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Kulicke & Soffa Industries Inc (NASDAQ:KLIC)
Q3 2020 Earnings Call
Jul 30, 2020, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Kulicke & Soffa, Third Quarter Fiscal 2020 Financial Results Conference Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions]. It is now my pleasure to turn the call over to Joe Elgindy, Senior Director, Investor Relations and Strategic Initiatives. Joe, please go ahead.

Joseph Elgindy -- Investor Relations and Strategic Initiatives

Thank you. Welcome everyone to Kulicke & Soffa's third quarter fiscal 2020 conference call. Joining us on the call today are Fusen Chen, President and Chief Executive Officer and Lester Wong, Chief Financial Officer. For those of you who have not received a copy of today's results, the release as well as the latest investor presentation are both available in the Investor Relations section of our website at investor.kns.com.

In addition to historical statements, today's remarks will contain statements relating to future events and our future results. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual results and financial condition may differ materially from what is indicated in those forward-looking statements.

For a complete discussion of the risks associated with Kulicke and Soffa that could affect our future results and financial condition, please refer to our recent SEC filings, specifically the 10-K for the year ended September 28th, 2019, and the 10-Q for the period ending, March 28th, 2020.

With that said, I would now like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusan.

Fusen Chen -- President and Chief Executive Officer

Thank you, Joe. Considering the increasing dynamic environment we are operating in, we wanted to start this call by highlighting three specific points, that may help to clarify our position and the strategy.

First, our manufacturing facility are operating at a nearly full capacity, and the development progress are continuing to progress as planned. Last quarter, we specifically identified supply chain concerns associated with the regional shutdown in place and the movement control orders, which constrained capacity at several suppliers. These supply chain issues were resolved by early May, and that we no longer anticipate supply chain challenge in the near-term.

Secondly, although US reopening challenge made adversity effect near-term [Indecipherable] and the industry-related dynamic. We continue to anticipate a robust recovery in semiconductor unit growth is inevitable. With over 80% of global semiconductor package utilizing wire bonding process, our core market is clearly correlated with the semiconductor unit growth. Total semiconductor unit production in calendar year 2018 was estimated to be about 5% higher than unit expectations in calendar year 2020.

This decrease in production is unique historically, and has impacted demand for our core products. Currently, recent semiconductor forecasts from Gartner support our view that semiconductor unit count will grow by 10% to 11% annually for both calendar year 2021 and also 2022. Again, this anticipated return to unit growth is expected to directly and positively trigger capacity investments for our core products. Last, our visibility in the longer term roadmap within the fast growing next generation LED market has improved.

We are technically executing on our production ramp in the near-term and are also very focused on next generation tool to increase our competitiveness and attract more share gains in this rapidly developing new market opportunity. I will provide additional detail on our broadly advanced LED business up till the financial review. During the June quarter, revenue came in at $150.5 million. We generated $69.4 million of gross profit, $11.2 million of net income and $0.18 of earnings per share. Capital equipment revenue decreased by 1.6% while aftermarket product in the service revenue increased by 4% sequentially into the June quarter.

Within capital equipment, we experienced softer sequential demand in the general semiconductor, memory and the automotive end markets. This softness was largely offset by improved sequential demand for our system supporting technology transition within the advanced packaging and the advanced LED market.

While we believe we are approaching an inevitable unit driven market recovery, I want to remind investor that our entire organization remain extremely committed to fundamentally expand our served market and the market share through ongoing development efforts. Organizational improvements over the past few years have allowed us to introduce several new and competitive systems, which are providing new assets to advanced packaging, automotive and the display opportunities.

Specifically, within advanced packaging, we recognized revenue on our first catalyst high-accuracy free chip systems and also recognize revenue with a new APAMA thermal compression customers during the June quarter. Within the LED space, we are especially excited for the technology transition within the display market. During the June quarter, we recognized the revenue on 25 Pixalux system, our largest quarterly shipment of our advanced LED tool.

Some level of cyclicality will always persist in our business, although we expect ongoing product adoption and the share gain within this new high potential market to provide added diversification and also to create meaningful and a suspendable value for shareholders over the coming years.

I would now like to turn the call over to Lester Wong who will cover this quarter's financial overview in greater detail. Lester?

