Dave Duley

Dave Duley from Steelhead Capital Management asked about the specific data center applications driving increased revenues within the general semiconductor segment, especially given a softer outlook for PCs and handsets. He also requested an update on utilization rates across key regions and inquired about gross margin expectations for calendar 2026, considering the December quarter's performance and future revenue ramps.

Answer

Lester Wong, Interim Chief Executive Officer and Chief Financial Officer, identified data centers as the central driver, supported by K&S's AP portfolio for chiplet and heterogeneous logic, traditional ball bonders for infrastructure, networking, communication, power, and storage, and enterprise SSDs driving memory business. He provided regional utilization rates: China over 90%, rest of Asia around 80%, Southeast Asia in the 70s (increasing), and North America/Europe combined at 80%. For gross margins, he expects them to remain around 49%-50% for the rest of FY 2026, driven by demand for high-performance ball bonders, increased volume absorption, and continued cost control.

Dave Duley asked for clarification on Kulicke and Soffa's increasing market share in DRAM, specifically if it relates to the HBM thermal compression bonding tool shipment, and what competition they face for HBM qualification. He also inquired about the vertical wire ramp in late calendar 2026, its drivers, and fiscal 2026 expectations, along with unit growth predictions for the general semi market.

Answer

Lester Wong, Interim CEO and CFO, clarified that the market share commentary referred to DRAM generally, not specifically HBM, and confirmed the HBM discussion centered on the thermal compression bonding tool shipment for qualification. He noted competition primarily from other thermal compression bonders, not hybrids. For vertical wire, high-volume production is expected in late calendar 2026, with tool shipments in late fiscal 2026, projecting around $10 million in FY2026 and significant ramp in 2027 and beyond. Lester Wong estimated general semi unit growth at 5-7%, emphasizing confidence from high utilization rates (over 80% overall, nearly 90% in China).

Dave Duley asked for clarification on Kulicke & Soffa's commentary regarding increasing market share in the HBM market, specifically if it solely refers to the HBM thermal compression bonding tool shipment. He also inquired about the competitive landscape for this HBM tool, the expected ramp for vertical wire in 2026, and the projected unit volume growth for the core general semiconductor business in 2025/2026.

Answer

Lester Wong, Interim CEO and CFO, clarified that the slide referred to increasing market share in DRAM, not specifically HBM, and confirmed the HBM commentary relates to the first HBM machine shipment for qualification. He expects competition primarily from other TCBs, not hybrid tools, for HBM. For vertical wire, Mr. Wong anticipates high-volume production in late calendar 2026, with tool shipments in late fiscal 2026, projecting around $10 million in fiscal 2026 and significant ramp in 2027. He estimated 5-7% unit growth for the core business, driven by over 80% utilization rates.

Dave Duley asked for details on Teradyne's three >10% customers in 2025, specifically their segments and how much they exceeded the 10% threshold. He also inquired about the expected 2026 overall TAM growth (around 30%), the relative growth of SoC vs. memory TAM, and whether Teradyne's anticipated share gains imply a growth rate faster than the overall TAM.

Answer

CEO Greg Smith clarified that two >10% customers were specifiers (one mobile, one compute), and one was a purchasing customer (across segments), all 'roughly ten' percent, not substantially higher. He stated that the 2026 overall TAM growth is uncertain, with a wide range of 20%-40%, and declined to confirm a 30% mean. He agreed that SoC TAM is expected to grow faster than memory TAM. He cautioned that even with share gains in compute, if the compute TAM grows significantly, it could dilute overall share percentage due to Teradyne's lower starting share in that segment.