Kulicke and Soffa Industries, Inc.

Greetings, and welcome to the QLOOK and SUFFOLK Q1 2025 conference call and webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. If anyone wants to require operator assistance, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Senior Director of Investor Relations, Joel Guindy. Please go ahead, Joel.

Welcome, everyone, to Kulikin's Office Fiscal First Quarter 2025 Conference Call. Fuzin 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 the 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 Kugel-Konsalfa that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically the latest Form 10-K as well as the 8-K filed today. With that said, I would now like to turn the call over to Fuzhen Chen for the business overview. Please go ahead, Fuzhen.

Good morning, everyone. Over the past several quarters, our general semiconductor and automotive end markets have shown signs of inventory and capacity digestion. And we continue to anticipate a gradual improvement in fiscal 2025. In parallel, we have continued to demonstrate technology leadership position within the growing thermal compression and advanced dispense. Visibility within our higher volume bore and wage market is typically limited this time of the year. Regardless, Our core business remains in the late stage of a market downturn. While we continue to anticipate a return to broader capacity addition within the COBOL, H, and APS businesses through fiscal 2025 due to improved real utilization rate, market trend, and reasonable industry growth expectation, we remain focused on what is within our control, primarily ongoing development customer qualification, and market adoption of our newest system. Additionally, industry momentum within thermal compilation technology continues to broaden, and we are extending our leadership through new offerings and customer engagements. Approximately three weeks ago, we shipped our latest fluxless thermal compilation or FTC system in a new dual-head configuration to a key Fungi customer. This system provides nearly twice the throughput as our existing production-proven FTC system, which was already qualified and already provides an additional value population for advanced logic customers within its single-head configuration. These new dual-head configurations will further extend value for advanced logic customers and also provide access into high bandwidth memory markets. Beyond this new dual head system, we are aggressively developing a future panel-based platform, which will further extend the value of FTC. Of note, we are pleased to extend our FTC customer engagement, which now includes a leading memory customer in addition to our existing base of leading IDM, Foundry, and OSEC customers. This new memory engagement is a supporting process development for future generation HBM applications, leveraging our FTC leadership. FTC is positioned to enhance the future HBM process, providing critical performance, form factor, and efficiency enhancements by significantly reducing pitch and increasing IO density for future AI and cloud computing workloads. Last, the copper-to-copper PCB process is continuing to pick up momentum and is currently being reviewed by leading IDM customers in addition to our previously announced customers. Our copper-forged solution provides hybrid benefits such as a zero-die gap, ultra-fine pitch, and direct copper-to-copper interconnect without a licensing fee, front-end production requirements, or ear issues, which are associated with the initial hybrid bonding technologies. These benefits are available today through our brotherly FTC portfolio, which is well positioned to provide additional value for emerging advanced logic and advanced memory applications. This technology leadership in FTC is enhancing our positions within the broader TCP market as well. We recently accepted orders from two new advanced packaging customers for several new Aptura systems. We estimate the time for TCB in calendar year 2024 has exceeded $300 million, which represents a key market milestone for two significant reasons. First, it highlights TCB is comparable in annual revenue to the mature free-chip mass reflow equipment market Considering free chip has been in high volume production for over three decades, this milestone has reached relatively quickly for thermal compressions. Second, PCB adds significant incremental value beyond traditional packaging technique due to its ability to efficiently stack die, increase package label transistor density, and simplify the wafer fabrication process. TCB technology has a long life ahead and is anticipated to grow significantly over the long term. Over the coming years, we anticipate the broad TCB market to grow at a compound annual growth rate of 20 to 25%, with FTC growth expected to grow materially faster over the coming years. During the fiscal 2025, we anticipate additional customers to move into higher volume FTC production. The need for more and more related packaging solutions are emerging rapidly, and we are excited to be leading this transition with our market-rated FTC solution. This broad industry evolution to more advanced triplet-based package is still in an early stage, and is anticipated to play out over the long term, driven by emerging artificial intelligence, cloud computing, and edge device requirements. As explained over the recent quarters, we have secured clear leadership position in Fractless Thermal Compilation, which will play an increasingly