KULICKE & SOFFA INDUSTRIES INC Q2 FY2025 earnings call

• Announced intent to discontinue the electronics assembly or EA equipment business, subject to local regulatory approval, while retaining technology, aftermarket parts and service business. - Prioritize development and leverage Ball, Wedge and ThermoCompression positions, with APS providing revenue consistency and Advanced Dispense portfolio offering growth paths. - Macro trade situation creates uncertainty in global markets and supply chains, affecting Southeast Asia Automotive and Industrial market but seeing utilization improvements in other Asia regions. - Simplified end market disclosure by consolidating LED within Automotive and Industrial. - Ball Bonding has ongoing customer engagements and new product development, including launch of Wafer - Level - Packaging solution ATPremier MEM Plus. - Wedge Bonding launched new Sonotrode - enabled pin welding system for power semiconductor applications. - Advanced Dispense continues to build out portfolio, received an order from a high - volume U.S. based integrated device manufacturer and has a solid - state battery opportunity. - Thermo - Compression team supports logic and memory customers in production and development, well positioned in advanced logic and higher volume opportunities. - TCB in Memory expects unique fluxless solutions to be key for future HBM opportunities.

In the March quarter, the general semiconductor end market saw a 38% sequential increase due to improved Ball Bonding utilization rates from demand in Ball, Wedge and TCB from the U.S. and China. Automotive and Industrial, excluding LED, was down approximately 7% sequentially but up nearly 14% year - over - year due to ongoing demand for Asterion and Power - C solutions. Memory had a sequential reduction in the March quarter due to softer NAND system demand. APS continued to enjoy a relatively stable base of parts, services and support revenue. The EA equipment business, which is being discontinued, had revenue of about $25 - $30 million per year, gross profit of $7 - $11 million per year, and operating expense of $20 - $25 million per year.

• June quarter revenue outlook: $145 million plus or minus $10 million, gross margins of 46.5%. - Non - GAAP operating expense anticipated to be $68 million plus or minus 2%. - GAAP EPS loss of $0.09 and non - GAAP EPS gain of $0.05 per share. - Effective tax rate expected to remain above 20% over the coming year. - Completed repurchase of over 500 thousand shares for $21.3 million in the second fiscal quarter with a 300 million dollar authorization in the first fiscal quarter of 2025. - Anticipate semiconductor unit growth to continue through fiscal 2025, with incremental opportunities in Vertical Wire, Advanced Dispense, and Thermo - Compression.

• Ongoing trade situation creates uncertainty throughout global markets and supply chains, leading to customer hesitation and defensive capacity planning. - Unique geopolitical and trade dynamics have created near - term order hesitation in certain capital equipment markets.

Q: Give color on June and beyond?

A: Q3 slowdown is most pronounced in Southeast Asia, with Q2 revenue $162 million and Q3 guidance $145 million, majority of difference due to Southeast Asia weakness. Believes Q4 will be better with feedback from customers and utilization rate support.

Q: Revenue run rate of EA business and profitability?

A: EA revenue was about $25 - $30 million a year, gross profit $7 - $11 million, operating expense $20 - $25 million.

Q: Market dynamics regional bifurcation?

A: Southeast Asia utilization rate still not high enough, Taiwan and China utilization rate high enough potentially to trigger capacity buy, Southeast Asia slowdown related to auto - industrial impact.

Q: Fluxless TCB fully booked meaning?

A: Capacity constrained right now, undergoing to increase capacity.

Q: Utilization increases in China and Taiwan and impact?

A: Utilization in China over 80%, Taiwan just touching 80% or so; don't think utilization rate will fall off in Q4 and Q1 as customers are running at higher than normal utilization and being cautious about tariff impact.

Q: DRAM market impact in fiscal '26 and '27?

A: HBM is focused on, first customer expected to go to production for stack DRAM in first half of 2026, working closely with multiple memory customers including IBM, Vertical Wire expected to take off with potential form factor reduction.

Q: Impacts from trade policies and tariffs?

A: Manufacturing in Singapore, shipping to China not triggering tariffs; indirect impact on customers' cautiousness, no direct cost impact on company but indirect costs across the board.