Hello, welcome to the Kulicke & Soffa 2023 second quarter results conference call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Joseph Elgindy, Senior Director of Investor Relations. Please go ahead, Joseph. Welcome everyone to Kulicke & Soffa's fiscal second quarter 2023 conference call. Fusen Chen, President and Chief Executive Officer, and Lester Wong, Chief Financial Officer, are both also joining 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. Complete GAAP to non-GAAP reconciliation tables are available within our recently filed earnings release as well as our earnings presentation. This information, in addition to our prepared remarks for today's call, are available at investor.KNS.com. In addition to historical statements, today's remarks will contain statements relating to future events and/or 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 a complete discussion of the risks associated with Kulicke & Soffa that could affect our future results and financial condition, please refer to our recent SEC filings, specifically the 10-K for the year ended October 1, 2022 and the 8-K filed yesterday. With that said, I would now like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen. Thank you, Joe. We continue to operate in a very dynamic global environment and remain focused on expanding self-market through cross-customer engagement, prudent acquisitions, and ongoing development activities. Macro factors such as global banking issues, inflation, and downstream inventory digestion are all contributing to a slow but still gradual rate of demand improvement over the coming quarters. While the pace of macro-driven recovery remains gradual, we see strengthening demand in our high-volume market and a broadening customer adoption and interest of our latest advanced packaging system. At this point, our delivery schedule for higher volume system provide confidence we are past trough. We now see an uptick in core activities which support further improvement over the coming quarters. Overall, our longer-term industry outlook remains fairly consistent and align with the third-party market forecast. We continue to anticipate positive semiconductor unit growth in fiscal year 2023 and a higher level of capacity and the technology related demand through fiscal year 2024. In addition to improving level of demand, our end market opportunity has expanded significantly over the prior years due to more complex assembly needs, including heterogeneous integration, electric vehicle, and infrastructure adoption, new display innovation, and the broadening connected electronics and the power semiconductor needs. As disclosed in late February, we have completed the dispense acquisition, and we welcome AJA to the KNS team. As a reminder, this new market provides access to adjacent dispense opportunity in both semiconductor and the electronics assembly, collectively representing a $2 billion addressable market and providing a new set of long-term opportunities. Our integration priority ensure the AJA team can efficiently leverage KNS resource, including our flexible and efficient manufacturing capabilities, our direct sales and distribution network, and our broad portfolio of system and the subsystem architectures. We have identified several target market areas for AJA, which we anticipate will ramp in later fiscal 2024. Turning to March quarter's result, we generated $173 million of revenue and $0.38 of non-GAAP EPS, significantly above our prior expectations due to better gross margin and operating expense performance. Our total capital equipment revenue was $133.7 million in March quarters, with a similar composition across end market as last quarters. Within general semiconductor, we continue to see technology-related demand for IoT applications, high-performance compute, and the growth in emerging applications such as artificial intelligence and the co-packaged optics. These trends, which are occurring both in leading edge and the high-volume market, are enabling share gain and higher margin opportunities. Regarding TCB, we generated record quarterly revenue during the March quarters in support of IDM demand for higher volume mobility production and high-performance computing. During the March quarters, we also shipped several fluxless TCB solutions and are preparing to ship our largest number of quarterly fluxless TCB system to leading OSAT, foundry, and IDM customers during the June quarters. In addition to heterogeneous, assembly complexity trends are also increasing technology-driven replacement for our future rich high-volume system, which will continue to enhance corporate labor gross margins. We remain on track to introduce several new wire bonding systems through the first half of 2024. Over the near term, we expect customer demand to continue improving due to seasonal strength and ongoing inventory digestion. Moving to LED, we are beginning to see gradual improvement within lighting opportunity and remain