KLAC - Earnings call transcript Q4 2022

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Operator

Good afternoon. My name is Leo and I will be your conference operator today. At this time, I would like to welcome everyone to the KLA Corporation June Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions] I will now turn the call over to Kevin Kessel, Vice President of Investor Relations and Market Analytics. Please go ahead.

Kevin Kessel

quarter. to the QX quarter results outlook the welcome call quarterly and and for discuss to of September you KLA’s XXXX fiscal earnings the Thank the June

Chief Joining Executive Chief me Officer. Rick today Wallace, Financial Officer Bren Higgins, is and our our

this our released the will today discuss close. we call, after During results market

specified. the is find of otherwise the our section reconciliation earnings the materials letter, references presented results You basis non-GAAP IR a Whenever release, can financial slide is on deck A GAAP of to business Today’s discussion made KLA’s shareholder press and on non-GAAP in to calendar detailed infographic full on they performance, are website. year unless year website. references. posted are our

contains corporate investor as and Forms our also well XX-Q. annual most to links on future governance and filings, and as presentations, including SEC our XX-K report recent events Our IR reports information quarterly website

the Our to comments forward-looking disclosure the come and subject and will SEC to today in make risks today cannot guarantee reflected KLA are risks statements true. Any subject statements are we including risk call our on those factor those filings. forward-looking those in uncertainties

may statements. differ those Our actual our forward-looking from results in projected significantly

highlights additional our and Higgins, then Our few comments to discussing turn June the Bren Wallace. call and with guidance. now conclude to financial as Rick quarter from industry June like Wallace, our semiconductor the begin results quarter well view CEO, will some with our Rick? some CEO, I’d a Rick our in the environment quarter as outlook CFO, over call demand before will highlights. brief our recent of the

Rick Wallace

about a I’d joining with begin the you today. us few for like Thank quarter. to all comments

drivers to continues multiple from quarter June KLA First, results. reflected in growth our benefit

$X.X range. needs guidance both to The for the non-GAAP XX% partners at and talented customers, was in of challenges. at and KLA top was evolving focused creating of teams $X.XX, sequentially. was strategically Specifically top customer have and our supply and of steadfast global range at year-over-year EPS chain revenue remained EPS $X.XX to commitment billion our the and up guidance are end our quarter, X% navigating our their for value on this responding shareholders. GAAP end They

are Our macroeconomic continue the as of this to a an evolving to the consumer across model of and follow our uncertainty areas guide benefit resulting teams the challenges performance, operating closely. KLA and effects demand we product demand monitoring strong opportunities groups, Driving major market. customer meet from are

indicated have segments PCs end have our both past seen mobile memory have in weakened. specifically customers markets, and the pricing devices few some and So softened months over we

‘XX our With our has ability concerns, WFE memory WFE announced the he readiness Bren expand ‘XX beyond and with While facility deliver with details in production. profile supply in to persistent have when KLA’s still WFE in confident tempered. in mind, growth for adjustment calendar in are recently and single-digit challenges outlook high outperformance. the the relative category. We will growth on see CapEx our more in outlook. this discusses In to their we assessing our and the continue issues have we shipment ability material see elevated normal change full demand WFE to we chain supply outlook, evaluated customers no CY aligning ‘XX the beyond customers from strong deliveries the tool

investment demand leader, We and in leading in the inevitable KLA of of one control additional segments at upside. have see would growing for is and landscape. fits market. the technology And as is nodes. be the Process chain an the market an challenges increased edge overall fastest WFE This We position supply current the abate. legacy demand continued

attribute critical We through most process and long-term steady unique technology drive see leadership at in to control These WFE packaging. to growth high growth categories, technologies differentiation factors support advanced category. innovation level address investing all strengthening on a a our challenges. focus consistent the of in also KLA’s portfolio for market including that and We the products

customers now quarterly briefly to their Our our a growth strategy. technologies I’d drive highlights. help like few summarize