Lester Wong -- Senior Vice President and Chief Financial Officer

Thank you, Fusen. My remarks today will refer to GAAP results, unless noted. Net revenue for the quarter was $150.5 million, gross margins of 46% generated $69.4 million of gross profit and net income of $11.2 million or $0.18 per diluted share. On a non-GAAP basis, we generated net income of $12.9 million or $0.21 per diluted share.

Operating expenses for the quarter came in on the lower end of our long-term target range as expected. This was due to ongoing cost control efforts, reduced travel, and also some local government assistance. We continue to be very focused on cost control in the near-term and we also continue to be very focused on development.

We are anticipating GAAP operating expenses to fall back into our target range within the September quarter. This target range consists of $53 million of fixed quarterly expenses plus 5% to 7% of variable expenses tied to revenue. Turning to the balance sheet, we ended the June quarter with a total net cash and investment position of $515.8 million or $8.21 per diluted share.

During the June quarter, we also paid down our overdraft facility as we repatriated a portion of our cash balance to the United States. We intend to maintain some capacity within the overdraft facility, which provides additional flexibility on US-related expenses such as ongoing development, dividend and the share repurchase programs.

Considering our long-term perspective on the repurchase program, we continue to view the recent market dynamics as an opportunity. During the June quarter, we further increased our repurchase activity and deployed $22.4 million to repurchase just over 1 million shares. While we intend to create meaningful and sustainable value through fundamental market expansion and market share gains, we strongly believe our long-term share repurchase program provides an additional lever to further maximize and efficiently deliver this value to shareholders.

In early July, we announced an increase and extension to our current repurchase program. This marked the third $100 million increase to the current program since its inception in August 2017. Including this recent authorization extension, at the end of the June quarter, we would have had approximately $151 million remaining under the share repurchase authorization.

On a book value per share basis, we closed the June quarter with $11.93, a slight sequential improvement. Working capital defined as accounts receivable plus inventory less accounts payable increased slightly to $260 million. From a DSO perspective, our days sales outstanding decreased from 119 days to 117 days. Our days sales of inventory increased from 117 days to 127 days and days of accounts payable decreased from 56 days to 55 days. This concludes the financial review portion of our call. I will now turn the discussion back over the Fusen for the September quarter business outlook. Fusen?

Fusen Chen -- President and Chief Executive Officer

Thanks, Lester. Despite the limited visibility in the challenging operating environment, throughout the semiconductor capital equipment space, we were able to maintain our development roadmap, expand our repurchase program, and the most importantly we have maintained or increased our outlook consistently for five sequential quarters.

Looking into the September quarters which over the past five years has shown an average 19% reduction from the June quarter. We are again increasing our outlook and anticipate September quarter's revenue to be $165 million plus/minus $10 million. Our steady business and outlook improvement since March '19 is a reminder that our business is more diversified and they now operate very differently than it has in the past.

While our end markets has not improved in lockstep and occasionally offset each other, they have all collectively improved. Despite this greater improvement, we are still operating below what we view as a sustainable level of capital expenditure, to support long-term semiconductor unit growth.

This growth rate has averaged 6.5% over the long term, which is expected to support our core annual revenue of approximately $700 million. Again, average semiconductor unit growth from calendar year 2018 through calendar 2020 is expected to decline, which is historically abnormal. This unique environment has created clear demand challenge for our core products.

With that said, we anticipate a return to more normal growth next year. As I mentioned earlier, this expectation is shared with external marketing forecast, which anticipate unit count growth to exceed 10% in each of the coming two calendar years. While there are clear challenge associated with the US reopening, and that we are entering a seasonal period with a historically limited visibility, a return to normal or an above normal level of semiconductor unit growth will have a direct and meaningful impact to demand level for our core products.

In parallel with this expected recovery, our new product delivered new capability and they increased assets to fundamental technology transition within advanced packaging, automotive and the display. These three special market are becoming increasingly dependent on technology transition, which we expect will continue to provide additional layer of diversification over the long term.

Within each of these categories, we have competitive and proven products that are already in high volume production, and are very well positioned to support our underlying technology transitions. Specifically, within advanced packaging current [Phonetic] opportunities are providing new and value-additive techniques which are offsetting the well known challenge of technology notion [Phonetic]. We continue to target several new customer engagement, which are providing access to high performance, larger application that were dominated by traditional free chip applications.

Transition within the automotive market are increasing the requirement for high reliability and the efficient power control, power storage and the power distribution applications, especially for electric vehicles. All current products, development road map and the customer relationship are very alligned with evolving opportunities within this dynamic automotive space.

