Kulicke and Soffa Industries, Inc.

Greetings and welcome to the CULIC and SAFA 2024 First Quarter Results Conference Call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require 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 Elgandy, Senior Director, Investor Relations, Thank you. Please begin.

Thank you. Welcome, everyone, to Kulikin's Office Fiscal First Quarter 2024 Conference Call. Huizhen 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. Gap to non-gap reconciliation tables are included within our latest earnings release and earnings presentation. Both are available at investor.kns.com along with prepared remarks for today's call. 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 and are subject to risks and uncertainties that may cause our actual results and financial condition. to differ materially from the statements made today. For a complete discussion of the risks associated with Kulik and Safa that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically our most recently filed Form 10-K and the 8-K filed yesterday. With that said, I would now like to turn the call over to Fuzen Chen for the business overview. Please go ahead, Fuzen. Thank you, Joel.

Good morning, everyone. Looking ahead into fiscal 2024, we remain focused and optimistic. Our businesses remain on track to support new level of value creation. As our core market recovers, we continue to anticipate a return to an above-average industry growth rate by the end of the fiscal year. As the semiconductor industry returns to a more normal growth pattern through fiscal 2024, will remain in dominant leadership position across the core market and will continue to aggressively drive key strategic initiatives, providing additional paths to long-term value creation and profitability. Specifically, these strategic initiatives are centered around three key businesses, broadbanding, advanced packaging, and advanced display. I will provide additional detail to each of these points shortly. But first, I would like to summarize our financial performance and market observation and the shares and update on the advanced dispense business. For the December quarter, we delivered $171.2 million of revenue, just above our guidance midpoint, with a GAAP net income of $9.3 million and non-GAAP earning per share of $0.30. From a market standpoint, the fiscal first quarter was a night with a seasonal expectation. Based on external market forecasts, customer feedback, and discussions, we continue to anticipate improvement over the course of 2024, with more significant demand in the second half of 2024. We anticipate overall industry conditions will remain favorable going into 2025 as we expand our market positions. Over recent months, we have made significant progress with our advanced dispense business and are actively competing for several opportunities in parallel. We continue to target key opportunities across our self-owned market which require high precision dispense capability combined with world-class motion control capability, KNS is known for. Initial customer feedback has been strong and we are increasingly confident we will leverage and grow this opportunity over the coming years. Thinking to the end market review, we continue to see signs of broader cyclical improvement and also anticipate gradual recovery through the fiscal years. Seasonal dynamic impacts our December quarter results as expected. This effect was most pronounced within general semiconductor Here we experience software demand due to seasonal patterns, which affects the board bonding business, and the software power semiconductor market condition, which affects our wage bonding businesses. The power semiconductor market is going through a period of inventory and capacity digestion, causing a near-term headwind in wage bonding. We continue to expect trends in power semiconductors to improve over the long term, and the support growth of our wedge bonding business. For ball bonding, we anticipate a demand environment to improve as the semiconductor unit growth returns in fiscal 2024. Next, LED remains relatively soft, with a demand primarily attributable to general lighting. We remain focused on the existing qualification engagement for both Luminex and Project W. And I will share an update to both opportunity shortly. With automotive and industrial, MAKO and the industry factor have impacted the near-term demand for our wedge solution. Despite the well-known softness in automotive near-term, we continue to anticipate specific opportunity for KNS in battery assembly space later this year. This specific battery opportunity is unique to KNS and will help mitigate some of the existing demand softness affecting the broader automotive market. Longer term, as the semiconductor content and the complexity within vehicle advance, we remain strategically aligned with the automotive trend. We will continue to provide leading-class equipment to support the transition to more advanced and sustainable vehicles, including efficient power delivery and storage applications. Finally, within memory, we have seen demand improve significantly for our leading-end solution across multiple customers. Memory revenue in the first fiscal quarter exceeded revenue for the prior fiscal year. This strong improvement provides further confidence that we are past 12 in the memory market, and we continue to actively pursue near- and long-term strategies to expand share in high-volume and leading-edge design applications. During the December quarter, we have also booked revenue for multiple systems capable of supporting vertical fan-out applications in production and remain very positive on the long-term potential of this smart packaging approach. We currently anticipate overall end-market demand will return to a more normalized level by the end of fiscal 2024 and continue when into fiscal 2025. As we prepare for the next period of demand recovery, we are extremely focused to execute key KNS opportunities, which will further diversify revenue, expand market growth, and sustainably enhance earning potential over the long term. I would like to provide a brief update on our unique position within the broadbanding, advanced packaging, and advanced display opportunity. The semiconductor assembly market continues to evolve and we are well positioned to add more industry value in the form of power efficiency, performance, package label, transistor density, and cost. This technology-driven evolution within assembly is demanding more feature-rich and capable assembly solutions, which we are well prepared to deliver. This semiconductor opportunity will continue to benefit our rebounding and advanced packaging business over the long term. Within Bobangjin, we continue to deliver new future rich solutions which will further extend our leadership position, drive share gain, and also help enhance and sustain long-term gross margin. Our initial two systems, Polcom and Polnex, were recently released and have been well received by customers. We are ramping the production of this initial system during March quarter. As explained on our previous call, the board bonding process remains the most dominant and cost-effective solution for both high-volume single and multi-bike