Kulicke and Soffa Industries, Inc.

Greetings and welcome to the QLIC and SELFA 2025 Second Quarter Earnings Call. 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 Elginy, Senior Director, Investor Relations. Thank you, sir. You may begin.

Thank you. Welcome, everyone, to Kulkin's Office Fiscal Second Quarter 2025 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. GAAPs and non-GAAP 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 Kewlick & Salfa that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically our latest form, 10-K, as well as the 8-K file last night. With that said, I would now like to turn the call over to Fuzan Chen for the business overview. Please go ahead, Fuzan.

Good morning, everyone. Last month, we announced the intent to discontinue the electronics assembly or EA equipment business. subject to local regulatory approval. We acquired this business in 2015 and it is currently a component within the All Other category. We intend to fully support and serve our customers with equipment purchase requirements over the coming quarters. We will also continue to retain EA Equipment Technology as well as the related aftermarket parts and service business to support the existing install base and our customers' operational needs. We believe this decision is not difficult, was critically essential to ensure our underlying business are competitive and are properly aligned with beneficial long-term technology trends. Looking ahead, we intend to prioritize development and further leverage our dominant bulk, wage, and thermal competition position while we have demonstrated clear technology leadership to address fundamental assembly transition within high-volume, leading-edge, and power semiconductor market. Additionally, our APS business, which provides revenue consistency, as well as our emerging advanced dispense portfolio, extends our technology leadership and provides additional growth paths through all these evolving core market opportunities. This restructuring effort is also intended to enhance our long-term financial with anticipated improvement in both margin and through cycle improvement. At a macro level, the ongoing trade situation has increased level of uncertainty throughout global market and the supply chain. This level of macro and industry uncertainty has created hesitation and a more defensive capacity plan approach. throughout our silk market. Sequentially, this hesitation was most evident in the Southeast Asia automotive and industrial market, which had the effect of limiting the seasonal momentum previously anticipated for the June quarter. Interestingly, over the same period, we saw increasing improvement in other Asia regions. While we are not immune from this macro-near-term dynamic, Semiconductor unit growth as well as the increased complexity of semiconductor packaging are expected to expand our self-market. We remain confident in the industry's resilience and also remain confident that our global business, supply chain, and development paths are best optimized as we look ahead. Over the near term, we intend to further strengthen our growth prospects with a focus on vertical wire power semiconductor, advanced dispense, and thermal compression, which I will discuss in more detail shortly. During the March quarter, the general semiconductor and market, supported by improving ball-bounding dilution rate, experienced a 38% sequential increase due to improved demand from ball, wedge, and TCB stemming from the US and China. In view of the changes surrounding the EA equipment business, we decided it was appropriate to simplify our end market disclosure and consolidate LED within automotive and industrial, starting in the current quarter as well as within comparable period. This change is aligned with the external semiconductor marketing forecast, where LED is generally a subcomponent of the industry market. With that said, automotive and industrial was sequentially down in the March quarter over the December quarter, largely due to the final Project W related LED sales, which were recognized in the December quarters. Automotive and industrial excluding LED was down approximately 7% sequentially, but was still up nearly 14% from the same period last year due to ongoing demand improvement of our Estonian and the policy solutions. Winning memory. Software NAND system demand was the primary driver for our sequential reduction in the March quarters. Today, our current memory exposure is centered on NAND, but we remain focused to diversify into dynamic memory through the fundamental advanced packaging transition, affecting HBM for leading edge memory, and also driving momentum for our emerging vertical wire solution for high-volume memory. Finally, within APS, we continue to enjoy a relatively stable base of part, service, and support revenue. Through this dynamic market environment, while there may be some fluctuation over the coming months, we anticipate overall install base and utilization trend will continue to improve, supporting a relatively stable level of APS revenue. At this point, We anticipate the majority of our business has gone through a long-term period of capacity digestion and remains very well positioned for the next set of bulk wage advance expense and the summer completion opportunities. Within Bo Bang Din, our ongoing pace of customer engagement as well as a new product development remain on track with our vertical wire solution which continues to gain momentum. Last month, we officially announced the launch of our latest wafer-label packaging solution, AT Premium Man Plus, which is specially optimized for stack dealing opportunity. This high-potential new memory packaging approach is driving significant interest with the leading customers, some of which are accelerating their transition and may initiate new stack dealing production by 