First, outperformance diversification peers. slow, signaled investment nodes to some strong continues industries. simultaneous multiple memory, remains a across foundry In KLA logic, drive multiple customers’ relative investment strong remain with In tailwind. other across to versus even demand

grew XX% inspection delivered business impressive again year-over-year. quarter XX% our in revenues wafer and June results the Second, as sequentially

quarterly the $XXX business million, delivered billion in revenue record components as June year-over-year. up our from the level the packaging quarterly KLA business surpassed time service for XX% first electronics, and Third, Fourth, KLA revenue $X.X the was quarter. revenue

cash Finally, quarterly quarter free the June of $XXX generated cash returns. million period to growth. capital XX% flow perspective from We exceptional year-over-year the free amounting flow and was of another

increase We also a dividend share program, quarterly billion our in announced repurchase a $X XX% level.

focused Additionally, shareholders returns our XXXX KLA’s XX% XXXX we objective to and flow. growth through revenue over programs. and X% New Investor ‘XX on remain features new growth our this major we increased returning business dividend quarter, at lines our that in period. XX% in repurchase June of via relative our long-term our capital to financial introduced targeted XX, long-term for each strong revenue Day model cash York growth City. targets Also, of versus stock We to new free capital

the today industry trillion KLA’s $X summary, through assumes results outperformance. X% of XXXX. by CAGR semiconductor sustainable demonstrate baseline once to growth the to model for long-term exceed June quarter X% many In Our with market again XXXX, semiconductor forecasts

macroeconomic and addressing dedication of of stakeholders. capital resiliency and Chief value go uncertainty consistent execution global the delivering chain allocation operating to our supply the highlights Financial Bren? team against marketplace highlights issues quarter financial KLA our outlook. long-term model, and our Our now to challenges the in commitment the Bren terms our in various persistent Officer, will Higgins, in June both assertive through and of

Bren Higgins

you, Thank Rick.

was $X.X and GAAP to execution new of Revenue $X.XX market XX.X%, and success non-GAAP near were As Non-GAAP our employees Rick and were results million our expectation position. diluted $XXX EPS margin joining quarter respectively. versus June strong of million, was has said, gross $X.XX timing non-GAAP KLA’s our operating expenses the the reinforce below and plan. mostly of $XXX billion, EPS due

also benefit operating in impact footprint. a from strong comprised from $XXX we million SG&A. expenses million dollar our cost addition, global R&D In $XXX realized resulting the Total U.S. in and

our demand expect operating the strong years and the investment expectations of going infrastructure model our backdrop, to growth. scale the our global important to leverageable Given forward, rapid last revenue couple over KLA expansion in facilitate systems we to and continue

to position product resources growth new volume-dependent against programs Our support expansion the our long-term structural execute our and company investments to business thesis. include as development we

trend result, September expect over of $XXX quarter As we we million operating to support be expenses forecast a approximately to XXXX to continue our balance operating revenue to in expenses and sequential growth the higher the expectations. quarterly

recurring investment implied. a Other from below mark-to-market income guidance million, non-GAAP the target growth X with We XX% normalized guidance model, our investment. at quarter margin XX% XX.X%, was by the a and positive a expense higher offset on million, the incremental in Non-GAAP net than was reflecting on the was of will size revenue on adjustment transacted delivers supply based that which margin strategic $XX over point a almost strong guidance gain operating company to operating $XX variance leverage of the midpoint time horizon. operating

share reflect tax per issuance. September the impact the For at quarter, million equity XX.X% $XX rate, we effective non-GAAP compensation would the Quarterly new been $X.XX was than principally XX.X% guided approximately At at the earnings to impact on the guidance to of debt deferred rate due higher the forecasted higher market programs. $X.XX. have

million. free long-term XX% $XXX a income and tax from a free resulting of of net guide $XXX free million flow flow and was was net XX%. revenue We found $XXX and The products within income major planning was shareholder can end is regions be in cash Cash continue reportable flow and of cash and was rate. margin flow the million. markets to slides. cash GAAP $XXX conversion XX.X% letter by segments Non-GAAP million. operations breakdown a And

