ONTO - Earnings call transcript Q4 2019

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Operator

Good day. Welcome to the Onto Innovation Fourth Quarter Earnings Release Conference Call.

During today's call, there will be a question-and-answer session. [Operator Instructions] Today’s conference is being recorded.

At this time, I would like to turn the conference over to Michael Sheaffer, Investor Relations. sir. ahead, go Please

Michael Sheaffer

Good and Onto this full market after Karina. XXXX afternoon issued fourth the quarter year closed. afternoon you, Innovation everyone. its shortly Thank financial results

not at www.ontoinnovation.com, a release, have If of is the where a the website to copy the you company's pleased received release refer posted. of copy

the are Roth, Michael on Officer. Financial Chief Chief Executive us Joining Plisinski, call today Steven Officer; and

and not you expected matters objectives, always is the forward-looking XXXX. are company's this at facts, the Such statements Private As today the best are of any expressed harbor regulations, forecasts time. of need regarding remind of whether information case, comments Act safe implied, or of Reform on to the plans, within estimates, that the performance based meaning being historical judgment Securities the particularly future made I Litigation company's available consist currently and

assumptions reasonable. company these range the believes are that be of to wide a Within

between specified. today's expressly results be in reconciliation However, and XXXX A uncertainties Technologies’ year Innovation's otherwise are presented and it XX-K other obligation vary the Onto must any non-GAAP be Commission. these Exchange Onto report GAAP financial a company Risk Securities report results financial found guarantee future currently factors cautions impact Form can can in does statements and materially. do described be well performance. the results Innovation that release. Nanometrics’ of range ended may basis that update so. with to on our Thus, will of that are statements Rudolph as statements actual disclaims to December XX-K filings Today's non-GAAP subject no cause are results detailed to earnings recognized not both that these and of forward-looking as unless a Form for discussion the

turn ahead to the I call Mike now, Mike? and will over go And Plisinski.

Michael Plisinski

of start I'll chain in that technology is the memory Innovation’s a evolution fourth to benefit semiconductor continued for Mike. for from call. quarter to and the launch every opens most devices exciting which value Nanometrics door logic across both the advanced on Rudolph form the of Thank event growth specialty Innovation fourth performance and nodes resulted the fabs in of the Innovation. from earnings essential for with Technologies, the everyone communications Good the integration and factor. an Onto and positioned major welcome and afternoon the packaging advanced to inflection greater merger Onto Onto update you, nearly of quarter, in levels of and smaller sensing

this talented closed since to support more integrated for future in experience our Innovation Onto months, transformational In and diligently have integrate innovation these value We customer merger efficiently businesses in working ultimately past portfolio to creation. our team formed October three the order our and our combined has shareholder been leverage our foundation late infrastructure with and solutions. customers’ and we teams improve then

of we synergies implemented annualized ending with follow. cost confident in year and have We million million with identified this to annualized $XX and $XX synergies synergies additional in are

teams technology revenue our potential our expand been have our Finally, markets core busy synergies and to strengthen SAM. exploring

time is will it course, for benefits be but effort take realized, fully these Of very to the progressing well.

above guidance. of forecasted our at coming team which in our was of at the to of the the mid-point range. Innovation Non-GAAP per earnings came $XXX.X in Onto million, specifics with delivered quarter, Turning high-end results solid at the fourth share our $X.XX revenue

results be As a reminder, reporting we'll three categories. in our

The logic DRAM, first is and category includes semiconductor advanced NAND nodes, foundry. which including

nascent silicon market. category and those and advanced is our packaging, and And our includes categories software devices specialty is category second manufacturing services. third wafer The which

optical control leading the edge. XD predominantly we in strong yields measurements quarter in III+ increasingly manufacturers. projected The the complex customers quarter, metrology to declined third the metrology in and decline semiconductor of – the NAND fourth to support five required ten, mostly five for top throughput is broad nodes help nanometer more suited Atlas last of from the memory quarter Atlas The metrology logic increased two the nodes overall. slightly logic well the doubled ramping by advanced the platforms For third and sales spectrum at growth customers demand offset after quarter. seven sensitive over more

increased – from packaging third and the device specialty our advanced segment quarter. X% from Revenue packaging

generally transitions. unit business technology higher volume driven meet through chip growth to a As volume is reminder, this expansions versus a where is typically

