Petróleo Brasileiro S.A. - Petrobras Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 9, 2023

There are 8 speakers on the call.

Operator

Greetings, and welcome to the Kulicke Sofa 2023 Third Quarter Results. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joe Elkins, Senior Director, Investor Relations.

Operator

Thank you, sir. You may begin.

Speaker 1

Thank you. Welcome everyone to Culkin's office Q3 2023 Conference Call. Fusen Chen, President and Chief Executive Officer and Lester Wong, Chief Financial Officer are also joining on 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 the recently filed earnings release as well as our earnings presentation.

Speaker 1

This information, in addition to our prepared remarks for today's call, are available at investor. Kns.com. Beginning with the June quarter 10 Q filing, we have amended our segment reporting and will provide additional segmentation details During this revision, a material weakness was identified over internal controls related to segment reporting and Sequentially trigger the filing of the amended 10 ks for fiscal year 2022 yesterday evening. Please note there was no impact on any reported available within the 10 ksA filed yesterday evening. In addition to historical statements, today's remarks will contain statements relating to future events and future results.

Speaker 1

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 Keulkin Sulfa that could affect our future results and financial condition, please refer to our recent SEC filings, specifically the amended 10 ks for the year ended October 1, 2022, and the 8 ks filed yesterday. With that said, I will now turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen.

Speaker 2

Thank you, Joe. We continue to make progress across a broad set of growth initiatives. During the June quarter, We deliver new ball and the wedge solutions supporting high volume semiconductor application, innovative advanced solutions supporting heterogeneous integration and the rich new milestone with our emerging advanced display prospects. We also maintained an aggressive pace of development and broadened our technology engagement in several areas. Additionally, our core market continue to improve due to technology trend, incremental capacity needs And an ongoing product refresh cycle.

Speaker 2

We continue to see gradual demand improvements across the above market and anticipate More meaningful demand recovery as the macro environment improves and the inventory is digested throughout The electronic value chain. Longer term, we continue to anticipate nearly 10% semiconductor unit growth in calendar year 2024 And anticipate unit growth will remain above average in 2025. In the near term, We remain focused on delivering new innovation, which addresses long term technology driven growth opportunity in both our core And the emerging equipment businesses, I wanted to spend a few minutes to outline several specific initiatives In our board, which advanced display and advanced packaging prospect that are increasing the value add of our assembly solution. First, we have begun the ball bond equipment product refresh. We recently introduced Powercom And the PowerNEXT ball bonder platform.

Speaker 2

This system have been well received by customers as they provide new capabilities for high volume System in package applications. They also enable and improve machine to operator ratio, which provide customer with efficiency improvement and a greater geographically flexibility. Over the coming quarters, We expect to release additional BAW bonding solution, which will complete our portfolio refresh. We are excited to provide new level of value And look forward to additional margin and cash flow benefit to investor over the long term. It has become clear that our core high volume semiconductor market has increasingly become more complex, creating the need For more advanced solution and advanced feature, growing complexity needs have already improved more bounding Gross margin by over 300 basis points since 2020 and we anticipate additional improvement going forward.

Speaker 2

Next, more efficient power control and the fast growing battery market create new technology opportunity And support higher growth rate for our leading which bounder platforms, sustainable energy, Electric vehicles and the more efficient consumer devices are driving demand for compound semiconductors such Silicon Carbide and Gallium Nitride and are also creating new technology driven demand for more complex Module based power devices. This multi chip module based power devices are driving a transition From aluminum to copper interconnect, similar to the goal to copper transition we lead within high volume borebonding. This shift in power semiconductor require new capabilities such as our high power interconnect or HPI extends our existing technology leadership in wage bonding and has provided new opportunity With the leading customers who are directly supporting power semiconductor and the electric vehicle transitions, We are also closely engaged with our strategic customer on the most critical and demanding semiconductor assembly application, which supports space exploration and satellite communications. To summarize The Wage opportunity. We have a strong and dominant historic position, which has more than doubled our Wage related revenue since 2020.