packages. As a pioneer in board bonding with decades of industry leadership, we continue to maintain a dominant market share in these key growth areas. Additionally, we continue to see many consumer mobile and IoT-based applications. in high volume market seeking new packaging approaches. These new approaches provide greater level of transistor density at the packaging level and provide candidates with opportunity to add additional value. Within broadbanding, these technology-driven changes are demanding more complex looping and higher wire count per package. Our market leadership and persistent development effort provide a unique position to track industry labor change. Currently, we see new market emerging in shielding and also willing high potential stack die applications such as vertical fan-out, which are providing specific, long-term, and unique opportunity for the company. New shielding applications are being deployed for both long- and short-distance wireless communication. As bandwidth increases and wireless communication becomes more ingrained in consumer electronics, we expect ongoing growth in this new wire-bounding market. This shielding approach was in development a few years ago and has now been broadly adopted by Oset and IDM and is utilized in high-volume production. We expect this shielding need to continue supporting near-term recovery and long-term growth in the broadband market. Similar to where shielding was a few years ago, there has recently been significant interest from customers for our vertical fan-out or VFO solution. This new opportunity is anticipated to further extend our memory market access over the course of the fiscal 2024. Over the next few years, We anticipate a similar vertical wire approach will provide a cost-effective alternative to through silicon wire or TSBs for high-volume 3D applications beyond the initial adoption within the memory market. The value of VFO stems from its ability to create complex 3D structures, which provide form factor, power efficiency improvement, and a significant cost benefit over alternative advanced packaging solution. One customer has reported a 27% improvement in the form factor and a 5% improvement in power efficiency alone with allowing higher I-O count and a better heat dissipation. During the December quarter, we booked VFO system revenue of just over half a million dollars to our first moving customer as they refine their production approach. We are currently engaged with the three leading manually customers who are seeking cost-effective 3D packaging approaches. Initially, we anticipate even application such as a low-power DDR, LPDDR, to move in low-volume production in calendar year 2024 and higher-volume production in 2025. Based on initial customer feedback, There is also strong interest in the potential that VFO can be deployed for high bandwidth memory applications in the next few years. Shielding, VFO, and the overall growth of high-volume multi-type applications has increased the growth rate, technology needs, and our competitive position within the accessible world-bounded market. we believe we are best positioned to leverage this new market opportunity long-term. Turning to advanced packaging, we continue to actively support several customers' engagement in parallel and anticipate additional orders from OSAP, IBM, and the Foundry customers as we complete key evaluations and qualifications. In addition to our incumbent position in high-volume semiconductor market, Our advanced packaging effort allow us to take shares in new high-growth market including leading-edge logic, mobility, and core package optics. We are increasingly confident on the longevity and the market potential for our TCB portfolio and expect to extend the technology well beyond the previously targeted 10-micron pitch. Using below this 10-micron ratio will further unlock the flexibility and the long-term potential of our TCV solution. We increasingly anticipate TCV will be an essential component for leading edge assembly for many years to come. In addition to final pitch capability, which extends bandwidth and the transistor density, our TCV solution also provides direct copper-to-copper interconnect. Direct copper-to-copper connections are best in class. due to low resistance and high performance. Our fluxless DC solution is well positioned to enable this industrial breakthrough across high-volume and leading-edge heterogeneous markets. We are confident of our significant technology lead in thermal compression, which we intend to extend further. Demand for our solution is rising, and we are running several qualifications within OSET, IBM, and the Foundry customers in parallel. Over the coming weeks, we intend to ship several more qualification systems supporting FluxDex DCB. I look forward to sharing new products and the new customer milestones over the next few quarters as we drive broader market adoption. Finally, within Advanced Display, we continue to expand access into the broader mini and micro-AOD market. Our growing portfolio supports the evolving display market, serving small format, high performance, mobile display, as well as large format, high volume, and direct initiative display. We expect to secure a qualification win for Luminex later this year. Luminex provides a dedicated Mini-LED, which will be increasingly necessary as Mini-LED designs continue to shrink. At this year's Consumer Electronics Show, it has become clear that Mini-LED technology is a significant performance enabler for the LCD market. Mini-LED displays have improved over the past years, delivering a higher level of brightness and quality and leveraging the large install base of LCD capacity. As dye sizes reduce, We are confident the industry will require a dedicated high throughput solution such as our Luminex system. Our other key opportunity in display is Project W, and I am happy to report that we are reaching new milestones expected to ship additional capacity during the March quarter and the recognized revenue during the upcoming June quarter. As we work successfully to qualify a previously shipped system, we are beginning to ramp production in support of our customers' long-term capacity plan. Our global R&D, operations, facilities, and supply chain teams have been working tirelessly to support this major initiative, and we look forward to sharing more information over the coming quarters. It remains a very dynamic and interesting time at the company. As our cold market recovers, we are again transitioning into a more optimized and a more diversified company. We are very excited to reach new milestones across our growing market. Looking through fiscal 2024, we continue to anticipate a gradually unique demand recovery and also technology-driven growth. As our core market evolves and we continue to extend our foothold in the new market, customer interest and momentum across our emerging portfolio remain strong. We look forward to releasing a steady pace of new systems, new features, and also announcing new customers and technology wins as the core business returns to a more normalized growth rate. With that said, I will now turn the call over to Lester, who will discuss our financial performance and outlook. Lester?