engaged with industry leader for both backlighting and the direct emission applications. In addition to supporting ongoing capacity addition with the PIXALUX. We are progressing LUMINEX engagement and the final qualification in support of large format direct emission application, and also emerging automotive display opportunities. Lastly, we are preparing to ramp production related to Project W, so that we are ready to move into higher production upon receiving the customer's next phase demand. Within automotive and the industrial, we continue to participate in power storage and the power semiconductor growth, which support transition to electric vehicle and the sustainable energy. We are currently preparing to launch our next battery bonder for higher form factor using both ultrasonic and laser interconnect solution. In addition to supporting the production ramp for customer and the commercial vehicles. Within power storage, our base of engaged battery customers continue to grow steadily with renewed interest from our largest EV customers. Due to safety and reliability needs, we are also beginning to see high volume applications such as e-bike transitioning to higher reliability ultrasonic bonding. Finally, we have also engaged in a promising new opportunity supporting the emerging EV tow market. Within power semiconductor, we continue to see strong ongoing demand driven by charging and the inverter applications, which are directly supporting this industry transition. Like many other areas of semiconductor assembly, we see stronger growth in highest value and the most advanced applications such as power modules. Compound semiconductors such as gallium nitride and silicon carbide are accelerating this growth and are directly supported by our market leading portfolio of rich bonder system. Next one, memory remains sluggish near term. We are also anticipating improvement toward the end of fiscal 2023. Finally, our aftermarket product and solutions segment generated $39.3 million of revenue, fairly consistent with last quarters. Before handing it to Lester for the financial review, I wanted to summarize a few key points. First, we are actively participating in several fundamental and the long-term transition across our served market. These transitions are providing both market expansion and profitability opportunities. Next, we remain in a very strong financial position, which has allowed us to invest through this recent period of market softness. Over the past year, we aggressively deployed resources toward organic development, internal capacity expansion, new inorganic opportunity, and return value to shareholders through a competitive dividend and an aggressive pace of open market and accelerated share repurchase. Finally, core activity for high volume business has recently improved, which provide additional optimism we are past trough. This trend is anticipated to continue improving through fiscal 2023 and 2024. Despite macro and the industry headwind, it remains a very exciting transformational time for the company as we are on the verge of several new product ramp, which can further enhance our long-term revenue composition and through cycle profitability. I look forward to demonstrating our effort over the coming quarters. With that said, I will now turn the call over to Lester, who will discuss our financial performance and outlook. Lester? Thank you, Fusen. My remarks today will refer to GAAP results unless noted. As Fusen mentioned, it is a very exciting time for the company as our core markets is showing clear signs of improvement and our new technology solutions are reaching final stages of development and customer acceptance. Our prior market expansion efforts have directly contributed to a much stronger trough-to-trough performance level. Over the trailing 12 months, our net revenue has increased by nearly 40%, while operating profits increased by nearly 2 times versus the similar trough period in fiscal 2019. We expect our fiscal, relative fiscal year 2023 financial performance to also significantly exceed our fiscal year 2019 results. Despite this material progress, macro dynamics will largely determine the trajectory of near-term growth, and we remain extremely vigilant to conduct our operations and development efforts in the most efficient and cost-effective manner. We are actively building out our Kranji facility here in Singapore. This site increases our capital equipment production footprint by 44% in support of these meaningful new opportunities. During the March quarter, we generated $173 million of revenue, 48.6% gross margin, and $0.38 of non-GAAP EPS. Gross margins came in above our guidance midpoint at 48.6% due to product mix throughout capital equipment and Project W related accounting. Non-GAAP operating expenses came in at $64 million, below our prior expectations due to the capitalization of specific expenses associated with Project W and ongoing cost control activities. Tax expense