Finally, our recent entry into the display market has a significant potential to enable the adoptions of high volume, cost effective mini and micro LED solutions. Over the course of June quarters, clarity on longer-term prospect in the road map supporting advanced micro and the mini LED application have improved.

And I would like to provide a few additional detail to why this new business is important to us. Under conservative expectations, we anticipate mini and the micro LED diode shipment to be over 100 billion units this year. And they will potentially reach over 1 trillion unit by 2024. Over the same period, we anticipate our mini and the micro LED served available market to grow at a compound annual growth rate exceeding 40% through 2024. We continue to expect demand for our current system to grow more significantly through our next fiscal year.

We have prioritized our focus on developing, qualifying and the ramping production of our mini and micro LED systems which target the final process [Phonetic] step within the fast-growing market. We wanted to remind investors that there are also several additional advanced LED process steps which can leverage our performance in unique high throughput capabilities. This including processes such as sorting, mixing, repositioning and the recalibration. Over the near-term we have a clear road map to extend our reach into these other process step, and are also very focused on pursuing additional customer engagements.

We are very focused on executing this strategy, and look forward to sharing our progress and the additional opportunity over the coming quarters. While the near-term environment isn't clear and certain, we are confident that unit count will eventually return positive as it has in the past cycle. As this underlying core market condition improves, we intend to further diversify the business by enabling meaningful technology transitions within the advanced packaging, automotive and the display markets.

This concludes our prepared remarks. Operator, we will now be happy to take the questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Our first question today is coming from Krish Sankar from Cowen & Company. Your line is now live.

Krish Sankar -- Cowen & Company -- Analyst

Yeah. Hi, thanks for taking my question. I have a few of them. Fusen, one thing is in terms of your guidance, when you look into the September quarter which verticals are driving the strength? Is it primarily semi? So are you seeing even strength in the memory, packaging, LED, any color on that would be helpful.

Fusen Chen -- President and Chief Executive Officer

For September quarters?

Krish Sankar -- Cowen & Company -- Analyst

Yeah.

Fusen Chen -- President and Chief Executive Officer

So, Krish, I think current market there are few bright spots, and also have some visibility issues. Let me give you a few bright spots. Number one is our mini and micro LED business are in high volume production. We also see 5G is a spending and the memory is recovering. And also I mentioned in the past two years, '19 and '20, the semi unit count growth rate was actually negative, and we believe and also many people believe unit count growth will tend to be positive, not only positive, it would be over 10% for next two years.

So that is really a bright spot. And along with this, we still have some visibility challenge associated with the COVID-19. But I think we just need to deal with that, right? Just like the US reopening and the inventory level throughout the supply chain. But compared to our last quarter, we are much actually confident compared to a quarter ago.

I wish I answered your question, Krish.

Krish Sankar -- Cowen & Company -- Analyst

Yeah, absolutely, that does. Thanks for that. Well, as as follow-up, I had like a two-part question on the Pixalux. Number one is, I was under the impression that Pixalux is a much higher margin product. At what point will you start seeing that drop through? Because it looks like compared to your March and June numbers you know, you had incremental Pixalux sales, but the margin profile was pretty much similar.

So at what point will the drop through pick in, as you shift to Pixalux? And also is it being used, I mean I was under the impression that Pixalux is used mainly for mini LED, not micro LED because the pick and place trends are in the [Indecipherable] micro LED. So I just wanted to get some clarification on that.

Fusen Chen -- President and Chief Executive Officer

So we have Lester to answer this question.

Lester Wong -- Senior Vice President and Chief Financial Officer

So, Krish. Hi, how you? So let me answer the last question first, yes, the Pixalux is for mini LED. As far as the margin is concerned, the margin is concerned, the margin is consistent what we've always said, it is one of our highest margin products. The overall margin actually got pulled down a bit, because there was a significant amount of LED bonders in the quarter.

So Pixalux actually pulled it back up, as well as our other APMR. So that's why basically the gross margin was flat for the quarter.

Fusen Chen -- President and Chief Executive Officer

So, Krish, if you remember, I think our last quarter Lester mentioned we have a lot of LED bonders and Pixalux [Phonetic] was a low gross margin, and he actually guide it would be slightly below 45%. But with the mini and micro LED Pixalux actually pull up above -- close to 46%.

Krish Sankar -- Cowen & Company -- Analyst

Got it. Got it. That's very helpful and very informative. Thanks Fusen. Thanks Lester.