Thank you, Fusheng. My remarks today will refer to GAAP results, unless noted. While there continues to be headwinds across specific end markets related to the macroeconomic and industry conditions, it remains a very exciting time for the company. Our core market has shown signs of improvement, and we are reaching new milestones with key customer engagements which provide new market access and enhance our long-term financial potential. During the December quarter, we generated $171.2 million of revenue, 46.7% gross margin, and 30 cents of non-GAAP EPS. Gross margins were aligned with expectations and are anticipated to improve with volume and new product launches. Non-GAAP operating expenses also met expectations at 69.8 million. Finally, tax came in just ahead of expectation at just below our longer-term 20% effective tax rate. Turning to the balance sheet, working capital days increased from 448 to 525 days in the December quarter. Over this period, the absolute value of working capital decreased slightly. Our repurchase program remained opportunistic and we have increased our repurchase activity sequentially to $26.8 million during the December quarter, nearly three times the value repurchased in the prior quarter. Additionally, we recently raised our quarterly dividend to $0.20 per share. This has allowed us to maintain an industry-leading dividend yield, nearly 1.6%, as of our most recent payable date on January 9th. Looking out through fiscal 2024, we continue to invest in the future and are anticipating capital expenditure to be $23 to $27 million. These investments will support growth over the coming years and will be deployed to enhance and expand operations, facilities, R&D, and corporate systems. Considering the ongoing softness in automotive and power semiconductor, which is affecting near-term demand for our wedge bonder solutions, we anticipate revenue of approximately $170 million plus or minus $10 million with gross margins of 47% in the March quarter. Non-GAAP operating expenses are anticipated to increase slightly to $72.5 million plus or minus 2%. We remain focused on controlling and limiting non-critical activities, although continue to ramp headcount where necessary to support our growing set of customer engagements. Non-GAAP net income for the March quarter is expected to be approximately $14 million, with non-GAAP earnings per diluted share of approximately 25 cents. In closing, over the long history of the company, we have never enjoyed as many different market and growth opportunities. The core semiconductor assembly market continues to evolve and is adding more value to the industry. New levels of capabilities are optimizing our high-volume business which will see demand recovery over the coming quarters. At this core, market recovery is underway. We are taking share and expanding our position in leading-edge large applications, memory, automotive transitions, and high potential display opportunities, which will add diversification and meaningfully enhance free cash flow generation over the coming years. Finally, we are starting to see material opportunities in advanced dispense and continue to adopt an active but cautious posture in exploring future M&A opportunities. Over the coming quarters, we look forward to sharing new milestones on our progress across this broad set of opportunities. This concludes our prepared comments. Operator, please open the call for questions.

Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you 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 the star keys. Once again, that's star one to register a question at this time. Today's first question is coming from Krish Sankar of TD Cowan. Please go ahead.

Hi, thanks for taking my question. I had a couple of them. Fuzan, I think last quarter you said you expected kind of like a sharp recovery in the fiscal second half of your year. I was wondering, is this true, or is it more a calendar second half recovery, which is the fiscal second half?

Okay. So, Krish, I will say this. I think our Q2, actually, weakness in the auto industry and the power semi actually impact our Q2 outlook. And also, Q2 is a shorter quarter, like we have with Chinese New Year. So actually, Q2 was, compared to our original expectation, was lower, and we see some push out. But we still, actually, still really feel good about the second half. we still believe the industry recovery actually will make our broadband recovery more significant. And in addition, I think we have specific KNS growth, which second half can do better than first half. In a display, VFO, I mentioned in a script, battery, some customers, battery assembly, and also TCP. So if you put like Q2 and the second half I just mentioned, I think it's unlikely the push out in Q2 can fully actually, you know, in fiscal year of 2024. But so some of them probably will go beyond 2024, you know. But we still, we are very good that we will be able to achieve, you know, $800 million. So to answer your question, I think we still feel good about the second half, but we do have a push out from the Q2. This Q2 push out might actually suffer compared to original expectation. But actually, I think we're still quite positive to move forward. Hope I answered your questions.

Yeah, I got it. Thank you for that, Susan. And then two other quick questions. One is, is the timeframe still around April to figure out any kind of PCB qualifications in Taiwan?

Okay, so actually interest in our PCB, particularly flux PCB, actually has increased significantly. We currently have a multiple engagement with also IBM and Foundry, including our top two potential customers. And even some company, we have multiple engagement projects. So I believe, you know, we feel pretty good the qualification, all the qualifications are performing well, and we expect a qualification win, you know, throughout 2024. Particularly, I think, in Foundry process, These, actually, the engagement projects are advanced, you know, new technology. We believe it will take an additional quarter or maybe a little bit more to finalize, you know, everything. But actually, we do feel good about the progress and the overall momentum of our TCB.

Time for just a quick one for Lester. Can you just help us understand what was the backlog existing the quarter and how much was China as a percentage of sales?

Well, I think the backlog has been coming down, as we've talked about before, from the ramp. It's closer now to the normalized, which is close to our lead times. As far as China, China constitute... close to 60% of revenues in Q1. 46% of it was China-headquartered customers. So China, it continues to be an important part of our business, and we do see some strength in China right now.

Thank you very much, Lester. Thanks, Susan. Thank you.

Thank you. The next question is coming from Dave Dooley of Steelhead Securities. Please go ahead. Dave, please make sure your phone's not on mute.

Thank you. Good evening, guys. I was wondering if you could talk about what are some of the signs that you might be seeing now that lead you to believe that your core business is in recovery mode? Is it higher utilization rates or customers coming in and asking for capacity? Just talk about what signs or early signs you're seeing for core business recovery.

So, actually, we see, actually, you know, we have frequent engagement with our customers. But from an industry point of view, memory actually is a recovery, right? Associated with memory actually is a phone. You know, a lot of people are talking about, you know, AI phone and a PC. We believe these are bright spots. And, you know, the iteration, I think Lester probably can make a comment later. But I think this industry, you know, actually, we do believe a new capacity probably is needed. Some customer was on fence, but now they point to second half, you know, probably, you know, I think we'll have more opportunity, particularly in our boardroom. And we also have some... project we believe will be more realized in the second half. So let's be on the comment.