Speaker 2

We continue to support the most critical and demanding power semiconductor and the cylindrical battery application. And we remain very optimistic for future growth as we are closely engaged with the customer who are enabling this market. Next, we need Advanced Display. We have reached new milestones for our portfolio of solutions, We address long term backlighting and direct emission opportunity that are demanding new mini and the micro LED assembly solutions. During the current September quarters, we have reached new technology milestone with Luminex and we were prepared to support higher volume demand As the market grows, we recently announced a collaboration leveraging Luminex technology With a leading SMT provider to accelerate the adoption of advanced display technology in both backlighting and the direct emission application.

Speaker 2

The Luminex system is designed for mini LED opportunities for larger format Direct image display and also for the high volume display transition to advanced mid lighting. We have made significant progress with our Luminex system, which support a final placement throughput of 140,000 DAI per hour was a year of 99.9% with even higher throughput in the years We have demonstrated the ability to accurately While we have seen early Customer using traditional die attach equipment to support initial backlighting applications. Over time, LED die size will continue to shrink And we anticipate demand for our dedicated high throughput, high accuracy Luminex system will accelerate. Additionally, we continue to make progress on Project W and expect to provide additional visibility into Project W's fine Fiscal 2024 revenue expectation over the coming quarters. Finally, while we are now Providing more value in the high volume semiconductor market as wire bounding become more and more complex.

Speaker 2

We are also actively Recently, we appreciate the increased customer interest and the peer commentary regarding the longer term We have worked aggressively to expand our engagement to leading commercial customers and also global technology consortium. We also recently announced an expanded partnership with UCLA's Center For Heterogeneous Integration and Performance Scaling, also known as UCLA chips. Together, we look forward to extending TCB pitch to below 5 microns. In addition to this expanded technology relationship, we recently shipped a regular number of FlexVest TCV system Through a broadening group of commercial customers who are spearheading the transition to triplet and the heterogeneous integration. Our strength in TCB has centered around higher volume opportunities supporting application processor, 3 d sensing and the silicon photonics, We are transitioning to TCB for technical reasons, such as smaller form factor, thinner substrates and improve years.

Speaker 2

We have also already grown our share in chip to substrate PCB for heterogeneous application in production. In addition to this proven market win, we are pleased to also announce our active engagement in several chip to wafer evaluation, We can materially accelerate growth of our dedicated advanced packaging portfolio over the long term. Turning to our June quarter results, we generated $190,900,000 of revenue and $0.55 of non EPS above prior expectations due to continuing stringent cost control on non critical matters and the discrete tax items. Moving to the end market discussion. 79% of total revenue stemmed from capital equipment and improved 13% sequentially, supported by utilization improvement in general semiconductor, LED and the memory end market.

Speaker 2

Within General Semiconductor, mobile bonding equipment sales increased sequentially by 45%, largely due to increased Utilization rate and the stronger demand of our highest performance repeat seaters. We also reached new record quarters For our thermal compression business and the book revenue for several fluxless system and our latest TCV platform. Within LED, we have also seen evaluation rate improve, which supported demand for our Ultralux Plus system. As of August 1, last week, the United States has implemented the anticipated ban on incandescent light bulbs in favor of more Efficient LED lighting. We anticipate utilization rate will continue to improve through the September quarters Next, automotive and industrial As slightly softened alone remained quite strong for a historic standpoint.

Speaker 2

Demand for power semiconductor continued to be robust Due to our contribution to the broad EV transition and the increasing content of semiconductor per vehicle, We also look forward to sharing news regarding our battery assembly opportunity over the coming quarters. Within memory, we recognize a better than expected improvement in utilization rate and a pickup in demand for our NAND assembly solution. Historically, we have enjoyed a dominant position in Net Assembly and have continued to expand our market reach into DRAM applications. Looking into fiscal 2024, we are excited about prospects such as a vertical fan out, Also known as a VFO, which is expected to further expand our shares in high density direct applications and can provide significant cost Improvement over TSV based approaches used in applications such as high bandwidth memory. I look forward to sharing more details on this exciting opportunity over the coming quarters.