for the quarter was $5.6 million. Turning to the balance sheet. Working capital days decreased to 517 days in the March quarter, primarily due to a sequential reduction in accounts receivable. Our repurchase program remained opportunistic and price dependent. Activity has slowed through the March quarter. We anticipate increasing the cadence through fiscal year-end. Looking ahead to the June quarter, we anticipate revenue of approximately $190 million ±$20 million with gross margins of 48%. Non-GAAP operating expenses are anticipated to be approximately $73 million ±2% due to additional R&D investment, largely associated with our set of emerging opportunities as well as the inclusion of the new dispense business. We remain focused on controlling and limited any non-critical activities and maintaining our hiring freeze. Our collective cost control efforts have reduced our June quarter operating expenses by over $5 million from our original budget. Non-GAAP net income for the June quarter is expected to be approximately $18 million, with non-GAAP earnings per share of approximately $0.32. We are anticipating an additional increase in tax expense during the June quarter. Looking into September, we currently anticipate seeing sequential revenue growth of approximately 10% over our June quarter's expectations. As we see gradual improvements in our high volume business and participate in several long-term transitions affecting the semiconductor, advanced display, electronic assembly, and automotive markets, remain excited for the future. Looking into 2024, we remain optimistic on broader macro trends and remain extremely focused to support the technology needs of our customers. This concludes our prepared comments. Operators, please open the call for questions. Certainly. We'll now be conducting a question-and-answer session. If you'd like to be placed into question queue, please press star one at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please while we pull for questions. Our first question today is coming from Tom Diffely from D.A. Davidson. Your line is now live. Yeah, good morning, and congratulations on getting past the trough. Always a nice thing. Fu, I was wondering, when you talk about, you know, sequential recovery here from the trough levels, can you frame the industry or your business as far as utilization rates and where you're seeing pockets of strength? Okay. Maybe I can make a few comments and Lester have maybe utilization information provided to you. Actually, last quarter, we feel we are pretty bottom because the broadband revenue is quite low. We do believe that second half will recover. Actually we did not forecast the banking crisis, you know, which actually likely will impact our spending patterns. Therefore, actually the Q3 and Q4, actually the growth is not as original expect as fast. At this moment, we still believe second half will be up, but the growth rate maybe is what will be impacted by the banking crisis. That's what we are seeing right now. Utilization rate? Yeah. Hi, Tom. Utilization rate is around 65%, but in a period inventory digestion, the absolute percentage of utilization rate is not as important as the trend of utilization rate. We've seen actually for Q1 and Q2, utilization has basically been a bit flat. From what we see from our customers, utilization is going up in Q3. Okay. Just the pockets of strength from a regional basis. Okay. Are you seeing even in China, some pockets of strength? Actually, yeah. We actually have a broadband demand actually from China. Our wedge binder actually deal with high power devices, actually quite strong. Wedge binder other than the EV and the automotive, we really see the strength in the power semi. The wedge binder is a record year for this year. We also see other opportunity, like I mentioned, the eVTOL. This is the electrification of aircraft. We also seen some transformation. There are some low cost welding, we call resistance welding, used to make a low cost application like an e-bike, transitioning into ultrasonic welding. This will also provide the strength for us to move forward. I think our AP is continuing to be strong and we do believe the next year advanced display will be very positive for us. Okay, great. As a follow-up, you know, previously you talked about perhaps seeing the recovery or a resumption of some display activity, for you in the second half of the year. Is that still on track? Yeah. Let me update a little bit of our advanced display. We actually recognized total of advanced display revenue about $240 million since we shipped the first PIXALUX. The past two years, from June 2021 to March 2023, actually, we recognized $160 million of advanced display. I think at this moment, the industry really need a very disruptive, high productivity for the fast-growing Mini-LED and Micro-LED mixed transport technology. 