Yeah, so Dave, you're right in terms of utilization. I mean, utilization obviously, as always, is mixed around different end markets as well as regions. But China, which I mentioned before, it's over 80% is actually closer to the mid 80s now. And we're seeing some real strength there. The other end markets are also doing very, very well. And also, this is also related to China. is memory. Memory, for the first time, the last two quarters are over 80%. This hasn't happened since 2022, so we see a real buildup in utilization in memory, especially in China. So we feel that that would help drive our ball-bonded business in the quarter and in the second half.

Okay. just talk about what your expectations are for unit volume growth for 2024, overall industry unit volume growth, and then maybe characterize what you think it would be in the first half and the second half. It kind of sounds like first half unit volume growth is flattish with an acceleration in the back half, but I'd just like to hear what you guys think about first half and second half.

So I think that we have a market forecast high single-digit. Well, as you know, I think Auto right now actually is a little bit weak, and Power Semi also has some inventory. So with these two, but if you look at it, in general semiconductors, I think are still positive. So actually, first half was weaker compared to our original, you know, thinking. So still industry i think from our customers and also industry you know forecast see a second half will be you know a low i think forecast is high you know uh like a single digits we still quite positive i think six seven eight percent i think should still be uh achieved including second half

So one way to think about that is the growth rate in the first half is probably under 6% to 8%, and it's probably over 6% to 8% in the back half.

Yeah, I would say that. It's probably close to flat in the first half, and then I think, as Fusun said, high single digits in the second half.

Okay. And then you talked a lot about the dispense opportunity. Could you just highlight what sort of revenue opportunity you might have there in dispense in 2024 and 2025? Thank you.

Oh, okay. So, actually, we're quite excited with our accreditation dispense unit. Actually, this is a huge market, and with a TAM, you know, our TAM is about $2 billion. And actually, we have adjacency to our business overlap, including a core, like a ball bounder, display, and SMT. So almost like every other company, I think they have a need for a dispenser. So what makes us excited is, you know, the technology is pretty good. I think we are entering a law called micro-dispensing, which really need to have a precision dispenser and precision motion. And a lot of company dispensers become a bottleneck. So we are engaging with more than 10 customers. Some of them are quite significant ones, and all the feedback are pretty good, quite strong. So our goal, actually, in 2025, we hope we will be able to achieve about $25 to $30 million, and the 26th, of course, will be even faster growth, maybe target about $15 million. Of course, You know, we actually talking to a lot of customers, and this is the area I think I need to have a breakthrough. Micro-dispensing with the capability of precision, you know, control over the dispense and the motion is really needed in this industry, right? So we are quite excited. Thank you.

Thank you. The next question is coming from Charles Shi of Needham & Company. Please go ahead.

Good evening. I have a couple of questions. First, I want to get a little bit more color on how the business of the wedge bounding equipment has been trending. I think you probably have talked about potential moderation for a while, but it does seem like the softness is a little bit above, I mean, beyond what you have expected in the past. So my question is, how much weaker would you be expecting in terms of the wedge bounding equipment business? And the ball bounding side, it does look like there are some signs of recovery. The largest OSEP is increasingly CapEx this year based on what they said last night. How much would the ball bonding equipment strength offset the wedge bonding equipment weakness this year? And any comment would be great between the puts and takes of your two largest product categories. Thank you.

So, hi, Charles. We do see, as Fusa mentioned in his remarks, that's what I said, we do see weakness in wedge bonding, particularly driven by automotives. So I think it has been trending down for one or two quarters, but we think for Q2, it's going to be a more significant downward, but hopefully it will recover near the latter part of the fiscal year.

So, Cho, actually you mentioned the weakness, not only power semi-wage bond, it's also industry. So the customer with auto exposures, I think they not only push out some wage bounders. So push out also include, you know, a bull bounder in a particular company because of auto also have a bull bounder associated with that, right? So I would say, I won't say all the push out actually are all wage bounder for this quarter.