diligent for issued June, new on million with the value agencies. ratings ended of three billion lot our $X and of billion announced June, debt In productive upgraded the oversight citing of attractive quarter our a capital by KLA KLA X balance and XXXX. active of awareness of structure of shareholder in growth. impact the cost the reinforce A- strong we capital completion of scale in to appropriate and quarter. for in offer and notch flexible all saw Later supported and These due Moving actions a the where senior profitable to KLA grade the maintained $XXX business allocation. this profile improved sheet, billion, capital tender total notes for and activity debt S&P and bond of a $X.X further we from cash, $X.X investment past maturity outlook

recent increased calendar target, new Day, KLA the Consistent consistent XXXX growth, of repurchases. long-term the increasing earlier. capital returns long-term this, that and targets at return by a the returns confidence share our financial both actions strategy our to and Investor demonstrated over in business committed dividend As includes cash as our is has announced capital with we mentioned

to shareholders, repurchases $X.X returned billion last and the XX including share in KLA dividends million $X.X paid. Over months, has $XXX billion in

single-digits to We billion high recognition for outlook, strength our chain have reflect segments. the for approximately of a are the gaining adjusted challenges our our in persistent to roughly to outlook in broad-based we XXXX that continued $XX expect demand market baseline ‘XX reflects calendar grow WFE now of supply revenue outlook and in to Turning peers. This XXXX. WFE overall calendar across shipments $XX customer the many off billion of

While ability customer supply at we capacity continue chain our to work and to hard our shortages demand. to meet with manage suppliers, KLA constrain

has over discussed challenging this While not and past through Investor has visibility at the remains as been our strategy, supplier engagement improved Day, our validated cycle, X supplier we months.

to through calendar range. the KLA’s growth growth systems The to XX% in exceed or semiconductor several expect continue low points average. than total the expect quarters, couple we indicated and sequential the growing meet company year control revenue last As process faster of this

in demand during another our sustainable relative to KLA outperformance year calendar exceeding strong in overall. to continue expect of supply to should we deliver PC second translate the semi business, half. Finally, year’s is which position growth

the ahead, and pressure remains the for calendar sequential XXXX. to their XXXX. our demand Looking affect the environment growth into high how for with indicated move Today, we deliver products macroeconomic expectations driving customers’ we and capacity customers through as our from plans they as earlier, concerned and calendar is are

the by our and current the sustainability diversification of demand encouraged are We profile company’s operational execution. and

control adding across long-term near-term are process We to support our capacity customers’ growing our requirements outlook growth manufacturing strategically footprint thesis. and through-cycle our our global

expected revenue. about around XX% expected total systems XX% Our expected to in be the to to billion, Foundry be is as is be We $X.X guidance be XX%, in is forecast segment plus or of minus September gross of $XXX follows: to range quarter mix of PC forecasted XX% range revenue and is to million. is the semi approximately memory XX%. be memory, In of the to margin XX%. non-GAAP NAND, DRAM and logic

have for in considering conclusion, enabling markets. technology $X.XX value run. execution application EPS shares. ability on investments nodes trends supply despite to our resumption comes of across Finally, outperformance our industry. and investment of across industry throughout and the EPS growth in the to of have the lowering EPS a is and content Broad-based GAAP customers to and be scaling compelling These share investments headwinds, trends changing is are simultaneous and to multiple long chain as to semiconductors semiconductor driving universe a for the macro industry our is expected record remains of of semiconductor $X.XX important the confidence a semiconductor-based non-GAAP power the for million range portfolio, the both see $X.XX growing WFE demand technology durable in diluted deliver $X.XX. long-term technology our we diluted periods. and that diluted sustainable broader secular fully and cost guidance and XXX our based In in drivers continue reflects growth customer of KLA, to economic our range track supporting end count the in on over When it secular approximately in our

industry-leading element the guides enable our capabilities customers’ of the infrastructure we position industry we maintain investments the fuel foundation These sustained our support combined model for at across in differentiation strategic our backlog That As our provides that Kevin? demand up concludes robust our plans. that outperforming and execution free mode, performance. turn growth, objectives. an track as including future. increasingly shores to competitive investment record generation offering. our look shareholders. leading remarks. our outlook returns our required objectives product and and long-standing in and funnel cash back expanding and an the growth They to These visibility, multiyear we wide to business begin operational continue I’ll support leadership, product execute and the continue the indicators This factors, excellence KLA Kevin of service our call sales our diverse growing confidence stability reliable are our over our Q&A. financial to to the and consistent business, of the outlook flow operating capital to development us invest to industry also our with technology for prepared

Kevin Kessel

Thank you, Bren.