Fusen Chen -- President and Chief Executive Officer

Thanks Krish.

Operator

Thank you. Our next question comes from the line of Tom Diffely with D.A. Davidson. Please proceed with your question.

Tom Diffely -- D.A. Davidson -- Analyst

Yes, good morning, good afternoon. So I guess following up on your comments about a recovery in '21 and '22, 10% growth plus in each year. I'm curious on a near-term basis, based on what you're seeing from utilization rates of your tools in the industry, have we hit the bottom at this point? Or do you expect the bottom to come over the next couple of quarters or what is the near-term outlook for just the core unit driven business?

Fusen Chen -- President and Chief Executive Officer

Okay. So, Tom, historically, you are talking about a quarter beyond September, that will be December quarter right. So December quarter historically, I think we are -- when we went into Christmas time and the Chinese New Year, we have less visibility, and September, I'm sorry, October-December quarter always a low quarter for us.

So as you know, we are seeing two factors [Phonetic] pulling each one. One is some bright spot I mentioned, 5G, actually spending and the memory recovering and we also believe the recovery is on the way and we also have a negative factor, these reopening, and the other country part of a second wave of the infection, right.

So, but I think that we are quite, quite hopeful, and maybe the recover can be stronger up the trends in New Year and maybe if you count the whole year it's a 10% and we are in the fiscal year ended at September, right. So probably we will be benefit half of this more than 10% of the unit growth was [Indecipherable], right, that's what we are seeing right now.

Tom Diffely -- D.A. Davidson -- Analyst

Okay. So what are the actual utilization rates you see in the field right now?

Fusen Chen -- President and Chief Executive Officer

We have Lester to answer it now.

Lester Wong -- Senior Vice President and Chief Financial Officer

Hey, Tom. So utilization rate mainly for the wire bonder because that's what we track, right. It actually it remained quite strong in June, even though it reduced slightly sequentially. We expect utilization rates to remain that way to the September quarter for most of the end markets. We think maybe memory and general semi is going to improve the most. Automotive, probably the least. And also within regionally, I think we think there'll be more improvements in Southeast Asia, Taiwan and Korea, through the September quarter.

Tom Diffely -- D.A. Davidson -- Analyst

Okay. And then Fusen, when we look at the likely near record levels of WFE spending this year, how much of that will ultimately translate into your business and what is the timeframe do you think before turning that capital equipment purchase into unit growth?

Fusen Chen -- President and Chief Executive Officer

I'm sorry, if I can ask you to repeat again.

Tom Diffely -- D.A. Davidson -- Analyst

Sure. Yeah. When you look at the near record level of WFE spending this year. Just curious how much of that spending, because it's advanced package or advanced notes, how much of that translates into your business over time? And what is the lag between capital spending and then the unit growth that you would benefit from?

Fusen Chen -- President and Chief Executive Officer

Well, I think front-in capacity inventory will come back again, right. So probably few quarters the highlight, but for [Indecipherable] we also see other driving force. For example, the increase in transitive packaging, not only can be done by more slow, right, it can also be done by advanced packaging. And by using advanced packaging you can include packaging label overall, transitive packaging intensity.

So they are something correlated with the front-end. But I think [Indecipherable] is also very unique. We have different type of driving force. So I think the next year overall, I think will be also a big positive for [Indecipherable].

Tom Diffely -- D.A. Davidson -- Analyst

Okay, thank you.

Operator

Thank you. Our next question today is coming from Carlin Lynch from B. Riley FBR. Your line is now live.

Carlin Lynch -- B. Riley FBR, Inc. -- Analyst

Hey guys, it's Carlin on for Craig. Two quick questions from me. One, you had mentioned or you detailed kind of previously how that traditional and kind of core semi business can do $700 million, $800 million in a normalized environment. As we look into '21 and on to '22, do you guys have a sense of when we can kind of get back to that level on a run rate given what we've seen this year with COVID and the recovery -- the 10% unit recovery next year, is that something that might happen in calendar '21 or is it really a calendar '22 item?

Lester Wong -- Senior Vice President and Chief Financial Officer

Well, Carlin, I think as Fusen said earlier in a response to Tom's question, right. We believe that the semiconductor unit growth of 10% will kick in probably in the second half of calendar '21, right. So it will be -- as he said it will be part of our fiscal '21, part of fiscal '22, because we are September quarter, year-end. So we definitely think the recovery again subject to the uncertainty around COVID or some of the other macros were based on historical patterns two years in a row, that is unusual and usually there is a pick-up after that. And again, Gartner calling for 10% or 11% semiconductor unit growth over the next two years.