As seasonality is QX typically quarters. effects susceptible being slower the and generally a more the to of the result, business with QX

five enabled revenue most packaging demanding applications. advanced stacked in memory packaging increasing XG devices However, revenue across achieved with Dragonfly record inspection in quarter and adoption for the X%. demand DRAM a advanced enjoyed for a including quarter the to top packaging reflects The tools revenue manufacturer growing broad shipped the multiple system fourth applications,

included substrate their clarifying and wins, announced wins of of delivery of QS XX% their driven manufacturers took for XD inspection with customer. Other systems mobility applications. series shipments and bump out XG Rounding support in over XD packaging by our the and for logic customers technology to computing including wafer products. multiple several five metrology system worldwide. Revenue to growth contributing record lines support customers NovusEdge top for inspection new shipments bump the of in high-performance a grew their by OSAT in to quarter, foundry first where expansion inspection manufacturers the customer to of Dragonfly FTIR Also the quarter, from fourth silicon

XXXX. during capacity delivered wafer us packaging and who JetStep adopted well customer, to for quarter, system for lithography a for top continued we the customer a is position growth is five all in the recognized on NovusEdge Also top and This second positioned of processes fourth growing panel customer number XXXX. increasing a and has attracted developed tool they the Firefly provide a in for four manufacturers five. our feed-forward of lithography QS and to been of to advanced year, silicon inspection StepFAST our reputation using devices this has believe the microcontrollers has high FTIR will also our the series customers solution by In We RF and last management mid as system for is power manufacturing yielding begin volume high quality such metrology XXXX. FPGAs. data panel and high incorporating modules, move as toward software This JetStep

company our enhancing in software services out more continues invested services to as customers. had Finally, and and grow technology infrastructure each to rounding value provide the our quarter, to business

deliver to improve start full see summary, the we value the As to broader efficiencies leverage services. In the more our enhancing call, and mentioned opportunities our year, over at infrastructure of to optical in new products leading markets strengthen position Atlas helped The expanded and core our and our logic edge open memory markets. the across III+ metrology customers. position opportunities in new

balanced We leaders in NAND a have resulting more to with XD XXXX. grow tool-of-record DRAM logic, in and from now in secured foundation which positions

new will lines, to XXXX NovusEdge and wireless as pleased packaging more we diverse our of Likewise, from market than with a advanced and continue FTIR are devices variety markets by wide of across the customers automotives. Shipments selection metrology our inspection believe product packaging XXXX the and and inspection this and in in such Dragonfly XXXX, We XXXX. a base power from across doubled XX of our revenue products first look quarter. million meaningful over in segment Specific part to XXXX grow specialty see continuing into grow XXXX. XXXX. a first ahead and be to as grow provide of devices quarter these to and of $XXX business to to in more of strong resulted the we Combined packaging new we applications

be quarter this By to a per upper are a of a many our rapid this that to first We XX, increase in midpoint would pause revenue our range the the share $X.XX of This of and range reported coronavirus offsetting of New travel across earnings $XXX being that the and see per country. our reflect midpoint plus expected DRAM And the of now, to on other X%. of shipments extension and timing cities restrictions to the you provinces the planned XX% quarantine holiday some of adjusted impact million and the we increasing Absent minus delayed quarter February spread Chinese in to of $X.XX NAND in the projected in represents Year or aware revenue resulted share. range has revenue the China. has downward guidance adjustment, an logic half coronavirus the of Lunar fourth after spending range. of mandated number over our of shipments of the strict February. The in in leading

our shipments did demand factories believe and the the The and is not when to Our travel priority that information through It's guidance to important situation from their only their can any impact as reflects and assess the and restrictions our shipments staff on on of as customers managed to safety note of we at our impact timing, families. will first available the be we they wellbeing will time. this be timing and resume. see lifted best to

modest all more XG phones in majority see see account XX% Gartner and Looking Driving broadly that in worldwide XXXX of all the for market. a will increase XXXX. increase XXXX, enabled broader enabled computing XG a a decline XX% sparking phones mobile in mobile to of shipments devices predicts that phone a which for the of year handsets, recovery we XXXX. at are will forecasts demand Gartner high-performance this versus in mobile increasing