Speaker 2

To summarize, We remain actively engaged with multiple customers who are enabling technology transition in automotive, semiconductor and the display opportunities. Our investment in development, engineering capability and the new market opportunity have enhanced our fundamental strength, Increase our value add and help solidify key pillar to our long term growth strategy. We are currently progressing several parallel qualification and evaluation and we look forward to providing a more detailed outlook over the coming quarters. Finally, within our core capital equipment market, we have seen clear demand improvement and utilization rate to further improve through the September quarters. Looking into the next few years, we continue to anticipate about AB And also announcing new customer and the technology win over the coming quarters.

Speaker 2

With that said, I will now turn the call over to Lester, who will discuss our financial performance and outlook. Lester?

Speaker 3

Thank you, Fusen. My remarks today will refer to GAAP results unless noted. Before commenting on our June quarter financial performance, I wanted to address 2 specific items related to our June quarter performance. First, during the June quarter, We booked impairment charges of $21,500,000 associated with our 2017 acquisition of Leitek BV And a minority equity security investment related to a technology asset. Neither of these non cash impairment charges Have a material impact on the near term outlook and we continue to support the market opportunities these investments have previously provided.

Speaker 3

To add context, since our acquisition of LiTec BV, we have deployed over $1,000,000,000 towards capital expenditure, Acquisitions and shareholder returns. Of this cumulative deployment, approximately 75% was returned to shareholders through the company's Increasing dividend and opportunistic repurchase programs. Next, I also want to set clear expectations regarding our order intake And backlog activity over the coming quarters. We continue to hold a sizable amount of order backlog, roughly 4 times the size of our 3rd quarter Fiscal 2019 backlog. This excess backlog will reduce the book to bill ratio and ultimately land at roughly 3 to 4 months of revenue, which is in line with our average lead times.

Speaker 3

In addition, some of our anticipated incremental opportunities in fiscal 2024 are not included in the current backlog. With that said, it remains a very exciting time for the company With ongoing near and long term improvements within our core markets and ongoing execution across a variety of end market applications. As an update, our capacity expansion investments are continuing on track to provide critical operation capacity to support The growing demand of our advanced packaging and advanced display offerings. During the June quarter, we generated 190 $900,000 of revenue, 47.2 percent gross margin and $0.55 of non GAAP EPS. Gross margins came in just below expectations, largely due to mix stemming from a rebound in high bright LED demand and also an increase in higher volume orders.

Speaker 3

Non GAAP operating expenses came in at $66,000,000 below our prior expectations due to shift in discretionary spending And ongoing cost controls. Finally, tax expense for the quarter was $148,000 lower than anticipated Due to the reduction in profit before tax, mainly from the impairment charges and a discrete item related to the reversal of uncertain tax positions. Turning to the balance sheet. Working capital days decreased from 5 17 to 4 65 days in the June quarter, primarily due to the sequential improvement in revenue and relatively flat working capital. Our repurchase program remained And we have increased our repurchase activity by 71% sequentially to $8,500,000 during the June quarter.

Speaker 3

Looking ahead to the September quarter, we anticipate revenue of approximately $200,000,000 plus or minus $20,000,000 With gross margins of 48%. Non GAAP operating expenses are anticipated to be approximately 70.5 1,000,000 plus or minus 2 percent due to additional general and R and D investments. We remain focused on controlling and limiting any non critical activities and have maintained a very cautious need based hiring approach. Our collective cost control efforts have reduced our June quarter operating expenses by approximately $4,500,000 from our original budget. Non GAAP net income for the September quarter is expected to be approximately 24,000,000 With non GAAP earnings per share of approximately $0.42 It remains a very interesting period of time at K and S The value of semiconductor assembly is rapidly increasing.

Speaker 3

As our core business continues to strengthen, we remain focused on expanding our long term market access This concludes our prepared comments. Operator, please open the call for questions.

Operator

Thank you. We will now be conducting a question and answer Your line is in the question Purdes, please proceed with your question.