We are queue for ready to questions.

Operator

first from will take of our We question Harlan Sur [Operator JPMorgan. Instructions]

Harlan Sur

execution. results and solid Hi, afternoon, good the Congratulations guys. quarterly on

think have plans views into good some of changes into next in and your know maybe a into, customers near midterm to your your there some in headwinds some on remarks seeing you’re of given the prepared is next I have you negative orders cases, spending any demand You for I of terms customers shipment are XXXX, from forward. guys signals next And all increasingly of quite year? visibility guys demand lead as conservative CapEx year, sort plans, year. you you are anything guys in but early highlighted of meaningful result looking customers’ the even but your long, also times going seen on in longer-term not

Rick Wallace

question. that in say certainly thanks I customers. we’ve changes seen for and would comments no the near-term, our the Harlan, the from Yes.

to as challenges facing some of that X months to to our are is adjustments today terms lot pressure the And ago. peer near-term of in tools WFE a fact, versus it on revenue, It’s ability ship high there. In WFE really and half. as for was companies our of expectations their second impact the what we Certainly, related the us in monitoring either the early too ‘XX. would see second the given the that growth half the or in recognize half of have – an for terms call to first were we’re

this from As our our of of move into the sit we we move planning – first outside we and year we as see move least sustainability – we in output into about today, part ‘XX. think where from as a as we at levels

memory churn and sit customers watch particularly our we will we challenges the no Now mean. timing. that and what to the of expectations from what in at have space and see some delivery today, of end up might the backlog and real least in in in doing terms But we where see

Bren Higgins

you been up, talk add could with some to our spot Yes, obviously, the things and we’re two, us keep somebody of One, that, please the because to recently they aware if basically telling Harlan, have are one slots. they we to opens they of give – even we’ve talking us. else’s is of things. And are that two seen it know customers

bit a what process a process seeing for are. control, probably we’re than different we’re in players the little position like feel So

Harlan Sur

the in event next year. And decline Great. WFE of

is of biggest got I downturn. right? You’ve services decline buffers, historically your positive feel several one that And does the like not business during ones

over has like So four is I And then your has near-term, actually I business KLA been its I all over past of been think look back XX downturns. the think services business those more the that only the if downturns, X services down. years, year four there in team past grown

periods WFE talked record services the like what’s services So the downturns? the nodes has know what stable where subscription and business weak? is on opportunities about services in the to allowed you outside on I on And else spending grow – historical contracts, expansion business its track team ETC annuity-like guys of service legacy during

Rick Wallace

the kind of end. threw you the two questions in at So one EPC

Let do the improvement downturn ways one one. want control historically of me to in we’ve they they with start heavily yield customers Often or stability. seen process And focus the is as process on what productivity. get that still

So tools high stay the on order capable. services we in keep actually utilization the see to

of will toward the their And actually base. limited installed budget upgrading sometimes some deploy they

In of cycle we’ve been not EPC, really terms through that. with a obviously,

bit little terms it know, in percent on of are for the the secondhand a knowledge. they hit of business, as year? overall services not we should it’s a But that in, change depends headwinds – you – into but dynamic So that that as next segment our we overall see will our going some

Bren Higgins

multiple we’re investment I’d that thing other only across The is seeing add, Harlan, nodes.

markets customers high-performance to from these compute those process they want up those of drivers and to center support they going so leading around to these transitions. to tools our a are edge And the technology data trying view, drive navigate as the complexity are to of and particularly control the given how tools them markets, buy point certainly, in that through will keep of use

the And of so that aspect value that’s we an important add.

pulling on ramping in capacity they the within if even might goals change. back still the frame particular And So some are investments just time and they making, facilities. be they R&D investing may a wafer start of are

you a memory control or areas If tends process about within even areas are some lower. trailing areas, where within of think bit those the little be to intensity edge

that impact I degree that so play the they it impact how out, just that terms those business are players. would less see think more capacity-centric we’re areas the of I they we exposed to investment other in to don’t And might think the

Harlan Sur

you. Thank Great.

