Kulicke sees Delco venture profitable in 98
By Richard Melville
BOCA RATON, Fla., Nov 18 (Reuters) - Kulicke & Soffa Industries Inc
(Nasdaq:KLIC - news)
expects its ''flip chip'' venture with the Delco Electronics unit of
General Motors Corp's (NYSE:GM
- news) Hughes Electronics Corp (NYSE:GMH - news) to turn profitable in
1998, the company's top
executive said Tuesday.
At SoundView Financial's Technology Outlook conference, chairman and
chief executive Scott
Kulicke said the venture, which is seeking to commercialize a Delco-
developed technology for chip
connections, has received its first production order and is negotiating
a licensing pact for the
technology.
"We expect it to go positive in 1998," Kulicke said.
Flip chip technology refers to a process under which chip connections
are done using small bumps of
solder rather than wires. The name is derived from the fact that the
solder is applied to the top of the
chips, which are put in place upside- down to make the connections. The
production order and
pending licensing pact are both with European companies, Kulicke said.
Kulicke said the company has worked through all the problems associated
with rollout of its
8000-series of wire bonders for chip production and by March 1998 will
complete a switch in
production and sales to the new-generation machines.
That schedule reflects a delay of about two months due to manufacture
processing issues that arose
during initial field testing earlier this year, he said.
''While we were going through that, we were unwilling to put more
machines out to customers,''
Kulicke said.
The company has a backlog of orders for the new machines from Motorola
Inc (NYSE:MOT -
news), Advanced Micro Devices Inc (NYSE:AMD - news) and others, he said.
In early October, Kulicke & Soffa warned investors that earnings for the
December quarter, its
fiscal first, would likely be below estimates because many orders it
took in the fourth quarter were
not scheduled for delivery until late in the winter, after the close of
the December quarter.
Kulicke said problems in Asia were not hurting business at the
semiconductor equipment maker and
the company's customers continued to express confidence in their
outlook.
In 1996, Kulicke & Soffa posted losses in its June and September
quarters when several Asian
customers temporarily stopped ordering equipment.
''The obvious question is are (Asian customers) losing confidence now,
and to a customer they have
said 'No,''' he said. ''There have been no discussions about (order)
stretchouts and no sliding
deliveries.''
Kulicke said most of the company's Asian customers are subcontractors
whose revenues from chip
processing tasks are dollar-denominated, which insulates them in the
short run from the crisis.
''In the short run, the currency crisis works to their favor, because
their costs are in local currency
and their sales are in dollars,'' he said. |
