Onto Innovation (ONTO) 9 Feb 232022 Q4 Earnings call transcript

Good day and welcome to the Onto Innovation Fourth Quarter Earnings Release Conference Call. Today's conference is being recorded.

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

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

received company's copy haven't refer posted. you a the of If release, to the the website of a where release is copy please

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

are I'd management the will statements call statements within to on meaning laws. remind the subject contain that that securities actual results statements the of and you to to range this like made vary the federal of changes, materially. by a uncertainties cause forward-looking Such risks can

Onto information regarding the obligation does update more to impact encourage future not these that may to you light in forward-looking or Onto filings. Innovation's review information our For and of Innovation risk I events. release new would the undertake results, earnings statements factors SEC our

non-GAAP otherwise a discussion our found on financial results will can results earnings between a in reminder, presented be as be today's unless release. financial a detailed and non-GAAP And Today's basis, GAAP reconciliation of specified.

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

Thank you, for our our quarter you finish and Mike. everyone With milestone XXXX. fourth achieved today. year, Onto in billion Good in the has in market equipment estimates an exceeding thank well saw revenue strong growth Innovation call our exciting joining $X consistently afternoon, wafer year. revenue Throughout fab growing XX%, we systems of this the strong crossing with demand for for X%

to established for R&D, investments new earnings Asia. centers grew increased closer in customers in more while capacity the XX%, year our exciting, and we training manufacturing Even

of position financial strong the areas expanded our growth. several performance, future Beyond in we

top increases nodes, at we three of been market nodes. our extended our logic the aspect with all metrology qualifying -- Atlas NAND, Optical prior NAND In our XD Atlas of This for with parameters measuring strong by opportunity all gate critical qualified NAND Starting XXX the IR four by around of position over layers. already by versus has transistors. producers top advanced XX% OCD over with leaders developing three Metrology

chain specialty our XX latest have packaging. and over the in with segments customers the of in the packaging, Moving sub-micron both inspection GX This to devices to market. tools one and end We replaced submicron Dragonfly front applications estimate the capable had inspection. in competitor's themselves year, incumbent advanced inspection our across value proven be growing fastest we products advanced macro for this

Finally, and customer’s into chain even entire ahead greater of this across performance million This to team in panel XXXX. as team our possible double be passion through Based expect Yoel migrate We Onto value without with the million roughly talent CAGR production. global in with Innovation and unrelenting packaging, of we XX% have projecting on in $XX finished the to high years our for results, level a these these success. XXXX. revenue roughly that and commitment would estimate the year market not technologies to $XXX been their we of see our

above quarter, $XXX of fourth record we our capped to this with revenue of turning our Now, million off year guidance. midpoint

will However, by aided earnings investment favorable guidance tax of per above was high which income, end the $X.XX a well share Mark and to of speak shortly.

new customers revenue revenue record. the and packaging advanced quarter, setting grew specialty In sequentially, XX% fourth our from a

and integrating XX% and quarter. which for was yield. semi compound the expected, Innovation selected customers grew improve over solutions, of Several to software markets, that leading connected Onto our power As systems growth specifically third these

thick XX%, run employing For the systems. analyze semiconductor example, million Discover translating transparent by This to patterns to do aligning to data, yield compound lithography Run per data by our over corrections of layers to particularly applications, to able layer challenging software process layer-to-layer in the overlay use to materials automatically more in year. we're several precise other provide additional accuracy and improves

and compelling applications. future inspection ownership for our resulted in stacking hybrid quarter, the cost In several of sensitivity and chip notable XD wins bonding

Dragonfly control well of was but to process The of selected GX of is XXXX. many generation annually still next LED growth ramping smartphone LEDs from provide leading for supplier XX% others to customer XXXX this inspection a estimates addition, orders additional mini market a to displays expect we support manufacturer. small, In as in through as

third impacted market record, US and XX% by to the especially advanced quarter NAND. in revenue both last October nodes, the Turning after restrictions a announced declines declined memory,

revenue production advanced of in quarter see and we generation next of nodes However, nearly of deeper, was nodes. R&D half support the looking in line our pilot

As off at our repeat and gate third around Atlas order mentioned Metrology this technology. in earlier, investing for included customer the all sign