Speaker 4

Yes. Thanks for taking the question and thank you for all the information this morning. Dusan, I wanted to start off following up on one of your earlier points about the view on calendar Street growth at 10% year on year. I think that was I'm assuming that's on a unit basis. The question is this around That level of industry growth, how would you expect K and S to perform, given The growth initiatives that you outlined and the improved positioning in some of your larger end markets like General Semi.

Speaker 2

Okay. So we believe 2024 will be a better year for us than 2023. Above average, right now is forecast, but we do also get a feedback from customer. But what will be the final number? I think a lot really depend on the macro environment.

Speaker 2

At this moment, still a little bit dynamic, We feel like 10% probably is a good number. So with this assumption, I think we will see improvement of our bow bound shipment. I think particularly, we start to see growth. We believe that BowBow Hunter will grow even more. And not only shipment, I think we'll see the gross margin expansion.

Speaker 2

So other than bow bounder, The witch bound remains still strong. I think due to power semi and the EV. And in addition, I think we will put a new For the AP, I think we will see the growth, I think, in the heterogeneous integration. We have TCB in non heterogeneous focus in Volume semi and the focus on our multiple applications such as silicon photonics, 3 d sensing and app processor And also have a heterogeneous integration. We believe particularly in heterogeneous integration, we can show growth.

Speaker 2

And we also hope to see the actually growth in advanced display In the W Project and also in the Luminex. So we probably will have a better Reading about the industry rate of recover maybe by November, maybe by November, we will have a better Feeding about rail recovery. So 10% right now is a number from industry and also from us And really depend on the next couple of months, the industry is still keeping this forecast. Okay. So great.

Speaker 2

Hope I answered your questions.

Speaker 4

Yes, that's really helpful, Fusen. And then combining that commentary with points that Lester made about Higher backlog levels than 2019, but I think if I heard you right, Lester, the likelihood that backlog does decline over the next few quarters, Can you talk about the visibility that you have into the fiscal Q1 of the year? And if we look beyond the guidance For the fiscal Q4, can you talk about some of the near term gives and takes for what's typically a seasonal softer part of the business?

Speaker 3

Yes, sure, Craig. Yes, I did say, I mean, we still have a very, very healthy backlog, just below about $500,000,000 So we do That backlog has come down over time and over the next couple of quarters. So As far as near term visibility, as Fusen mentioned, right, it is pretty dynamic at this point. We believe there will probably be some more seasonality this during 'twenty one, 'twenty two, during the ramp. Also, I think, for FY 'twenty 4, as Susan indicates, we believe it will be a much better year than 2023.

Speaker 3

However, when I think the first half may not be as strong as the second half. But again, there's a lot of moving pieces right now, but we feel pretty good about 2024 as compared to 2023.

Speaker 5

I was wondering As far as when the improvement that you're seeing in your overall revenue in both The June quarter and the September quarter you just guided to. What segments are showing improvements sequentially?

Speaker 3

Well, Dave, I think, Ball Bonder is the main business unit that is showing improvement. Wedgebonder has remained relatively strong throughout the last couple of quarters, but I think we are seeing Bob Bonder become stronger. I think this is tied to seeing utilization rates going up. And so I think that's basically the increases over quarter to quarter. And as well as Fusen mentioned, we shipped a record numbers of the Flexus TCB this Quarter as well as record TCB revenue for the quarter that just ended.

Speaker 5

Okay. And as a follow-up on the thermal compression bonding market, could you just perhaps articulate What you think your position there is? How big the market is? What percentage of that market you think you're currently capturing? And there seems to be a little bit of Push and pull as to whether thermal compression bonding or hybrid bonding is going to be a bigger market.

Speaker 5

If you could just kind of talk about what Which pieces of the market you think each technology would capture or just characterize how you think you're doing in this particular market?

Speaker 3

Okay.

Speaker 2

So Steve, we believe we have a Quite strong TCV product portfolio. So actually, I think I make a comment. All TCV I have 2 markets. 1 is a focus on high volume semiconductor and this is for non heterogeneous integration. And we serve in the application such as application processor, 3 d sensing and also silicon photonics.

