(July 16, 2008) SAN FRANCISCO &#151 In a round table discussion over lunch, Scott Kulicke, CEO, Kulicke & Soffa, responded with candor to questions posed by analysts from Prismark Partners, VLSI Research, and TechInternational; and editors from a variety of industry publications. Topics ranged from the success of the company’s recent tool launch, last year’s acquisition of the Swiss die bonder company, Alphasem, the transition to copper wire bonding from gold wire, and the state of the industry as a whole.

Launching right in during the salad course, Brian Swigget, managing partner of Prismark Partners, inquired about the integration of Alphasem die bonders into the K&S portfolio. Kulicke responded that although the process had been arduous, the company had achieved a full and dramatic integration that had been intense and rigorous. But all in all, he said the team was stabilized, and a next-generation die bonder tool is on schedule for launch in the first quarter of 2009.

In answer to VLSI CEO Dan Hutchison’s question about capacity in the back-end, Kulicke responded that although relatively healthy, he’s seeing lots of indecision in that space. He cited macroeconomic risks &#151 such as the real estate crisis &#151 rather semiconductor industry risks at the center. “We’re working in an environment where the economics are more interconnected than they’ve ever been..” he said. “We’re in uncharted territory.”

Despite a cautious outlook on capital equipment expenditures, Kulicke says he wasn’t concerned about the launch of the two new wire bonders in this economic climate. “We were launching in reaction to our internal forecast of customer requirements,” he said, adding that it was technology driven. Qualifications are going well, he said, and the company is meeting performance numbers with the tools. He expects to reach gross margin volume by the end of September.

On the topic of transition to copper from gold wire bonding, Kulicke said there is a lot of momentum, driven largely by a 25% cost savings, despite any minor process expenses due to conversion kits for the tools, and the addition of forming gas needed for copper wire processes. “We think you’ll see a relatively quick transition to copper,” he noted, predicting that the half of the industry will have made the switch in three years.

By dessert, conversation had turned to industry philosophy, and the need for parallel development across the supply chain, something that was a given in the days of vertical integration. The industry has become fragmented and disconnected, he noted, saying that it was a barrier to innovation. Although Kulicke doesn’t see a return to vertical integration, he did stress the need for a reconnect.