We characterizing for metrology NAND. for solution also The evaluation at parameters fourth correct manufacturer. are NABD is recesses, successfully our lateral the an leading aspect metrology the IR critical to aspect maintaining electrical only inline completed which

slower resort measurements systems. offline far aspect to would sampling customers using metrology, Prior x-ray to

market been fourth Finally, position tool of top five the well manufacturer. Films years we three five as qualified for at power quarter, at Since in the two semiconductor new ago, Iris released as its top Metrology Iris of another won record semiconductor device several has customers. manufacturers, now

us into customers new deliver production. slow, successfully to technologies with and expansion solutions factory full fully while require develop the even our to are they their migrate So engaged

into first Before for I'll Mark? outlook Mark I financial the to and the year, quarter the give some color call the highlights. for our over go turn on

good and everyone. Mike, Thanks afternoon

of milestone above and of range. guidance achieve surpassing X strong helped quarter $XXX the significant quarter revenue the same $X fourth As XXXX. us up we in the in midpoint another million of billion Mike strong quarter revenues finish quarter This last XX% fourth over get with highlighted, million our fourth period year,

team together at a revenue. This is under for in that million base years $XXX annual an incredible a and achievement ago started of three came just just combined

year. strong income achieved of $XXX also of net highs million, in in records income the full operating million other our several We contributing financial company for performance to setting year $XXX financial

by and $XXX.X over achieved million, to of represents Now Advanced million revenue $XX.X revenue. year and in I'll market. and quarterly revenue, XX% packaging revenue revenue. move grew XX% XX% represents over grew year advanced year nodes Specialty of year of XX% on device

Software $XX.X over was and services of year XX% slightly down revenue. X% and year million revenue of represent

the in gross We for our line margins fourth previous with achieved quarter XX% guidance range.

We experience and continue to inflationary raw on labor. materials pressures

previous Fourth $XX expenses quarter. million our were of previous the quarter operating at midpoint to and the flat guidance

and slightly a flat declined of over Our as the operating to revenue expenses year quarter. prior year percent

with during the expansion. next comments, will his of in XXXX growth which mixed operating expenses Our programs, highlighted propel our investment phase during within Mike R&D more earlier opening shifted strategic into the support to help

$X.XX -- of year the the of was year, record income fourth XX% increased million, $XX previous in share, end operating was per $XX of guidance high which income A or range Our $X.XX the XX% quarter of the third quarter. over over net share million, per XX% fourth the revenue up in same $X.XX above share. our $X.XX to last period level and for per year,

had previous to we discreet tax rate, our one-time positively several our quarter, XX.X% of tax XX%. down compared range impacted that items bringing to XX% full as to guidance the During it year effective

end tax benefits, of the we would Excluding exceeded the one-time still of impact high $X.XX. by our approximately these guidance range have

primarily for the short-term through year in cash XXXX to chain issues, cash levels, the levels, were operating down the we driven sheet, the million inventory from increased by balance $XXX $XXX and year safety long ordered supply investments within time flow with lead our as increase Now million moving of stock manage and items.

to components in year million in we key the within the our receive service base. continue to as of business install end support and the growth lithography expanded $XXX at quarter to Inventory our

XXXX million in One of top to our to our inventory is return levels priorities optimize and mid XXXX. the for $XXX range of

result, and declining first throughout in start half year. to a we the 'XX inventories the expect As of

XX%. historic due within This our will our of will primarily increased days, in continue to to Accounts to of three flow sales levels million receipts and to $XXX the returning this timing the revenue quarter. contribute receivable days quarter cash increase the and -- day outstanding XX performance free over to

the allocation continually investments, between repurchases. strategy, on which our includes share during As we and previous commented internal quarters, capital balance assess M&A

During shares were over to year-to-date repurchase to The bringing return we capital million. of of additional the stock, share authorization. existing $XXX XXX,XXX million a executed $XX.X just shares under share purchases quarter, in repurchases of common an resulting shareholders one our total million

we revenue the Now expect $XXX outlook for three QX, for minus currently points. quarter to be turning million percentage to our first plus or

profile We expect will our pivot gross our margins record supporting as XX% place from XX% in manage to we throughout year. and cross the manufacturing be through between

million we operating to For be $XX to expect between expenses, $XX million.