Got it, got it. So what's the, I know directionally, you do expect a bull bounding business. I mean, other than what you said about the, yeah, they are push out from the auto industrial sector, some on the bull bounders, but in general, what kind of expectation that the profile of the ramp of the bull bounder revenue throughout this year, it does sound like based on your commentary about the unit growth you were expecting probably a more gradual and modest increase of the ball bonding revenue for the first three quarters of this fiscal year, maybe a little bit update in September. Is that the right way to think about it?

I think, as Susan said, Q2 ball-bonder is also a little bit weaker than we expected, right? But we think actually Q3 will definitely start seeing recovery from conversations we've had with our customers as well as seeing what I mentioned earlier about utilization rate increasing, particularly in China. So we think Q3 would definitely pick up for Ball Bonder and definitely Q4 would be much stronger. So I wouldn't say the first three quarters would be weak for Ball Bonder. I would say Q3 and Q4 for Ball Bonder, I think we think the recovery would start in Q3 and then really pick up pace, latter part of Q3 into Q4.

Got it. Thanks, Lester. Maybe I want to ask one last question. So you didn't provide a new update on Project W. I just want to check with the management team. Do you still expect the high volume production to be in 2025 and work should be the next milestone? I'm not asking for the timing of the next milestone, but what exactly should be the next milestone? Thank you.

So, Charles, I think for Project W, the next milestone, I think, as Susan mentioned, we've shipped one system and shipping more capacity for the customer. I think the next milestone probably would be the qualification of the initial pre-mass production tools, which have been shipped. As far as whether we believe mass production kicking in 2025, a lot of that has to do with the customer, right? And the readiness of the entire supply chain for Project W. So we still see, I mean, for 24-25, pre-production tools going in, and we're getting ready for the ramp, which could be the latter part of 25-26. But again, a big part of it depends on...

the customer's readiness thank you thank you once again that is star one if you would like to register a question at this time the next question is coming from craig ellis of b riley securities please go ahead yeah thanks for taking the question and good evening guys so i i wanted to just go back to some of the earlier comments and try and

stitch together what we're saying about fiscal 24. So, Houston, I think early on you said that you think $800 million in revenues is possible, and it seems like with your traction in dispense at $25 to $30 million, that's going to drive about 60% of the incremental year-on-year growth. So does that mean that the balance of the growth is from ball bonders or wedge bonders, or do we have something hitting with advanced display and TCB this year?

Actually, Craig, I make a comment. I think 25 we expect dispense probably have really momentum. This year, 24, we have a lot of engagement with 10 customers, right? So, at least, I think traction is going to be 25 to $30 million is what we're looking for. And what I mentioned in the second half, I think in addition to more on the recovery, actually, even the recovery, compared to the peak, we're even not 40% of the peak volume yet. So I think Beaubank will have a lot of long way to go. So in addition to the Beaubank recovery in the second half, I think we also expect many things. We have a VFO, we expect this spread, right? And we have other areas to grow, as I mentioned in my script. So I hope I cleared it.

Okay, that helps, Houston. Thank you for the clarification there. And then I wanted to dig into another comment. You mentioned that it's possible that you'll see some auto battery shipment acceleration later this year for, I believe it was Wedge. And I wanted to get a sense for what you thought the magnitude of that would be and how the linearity played out in the back half of the year.

Yeah, so Craig, I think the magnitude is not huge, but it is significant. This is the first big buy we've had from the customer for quite a while. I think as far as linearity is concerned, I think we believe that there will be some in this quarter, but mostly it will be in the second half of the year.

Yep. And then lastly, if I could sneak in one more, certainly some encouraging signs in China memory. The question is for Korean memory and U.S. memory companies, what's your expectation for when we get back to 80% plus utilization rates that can benefit the business in those geographies with those customers? Thank you.

Well, I think right now, well, when you say U.S. memory companies, U.S. memory companies also have operations in China as well, right? Sure. So I think utilization in those geographic areas is, again, right now, not specifically the memory, but is probably in the mid-60s to 70s. So I think we hope that by, again, there is recovery in memory prices. We hope that by the second half, that will start picking up. for everybody.

Got it. Thanks very much, guys. We'll hop back in the queue.

Thank you. At this time, I'd like to turn the floor back over to Mr. Elgini for closing comments.

Thank you, Donna, and thank you all for joining today's call. As always, please feel free to follow up directly with any additional questions. This concludes today's call. Have a great day, everyone.