Inquired whether IDMs, foundries, or OSATs are the primary drivers for TCB growth, especially given the "well over $100 million" target.

Growth is across all three: IDMs, foundries, and OSATs, with increasing interest from OSATs and fabless customers. “I think it's all 3, Krish. I mean we've always had a very strong position in IDM, right? And then over the last 1.5 years, we've moved into foundry. Now we see a lot of the OSAT interested.”

Asked about the sustainability of current revenue levels and outlook for future quarters, given improving visibility.

Expects a slight sequential improvement (5-10%) into Q4 FY26 and strength throughout the core and Advanced Solutions businesses through calendar 2026. “I think for the fiscal fourth quarter, we expect sequentially incremental maybe 5% to 10%. I think we're getting much better visibility now through FY '26. I think actually, there should be strength throughout the business -- the core business as well as our Advanced Solutions business through the rest of the calendar '26.”

Questioned the sudden investment to expand TCB capacity to support $400 million annually, given current TCB revenue targets, and what triggered this decision.

The investment is triggered by a very bright future for Fluxless TCB, belief in having the best system (flexible, robust, proven platform), and significant inbound interest from various customer types. “I think we're investing now because we definitely see a very bright future for us in Fluxless Thermo-Compression, right? We believe we have the best system in the market, right? We have a very flexible system... We have also gotten a lot of inbound interest.”

KLIC

Kulicke & Soffa (KLIC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Apr 2026 (Q2 FY26)· Information Technology· May 7, 2026

Source: earnings call transcript

Executive summary

Kulicke & Soffa Q2 FY26 — Strong Demand Improvement and Capacity Expansion

Kulicke & Soffa reported a strong Q2 FY26, driven by improving demand in general semiconductor and memory, particularly for data center expansion and advanced packaging. The company is aggressively ramping production and investing in capacity expansion for its Advanced Solutions segment, while also accelerating R&D in emerging technologies like Hybrid bonding, positioning for continued growth despite some softness in traditional aftermarket sales.

Highlights

Revenue increased by 21.5% sequentially to $242.2 million, exceeding prior expectations.
Memory shipments surged by 93% sequentially to $31.3 million, driven by China OSAT expansion.
Automotive and industrial shipments increased by 63% sequentially, primarily due to automotive content growth.
Advanced Solutions segment production capacity is being expanded to support approximately $400 million of revenue.
Fiscal year 2026 outlook for Thermo-Compression (TCB) remains strong, with expected growth of at least 70% sequentially to over $100 million in revenue.

Concerns

Aftermarket Products and Services (APS) demand decreased sequentially due to lower refurbished system sales.
Southeast Asia utilization rates remain soft compared to other regions, though showing some improvement.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$310 million high materiality	Q3 · FY26	High
Gross Margin	48% medium materiality	Q3 · FY26	High
Non-GAAP Operating Expenses	$85 million medium materiality	Q3 · FY26	High
GAAP Earnings Per Share	$0.87 high materiality	Q3 · FY26	High
Non-GAAP Earnings Per Share	$1.00 high materiality	Q3 · FY26	High
TCB Revenue	over $100 million high materiality	FY26	High
Capital Expenditures for Advanced Solutions Expansion	$12 million medium materiality	FY26	High
Advanced Solutions Segment Production Capacity	support approximately $400 million of revenue high materiality	Ongoing	High
Effective Tax Rate	slightly over 20% low materiality	Near term	Medium
Fiscal Fourth Quarter Revenue	slight sequential improvement medium materiality	Q4 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
General Semiconductor Driven by higher capacity and technology requirements for both ball bonding and advanced solutions segments.	$148.9 million	—	19.4%	—
Memory Currently focused on supporting NAND technology and capacity requirements, with expectations to gain market share in DRAM with new solutions as advanced packaging trends evolve.	$31.3 million	—	93%	—
Automotive and Industrial Driven primarily by high I/O and high-volume power and mixed signal packaging, mainly automotive. Positioned to benefit from long-term share growth in battery and plug-in hybrids.	—	—	63%	—
Aftermarket Products and Services (APS) Demand decreased sequentially due to lower refurbished system sales. The broader consumables portion has remained consistent sequentially.	—	—	decreased sequentially	—