Innovation result, we XXXX. number see expect Onto a markets to of As in a expand

see growth capacity by these XG two from in the earlier to advanced continued additional XX increases XXXX customers driven orders specialty most our from expanding as advanced this is volume obvious impact Underscoring well advanced for devices. segment. We rapidly The packaging. level and packaging inspection wafer month devices as is opportunity support of growth to devices in this markets our in migrating packaging release receipt of of the in systems packaging announcing

segments DRAM XX% per We benefit a growing benefiting process content computing. And per which Hynix in recently also recently for XG from such drive high-performance will will modules in phone and processors, phone. increase demand their smartphones computing XG XG SK front-end cited our while as advanced leaders node and XX% forecasts X-nanometer advanced see TSMC from increase NAND RF

memory advanced levels spending with sustained DRAM. our logic grow and to node modestly segment with semiconductor expect in starting of We a pickup spending foundry

more and factors. and customer becoming see innovations are engines form We new of the unlock wearable to semiconductor as and the a smart year. technology the logic AI advanced to markets sensing We advanced enabling home, full smart Onto autonomous, memory chip health energy. markets an customers tightly partner centers new both see products cameras, packaging enabling of such integrated our in increasing every diverse more medicine, innovations and their high-performing and chip up for important data customers. in conclusion, growing open communications monitors. number see to and driving and nodes potential such In Across designs entirely We focus on new spectrum, is Innovation as grids

merger provide and to further challenges Our our strengthens ability integrated down comprehensive value our customers’ our customers, pace to services increase deliver of our roadmap. more product solutions innovation to enhancing

very customers, shareholders and are journey, we committed We benefit of to potential are of our the but our this the team. only at stakeholders, of maximizing all start to our

turn I'll Steve the to highlights. review to that, the call With Roth financial over

Steven Roth

Mike. Thanks,

Rudolph compensation I discussed on I non-GAAP the here as company our be non-GAAP new a as did. my merged former provided no today, then remarks financial stock-based for usual, want begin Before and results the you to the basis presentation longer financial remind financials excludes will

closing the In conference the And fourth for financial detailed comparative the therefore the was to to the in last full financial recognize of former somewhat quarter, the our differences the presented merger merger. prior makes addition of results for prior acquirer those comparability I results partial this and of the difficult as bridge combined represent October the I'll periods. Nanometrics results call, that of since only XX. Rudolph today quarter Rudolph periods but on deemed try in purposes

of $XXX would Mike revenue of eliminated shipments As have deferred the the quarter, XX excludes million revenue revenue the the quarter, add and the quarter total of merger companies third basis quarter into quarter decrease That from reported of beginning full million you was mentioned, our midpoint the as on but our if the million together. combined a both above merger been October in that guidance. revenue was would a separate completed X% revenue have if was million. revenue two quarter our That's $XXX.X million Nanometrics’ accounting. Therefore reported in fourth rolled $XXX.X at $X.X the

and of devices services offset customer of the quarter market, business, and revenue revenue foundry revenue came XX% nodes the from account by representing Breaking our fourth packaging with specialty from had in business. logic of sales. strength We by down greater for software for revenue XX% and XX% advanced advanced of memory remaining lower the in and accounted XX% revenue customers one

the and all we the packaging the diverse benefits merged with wafer customers. manufacturers XXX As over customer is broad have discussed, one the way silicon base of advanced customers to of company from

Turning by in with margin inventory to quarter go and to we gross a gross new January, which fourth prepared items XX% ERP as impacted not out. non-GAAP was live margin, of cleanup system the was did we

Excluding gross those inventory margin adjustments, been approximately our QX have would XX%.