Speaker 2

And actually this year are doing quite well. And other than that, I think we have a lot of focus on actually heterogeneous integration. We last year, starting last year, we believe we have very strong in our position in actually heterogeneous integration In the C2S, triple substrate. And the customers are actually already in the production. And we at this moment engage with multiple customers in the C2W, we do believe we are on a way to get the market shares.

Speaker 2

So for our TCV, I think our focus At this moment, we're working with multiple customers in IBM, fab plus, OSAT and also Foundry To push our TCB capability, to push our technical limitation To the best and which is below 10 micron and with all the information we feel, We actually feel quite positive about the direction we are going. So when you hear about when you ask about our flexible TCV, both of our hybrid. So let me make a comment. I think at this moment, these two markets are not overlapping. Because heavy bonding has its advantage, which is a non thermal, actually you don't have a heat, you also Don't have a stress.

Speaker 2

So this advantage hybrid has. In the meantime, I think this is a little bit more expensive process. So To ask how do we compare to hybrid? I think it's a hard question. I just want to tell you our mission actually is to push PCB as far as possible below 10 microns.

Speaker 2

So in the future, I think when They might in some point to compete in a 5 pitch. And which one have a higher volume? I think it's really a lot depends. For KNS, I think really it depends on the capability of our TCV, how far it can extend to a 5 page, Right. And also for hybrid bonding, how cost effective and how much productivity this process can improve In addition to actually, of course, there's no thermal, no stress.

Speaker 2

The process actually is robust. Also finally, I think it depends on final customer's choice, right? So I wish I answered your question. I think hybrid and the TCB at this moment is not competing. And our mission is to push our TCB as far as possible as the first release described today.

Speaker 3

Okay. So I just want to

Speaker 2

provide to you. So it's our belief, I think this year our TCB, We are looking along $60 some $1,000,000 maybe $68,000,000 with total dedicated AP probably above $100,000,000 So by 2025, we actually have a lot of opportunity. But after realizing market shares, we also need to wait a little bit couple of months for the high volume. So but we do believe by 2025 our TCPA alone should be above $100,000,000 and a lot of time our dedicated AP, we are looking For about $200,000,000

Speaker 6

Okay. And then you mentioned

Speaker 5

Some details about high bandwidth memory. I'm wondering what your exposure is there. Do you are you currently in production? Are they using wire bonders and cells for the stacks or maybe just elaborate a little bit?

Speaker 2

So actually we are working with actually not many, actually this industry only a few. But also we also work with a few memory customers. There's a publication by major customer, one of them actually to use wire, vertical wire actually to be alternative for TSV. So actually we are working with the customers. I think next year there's a possibility For 1 or 2 customer maybe in a small volume in our preproduction.

Speaker 2

So we are Actually quite excited about this opportunity. Thank you.

Operator

Our next question comes from Charles Tsai with Needham and Company. Please proceed with your question.

Speaker 7

Hi. Good evening, Fusen and Lester. Thanks for giving me opportunity to ask a couple of questions. I want to start again, thermal compression bonding. I think a year ago, you announced Receiving roughly 80,000,000 orders in your backlog to ship by the end of 2023 And $300,000,000 cumulatively by the end of 2025.

Speaker 7

So this is a 2 part question. So How many have you shipped so far out of that 80,000,000 orders? And Have you turned more of the opportunity beyond the initial $80,000,000 I mean more into the From $80,000,000 to $300,000,000 opportunity into the backlog and if yes, how much have you received? Have you turned

Speaker 2

So this $80,000,000 I think remain there. I would think maybe by the latest by maybe middle of next year would complete. And Charles, I think when we look at the opportunity, we have engaging customers. But a lot of time, I think I can tell you the customer engage and have a high potential remain there. But sometime I think their opportunity, their process integration architecture might have fine tuned.