Product announcements

Product	Type	Timeline
Asterion-TW system	launch	late March
ProMEM Suite	launch	—
ACELON dispense system	launch	November (Productronica)
Panel level dispense solution	launch	March quarter

Capital programs

Advanced Solutions segment production capacity expansion underway $20 million

Period spend: $12 million

Start: April

Benefit:support approximately $400 million of revenue

Expanding the Advanced Solutions segment production footprint by investing in capital expenditures. These investments started in April and are planned to significantly expand Thermo-Compression capacity by the first half of fiscal 2027. Total capital expenditures are expected to be $20 million, with $12 million deployed in fiscal 2026.

Risks & headwinds

Lower refurbished system sales Q2 FY26

decreased sequentially

Mitigation:not stated

Soft utilization in Southeast Asia Q2 FY26

still a bit soft

Mitigation:improved a little bit

What to watch in Q3 FY26

Advanced Solutions segment revenue capacity

H1 FY27

Current Target capacity to support $400 million revenue

Target Progress towards supporting $400 million revenue

Why it matters

Indicates the company's ability to meet growing demand in advanced packaging and TCB, crucial for future revenue growth.

Over the coming year, we anticipate to significantly expand our Advanced Solutions segment production capacity to support approximately $400 million of revenue.

Find out whether KLIC delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked for an update on utilization rates across geographies, especially given improving demand.

China remains very high at ~92%, with strong utilization in Korea, Japan, and Taiwan. Southeast Asia is still soft but improved, and North America/Europe also improved.

“China has been very high utilization rate for the last couple of quarters now. So for this quarter, they're over 90%, around 92%. We're also seeing strong utilization in Korea, Japan and Taiwan, what we call other Asia.”

asked by Krish Sankar · answered by Lester Wong

2 min read 5 chapters

Detailed narrative

Strong Demand and Market Trends

Kulicke & Soffa reported improving demand, exceeding expectations, with strong customer sentiment and above-average utilization rates in key markets. This strength is primarily driven by general semiconductor and memory demand supporting data center capacity expansion, with improving conditions also noted in premium smartphones, automotive, and industrial end markets. The company has improved visibility through fiscal 2026, anticipating continued strength.

Advanced Packaging Leadership

The company continues to lead in Fluxless Thermo-Compression (TCB) solutions, with revenue increasing sequentially. The FY26 outlook for TCB is strong, expecting over $100 million in TCB revenue, growing at least 70% sequentially. TCB is being adopted by OSATs, foundries, and IDMs for complex heterogeneous applications, with the company noting its robust and flexible system as a key differentiator.

Strategic Investments in Emerging Technologies

K&S is accelerating R&D in next-generation packaging, including panel-level base system architecture and Hybrid bonding technology, anticipating it will be commercially viable in a few years. They also introduced the Asterion-TW system for power semiconductors and the ProMEM Suite for DRAM solutions, highlighting a growing portfolio for both cost-sensitive and high-bandwidth memory applications. The company is confident in providing a competitive solution for Hybrid bonding.

Capacity Expansion for Advanced Solutions

To meet anticipated demand, the company is significantly expanding its Advanced Solutions segment production capacity, aiming to support approximately $400 million of revenue. This expansion involves $20 million in total capital expenditures, with $12 million deployed in fiscal 2026, and is expected to be completed by the first half of fiscal 2027, specifically targeting Thermo-Compression capacity.

Operational Efficiency and Cost Control

Despite increased investments in R&D and critical headcount for growth areas, the company maintains focus on controlling costs. Non-GAAP operating expenses are expected to increase due to variable compensation tied to higher revenue and strategic R&D investments, particularly in advanced packaging and Hybrid bonding, ensuring resource availability for growing opportunities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.