Operator

Cowen. Our next question of comes from Krish Sankar

open. is line Your

Unidentified Analyst

on This then look could color follow-up. thinking on have shipments, might just how like, of questions. just whether impact for you’re one potential My of that? base to in this sort And the taking business I there of or first what pool you any based Krish. XX-nanometer sort around if is to about terms shipments a my were question on for provide sub any was [indiscernible] Thanks China, tax restrictions if Pacific

Bren Higgins

some Well, there development gotten of have receive about this a specific as well. for some China production. to requirements licensing to of related question. and our And question was notification I know the sub-XX-nanometer government peers course, U.S. that new did from – we But

the Of course, laws guidance comply no on would the unpredictability at we will over comments all for the our new will months, we in of we lead next where funnel and I quarter, an this impact to say, material we that the on what business look here. guidance is with the time dialogue expect, XX active continue I upcoming given engage say as our our the fully would And timing given have I new with and has of applicable remainder requirement. and to any from this and ‘XX. that don’t investment licenses, see effect happening government

the don’t to But want So today topic. have and happen. I that’s could what been what know on I say based else we’ve about we what to what speculate asked, mostly on

Unidentified Analyst

That’s you China assumption? that just between have breakdown helpful. you for towards And is a domestic mentioned international the shipments foundry maybe Okay. domestic then quick, customers if past, the remember provided fair I smaller more and players, correctly, real in skewed to

Rick Wallace

still true. multinational activity The more That’s Yes. in is mature. China

so process of be tends China native our to is control. semiconductor business And relates it in to China, it most as

the this is company, to quarter, foundry business on, overall, projects. other the or and up process closer whole semiconductor it is tend you projects. include last end logic. is most so so are and a to there was so systems, company, it for of most They within now as parts – EPC shipments across service XX%. in multiple about of of more There be control So to lot of our Most the and you XX% China. And of you

reticle You infrastructure infrastructure wafer have and in investment infrastructure. to also related

serve there, parts is happening as products and investments that And we well. so that of are market the there those have

Unidentified Analyst

Thank you. me. all Great. That’s for

Operator

question Our Quatrochi from next of comes Joe Wells Fargo.

Joe Quatrochi

should quarter the kind cost and what’s taking how question. puts and gross wondering guidance? I we and for Bren, embedded Thanks if – about margin quarter you think the you the through pass in this go through takes was Yes. this on if of

Bren Higgins

quarter-to-quarter revenue dilutive and in a view. from XX.X%. a I related we But record efficiency point had that It that We what was in we of drag more was we out were for little in EPC had EPC, played much had pretty factory chain part. a and a as means Certainly, of of the a And challenges way expected. midpoint terms XX.X%, the think quarter to mix also on we that modeled is at bit our the the margins. and most supply guidance

So pretty much as we had expected.

most to a our quarter, It EPC September be is and the of fact, semi down would at is growth richer because then in little quarter-on-quarter. – look the a I coming some we all bit it’s expect mix. growth the As coming from PC, from

will we up or XX see the so points that about basis midpoint. And at go so

cost parts, expect see We also and in – leverage of I but that’s environment like away logistics, in are some in expanding you taking terms think revenue of from to seeing in of pressure freight we the would increase, what and both incremental an are terms in. of terms

we felt XX% So, and it’s the are end those with this most guidance around have that. been day, been offsetting we year, line of at benefits, be operating would somewhere and giving the part, the but we for some through in like I the that’s of

Joe Quatrochi

versus you what the September And mix NAND of missed for helpful. guide. very I was maybe quarter know DRAM did quarter? it, I That’s for the this then but it

Rick Wallace

Yes.

the two-thirds So, XX% was was memory, mix and DRAM.

Joe Quatrochi

you. Thank Perfect.