So we think there will be some in '21.

Carlin Lynch -- B. Riley FBR, Inc. -- Analyst

Got it. And then I guess just for my follow-up in the auto segment and I apologize if I missed this. We've seen from a variety of kind of people in the auto semiconductor chain, things are maybe as less bad than feared, things are may be picking up a little bit quicker than expected. Are you guys seeing any of that or is that kind of something that maybe you would see next quarter just due to a delay?

Lester Wong -- Senior Vice President and Chief Financial Officer

Yeah. So we are still seeing auto as relatively soft, right now our June quarter revenue was roughly at a 36% five -year run rate. So we think auto will take a little bit of time to get back. We think that the improvements in the EV space will probably pick up first in the next couple of quarters.

Carlin Lynch -- B. Riley FBR, Inc. -- Analyst

Got it. Alright. That's it from me. Thanks guys.

Operator

Thank you. Our next question today is coming from Christian Schwab from Craig-Hallum. Your line is now live.

Christian Schwab -- Craig-Hallum -- Analyst

Yeah. Great, thank you. Just as a follow-up on the Automotive question if you could put some numbers to that. I think most people are talking about automotive business bottoming in the September quarter with a gradual recovery from there, at least on units and equipment that we talked to. That being the case in the kind of the 36% run rate, can you just quantify that as a number for us quick what that business is doing to quarter and if things normalize in a semiconductor unit recovery at some point in '21, how big that business could recover to on a yearly basis? Can you give us any color around that?

Lester Wong -- Senior Vice President and Chief Financial Officer

Sure, Christian. So, for the June quarter, automotive -- we do, automotive, industrial together. So it basically -- it went down quite a bit, it's only about $8 million to $9 million. So if you talk about on a normalized rate, that will give you some idea and previously in the higher quarters back in stronger years of '18, I mean auto industry was over $25 million.

Christian Schwab -- Craig-Hallum -- Analyst

Okay, perfect. And then on the memory side, with the listening to everybody last night, I think it's crystal clear if it had been already that memory is going to have a strong capex here in '21. Is there any type of numbers that you can kind of walk us through with an increase in spending and technology transitions with some new wafer starts, etc. Is there the same type of math you can give us for a recovery in the memory business?

Fusen Chen -- President and Chief Executive Officer

I think Christian we started to see, you know, this trends for us actually in the September quarters. Probably this is the first quarter, we started to see more significant recovery, but last quarter I remember, I think memory is less than half of our historical run rate. And we started this year with a positive sign, again start from September [Phonetic] quarters. And I think [Indecipherable] probably will see a stronger recovery [Indecipherable] moment.

Lester Wong -- Senior Vice President and Chief Financial Officer

Yeah, for the question, do you use the same metric, June quarter memory revenue is roughly about 30% of the five-year run rate.

Christian Schwab -- Craig-Hallum -- Analyst

Okay, perfect. Okay, great. In outside of memory and industrial and automotive, is there any particular applications you know, given the fact that 80% of chips use wire bonding, is there any other big pockets or markets that investors should be paying attention to, to get more confident? In '21 unit growth have been 10% plus for the industry outside of well, I'll let you just answer that question as you can. Sorry.

Fusen Chen -- President and Chief Executive Officer

I think 5G is expanding right now, right? I think the wearable device is doing very well. These are two area I think the market is doing well.

Christian Schwab -- Craig-Hallum -- Analyst

Okay. Fabulous. And then my last question, there seems to be a lot of enthusiasm about mini and micro LEDs, and I think you guys have one of maybe the only machines out there functioning. Can -- if some of those big, there is some really large expectations for that marketplace. Is this something that could, you know, if those growth rates kind of prove out, I mean could you kind of paint us a picture of -- about how big that market potentially could be for you two to four years out?

Fusen Chen -- President and Chief Executive Officer

Okay. So Christian, I think our mini and micro LED, what we are focusing right now in two application, one is a Backlighting, one is a Direct View, right. So for our Backlighting, we expect the penetration rate will be above 15% in 2024, right. And for the Direct View, [Indecipherable] initiative [Indecipherable] probably a large display. I think the penetration there will be lower. Maybe they'd go 5% to 10%. But I want to give you an example how big is the opportunity. One very large display and if we are in Direct View TV market, we need to transfer about 25 million [Indecipherable] from one place to the other place, right? And the traditional transformation is very, very low. So just one display and -- will provide a huge opportunity.