between full to For XX% 'XX, the rate tax expect to our effective we be XX%. year

to earnings $X.XX million these our for be We QX share expect per assumptions, upon we $X.XX our shares. Based per to XX.X anticipate non-GAAP diluted count approximately between share. share to be

started to $XX reduced spending in to employee annual while operational XXXX, annual million offsetting execute already increases. staff to million, includes such sites, driving manufacturing the entered our we outside further at As our travel which reductions, as reduce plans we services, discretionary $XX and range efficiencies have of spending compensation

move into long-term growth our when With these back efforts, we expect model industry returns. to operating

Mike? And with that, I Mike for back insights into additional to will XXXX. turn it

you, Mark. Thank

start mentioned, a As expect XXXX. slow just to we Mark

For and the seasonality. by quarter, impacted by to the the slowdowns we of mid and first effects broader declining see advanced market packaging teens, specialty both upper

reductions due in an and memory We to decline in estimated to expect spending by advanced restrictions nodes China. revenue primarily sharp XX%,

sales customers see reducing wafer higher packaging. response or XXXX plans investments lines to Advanced oversupply but not and expected delaying continue, we quarter, in slowing until advanced smartphone logic of starts the utilization beyond the are inventories. chip Looking of expansion current with down driving volumes

Overall, for wafer fab down XXXX. estimates are equipment spending XX%

an Morgan at to analysts and spending XX% spending. down equipment forecasting after lithography are end and excluding estimated However, front Stanley Stifle be

to remain in we wafer Edge backlog revenue semiconductor and support customers grow. inspection for This Despite expect confident business our to from and weakening revenue our which our includes EU to increasing lithography compound support doubling this in XX% we power thesis year, manufacturing, environment, outperformance, novis

giving in range steps to year, which the incremental markets in In we both down manufacturing we've by to least expenses. over of and overall industry from at XX that about total, This operating is revenue about our these XX quarter expenses taken outperformance year. includes response year to this slowdown, market XX%, a see us reduce XX% million

model the these while minimal financial us The to critical our with a employees. programs costs invariable our healthy maintain reductions d were invest to The customers. will adjustments r continuing majority allow in full-time and to to impact of

again, focus supply strengthen chain also returns time and to advantage markets. model to our margins will growth our initiatives our take this that We'll on when of move operating us closer to long-term

for estimates by trillion X has XXXX not clear, term and So timing demand. that return for diminished doubled to growth nearly the longer not chip current be estimated growth is though to is currently the

requiring value thus and a strong growth, new continue to more introduction process at to unit expand the to contribute viable across intensity additional for the maintain environment the of connected is addition device customer increasing to will greener complexity that the innovation, capital devices This enable yields. to In higher control the semiconductor a chain and innovations our to is a great smarter, future. of and exciting partnerships

call And we'll that, Operator? with the for your questions. open

we with to [Operator Stifel. will question instructions] Chin go Brian first from And our

or few evening. you're you this there. it Hi over clarify aligning letting year that, sort of further see flattening XX% but that what revenues to little to of XX% the and Is see clarify, that to you sort heard okay, I point, way and was stabilizing remarks, kind And and pattern? year? the down, a would Mike, do then the year? I contour maybe questions and there revenue maybe maybe I at is XQ so that Good a guess for think year bit out I tapering of in guess Thanks kind do the for let into there anticipating off just of us the different a you're ask me,

movements both been start flattish see be lot think lot what to But seen now. of maybe movements we now, out. but movement believe. see out, from again, a stabilize That's we're QX, movements and in into expecting up that of seen right a QX QX. we've we're right going there's to We QX, We've to We and slightly improvements. some

up. Flattish is slightly

dial they efforts Okay. sort $XX sort and that about our reduction margins models? above the year. about? cost Are to talked maybe margins, the balanced the gross relative relative line, million OpEx I or think for how some between into How to to should you $XX million focused, of of we of the that

to more Yeah. no, traveling level definitely and would Mark. discretionary I there's I in think, Brian OpEx that related in Yeah, XX-XX. little things party because this bit it's more services say is a There's that. I other down and think the probably like third

of things that. there. driving freight margin as had We well, and are benefit efficiencies gross reductions areas from some We've looking all at like

that flow So will margin. through

helpful. for Okay. Got the tied incrementally to play year. there, volume there? that's some I, That, qX but still sounds into business gross this guess impact then It know, is there's it. much obviously I, how the I strong And lithography some, Nicks should panel margin guide be like, you coming

maybe margin Nix is that gross guide? much how So to related in

the there's volumes. some the I think change there's, adjustments relative of of in and able manufacturing it to to change amount certainly mix adjustments relative costs is to there, but in the the being in Yeah, volumes, bulk to capacity make the

quarter. strong of quarter, is that's so that lithography XX% it's it. the bulk So than a of impact prior relatively nearly greater There the some

as, early to to into half the of qX move margins year. as our second even as the into level expect do we But back moving and start

did well throughout with at have the year and lithography those gonna the reminder, improvements margins we're incremental As on as, tool a end we the say margins Target. as XXXX