Operator

is Patrick question next Our of Ho Stifel. from

Patrick Ho

is lot a logic, Thank quarter. plans changes at are noise any think there marketplace to obviously, off, on nice you your basis? that? investment are the the timing or they It’s on first with congrats device much seen track edge around edge very leading Have given of what of a question I edge still Maybe foundry trailing the that of on of and customers plan. can investment of you a that in get on Can you marketplace, versus tools. still characterize their you trailing going-forward seeing when in edge leading more lot that terms are powering

Rick Wallace

and The in right. guys you that. with don’t any don’t change we expect yes, in leading conversations And them, continuing our edge expect are we are Sure.

of of with a we And In terms as not are them. struggling look – some for business. it’s we with part trailing of really the edge, big demand still been our supply forward,

And about if accelerate more we been have the deliveries so changing they them actually, the been having could conversations asking than have profile.

have could facilities, we upgrade have of the And So, access really get and it’s I products a they may their fact, it where to their had spot we It to open edge, the earlier, not the be because oriented hasn’t of desire tremendous they change our them, especially if kind given and people tend conversation made that’s demand. we more asking some comment that in really are of been up, need, having products conversations in but trailing been that have profile. if the yet. anything, in soften, BVP to

Bren Higgins

other the XX% to about be And Yes. the would revenue is of leading thing add tends I edge.

that to process expanding just intensity, as inflecting been time as more, wafer So, don’t expanding you the significant are for particular a if environment, they selling as they just do changes in-source could generally, result investments their demand so of more strategically customers add are strong long a investments. making the control they running process are real But specifications in facility. control trying they see are equipment edge, run parts in have that end a starts that for they where are and products to we changing process to just longer have And that change control are capacity requirements. you the trailing term are

intensity the drives control fairly process that’s So, light. that

and selling we driver around happening over KLA. contribution end is or than of to platforms are impact the or customers opportunities revenue leading I in Now edge those into But revenue, terms that edge. us. the for able business time, It’s creating extend much But what’s markets older financial seeing we that’s an less the platforms in profitable some that more from revenue in trailing it’s to the what think been given for the great it’s have of our is we are markets. those big

Patrick Ho

And maybe follow-up helpful. you. Great. That’s really as a for quick Bren, question

whether into the movement quarters. chain components the of You a How have possibly the at you through the the that over something guys assume good obviously do that issue going ecosystem rest of logistics, environment supply job industry cost next Is of the elevated, done are have really ’XX? that we managing to of several are to seeing, this ‘XX is and freight and the costs through things nature. and the at look just least it’s and

Bren Higgins

Yes, it’s everything expensive. good a question. is course, And of more

little And so than kind are year, flow this you through seeing into the talked quarter, earlier it’s And last basis impact, if point see XXX maybe that. to I that expecting the a of we cost freight before, one quarter it, about or incremental point from higher increase. quarters, bit probably prior than so add

don’t necessarily And through. so we are they go down. up, seeing that play Generally, when go prices

And we of Day, I for this overall. as we is on will doing us do to said – at about really we And Investor [ph] have how planning to think there it. not are terms work so in

we financial a the part in to improvements we plays important that particular to and what of is terms ownership cost to out terms in from to our are capability share of of we model we cadence us a getting that are reassess the customers of generally, it will we our offer tool for that, of means we managing offering situation opportunity products, but that a in products, try value in to from how return. of capability And the so competitive and Our think and cost new value only returns our the and the how are sell in point how new not market, about terms view also that. of an share

being are of benefiting not where are from from a we So, Certainly, the view. scale revenue we expansion we opportunistic point can.

we extent giving in that And purely not to to the are past. so we have related volume discounts the

of resetting think time. our things of that And more priced and things general, – offering I with some kind we customers. are in are But how so much it’s how over the value about

Patrick Ho

Great. Thank you again.

Operator

our Atif take question will from Malik We next Citi. of

Atif Malik

and question. able get that how my U.S. manufacturing change, I Act you with early. your manufacturing to outside strategy? and be going in if expand all, taking U.S., companies equipment first Thank long-term like on had you the a understand manufacturing already understand both priority would It equipment I might money I and looks the CHIPS in manufacture the to two it’s for companies the Hi. question U.S. this at guys inside have and of

Rick Wallace

really the strategy. for doesn’t change It Thanks question. our

we sense We on to make and the supply it need. we to makes as going the to can can we where based where decisions are get for are customers most we products the decisions us always the that not talent to build chains going make have, we have our that. on where support based

our So, it will decision not impact making.