Fourth excluded in as margin a the first Mike million. basis, fourth full when we equaled million would operating third reported and or million we separate the approximately expenses XX% expenses just expect and As quarter provided each to $XX.X closing. therefore $XX.X total volume quarter see On by quarter reported margins have affecting full of Nanometrics $XX.X mix of the combined combined XX%. company XXXX Operating of our to expenses $X.X revenue the that million. and quarter guidance were QX, in look gross been to in operating prior per range quarter our primarily be product the expenses forward to Mike's

due for Portion quarter-over-quarter expenses performed QX quarter QX periods taxes the effect decrease compensation of is Historically, year. increased having annual reviews the equity as during bonus payroll and from to and the reset expenses. partial QX between operating on and a synergies grants our the the first to merger we plans positive

to portion stated synergies, mainly goal and corporate end costs, our company which significant duplicative overhead on business a totals puts of our basis us well of an around implemented way public also million annual $XX achieving streamlining of and XXXX. have rationalization, We million eliminating our by $XX on the

based normal in the that, I quarterly QX are that those range we just synergies of on our million be $XX.X expenses expense increases offset $XX.X benefit And QX partially operating the currently of million. end of quarter for income Net The That will to the operating fourth mentioned. due share was the of on our the and was deal XX in million per shares diluted middle higher to closed the million quarter. being $X.XX outstanding or the $XX.X guidance. share amount at based per to

first calculations. million QX. $X.XX per negatively the are per compared by For That's share we XX.X diluted count difference in a share count to QX of earnings impacts quarter, when share shares estimating approximately guidance approximately our share

$XXX.X are Now million million a $XX to share $X.XX on that basis, year approximately cash after GAAP turning and ended paying – to expenses. investments, the which equates account share. in cash we and per XX.X On with million cash position merger a out of diluted

XX% flow to synergies improve As approximately our and from in we capital begin the working to be industry benefit we're continues the operations our and to targeting cash improve of metrics, XXXX. revenue in

the Now, I would open to questions. like call Operator? to

Operator

first our We'll with Thank question Ho ahead. Instructions] from go you. Please Stifel. take [Operator Patrick

Patrick Ho

helping increasing been you end terms in terms spending increase. the on layers intensity order from and the a we specifically get of out? secondly, look metrology in side, for on in color your would metrology much of on – little and related can the NAND in to metrology a the made market that obviously some as capital trends the And capital the trip, the of comments use on to the give very I do first you the particular broader-based at forward of there's plays metrology basis. think on in Mike, DRAM come? DRAM bit going how How intensity believe flash when quote of maybe you you NAND off, color one environment timing front you Thank and thank business, flash and financials

Michael Plisinski

the So, I'll start with NAND. XD

relatively several quarter. a strong fourth year-over-year strength for comparison, in So half staying half pause quarters half strengthening first XD We more up seeing. of had from we bit after pause NAND second picking see sure of and of the the what for a XXXX, the we're in magnitude little obviously second the – the determine picking could the which but in for and the

well-publicized. obviously expansion announced the to has than the little side, in in the We is and of we a think bit going the DRAM starting see process part stronger that third first bring second in – Beyontec And is opposite. I equipment some for in see On metrology into first equipment Samsung a bringing quarter equipment half of sooner and the process and quarter. help qualified the the demand of the equipment.

So…

Patrick Ho

great. Okay, helpful. That's

Michael Plisinski

your Does answer that question?

Patrick Ho

is it Yes, maybe see And looks in How what actually you I have. trying into as new you're that looking management? are And QX in synergies relative to does. XXXX the still good terms really place. at the at for progresses at trends I'm How do of of Steve, I'm some investments. do cost put get be look expectations management progressing? the OpEx going to OpEx to we sure

Steven Roth

say that can some the obviously right that, of down because high – at a coming, gave is they of mean, I the way QX said, there now lot say you right costs I models yes, in. timing of guidance costs Yes. as – it for quarter-over-quarter would But of the is look synergies we I some I a linear. the not are a now, said, I – phase like you point lot it would

down I from So there's Patrick, always first the that quarter. here, was this expecting guidance. in uptick And trail the from then

Patrick Ho

Great. Thank you very much.

Operator

ahead. question with Quinn go from And Needham. Bolton our we'll next Please take

Quinn Bolton

advanced versus the advanced the second the sort to logic spending start you side congratulations front of business and how foundry see company. may be kind specialty like just first of and half the combined half. the on wanted first loaded. in of profile nodes with it half I Certainly, across the WFE of guys, nice sounds results a Hey quarter as

You the QX. DRAM stronger talked in half, steady about being being bit a NAND second little in QX, more

of you a So put sequential all XXXX? basis or how half-over-half in see pattern do on when you the revenue that together, basis

Michael Plisinski

about You're Correct? us. speaking specifically

Quinn Bolton

Correct.