Okay, All right. great. Thanks, appreciate that.

will we next Ellis with Securities. Riley to And B. go Craig

taking a little XX Nice guys. the to congratulations see. and deeper into just savings. for and digging financial the thanks to wanted bit records on start the question by calendar all I cost Yeah,

OpEx that see COGS. for to that look million like question $XX margins. nice the, and So savings you're in The protecting about in million $XX is the

what's How given How with beyond guidance you the one and that the about of quarter included much the realize should is in incremental linearity we what with of Q? the left first benefit through that think in you've year? some then for

at portion Craig, as, a Yeah, we improvement guide that, around we end we and of QX our those to still even of no, to, the and we've in There's margin our, said qX. plan certainly that'll We've, have Yeah, it's savings tXried as certainly Mike certainly in the Mark. occur note to do of start and our do our just reductions QX are to lot made work be as for to those impactful results. beyond. guide a QX need to that executing

does standpoint to much our the We But an other operating got items. stock-based will and offset we in those we're, annualization merit place and know, we we've of, can. of to see up and we've doing historically pop plans with QX our as obviously comp best from you as execute done again, started we're

the to would it's look So say I think you'll the you see, And know, I up. to continue for we're drive throughout probably areas gonna proportional year. efficiencies

in Okay. year, right? Proportional rather through the but that with COGS is than starting XQ really XQ,

there I say would elements some the qX, I think in Yeah, of majority that. I are see, but see you'll

in beyond right, it's and the Yep, because probably I QX You're think

ahead. Go

into kind the just, of pivot it's overall QX from the and the and just No, QX it's looking through issues. volume absorption just

three the company to ago. minus take months litho your very of view just and, minus get your looks Mike, out saw It then to And it. out. generally about we're helpful we you XX. Got pretty XX, like where on and the to industry midpoints similar is WFP, what excess shake we'll industry growth If

points for it were before for So the and basis looking related litho up looks tracking looking we versus XXX XX little my at was you year. that to I versus -- least that's the is right about and like, were this is before. expecting that, a bit what read

talked think XX. I you about

then and frame come me micro litho. back help point the macro just the on panel So to

from memory then last little area. November, prepared say advanced nodes, packaging NAND a the, but even DRAM more significant call in even my as in pullbacks from, a more logic So mentioned broad very a the definitely in pullback bit, since and dram, of and and I the know, our you seen, let's pullback we've remarks

-- then of as the And being, far a Edge based ex in areas -- several now performance we've being upside. about where those of on we to areas, with as maybe we're bookings and that that what we're the so so Novis pointed market, out, we when with down and XX% originally of the talked, million the had full the also seeing, that leveling out. as then So, XX% booked you and market's talked end is the be litho, place booked front one a at looks the $XX litho down out looking

really suites compound which have that for and And of orders tools, have semi already semiconductor solutions then software is we quite several market. have manufacturers resonating the The compound portfolio of value the proposition bought broad complete exciting. connected is the with our in we

see up why going XXXX. we our we're power in thesis for there part to going -- why that's in primarily we So performance customers, confident from bookings we're our believe and of

I just full started compound over you're in and Mike, the on suites XX it seeing think think customers so point, last Yeah, semi. back months, DRAM and first that and I tools, seeing now of remember as NAND I we and that if I last think buying seeing well

So it beyond more offering potential on a basis? demand solutions How seems on you're are looks XXXX? the really at profile resonating and term look thoughts the the semi just what you do intermediate multi-year like compound like, growth any that

we We've think good very the in have strong is multi-year focus of we had in our out. Semi a we a software early just and on there Oh, think software basis a position. Compound always stages building position

focus And those now those far our as XX a high inspection the power there's of to of XX is tied that submicron out were tied finding other But metrology, the several as resolution inspection, customers a we're at XX to customers applications. as as number customers hasn't we value for instance, were problems for many the that, of looked what and as been we, big areas.

