Kulicke and Soffa Industries, Inc. designs, manufactures and sells capital
equipment and tools used to assemble semiconductor devices, including integrated
circuits (“ICs”), high and low powered discrete devices, light-emitting
diodes (“LEDs”), and power modules. We also service, maintain, repair
and upgrade our equipment. Our customers primarily consist of semiconductor
device manufacturers, integrated device manufacturers (“IDMs”),
outsourced semiconductor assembly and test providers (“OSATs”),
other electronics manufacturers and automotive electronics suppliers.
K&S was incorporated in Pennsylvania in 1956. Our principal offices are
located at 23A Serangoon North Avenue 5, #01-01, Singapore 554369 and our telephone
number in the United States is (215) 784-6000. We maintain a website with the
address www.kns.com.
The semiconductor business environment is highly volatile and is driven by
internal dynamics, both cyclical and seasonal, in addition to macroeconomic
forces. Over the long term, semiconductor consumption has historically grown,
and is forecast to continue to grow. This growth is driven, in part, by regular
advances in device performance and by price declines that result from improvements
in manufacturing technology. In order to exploit these trends, semiconductor
manufacturers, both IDMs and OSATs, periodically invest aggressively in latest
generation capital equipment. This buying pattern often leads to periods of
excess supply and reduced capital spending—the so-called semiconductor
cycle. Within this broad semiconductor cycle there are also, generally weaker,
seasonal effects that are specifically tied to annual, end-consumer purchasing
patterns. Typically, semiconductor manufacturers prepare for heightened demand
by adding or replacing equipment capacity by the end of the September quarter.
Occasionally, this results in subsequent reductions in the December quarter.
This annual seasonality can be overshadowed by effects of the broader semiconductor
cycle. Macroeconomic factors also affect the industry, primarily through their
effect on business and consumer demand for electronic devices, as well as other
products that have significant electronic content such as automobiles, white
goods, and telecommunication equipment.
Our APS segment is less volatile than our Capital Equipment segment. APS sales
are more directly tied to semiconductor unit consumption rather than capacity
requirements and production capability improvements.
We continue to position our business to leverage our research and development
leadership and innovation and to focus our efforts on mitigating volatility,
improving profitability and ensuring longer-term growth. We remain focused on
operational excellence, expanding our product offerings and managing our business
efficiently throughout business cycles. Our visibility into future demand is
generally limited, forecasting is difficult, and we generally experience typical
industry seasonality.
Our technology leadership and bonding process know-how have enabled us to develop
highly function-specific equipment with high throughput and accuracy. This forms
the foundation for our advanced packaging equipment development. We established
a dedicated team to develop and manufacture advanced packaging bonders for the
emerging 2.5 dimensional integrated circuit (“2.5D IC”) and 3 dimensional
integrated circuit (“3D IC”) markets. By reducing the interconnect
dimensions, 2.5D ICs and 3D ICs are expected to provide form factor, performance
and power efficiency enhancements over traditional flip-chip packages in production
today. High-performance processing and memory applications, in addition to mobile
devices such as smartphones and tablets, are anticipated to be earlier adopters
of this new packaging technology.
We have also broadened our advanced packaging solutions for mass reflow to include
flip chip, wafer level packaging ("WLP"), fan-out wafer level packaging
("FOWLP"), advanced package-on-package, embedded die, and System-in-Package
("SiP"). These solutions enable us to diversify our business while
further expanding market reach into the automotive, LED lighting, medical and
industrial segments with electronic assembly solutions.
We bring the same technology focus to our tools business, driving tool design
and manufacturing technology to optimize the performance and process capability
of the equipment in which our tools are used. For all our equipment products,
tools are an integral part of their process capability. We believe our unique
ability to simultaneously develop both equipment and tools is a core strength
supporting our products technological differentiation.
4.51% 
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