Michael Plisinski

we're strength, cetera. on So application – seeing et obviously market depend and share, customer mix, yes, will that

So from our logics. perspective, seeing we're

see then give into logic XXXX. you foundry, then we picture. with NAND continuing we XD maintained start the see a rather we'll a high see So up DRAM, and relatively of second as nicely That's going determine will kind the And depressed. – And a has I'd that into grow levels XXXX. to little in and over complete a over the foundry of a it we picking the half the is bit wildcard Logic magnitude really which is the little year-over-year pickup say certainly going bit. to it first or half stay

Quinn Bolton

larger second upper And coronavirus that of range. effect I middle am a revenue sort guided the players first the or Is the conservative just you tool the going in everything given trying specific you China. that of to NAND you're guidance question outbreak? delays the then the to you seeing wondering of are that's on risk? the on great. deliveries Okay, without quarter quarter middle have probably with mentioned would in closer whether generally part coronavirus Or one be with that March to

Michael Plisinski

a No, That's obviously they're that's right mean of in center ground I zero. specific – risk. the

to they on we're of we've still realities situation the there had of a discussions have obviously balance demands the So, with the the clearly, working ground. that detailed and customers lot with the

Quinn Bolton

at for How quarter? sounds year sort XX%. some gross it gross factors. through first and one like It pits the some first the see margin Great. quarters the are that come XX% specific just or last you in so is of like mix beyond trending to do quarter sounds me there we And then margin

Steven Roth

we in is Steve, is obviously our is point going this the This Yes. low for with Quinn. year. – our This the QX. where is industry see plan say would I

the back start trend model to as the towards And those you fairly closer but seeing margins end like by depending model getting we're us, think long – year us of range for I think would our those up like as year on the in we we plans so, how it margins is. getting out significantly going improve

Quinn Bolton

you. Thank Great. Okay.

Operator

Craig from Please with And Riley our next question we’ll FBR. ahead. B. Ellis take go

Peter Peng

Peter calling actually Peng Craig Ellis and thanks taking for question. for Hi, in this is our

$XX weighted? we fourth do On think mostly $XX the you from third in Is getting how synergies cost this quarter should Or second to quarter? and coming million million, see there? incremental about

Michael Plisinski

will from my into we the it what's be think trending ties see of incremental. down that Patrick op I some response That's kind to here. expenses and

we clearly won't that be, year, longer see some the within in identified have the that P&L. the they on the end by but of are there'll really to much So effect period but – we've month that have there's XX that longer place we'll implement

going effect into hit the So that that not on trending I'd be portion that and there we But but year track the a have XXXX, are say exiting the clearly kind will third that on to it there to quarter. keep a fourth differential is of XXXX see the second, will get might material of us some financials.

Peter Peng

Okay. about synergies, And the revenue just of can more – when just and potential hit meaningfully? kind hit talk the on that you revenues your could

Michael Plisinski

would something we'll Day, is half revenue and XXXX hope a we middle type of the that's that. starting more as meaningful we detail say our a time work that. I activity get little through this would impact, level end year. to we'll that probably probably of I meaningful continue of in have the some impact Analyst say quantification first you XXXX, of think the synergies I around would I more a When of with more the year, in think So quantify

Peter Peng

something Got is kind little – think it. talked about context the against views. I of WFE growth then the Kelly a XX% broader And two of bit lower. is in is One just on – just a kind and there Lam

your would against that? you do front-end do how think Just against this backdrop, business

Michael Plisinski

ramp. two. XD on lot the second each that balanced be in and we're aggressively how that depend I half balanced will talked exactly, think the the but already we'll between – think the a about NAND the especially and serving, right segments with of Not the We – we've portfolio

DRAM much the we add outside to and strength then customers And additional The foundry their ours. think some as well as very I logic there. And the vocal say, can let's model. positioned fairly would Samsung sustained you about expansions, has pretty to, logic been that that of a have is and that always that growth more to I well. starting growth fab announcements, see we're of – expect react been already

So, yes so that's idea – should – I think That an yes, where of model you give pretty to us. much.