those finding what opportunities the asked metrology as as size, you promoted it the we're customers some to real for. wasn't far where then And really

continued numbers double It The there. their, on obviously for see looked few rates, on next the growth We at growth, annual we least XXXX. depend the growth continued digit haven't really years. is at

the, that. expect Well, So mean, XX% the than real, products them. grow it's based that to with maybe than and another a it's broader XX% double on the better with XX%, dig? I customers into better problems new for if or real or we resonate it's, that, that XX% to introducing we're going solving we're fact portfolio to Better grow if to suite seems

Yeah. mentioned Sorry, just also it's solving. I

your of We've Yeah. points yields up been appropriate. certain are areas in quite so that certainly picking data would the semi, be compound tough solutions

think Novis Edge each specific were of $XX I, that or shake Panel think incremental mentioned films, about contribution and three add the revenue. out XX% that. initiatives about Lastly, three? of you would we that like of the thin million be other there half do about two I Did the could how an panel Looks relative

films thin So be could upside potential is upside. that additional

So mention that a lot semi we compound good then it's lot mentioned right? we that power tied is the of but that, some of didn't end, that we're, the see growth. but devices and we power products, fairly includes market of of Edge suite Novis was said a So we what that a driving front to and

I'd it's As XX-XX the the far say of as XX%. shakeout, million, other $XX right,

So $XX each, million roughly.

go will we & Needham And Company. with Bolton to Quinn next

Just up the to market. and wanted power on compound maybe follow

us if big for you just it the quarter, you was said is could that second annualized apologize if how I this said on think what quarter, sort an a I wondering it last you of basis. segment. give now size, business but was I missed largest you

of mentioned, it's becoming the fourth It grew segments largest a out, definitely logic now we one DRAM definitely a -- the of also the of logic as foundry It in business. okay. significant I'm the a -- it a quarter. spend we had break remains significant foundry more becoming part tank, but but don't we Quinn, stayed more it's lot, lot looking

So a grew second it in the like XX% it's XX categories, still -- high. is quarter-to-quarter. which And relatively mentioned, I

it think does lot it but numbers So double digits. continue so. I right of way? a continue does that don't No, small now, It's

reasonable. that's I think

it. Got it. Got

at base, outlook like then at your look the $XXX the it thinking of Okay. million for I the midpoint for just to the XX% rate for And quarters. feels quarter. run If year, million $XXX XXXX, March kind X down guided you you're at about the about of billion $X for to going just each

to I'm bit I thought an QX. so the maybe that for just sounded for thinking chance think looking sure of stronger It make a And wanted earlier in there linearity. And were slightly to you second in like question, half. little I previously, growth response was Mike, about you a

the expectations. of just So of terms trying shape your to right get the in current

I think about Obviously, Yes, last we guided. when things a November first Quinn, changed right. lot that's from

what just what bottom like, more getting a we'll recessionary when the what to is believe inventories period -- transition bottom a move we smartphone would sort and of expansions. cetera, other and as instance, -- start scenario. looks be we're So packaging, now, we for et this I the does further see end that start case. visibility past of XG mindset, seeing refresh inflationary and reflect we to that And see trying right we better then hopefully, guess, cycle can But we'll the and our activity, of

Got it.

Okay. second XX% with certainly but QX it of flattish get by kind for sounds cost and the towards on gross And not year, in of half the Mark, QX, I you revenue. if actions then margin guess reduction that's a can back like

As gets quarterly good or benefits level, it some $XXX I to absorption feels revenue be extent back pretty the 'XX look into there'll million the gross 'XX, higher like margin. to to

XX% or feel pretty like XX% wanted I get to can guess you, getting to you I there ask So easily.

Just absorption basis. an on

revenue do wonder, is And back taken? these with of so some Or even maybe that reduction come getting margins? pressure recovers think XX% that there to would to as you've higher that actions grow possible starts or as XX%, cost offsets some revenue you now are maybe I cost

higher maintain OpEx. stay, is drive be the to I stay Yes. our obviously range this have these in of margin go mean, and that right. reductions helped year, No, through Quinn, you're and goal where profitability stay we that effective the absolutely and

get so. on for to our track -- drive and model back and mean, I have 'XX, the, operational of reap trying I to goal that we're in 'XX operating the benefits long-term the efficiencies certainly guess, is the But quickly to beyond.

kind say, Quinn, Yes, but to go downturn let of a it's never funny good to waste.

