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    KLIC
    Earnings call· Apr 2026(Q2 FY26)

    KULICKE & SOFFA INDUSTRIES Q2 FY26 earnings call KLIC

    May 7, 2026 Source

    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

    5

    • 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

    2

    • 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

    10
    CategoryTargetConfidence
    Revenue
    $310 million
    high materiality
    High
    Gross Margin
    48%
    medium materiality
    High
    Non-GAAP Operating Expenses
    $85 million
    medium materiality
    High
    GAAP Earnings Per Share
    $0.87
    high materiality
    High
    Non-GAAP Earnings Per Share
    $1.00
    high materiality
    High
    TCB Revenue
    over $100 million
    high materiality
    High
    Capital Expenditures for Advanced Solutions Expansion
    $12 million
    medium materiality
    High
    Advanced Solutions Segment Production Capacity
    support approximately $400 million of revenue
    high materiality
    High
    Effective Tax Rate
    slightly over 20%
    low materiality
    Medium
    Fiscal Fourth Quarter Revenue
    slight sequential improvement
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    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—

    Operational metrics

    12
    Non-GAAP EPS
    $0.79
    Q2 FY26

    GAAP earnings were $0.66.

    Non-GAAP Gross Margin
    49.3%strong sequentially
    Q2 FY26

    Remained strong sequentially due to customer and product mix.

    Non-GAAP Operating Expenses
    $73.8 million
    Q2 FY26

    GAAP operating expenses were $81.1 million.

    Effective Tax Rate
    slightly over 20%
    Near term

    Anticipated to remain slightly over 20% near term.

    TCB Revenue
    over $100 millionat least 70% sequential growth
    FY26

    Expected to grow at least 70% sequentially this fiscal year, with majority stemming from large applications and heterogeneous packaging trends.

    Advanced Solutions Segment Production Capacity
    support approximately $400 million
    Ongoing

    Anticipated to significantly expand over the coming year.

    Capital Expenditures for Expansion
    $20 million$12 million deployed in FY26
    FY26-FY27

    Total capital expenditures for expanding Thermo-Compression capacity, with $12 million deployed in fiscal 2026.

    Utilization Rate
    strong
    Q2 FY26

    Utilization rates are strong in these regions.

    Utilization Rate
    soft but improved
    Q2 FY26

    Utilization rates are still a bit soft but have improved.

    Utilization Rate
    improved
    Q2 FY26

    Utilization rates have improved in these regions.

    R&D Investment
    increasing
    Q3 FY26

    Increasing investments in critical growth areas, particularly around advanced packaging and Hybrid bonding.

    Vertical Wire Revenue
    a little bit
    FY26

    Expected to contribute a little bit of revenue this year, but primarily a future growth driver for low-power DDR in AI applications.

    Industry KPIs

    2
    MetricValueDetails
    Fab capacity utilization92%%
    End market segment revenue mixGeneral semiconductor: $148.9M; Memory: $31.3MUSD

    Product announcements

    4
    ProductTypeDetails
    Asterion-TW systemlaunch
    ProMEM Suitelaunch
    ACELON dispense systemlaunch
    Panel level dispense solutionlaunch

    Capital programs

    1
    Advanced Solutions segment production capacity expansionunderway$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

    2
    Lower refurbished system salesQ2 FY26

    decreased sequentially

    Mitigation: not stated

    Soft utilization in Southeast AsiaQ2 FY26

    still a bit soft

    Mitigation: improved a little bit

    What to watch in Q3 FY26

    5

    Advanced Solutions segment revenue capacity

    H1 FY27
    CurrentTarget capacity to support $400 million revenue
    TargetProgress 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.

    Q&A highlights

    7

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.