Speaker 2

So We actually as I mentioned, I think $25,000,000 we probably were actually About $100,000,000 But I think at that time, the $300,000,000 So including this $80,000,000 I forget actually exactly what I said. But I can tell you all the opportunity are still there. But the customers forecast a lot of time and also their process, the project, the schedule My apologies, this is Shiv. What I can tell you, I think all the customers we engage are still very positive and maybe the forecast A little bit different. So right now, we are looking at the TCV.

Speaker 2

I think by 2025 annual revenue will be greater than $100,000,000

Speaker 3

And, Chao, just for a point of reference, over the last two quarters, we've shipped over $40,000,000 worth of TCB.

Speaker 7

You mean fiscal Q2 and Q3, right?

Speaker 3

That's right. Fiscal Q2 and Q3.

Speaker 7

Yes. Thanks for the great color, Fusen and Lesc. Also on PCB, you mentioned other than the IDM, there's OSAT and foundry opportunity. I want to ask you specifically about Foundry. I definitely heard some of your IDM strength seems to be carried over to Foundry at least From what they are doing in terms of evaluation.

Speaker 7

So can you talk a little bit more about The engagement with a leading foundry TCV, what's the status there? And I mean, obviously, this is probably a beachhead, but what's the first application of any of the evaluation you're engaging with them? Is it the C2S, C2W or is it flux with flux or fluxless kind of application? Thank you.

Speaker 2

Yes. So, I think I mentioned we have multiple engagement right now in the C2W, we really don't specifically talking about the customers. But I think at this moment, the C2W, fluctuates With cover to cover contact capability and that's really we are focused on and we have multiple offline ship All going to ship. And this is another first time we process So I think there are 2 purpose for Fluxless, Particularly in the sheet W. 1 is to reduce the defect drops remain And which will impact the year and due to our condemnation.

Speaker 2

The other one, I think the cover to cover contact Very important. And not only cover to cover contact, reliable cover contact is reliable reliability is very important. I think we have a very special actually structures and the process To make a very reliable copper to copper content and this is a comment by many customers we are engaging with.

Speaker 7

Thank you.

Speaker 2

No, I think in terms of application, We actually don't specifically comment about customer's process. But I can tell you, we have multiple engagement And I think our C2W is a very focused area at this moment and which we are quite excited about.

Speaker 7

Thank you. Maybe one last question very short. Do you have any preliminary view about the fiscal Q1 2024, the December quarter, in terms of how much sequential is it going to be from the fiscal 4th quarter

Speaker 3

So Charles, right, as you know, we don't guide beyond the As I think both Fusen and I said earlier, there will be some seasonality in the 1st fiscal quarter unlike in doing the ramp of 2021, 2022. We do continue we do believe that the business has continued to improve as well. As far as the magnitude, I think again, there's a lot of Uncertainty macros out there that will give further color in our Q4 earnings release. So Charles, maybe I just want to make one comment.

Speaker 2

I think we do feel 2024 will be a better year. Really, I think how much I think I can tell you if you if we can count the biggest opportunity, I think it's really bow bound. And our Boardwalk rate came down from a very high level. So we are actually quite pleased. If you remember, I think in Q1, we feel like our bow bounder actually has come to a trough And Q2 actually showed improvement.

Speaker 2

So the noticeable change from Q2 to Q3, Q3 to Q4 It's also a bow downer and we are seeing short term capacity buy and also some customer need For the better capability of Bonder to handle more complicated structures. So if you ask me, we feel better We have opportunity. I think Bo Bongde can carry a very good growth for 2024, but really how much is much. I think probably really depends on the recovery rate. I think we'll have a better judge probably in November.

Speaker 2

Well, we feel like the current rate of recover is still not very strong. So we do expect our second half will be better than the first half. I hope this helped.

Speaker 7

Yes. Thanks for the abundant color, Hu Shan. Thank you.

Speaker 2

Okay. Thank you, Charles.

Speaker 7

I'll hop on in the queue. Yes. Thank you. Bye.

Operator

Our next question comes from Tom Diffely with D. A. Davidson. Please proceed with your question.

