Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) Q2 2019 Earnings Conference Call - Final Transcript

May 02, 2019 • 06:00 pm ET

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Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Kulicke & Soffa 2019 Second Fiscal Quarter Results Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Joseph Elgindy, Senior Director, Investor Relations and Strategic Initiatives for Kulicke & Soffa. Joseph, you may begin.

Executive
Joseph Elgindy

Welcome everyone to Kulicke & Soffa's second quarter fiscal 2019 conference call. Joining us on the call today are Fusen Chen, President and Chief Executive Officer; and Lester Wong, Chief Financial Officer and General Counsel. For those of you who have not received a copy of today's results, the release as well as the latest investor presentation are both available in the Investor Relations section of our website at investor.kns.com.

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. 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 September 29, 2018.

I would now like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen.

Executive
Fusen Chen

Thank you, Joe. Despite the current industry conditions, all global organizations continue to be increasingly focused on cost control. While we also prioritize our ongoing business development process and effort, to drive fundamental business optimizations, we continue to be cautiously optimistic and believe the current demand environment has stabilized. Customer sentiment and our check on field utilization rates have both improved through the quarter. For all of you, excess capacity is being digested and we believe one of the key factor contributing to this lower level of capital intensity is uncertainty surrounding global trade.

Despite the lack of a resolution on US-China trade, there continue to be positive macro, micro and company-specific drivers that provide a solid foundation for long-term growth. Macro conditions such as the strong global employment, a strong US economy, ongoing global expansion and the fiscal stimulus program in major consumer markets, I anticipate, to positively impact global semiconductor consumption. From the micro industry's standpoint, again, we see improving trends, such as a slight pickup in both utilization rate, for the field capacity or wire bonder and we also experienced a slight pickup in our shipment late in the March quarter.

Also major changes such as the 5G and IoT are anticipated to be key drivers supporting higher level of semiconductor unit growth. We continue to anticipate the 5G transition will reinvigorate the premium smartphone market, drop demand for infrastructure buildup and broaden adoption of new low-cost end devices. We expect our core market-leading product will benefit from this