2023 is a transformation years for us for the advanced display business. At this moment, both our LUMINEX and the Project W are progressing well. Very short summary, I think LUMINEX, because it is going to be a product for many, many customers, our qualification take a little bit longer time to serve many, many requirements. We expect a successful qualification of both backlighting and the large format direct initial application with a 3x productivity compared to a PIXALUX by September this year. We will win multiple customer in FY 2024. We also expect Project W will go to initial production early 2024. We are preparing for a ramping. In addition, I think 2023 is a little bit tough for everyone. It's a transformation year for us and also a very challenging year for any incremental capital expenditure. Majority of our display business we expect probably in Q4. Beyond that, I think will be quite positive for us from there. Great. That's helpful. Appreciate the time. Okay. Thank you. Thank you. Next question is coming from David Duley from Steelhead Securities. Your line is now live. Yes, thanks for taking my question. I have a couple. I guess, Lester, in one of your slides, it talks about executing margin enhancement strategy. I guess this is for your core wire bonder business. Could you just update us on, you know, how much gross margin improvement you would expect from that new product and the timing? Yeah. Dave, I think we've been very focused on ball bonder optimization in terms of increasing the gross margin. Some of the technology changes have helped. You know, I think Fu-Sun mentioned for capital intensity. I think we're also doing some SiP packages, which also requires the higher pin count, more advanced bonders, which gives us better margin. I think we're in the process of introducing a new suite of products from all the way from our LED bonders all the way up to our high pin count bonders in late 2023 to 2024. We believe that will help us, the ball bonder gross margin will continue to rise. Okay. Just out of curiosity, one of your competitors talked about introducing a thermal compression bonder on their conference call, and they've historically been focused on the hybrid bonding opportunity. I guess from your perspective, do you think thermal compression bonding is a bigger opportunity than hybrid bonding? And if so, why? Dave, let me answer this. I think the heterogeneous integration, this is a large triplet process together, consists of multiple packaging technologies such as hybrid bonding, TCB, and say, you know, there are many technology can coexist. At this moment, the hybrid bonding and the TCB are really not necessary to be competing. In a certain technology, actually, they can coexist. Can as a solution, actually serve both a fine pitch C2S and C2W process, and most of them are very sizable. We expect our C2S roughly is about same size as a C2W. Our C2W actually, there are two ways. You know, we allow hybrid bonding, and I think that is still a big market. The current, the pitch is about 35 micron, and the hybrid bonding actually focus on actually below 10 micron, roughly 10 microns. There are a lot of volume actually with TCB and hybrid bonding, actually more front-end process. In some area, hybrid bonding and the TCB can be complementary for our C2W. For example, our C2W TCB is capable to place a hybrid bonding bond, you know, bonding die actually on a silicon interposer. Your question is a TCB, the market size can be bigger? We tend to agree. Of course, you know, we are not, you know, the major player yet for hybrid bonding, but it's a capable technology, and some customer actually start to use, you know, production. Dave, I wish I answer all your questions. Yes. Just as a follow on, I think you mentioned you had record revenue in this area. Right. Maybe give us an expectation for, you know, now that you've started to ramp this product, like what kind of revenue levels you can reach on an annual basis at any time in the future here? Annual target. I think last time Krish asked it. I can give you a little color. This quarter, our dedicated, you know, AP, dedicated, you know, we have AG premier. It's a wafer-level solder bumping and plus SiP, you know, active passive altogether, SiP plus TCB. This quarter, Q2 total dedicated revenue is $33.7 million. This $33.7 million, the TCB alone is about $20 million. Right? That's for the Q2. For the Q3, I think, we say we are going to expect to ship, you know, numerous Flexarrays, and the momentum will continue. At this moment, our TCB, actually customer including IDM, OSAT, and the foundry. I think last quarter, when we give the guidance this year, our TCB alone will be roughly $68 million. I think, last quarter, we guide, you know, next year will be a sequentially higher. Maybe later part of this year, maybe another one or two quarter, we have a more concrete number. We can guide, you know, the TCB, you know, for the next year. Thank you, Fu, so much. This year, I think we expect $68 million. Excellent. Thank you. Next question is coming from Krish Sankar