Speaker 6

Yes. Good morning, Joe, and good evening, Lester and Fusen. Maybe Fusen, following up on that last response, What are the utilization rates today and how low did they go a couple of quarters ago?

Speaker 3

So maybe I'll answer that, Tom. So utilization rate right now is around 70%. The previous quarter was around 60%. And I think the quarter for that is about the same, a little bit lower. So we are seeing it Go up.

Speaker 3

We also see Q4 utilization rate will also probably be higher than Q3. So we're seeing that nice trend as it heads towards the mid-70s.

Speaker 6

Great. Okay. No, very helpful. Appreciate that, Lester. I wanted to dig in a little bit on the tool refresh that you're doing across your product lines.

Speaker 6

You mentioned a couple of new ones hitting the market. How do you see that rolling out as a percentage of your sales or percentage of revenues or shipments? Is this a 2 to 3 quarter transition? Do you think a year from now you'll be largely with the new higher margin tools? Just a little color on that would be great.

Speaker 2

So, Tom, I think the first For a low income and we have another one is for the high performance one. And hopefully, we will see maybe some margin improvement in about 2 4 quarters, maybe 2 to 3 quarters. So hope that helps.

Speaker 3

Yes. And Tom, we expect most of the products Fusen referred to be released by the first half of twenty twenty four. Obviously, as it release, it takes a little bit of time to gain traction. But as I said, I think we expect the margin improvement Starting in 'twenty four and definitely by the second half 'twenty four, the increase particularly in ball bonder margins should start hitting.

Speaker 6

Okay. I appreciate that. And then I guess finally, maybe just a quick update on the Project W still expected to Start to ramp in the first half of twenty twenty four?

Speaker 2

No, actually, Tom, if you listen to me, I think, Actually, this is a Tommy issue, but we always feel this is going to be 24 We'll be prototyping and preproduction, right? So I think beyond that, I think the volume will be Hi, but next year I think we were working together with the customers just on Pre production and also prototyping. Okay. I apologize for that. So we I think in about maybe 2 quarters, if we probably have more insight, we will share with you and share with the public.

Speaker 6

Okay. And then final question maybe for Lester. Looking at the cash balance and the share repurchase, your share repurchase levels although up sequentially or well below where they were a few quarters ago. Has there been a different philosophy or Change of thought as far as share repurchasing over time?

Speaker 3

No, no. I think we've Our philosophy always has been to be opportunistic, right? I mean, Susan always discussed with the Board every quarter on our capital allocation. So We kind of slowed down for a while and we picked up a little bit, but we believe that we will probably continue to be opportunistic and I think The volume will continue to grow.

Speaker 6

Okay. Thank you.

Operator

Our next question comes from Christian Schwab with Craig Hallum. Please proceed with your question.

Speaker 3

Hey, guys. I just have one quick question. Your commentary regarding memory That you saw better than expected improvement utilization rates and a pickup in demand in NAND, which We're not really seeing or hearing from anybody else, including the manufacturers of NAND Other than possibly bottoming, so I'm just looking for greater clarity on that statement, please.

Speaker 2

Well, I think we actually NAND, we actually have a high market shares, right? And I think this quarter, we do get business from name business. But at this moment, Christian, even people expect memory to touch to the bottom, We still see a recovery will be still slow. So overall, I think memory, our expectation is Yibao is an uptrend. We do believe the best 24, the whole industry, Probably can go back to 22% plus maybe about 10%.

Speaker 2

So but I just want to make a comment, I think NAND, We have a pretty good market shares whenever capacity come and next focus for us And I'll see if we can get the auto market share gain in the this upturn for D WAN.

Speaker 3

Okay, great. Thank you. No other questions.

Operator

There are no further questions at this time. I would now like to turn the floor back over to Joe Elgrenny for closing comments.

Speaker 1

Thank you, Maria, 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.

Operator

You may disconnect your lines at this time. Thank you for your participation.

Remove Ads
Powered by Quartr
Earnings Conference Call
Petróleo Brasileiro S.A. - Petrobras Q3 2023
00:00 / 00:00
Remove Ads