what invest the chain level synergies some still mentioned because to of remember, just is we -- initiatives talked growing in that we we so so we're after we merger never and about second got And supply the fast. going so the to were

Now a some we've to XXXX. try plans those, some of and pretty so get we have chance and to this got year, to them complete in aggressive they'll be impactful

So to there's a into strength of XXXX. for quite bit bring foundation we our that hope

really, levels Great. a And on expect to my I I just you kind lithography you get the last target now that question to guess, was Mike, clarification said by think of margins. end the until happen of the costs. manufacturing and just previously not margin thought component improvements of 'XX those to some time time because thought XXXX. to you reduce of I might increase

around margins? pricing margin better I'm And I margins? did perhaps or leading improve some have your so that able comments wondering, pull in of to you benefit that's to lithography Or misinterpret been

Yes.

side were of selling still we're it's demo of able for we're booked presentations a as to we to aggressively beginning and bit ability our equipment. PowerPoint technology seeing of well -- release value X little the when years the we're new cost orders, little ago, where we show charge also advanced side. think I from a lab But bit advances, pricing the of We've very the we're lot that, these where margin pursuing seeing some to both on some a the a been of situation, as both.

didn't to really they So see. get

and the illumination charge this. proven, whether understood we've is capabilities more value we're bringing capability Now upgrades clear, upgrades we're in, and able it's and for of overlay to we're with like the or the throughput things new

Hans to next Davidson. go Chung with D.A. we'll And

So with I customer, first, what's could resume? your on the your I the do like you up given thoughts the memory think when industry the downturn, commentary. memory spending want to conversation on follow was wondering

but be the into caveat in say of that would is production, XXXX be at end some The -- I that to spending earliest, would XXXX. there and the could R&D. it's tail possibly

in So which more of high the spending XD in the stack still lines, NAND some infancy. are

that products similar We in more erosion the in to DRAM. going newer to market, could to and they -- story go see market some customers ASP of with be want where up hopefully their this make the when aggressive

really So that the be they're the ASPs the inflection that focused on points watching the and will But be thinking or now, decision supply inventory our through. through right levels, working -- are chains. will watching this that customers there

Got it.

And Okay. the your being [ by in then the given [indiscernible] gate-all-around so ], prepared OX the remarks, for selected manufacturer transistor. that's

So does just that. on imply competition have there share? is XXX% any wondering, market And that you

There is competition.

XXX% that's So we share don't have fighting but a we're what for.

the and -- So decisions try all so we're our talk one. on share, it have over XX% our -- would again, fully of If onto we that to depending the which share continue the we fighting each average of I average, layers And them. share. different, is bring three about, position systems. the achieve take And and be more XX% we're to aren't customer we market these well and at general, take In made, over majority. fight if I

the that but at to our applications suited be easier. of also we're outside the to back end that measure, optimized again, transistor outwards platform moving hardest at But into a for better performance, is looking platform, with are looking little line of as gate-all-around the those capability our They're well. the thing we're also for further We're metalization of downstream. layers price

the nodes? compared And see. higher share or to similar is that I previous

intensity expect mentioned this, on share higher my that in remarks. would I higher of a dynamics higher we versus and XX% in definitely prior based at improvement revenue nodes. least It's based capital the Yes. on

it. Got

it you wondering seems and I was also, smaller have it now, sounds mini but here. Okay. it And then then -- potential mentioned like some LED, could like right

size Just the mini characterize would LED? the wondering how opportunity you of from

display several mini the LED. customers, got they have and I on opinions different because chuckle I have

want I bit to So a careful. little be

type, there's proliferates replacing I becomes not certain not the smartphone of think mini Whether aggressively the display There LEDs applications the are the display large where the experts AMOLED sure certainly manufacturers. from and opinions by different certainly and are at new very in looked or one that I'm manufacturing. yet. displays. being

And any it. capital Got Okay. strategy. allocation then you wondering have I'm lastly, update if on the just

given kind so Just Or like share would would you of have a just very especially sheet. more M&A you on? of for in and healthy kind see balance And you prioritize buyback?

itself the of Yes. the quarter allocation, capital we the we right to there. presents we our definitely, do if M&A as now. that course, I at as great approved criteria opportunities aggressive for looking and for time will in execute on It's within can mean, No, being limits. that as a continue look buybacks, the also, and we're set opportunity And based