from Cowen and Company. Your line is now live. Yeah. Hi, thanks for taking my question. Fu and Lester, you know, thanks for the co-color on, you know, the June and September guidance. I'm just kinda curious when I look at it, you know, six months ago, we thought FY 2023 would be about, you know, $900 million. Last quarter used to be about $840 million, now it looks like more like $750 million. I understand that we are probably at the trough, but it looks like the recovery seems to be more gradual. I'm kinda curious, A, number one, what is the reason for a slower recovery versus three months ago besides the banking crisis? Number two, you know, what gives you the confidence that, you know, we might not be stagnating at these levels for a longer time? Krish, I think, we was expecting faster recovery. You know, unfortunately, I think, not only us, the industry and also, you know, some of our peer group, also see the same phenomena. Maybe there are two things. I think majority impact to us actually is, we are seeing the, high volume business, particularly ball binder, we originally expect will actually grow faster. Actually, the quotation activities still increasing very, very dramatically. Come to, you know, scheduling, you know, we see in Q3, Q4 also are seeing some push out. We are hoping, if our third party forecasts are right, this year I think, unit growth is about 3% and, market right now is forecast about 10%. If you ask me, I think, the, maybe the inventories still not fully depleted yet. Also, the banking crisis probably cause, you know, consumer confidence and the spending impact their spending pattern. This is up to I can think of. We do believe, 2024, will be a better year for everyone. Got it. Got it. Fair enough. Then quick question, did you guys say what your backlog or book-to-bill was? Yeah. Our backlog is right now as I think we've discussed this before, Krish. Backlog for us, we define it as POs with delivery dates. That's about $500 million right now. If you add the POs with delta delivery date, that's another $250 million. That's basically where our backlog stands. Backlog is pretty healthy. That's also another reason we think the recovery is we are past trough and we're going towards recovery. Got it. Thanks a lot, Lester. Thank you very much. Thank you. As a reminder, that's star one to be placed into question queue. Our next question is coming from Charles Shi from Needham & Company. Your line is now live. Hi. Good evening, Fu and Lester. Thank you for letting me ask a couple questions. I think your guidance for June and September looks very encouraging. You are seeing sequential growth 2 for 2 consecutive quarters of the trough in March. That's certainly encouraging. I just wonder, can you help me reconcile a little bit of what your 2 other competitors are seeing versus what you're seeing? The 2 other competitors of yours, they are seeing the calendar second half possibly slightly lower than the calendar first half. I know you're only guiding to your fiscal year end, which ends in September. Can you kinda help us understand given that where your September numbers are, looks like your calendar second half probably is flat to up relative to the calendar first half. Can you help us reconcile what's the differences here between what you're seeing and what your competitors are seeing? Sorry, yeah. Yeah. I think I look at the competitor, we have two of them. You know, I only remember rough number. I will not, you know, be the best person to come and compare this financial performance. If you like to make a comment, we welcome your comment. Yeah. Charles, I think, I mean, we've already indicated that we see our order book going up, backlog going up. We're involved in a couple of, I guess, vectors where there is a strong recovery, right? You know, AP, automotive, electric vehicles that Fusen mentioned earlier, as well as power management. Again, I mean, they see what they see, we see what we see, right? As we indicated, we believe that the second half will be stronger than the first half. Right. Charles, I think sometimes compare same quarter with a different company might not be the best one. For example, in 2021, 2022, I think we go up to $1.5 billion. In one quarter, I remember, it's almost $500 million. Pick up a quarter to make a comparison, I don't know, you know, is the best comparison. I think of just for KNS, we want to make sure, you know, in this difficult environment, we ramp up, you know, our future products and we watch our spending. We respect, as you know, we have a good competitor and we respect them. You know, for the quarter-to-quarter comparison, actually, I actually don't have accurate number. If you'd like to make a comment, we welcome your comment. Yeah. Yeah. No, no problems. Thank you for the color. Maybe another question on backlog and book-to-bill. Your backlog has been kinda covering, probably three-plus quarters of the revenue for a while. Looks like some of the movement