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$KLIC - Earnings is later this week, but I am very pessimistic.
There’s a triple whammy here. Let’s not forget the CEO sold a lotta stock recently…
- China lockdown. Lam Research and KLA have had huge issues getting deliveries to China, part of that is pushing revenue out to the next quarter.
- KLIC order terms are not favorable. Because where they sit in the supply chain and their customers, they have worse terms for orders and deliveries. LAM and KLA can recognize revenue at shipment or delivery, KLIC almost always recognizes revenue at delivery. Any hiccup here hurts hard. The China issues will push on KLIC far harder, so I expect this issue to be exacerbated here vs the front-end semi-cap.
- Wire bond temporary saturation. There are over 10 OSATs with >$100M revenue, so it is hard to judge the market, but looking at the 3 largest, ASE, Amkor, and JCET, they are scaled back wire bond orders significantly in Q4. KLIC trades on the order book right now, for a variety the of reasons, investors do not care about the cash on hand or buyback story. They don’t care about miniLED, TCB for photonics, or the battery business. We do expect wire bonding orders to reaccelerate at some point this year because capacity is not anywhere close to ready for the flood of trailing edge semi coming online, but for current fabs, we have plenty of capacity at Tier 1 OSATs and Tier 2’s/3’s are somewhat overbuilt.
That said, stonk cheap, so how much can it move.
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