So well. to that we'll continue search as

next And Steelhead go with David we'll Securities. Duley to

Yes.

the how of things, that in bit a Dragonfly some about little press on particular applications. release, do hybrid Could talking One talk your system is going just to I product you you're bonding qualified, line your think, area? in in about I think, what's

Yes.

particle the have them So the of adhesion. issues with pads. of with it a kind one the when surface roughness, of you're And turns deformity hybrid critical bad you or pushing these any issue out bonding together, is roughness

you've now on the what And of destroy per of course, it depending tried thousands two millions here, that we're just just die to talking about takes packages connect. to X then or of interconnects

killing only the also have defect, on but the can ability all customers to to the yield a nuisance true detect defects defects the so focus to not the that's eliminate advantage. for Dragonfly the sensitivity GX really So big the ADC the leveraging

you which good you these reliability has been be a always reliability, where optical recall can't also the of have pads, techniques improved seen like source on and addition, can be Clearfind normal a can a through bond. In RECIST residue, may

RECIST your because You around walking electrical weather, It ends taking the but and heating electrical that of in a being break. test born and failure. residue, cooling from phone an have and cars you out, okay, through the have up can

So that advantage GX. the is another big Dragonfly for

has attachment substrate talk you die-to-die die-to-substrate so that's pads, this or? when Now to or tied to

for We're seeing applications both.

die-to-substrate. die So involved in we're die-to- both and

that is a focus? what this exposure recent regarding wondering, semiconductor power. -- is Okay. Or can a talked increase carbide silicon is your rate, understand us -- in from And compound you was I there? Or help about is at your you point? just growth there significant contribution the business,

carbide. a in the power, a interest it's they We issues. are definitely certainly an fast-growing that more a small yield have lot a and lot in, area It's of seen area Yes. but investing from of part growing still and interest have people silicon overall

we're maybe and we semi engaged X/X, quarter, from I'd of compound last say say, rest and applications. little the silicon But there. the the maybe growth half, So than less saw it was, than in some GaN X/X less carbide I'd other a

color. are think you And Iris tool, more bit for but but a final give list products little imagining a year-over-year the because to sector, me of the on memory maybe additional talked then -- the I wasn't I'm going for that's qualifications, question of it about us that is basis. on grow just

I product was a year-over-year. expected think ago excluded that was you've quarter list. to And on now grow that

the year? next your so most is area kind adjust the for reductions for where that new you're guidance seeing -- And to of

grow, the but other to going of the products. Iris not is some as significantly Actually, as

relatively is and reducing significantly. those mild of customers in face -- the several So expense it's of fairly growth

expected power based to adopting new are equipment. that adopt in yet, platform down XX% it. And Iris capital penetration for and initial customers wafer that our the be and memory be the maybe memory, some is the it down XX% Logic range. including on will customers to the continue XX% mentioned You to also

will it across we're The all will Iris but be beautiful customers. planting part huge. the incremental. platform It be these is won't seeds grow, The major

-- year, occur earlier next hopefully, significant we this fairly do maybe should this see late expansions Iris. in when So growth year,

go we'll Benchmark. Miller to And Instructions] with [Operator next Mark

add good -- year projected what that from could very in is sales of percent restrictions? decline, of estimate on terms I coming you wondering if XXXX. Let was a the related congratulations new the in the my me to U.S.

Is least it about at X% to -- XX%. was

decline. okay, X% the to of XX%,

Yes. And booked. that was mostly

was So big hit. that a

not as Okay. There's XXXX. you, Europe up funding of orders when but Japan, optimistic. a U.S., by fabs as and will -- have these for more Are in you're these currently be lot show new to you are optimistic been start will announced and opportunities the come well that several up, been

We're seeing orders now.

not the going now. So orders but Arizona, -- like into the from we're although sac TSMC of money, chip seeing some -- fab that's

orders don't happening, orders I Samsung Taylor volume those incremental from think Intel, Ohio fab, cetera. but the see et XXXX. -- the until any of So so are fab we real significant

for the like to would turn I comments. time, additional to this at call closing Sheaffer back or And any Michael

the conclude today. evening. replay Jenny, to thank in like call. this I We'd of to you. Thank you. like please interest joining your for us continued Thank Onto Innovation. Eastern thank on our would the A website everybody be you available call will about for Time X:XX

And your again, for participation. call. this Thank today's concludes you

disconnect. now may You