important role within future heterogeneous and triplet-based applications. Currently, Most advanced logic applications are dependent on aging-free chip technology, which we anticipate will continue to transition to traditional TCB or fluxless thermal compilation applications. We continue to demonstrate consistent progress to expand our TCB portfolio, customer base, and market access. This highlights our ongoing leadership, industry focus, and the long-term potential of this emerging technology. Turning to our financial results, for the December quarters, we delivered $166.1 million of revenue, 52.4% gross margin, and a non-GAAP EPS of $0.37. GAAP EPS of $1.51 was largely supported by customers' reimbursement associated with our fiscal second quarter 2024 impairment charge over Project W. This will provide additional details shortly. From an end-market standpoint, the December quarter is generally driven by sustainability within the general semiconductor market, although we continue to anticipate broader industry growth and the demand for our core solution within fiscal 2025. The general selling contact market continues to be largely in a state of capacity digestion, with the ball-bounder revenue sequentially lower from September as expected. We continue to expect we are in a late recovery stage and remain positive on broader recovery through fiscal 2025. Our ball-bounder team remains very active developing new features and platforms to support the evolving high-volume assembly market. We look forward to sharing more information and broadening the board-bound portfolio later in fiscal 2035. Within automotive and industrial, we have seen demand improve over the same quarter last year, related to EV and also power semiconductor demand. During the December quarter, we shipped several sets of battery assembly systems to several customers, including a leading EV company and a promising solid-state battery manufacturer. We continue to anticipate additional recovery in the power semiconductor market over the coming quarters. Similar to general semiconductor for wall bonding, auto and industrial is our primary market for wedge bonding. And similar to Bolt, our wedge team is aggressively developing new systems to expand our dominantly heavy wire wedge position into thinner wire, pin welder, and also clip-attached market, which will help us better support the rapid evolution of emerging automotive and power semiconductor needs. This transition is being driven by growing global demand for more efficient power delivery and storage. We are playing a critical role leading the transition from lower conductivity aluminum interconnect, which we are the standard in the power semiconductor applications, to copper interconnect. As we are currently demonstrating, within the FTC copper-to-copper TCP process and have also lead the transition from gold to copper in the high-volume ball bonding market over 10 years ago. We have inherent competency in copper bonding, in which the benefits of more expensive materials like copper are significant as it supports more efficient charging, energy generation, and high-power applications such as AI and cloud computing. We are excited to support customers through this potentially significant long-term wage transition and will provide additional information on this emerging opportunity over the coming quarters. Finally, within memory, we remain focused on driving vertical wire adoption for emerging applications within both DRAM and LAN. Separately, vertical wire continues to be another emerging memory solution for several global memory customers, who are either requesting information, developing their process, and or beginning to produce a sample to drive market adoption for future stack DRAM applications. As explained last quarter, vertical wire-based assembly is positioned to support future high-volume stack memory applications, but also significant potential to enable future high-volume stack logic applications. Similar to TCB, we have a significant technology leadership position with a growing base of engaged customers who are developing new vertical wire packages. Our process and development engagement have recently increased. We are currently working with leading memory customers in Korea, the US, and China. Over the coming year, Vertical wire connected memory applications are anticipated to move into higher volume production. In the longer term, we expect this enabling technology to extend into higher volume general semiconductor market. As I explained earlier, in addition to vertical wire, we are also supporting a major memory customers who is examining faultless HBM alternative in coordination with our highly capable FTC process development team. The company continues to be at a unique period of time. We are well positioned for several promising high-growth opportunities that are supporting long-term critical technology transition in both leading-edge and high-volume semiconductor assembly. While we have already experienced core market improvements, we continue to anticipate both the board and the wedge will reach a more normalized level of demand within fiscal 2025. Although we anticipate this broad and coordinated recovery to be imminent, we remain focused on what is within our control. Our priorities are to maintain our aggressive cadence of development across all supermarkets while we continue driving customer acceptance to our new products and services. I will now turn the call over to Lester for the financial update.