So we believe this is really a very, very huge market. But at this moment I think we only work on one of the process that we call final placement, and there are many, many processes, right? So we actually want to have a conservative just for us. I think this year, originally our guidance is a $14 million for the whole calendar year, but actually in short term we are seeing more positive. So we probably can have a $14 million revenue just for our '20 fiscal year.

As of next year, we are looking at fiscal year, fiscal year, right, so as you know, we probably can do 60 [Phonetic] to 80 [Phonetic] and then another year, depend on if we actually push through other space, like I mentioned. So in mixing, repositioning and recalibration, you know, if we get to other process, I think it's going to be much bigger. If not, just on the final [Indecipherable] step, we expect probably more than $100 million. Another year will be much, much more significant growth [Indecipherable]. So maybe in a few quarters we'll provide you more clear idea. But we do believe we are very excited and this is really a huge, huge market for us.

Christian Schwab -- Craig-Hallum -- Analyst

Great. I don't have any other questions. Thank you.

Operator

Thank you. [Operator Instructions]. Our next question is coming from Qiqi Shi [Phonetic] from [Indecipherable]. Your line is now live.

Qiqi Shi -- Analyst

Hi management. Thank you for taking my question. I have two questions. The first is regarding our mini LED equipment. So when I was doing the supply chain checks in Asia, when I asked kind of the LED companies, about pick and place which is one of the most important process in this technology. And then some of them will come back and say, oh, we have proprietary pick and place technology. So I'm just wondering for our pick and place transfer equipment, is it a universal platform or so we saw our competitors kind of -- in-house of those companies or those company when they say proprietary, they're really buying our equipment, and then modify it and then use for mass production? That would be my first part of question, the universal platform and how should I think about the market share in kind of the -- other kind of opportunities rather than kind of this big customer, we are locating now. Yeah. That would be the first part of my question. Thank you.

Fusen Chen -- President and Chief Executive Officer

Okay. Actually what I can tell you is, our technology are really not traditional pick and place. So a lot of market share you mentioned are really hard to answer you. But what we can tell you is the product we are having has a probably current high throughput in the market, and it's not pick and place, traditional pick and place. So I will not be able to provide you more color with your questions. Thank you.

Qiqi Shi -- Analyst

Okay. Okay. Sure. Got it. And then my second part of the question is about the product roadmap because I think one of the key barrier for mini LED and micro LED, of course one is US, and the other is kind of the cost. So just on our transport side, do we have a very clear kind of throughput improvement roadmap in the next two, three years, kind of, we are targeting a particular kind of throughput improvement where -- what kind of LED sizes we can do, I don't know up to like 70 microns or like, 30 microns in next couple of years or can you give more colors on our technology roadmap? Thank you.

Fusen Chen -- President and Chief Executive Officer

Okay. Again, I think we have a very, very different technology compared to other company. So this is a very huge market. But in the meantime, I think this is also very challenging. And at this moment probably we'll have more than 20 kinds of mass transform matter, right? So the successful leader, I think, need to be very dynamic, continue to develop a next-generation system and our normal pick and place, I think we are talking about maybe 10 to 20 hertz [Phonetic]. But I think the requirement will continue to increase and depend on different company, I think they will need different roadmap. Okay, thank you very much.

Operator

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Joe for any further or closing comments.

Joseph Elgindy -- Investor Relations and Strategic Initiatives

Thank you, Kevin. Thank you all for the time today. We'll also be presenting at several upcoming virtual conferences throughout August and September. As always, please feel free to follow up directly with any additional questions. Have a great day, everyone. Kevin, this is -- this concludes our call. Thanks.

Operator

[Operator Closing Remarks].

Duration: 60 minutes

Call participants:

Joseph Elgindy -- Investor Relations and Strategic Initiatives

Fusen Chen -- President and Chief Executive Officer

Lester Wong -- Senior Vice President and Chief Financial Officer

Krish Sankar -- Cowen & Company -- Analyst

Tom Diffely -- D.A. Davidson -- Analyst

Carlin Lynch -- B. Riley FBR, Inc. -- Analyst

Christian Schwab -- Craig-Hallum -- Analyst

Qiqi Shi -- Analyst

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