Kulicke and Soffa Industries, Inc.

Hello, and welcome to the CULIC and SOFA 2022 First Fiscal Quarter Results Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Joe Algindi, Senior Director, Investor Relations. Please go ahead.

Welcome, everyone, to Kulkin's Office Fiscal First Quarter 2022 Conference Call. Joining us on today's call is Fu Xinchen, President and Chief Executive Officer, and Lester Wong, Chief Financial Officer. For those of you who have not received a copy of today's results, the relief as well as our supplemental earnings presentation are both available in the Investor Relations section of our website at investor.kns.com. 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 complete discussion of the risks associated with tool consult, so that could affect our future results and financial condition, please refer to our recent SEC filing, specifically with 10-K for the year ended October 2nd, 2021, and the 8K filed this morning. With that said, I would now like to turn the call over to Fuzhen Chen for the business overview. Please go ahead, Fuzhen.

Thank you, Joe. It continues to be a very exciting and transformative time for the company. Our core business is being fundamentally enhanced as the importance of semiconductor assembly increased in both high-volume and leading-edge semiconductors. Additionally, We continue to make significant progress expanding our market reach as interest and adoption of our advanced packaging, automotive, and advanced display offerings are accelerating. Our confidence in these high potential new initiatives is improving as our market engagements are tracking better than expected during our investor day in September. I will spend a few minutes to cover each. Within our dedicated advanced packaging business, we continue to gain access into the logic, networking, and the mobility market. This portfolio, including our lithography, thermal compression, high accuracy free chip, and the system in package free chip solution are extremely competitive and address the broad and the growing semiconductor assembly market. We continue to drive adoption across this growing portfolio, and Appalma, our summer compression platform, is making significant progress. Heterogeneous integration or triplet integration is one of the long-term opportunities that we are pursuing aggressively. Although this is not the only market, in addition to heterogeneous integration, we are also extending access within mobility for both high-volume logic and the next generation 3D sensing applications, and also for core package optics necessary for ultra-high speed network communications, such as high bandwidth transceivers. The key benefit for the thermal compression, or TCB process, include an efficient solution for higher bandwidth interconnect assembly, down to 10 micron pitches, which is way beyond the current interconnect pitch for most leading logic applications. Additionally, TCP enables stacking for emerging 2.5 and 3D architectures. This shift to emerging multi-chip structures is increasing the value of packaging technology, and it is increasingly necessary to support here at the leading edge. In addition to these fundamental benefits Within leading-edge logic, TCP also enables assembly for components which are heat-sensitive, including thin substrate and optical components used for communication and sensing. We recently received acceptance and recognized revenue for a high-potential silicon photonics application supporting the optical transceiver market, with increasing cellular bandwidth needs. Network-to-network communication is expected to grow dramatically, with high bandwidth optical transceivers expected to grow at 50% CAGR through calendar 2025. We are very early in this transition, and we're positioned to help enable this growth. The next update is related to our automotive opportunities. The transition to electrification and the autonomous are accelerating semiconductor growth in the automotive market at a rate of over twice the industry average. Over the coming year, our high performance, high reliability system mesh well with this end market. In addition to our historic leadership position within the automotive semiconductor applications, we have also been developing new battery assembly systems Over the past several years, we had one core battery solution that was adopted and globally deployed by one customer. While this solution was very successful, the market was limited. Today, many more customers are entering this space, and we are working to bring new innovative solutions, supporting both cylindrical and prismatic battery opportunities to market. Recently, our engagement and the market interest with our current and the new battery offering have expanded dramatically. At this pace, we are tracking better than the expectations set during the recent investor day. We are currently engaged with over five high potential customers eager to rent battery production for the commercial and the consumer vehicle market We are also experiencing growing interest within emerging industrial applications, such as battery backup and agriculture. Finally, the third key growth focus area is advanced displays. We continue to deliver our market-leading piezo-lux system and are ramping production of several Luminex qualification tools. Over the coming quarters, we anticipate winning several new Luminex qualifications and gaining more visibility on a broader industry ramp. Turning to our results this quarter, we achieved $460.9 million of revenue and a non-GAAP EPS of $2.19. We generated $408.6 million within capital equipment and the demand remains strong across all end markets. General semiconductor remains very strong, softening by 16% sequentially as anticipated. Within general semiconductor, the more capacity driven, more bonding business declined by 8%. The larger sequential reduction stems from very strong September quotas demand for our wafer label, logic, and the power assembly solution. Retaliation rate remains strong across these broad install base. As a reminder, general semiconductor revenue in the recent December quarter is currently over 50%, higher than the same period last year. Within the LED market, we continue to support rapid growth within advanced display. Advanced display increased by 28% in the December quarter, representing 56% of our total LED revenue, up from 40% in the September quarters. We continue to aggressively work toward expanding our presence in this new exciting area, and anticipate advanced display will grow dramatically over the long term. Next, automotive and the industrial remain a long-term growth opportunity for us. Automotive demand increased by 92% sequentially and was driven by improvement in our battery assembly, power distribution, and the sensing solutions. We are very eager to continue participating in the long-term transformation of the automotive space. Finally, demand for our memory solution increased by 17% sequentially from the very strong September quarter. Overall, current market conditions and our long-term outlook are tracking better than expected, and we remain very positive over the coming years. New term, we are very focused to drive new customer engagement and win new qualifications across advanced packaging, automotive, and advanced display portfolio. Over the prior years, our focus development effort have better align our business with long-term technology-driven market opportunities, which we are executing on. While broader industry supply chain and the global logistic challenges are part of the current operating environment, we believe they are very short-term and anticipate greater improvements through fiscal 2022. Over the coming years, The future is very bright, and we look forward to sharing our progress over the coming quarters. With that said, I will now turn the call to Lester, who will discuss our financial performance. Lester.