Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) Q1 2023 Earnings Call Transcript

Hans Chung: Okay, got it. And then the last one, just regarding the capacity for advanced display and packaging and we’re going to add more, much more in ’23. So just can you give me the color around how much revenue that the new capacity will support, and what’s the implication to the gross margin and then, and also the OpEx after we’re assuming we’re going to have to put that labor in place, right. So just any color around the new capacity for advanced packaging and display.

Lester Wong: Well, Hans, I think as I indicated in an earlier response, the revenue that will be generated from this additional capacity in advanced packaging and advanced display will probably again be more significant in ’24, right? And we are inquiring. But in order to prepare for that in €˜24 we are now expanding our production facilities, as well as getting ready the tooling, as well as training and running — getting those facilities ready to ramp. So that has a negative impact in FY ’23, because it doesn’t match up with the revenue, but as the revenue comes in from those products, the margin will then obviously go back up.

Hans Chung: Okay. So our, gross margin of 47% for €˜23 that’s already factored in the ramps in the new capacity for advanced packaging display, right?

Lester Wong: The 47% includes, yes, the manufacturing costs that I was talking about that’s what brought the margin down, so margin will increase into €˜24.

Hans Chung: Got it. Okay. Thank you.

Operator: Thank you. We reached end of our question-and-answer session. I’d like to turn the floor back over for any further or closing comments.

Joe Elgindy: Thank you, Kevin. And thank you all for joining today’s call. Over the coming months, we will be presenting at several investor conferences hosted by Susquehanna Financial Group, B. Riley Securities and Craig-Hallum. As always, please feel free to follow-up directly with any additional questions. This concludes today’s call. Have a great day, everyone.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.