within the backlog is a little bit stagnant. When do you expect the backlog to return to more normal range in terms of how much it covers the quarterly revenue? Maybe I remember it's somewhere between one to two quarters will be the more normalized backlog level. When do you expect that to happen? Thank you. Charles, I mean, thanks for the question. I mean, the backlog obviously spiked tremendously during the ramp, right? Due to supply chain issues and long lead times. It's been coming down. We continue to expect it to come down. As far as when backlog will match exactly to, you know, 2 quarters, I mean, that historically, that has been true for some, in some quarters. I think actually for us, also the way we define backlog, I think the backlog continue to go down, but it's difficult for us to say when it will match 2 quarters of backlog going forward. Yeah. What's the book-to-bill ratio you're seeing in March quarter? Certainly, I understand that you are seeing increased quote activities, what's the actual book to bill in March quarter? It's less than 1. Do you expect that book to bill to come back up above 1 maybe in June? Just try to understand the ordering trend here. Thank you. Well, Charles, I think again, as I indicated before, it fluctuates quite a lot. I would not say we expect it to go above 1 in June. I think, you know, over the next 2 quarters, it'll move up and down. I mean, historically, it's been around, last 2 quarters it's been around, 0.8-1. Got it. Thank you. I just wanna ask- One... Yeah, yeah. Go ahead, Fu-san. Go ahead. No, go ahead. No, go ahead, Charles. Yeah. No, no. I just wanna say, good to hear you guys are passing the trials. But Fu-san, please, if you have a make comment, please make it. Thank you. Charles, I'll give you an example. I think, we start to see core activity increase. Actually, some of bigger customer we start to engage, they give you indication of, you know, a period time, for example, maybe like beginning of 2024. You know, there's no definite date. Even if we get a PO, actually, we didn't put that, you know, into, you know, our backlog. Like, you know what I mean, right? Even we get a PO, unless it's definite date, we put this as a backlog. That's what we're talking about. Let me repeat again, we do actually get inquiry much often. I think last quarter we start to see actually a smaller one and they probably need to have much, much less number. Right now, I think we are actually working with a few actually midsize. We do believe, I think a recover will happen and on the way. Of course, unless something happen, you know, it's gonna impact everyone. Yeah. Thank you, Fu-san and Lester for the color. I'll get back to the queue. Thank you. Thank you, Charles. Thank you. Next question today is coming from Tyler Burmeister from Craig-Hallum. Your line is now live. Hey guys. Thanks for letting us ask a couple of questions here. First, maybe a little bit of clarification and if you could expand on your assumption for semi unit growth. I think you said this year's up maybe 3%, if that's correct, and, you know, any update on where you guys kinda see that going next year? Okay. I think this year, of course, the same content of iridium is going down. The number, if I remember correct, unit number still up a little bit. You know, like some devices, the price came down a lot. That's why I think same content of iridium go down, right? I think this year is about maybe slightly above zero. Next year, if third party all together, we feel like it will be between, like, 8-10. That's the number we are getting. All right. Perfect. Then, you know, last quarter, I guess, just a little update from last quarter, you guys highlighted advanced packaging, some inroads you're making, I believe with the large foundry, you know, set yourself up for some potential market gain shares down the road. Any, any comment or update on progression there and how that's tracking? Well, you know, we don't talk specific, you know, customer, but we do believe we have a differentiated tool. You know, the engagement, we have numerous customer and also in a different area. Like we have IBM, you know, we have OSAT, we have a foundry. I think, you know, we probably will report the progress, but the engagement with a foundry, you know, is probably a little bit later than the IBM. But I think as we go on, we'll give you more color. The progress actually we are quite happy at this moment. Perfect. That's very fair. I appreciate that. All right, that's all for us. Thanks, guys. Thanks, Tyler. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. Thank you, Kevin, and thank you all for joining today's call. Over the coming months, we will be presenting at several investor conferences. As always, please feel free to follow up directly with any additional questions. This concludes today's call. Have a great day, everyone. Thank you. You may now disconnect and have a wonderful day. We thank you for your participation today.