Bren Higgins

all have assets asset-light. were fairly that our You

to equipment. extent really space expanding anywhere, we facilities it’s that or are our than the and about anything some more So, building

– terms in So, customers billions our of a it of isn’t it’s different very dollars than facility. significant investment production what in

much for come primary build whether form it’s very operational about form Obviously, terms of why point, or they operational in Rick’s in incentives, the build, we more the motive come we is what we to wherever secondary. the the that us. grants, for we taxes of are, optimize we but And always So, they motives where. have in of

Atif Malik

Great.

about the segment EPC full looking year? for XX% systems seeing a you end segment that of As how record Bren, XX are for and And were what you Are you was growth Auto years I in are talking Mobile growing the market? XX% versus for year, at follow-up, June my the still ago, the quarter. you EPC – understand the systems

Bren Higgins

driven the specialty side. mid-teens we improvement mostly and bit we a the auto half be PCB the company to versus seen yes, little stronger but whole just in given it’s exposure stronger. and SPTS, its strength the softness the would market. automotive part some great little a – in is the by have mobile on seen power, seen question. in continues terms first as softness the business, but have EPC to and expect been second half year, our of of growth PCB have the semiconductor we But particularly systems bit in Auto strong, Yes. That’s to this be is pressure, some power, I in in the a

still nice growth, not mid-teens XX%. growth, So, net-net, but

Atif Malik

you. Thank Great.

Operator

from Instructions] will Jefferies. [Operator our of Shrotre take We question final Vedvati

Vedvati Shrotre

question. go earlier. something back Thanks asked was to wanted my taking for on Hi. I just that

So, up. opens case you sort your customers in that mentioned for slots are any looking of

works? So, a mean to me push back that sort out your go understand customer, Is the that that from how can you a has does right line? the is interpretation? So, customer get help if slot close and you in of that

Rick Wallace

Yes.

while want to hard is explaining kind have customers think move working I them, they I of then But that you have are It it. have doesn’t mean So, up priority really same list. keep and question the far we really do we we work as supply, do. to demand, our the way. what to more we expand

out exactly will do this really products things delivery. them of to no hopeful far are the kind are about really we that sooner, the think asking point of a approaching the to it’s slots. is done that that they We they chance can have is But it. question just is are of get pretty you for So, many It’s what free not get customers, some this, and can are same. people, but they the for that’s allocations the way aren’t give they are That’s my just in tell. way

queue, person move up in So, of out the the next would work. terms if somebody just of would that drop the way were to

– not in people going the it’s ahead line. to So, aren’t jump

Vedvati Shrotre

Right.

is so so kind push-out from… push-out a – a up a of cancellation, understand a or not does there And different and I necessarily if correctly, if case open that if in slot

Bren Higgins

had and somewhere they The December June they fit have slot next that would would line in get likely person and now, love in in don’t that June. that be So, until would we our right slot, need to December slots customers December. a slot in in they that in said, if have And a somebody June. are

times products. given So, lead the of on our some

and It they So, they facility lot be setting or up their tied readiness. other lines. production that’s also can sometimes are tied facilities of churn received natural customers other from as it the And we tools up as setting they see. certain to suppliers whether a to are is

point, we the level a are have. little But Rick’s we like So, of that. see bit movement under-serving you to always demand of

in lot And so way to line customers are a of out get a long having in cases.

to of opportunity the have constraints our the so demand take a And that our they their ability of them. for customers to would earlier satisfy that given that the of be desire and lot want an they would advantage also around certainly demand but strength seen, these for products

Vedvati Shrotre

you much. Got very That’s it. helpful. Thank very

Kevin Kessel

day everyone terms today it earnings. for We us. busy of of a you Thank know joining in is thank how you and

call your that, close With I and to turn So, will I Leo appreciate time the it. over back to interest.

Operator

June this a the and and webcast. call concludes line at quarter Corporation XXXX your Please wonderful day. KLA earnings disconnect This time, have

KLA (KLAC) 29 Jul 222022 Q4 Earnings call transcript