21% for the January payout and plans to continue increasing it consistently [24] - Share repurchases in the December quarter were over four times higher than the previous quarter, indicating a strong commitment to returning value to shareholders [25] Q&A Session Summary Question: OpEx guidance for fiscal 2022 - Management indicated that non-GAAP OpEx is expected to remain around $75 million for the fiscal year, with Q1 being lower due to delayed R&D projects [33][34] Question: Revenue guidance and backlog - The revenue guidance of $1.58 billion is considered a base case, with potential upside depending on supply chain improvements [37][38] Question: Revenue split between China and non-China - China represents about 70% of revenue, with a significant portion coming from OSAT customers [40] Question: Supply constraints and wafer shortages - Management noted that while supply constraints are easing, the impact of wafer shortages is still a concern, with expectations for gradual improvement [46][70] Question: Battery business and competition - The company is developing new battery assembly systems and sees laser-based solutions as a competitive advantage, although reliability remains a concern [78] Question: Utilization rates and seasonality - Utilization rates are in the high 80s, with some seasonal dips expected around the Chinese New Year [65][69] Question: Future engagement with automotive OEMs - Some engagements with automotive OEMs are expected to yield results in fiscal 2022, while others may take longer to materialize [88]