2026. Additionally, This vertical wire capability is also comparable with non-memory final devices, which support high-volume general semiconductor applications. As explained on prior course, similar to leading-edge application, cost-sensitive wire-bounding applications are also aggressively demanding new transistor-dense packaging solution, and our vertical wire technology is very well positioned to effectively address both high-volume logic and the memory transition. In addition to vertical wire, the pace of our liberal bonding development initiative remains on track. We continue to prepare for new solutions to this highly volume market over the coming quarters. Next, waiting with bonding, the power semiconductor opportunity continues to demand higher current, higher reliability, and higher efficiency devices. A few years ago, This power semiconductor application was some of the most cost-sensitive and competitive semiconductor assembly market. The growth in electric vehicle and the sustainable energy has caused this basic power control application to become increasingly complex, requiring better materials, more robust interconnect, and more advanced equipment. In April, We proudly announce the launch of our newest Sonotrode-enabled pin welding system for power semiconductor applications. This new system, which leverages our leading Australian platform, extends our market reach while enhancing alignment with the growing and evolving global demand for electric vehicles and sustainable energy. The use of pins within this market is rapidly growing. which support better inductance and better flexibility as they improve power monitoring and sensing to support higher-efficiency applications. Additionally, within this emerging high-performance power module market, there is an increase in new semiconductor materials such as silicon carbide, but also an increase in the use of copper materials and interconnects. Copper interconnects are a core competency for K-Net which we intend to fully leverage as this long-term market evolution continues. Next, within the Advanced Dispense business, we continue to build our portfolio of solutions as well as our customer-facing engagement. We continue to grow our customer base and recently received an order from a high-volume US-based integrated devices manufacturer. Additionally, our recently qualified solid state battery opportunity has been performing well and we anticipate a potential production ramp to begin over the coming quarters. Over the coming years, we are also focused to expand our advanced dispense market presence. This effort will combine our unique dispense capability with our existing market leading core system technology. Turning to thermal completion, our advanced solution team continue to actively support logic and memory customers in production and development. We remain well positioned and are continuing to take a shift in advanced logic application as the market transition to next generation chip on wafer and also wafer on substrate applications. Larger and more complex multi-chip processor for data center and AI application are expected to drive the next wave of leading-edge customer capacity. We have worked very closely with many customers over the recent years and remain well positioned for leading-edge but also higher-value opportunities, as mobility devices begin transitioning to cheap and heterogeneous applications. Finally, for TCP in-memory, we continue to anticipate our unique fluxless solution, which provides direct copper zero die gap and ultra-fine pitch compatibility will be a key contender for future HBM opportunities. Building on traction from the prior quarters, we expect to ship additional tools to our leading memory customers toward the end of the fiscal year. As a reminder, our innovation in thermal compression and vertical wire have unlocked new market access to logic and memory opportunities, which our company was previously excluded from. Today, as the world takes the next step to transition single-die semiconductor package to multi-die and heterogeneous triple-die packaging format, thermal compilation is rapidly becoming the incumbent technology for high-performance applications. While our vertical wire solutions are increasingly well positioned to address a wide portion of the high-volume market over the long term, As a reminder, we remain the only fluxless TCP supplier who has been qualified for higher volume manufacturing with some of the most advanced semiconductor company. And we are nearly fully booked for physical 2025. More broadly, we have nearly 120 system installed base across 10 different highly engaged customers. This helped to demonstrate our track record for winning, as this installed base captured a wider portion of the market than any of our competitors have been able to address. In closing, we have worked hard to ensure our business is best aligned with critical technology change, such as a vertical wire in memory, TCV in leading edge logic, and our increasingly capable assembly solution in power semiconductor. Additionally, our growing but advanced dispensed portfolio of solution increase our potential across all of these long-term technology transitions. While recent core market utilization rate are promising, we remain in a unprecedented state of macro uncertainty, although remain confident in our technology and the market positions, and are prepared to overcome near-term challenges. At this point, our core structures existing product portfolio and the through-cycle performance are optimized. And we will continue to enable fundamental technology change throughout our supermarket. As we have done for seven decades, we will continue to closely support our customers and emerge a stronger, more profitable, and more growth-centric company. I will now turn the call over to Lester to cover the financial overview. Lester?