Peter Peng

Got you it. Thank Great. guys.

Operator

And take Company. from our Krish Sankar we will ahead. next with go and Cowen Please question

Krish Sankar

Yes. questions. was for viewed taking couple solution Hi. market of share an Thanks metrology KLA. your think XXXX? thin-film exiting you specific had it do where my alternative question. Mike, XXXX? I plainer where exiting And had you product guys on your as one, a Number been was Where to

Michael Plisinski

So plainer market tiny range I would percentage we’re here. segment single-digit in of say, the very, a that films, growth very

Krish Sankar

guys share gained or… year you Did last you think

Michael Plisinski

about the it it had perspective. us. we I for from don't talked films, I On small gain relatively plainer even a think a because don't so. was revenue We think share growth nice

Krish Sankar

And All it. then ahead legacy Got go yes, on it. the Got right. please. Nanometrics –

Michael Plisinski

I to clarify maybe just want something.

the plainer I companies: from as solution into together evidenced and the had little technologies neither might But in an not go more stood market as perfect think by the that provide look themselves perspective, this the to at might it market capabilities share. together each side opportunity aggressively. two as companies – we Nanometrics, we when certain So Rudolph a and think you had film bring a

Krish Sankar

questions. me my Got two right. it. serves is Mike. And memory then quick if That's One helpful, very

up. ago, I I tied year, took does think all pretty business And away much you and two NAND? at follow today? Nova is from a had some year half, it guys that businesses How years to trending Samsung. then Nanometrics a a And

Michael Plisinski

in space. on sure And our DRAM We do stronger is growing customer in strength say, we're have, we space. have opportunities more opportunities, NAND let’s strengths DRAM. for But within XD the that the

Krish Sankar

Got final on it. any update question, stepper the a And tool? then OLED

Michael Plisinski

they Lunar last as mentioned is in that our commercial being extended and – focus unfortunately think we've the right with New side I customers since Year most and no our China, of there's our and now been on No, updates call. they

Krish Sankar

very Mike, Thank Thank helpful. God. you.

Operator

And our take Tom go we Please D.A. Diffely Davidson. next question ahead. from will with

Tom Diffely

afternoon. good Yes,

a your of coronavirus business, over with pretty – that? was part XXXX Moving of the unit growth? driven you views are be how may for do the side to XXXX soft strong impacting And of industry. after the What the the XXXX unit for what unit near-term growth,

Michael Plisinski

the – think right and a a could suppliers so longer can't instance outside demands Chinese really not ripple it's under that the so impacting the restrictions. equipment. remains decrease ripple I it's be to effect. any seeing domestic travel Chinese are regions Huawei, country the But near-term supporting in manufacturers. effect other now, There for handset seeing outside limited We're to China, we're not that the of the China. supplying far of receive And it's suppliers that

Tom Diffely

All right.

year for industry? the So is a units your view recovery in XXXX of

Michael Plisinski

handsets, content we do from performance increase perspective and mobile head Due handsets in volume markets we computing XG, yes. unit the there's other increased to those believe the into a the absolutely. the Oh, as high we the XG XXXX, cited,

Tom Diffely

the then RFs on non-STEMI put of the or And businesses, MEMS thing. sensors, like some for maybe you of packages and great. together tools type Okay, little things that a update

Michael Plisinski

kind you for? repeat repeat When you that are of – you if Tom, the What's you can that what RFs… looking wanted going And – on?

Tom Diffely

in – sensors the you for kind there discuss market business RF or the where can together in the the package potential market of Yes, the your of in put or tools. discuss MEMS market out yes, the

Michael Plisinski

growth, positioning those positioned think prior in that's markets outside in XXXX well which an taking XG enabled discussed grew the and inspection And pretty grows. software in from those view. We the well us calls, we've we're the devices as unit think for steadily markets. of I advantage our point of I we volume customer as foresee grow, in base

support devices. or a volume businesses, from these CIS one strength. growth mobile are of So note is reasons metrology also that's some I that of being to driven unit that that also important Nanometrics, to and I the systems integrated think some IMPULSE a the some highlighted tied former of What’s Nanometrics, the the

drive increase think we together these the in will solutions markets. and when and to integrated these the customers the to So customers with only bring relationships continue businesses we opportunities with the continue our

Tom Diffely

look Okay, during you needs customer? then driven JetStep by technology pure the that great. the purchased finally, at a And the when or tool that by capacity was you sold was just quarter, that

Michael Plisinski

it’s by That's question. need. a Actually, driven capacity good

So required growing very panel panel customer factory. additional – very this a planning step customers to existing demand is they're just They're line. actually ramp. their in exclusive panel and actually the large announced to factory, But attracting planning for current They've the lines. is meet large

Tom Diffely

for Great, your time. thanks

Operator

take [Operator Instructions] question go Steelhead our next Duley Please Securities. from David We'll ahead. with

David Duley

just taking I had for clarifications. questions. Thanks my of little couple a problems a audio earlier. had I And

Now with market questions predicting other business Nanometrics WFE be growth up industry? your the is – is revenue metrology earlier will to the in is front-end the look the rate In XX% one is words, how business of up more growth going that XXXX, the is the keep – how versus or going lower? or higher than if business is XX% Lam in that was

Michael Plisinski

up No, answering we're growth keep particular that going not was that not overall, on based with to I segments. rate. just

reasons growth rates about which a a driving Lam, some will the high at look XXXX. specific of bigger, of one discussed. for process growth, be that's relatively drivers growth they're the than process control talked And customers in talking bigger different equipment of you if equipment, being So about we DRAM I

speaking believe that. don't I was So about Lam

XD highlighting were think NAND. I they

David Duley

the growth business a is what will XX% not out? figure XXXX to essentially trying we're Nano So in rate at grow

Michael Plisinski

Yes, agree. correct. that's would I

David Duley

Okay.

the next growth be, that guys think don't the for of benchmark go that X% guesses has TSMC just it's the to around the and For impact think year business year? will that that. anyone, let's without business will unit that twice minimal. projected going to of what might business, driven upcoming back-end which the the X% assume driven Is non-memory coronavirus, revenue foundry really is this be I knows I logic a your in volume what grow good impact

Michael Plisinski

or a benchmark. guess fair fair a that's Yeah,

David Duley

Okay.

Michael Plisinski

XXXX. we I is it mentioned do of a certainly business which be bit that the Just is moving so you in – just to my in smaller to that also solutions wafer category expect business, little remarks, part base. a But the frame into growing that meaningful above more prepared as

And on the mentioned. advanced the an I business, that specialty that unit driven so have volume general, effect that believe devices, grow range will the But would growth. in you packaging increased in

David Duley

customer spending customer big billion the in increase end a year or I about in CapEx in spending huge you for lithography is you? foundry in talked inspection? that increased That's billion. on opportunity backend wondering will good bump or just Also the spending you and that I'm think from like has certainly a Okay. Are current that from either for XX% benefit $XX of budget level customer. Taiwanese that the – back a $X.X from

Michael Plisinski

market including sure always process strong customer that at the the customer we've in before. had XX% a control position, they've For space, where been

Covas or on the – So, nicely… yes, be expansions Info us [ph] would would benefit

David Duley

And then…

Michael Plisinski

Not on lithography…

David Duley

the sorry, I'm On lithography, go ahead.

Michael Plisinski

said at this I lithography not, time. not on

David Duley

then the missed just the clarification, highlight them Steve, of you guidance again operating could then part prepared your them margins. gross quarter dollar and And the I just numbers March Okay. expenses, during remarks. or a on Again, your for

Steven Roth

Okay.

the number on XX% XX% we OpEx on gross to million said $XX.X and million. So, $XX.X margin to the

David Duley

Thank Okay. you.

Operator

any It I'd appears at further this call questions for Mr. time. there Sheaffer the to to are remarks. closing back over turn additional no or like

Michael Sheaffer

Thank for of That like your your have in you. Karina, you in rest up. a for great call. day. concludes call and the Innovation. participating to remarks Hope wrap interest it everyone today our please for We'd thank Onto

Operator

concludes Thank Thank conference. again, you Once participation. you. that today's your for

your lines. disconnect now phone may You

Onto Innovation (ONTO) 6 Feb 202019 Q4 Earnings call transcript