Greetings ladies and gentlemen, and welcome to the Kulicke& Soffa Fourth Quarter And Fiscal Year 2007 Results Conference Call. Atthis time, all participants are in a listen-only mode. A briefquestion-and-answer session will follow the formal presentation (OperatorInstructions). As a reminder, this conference is being recorded. At this time, I would like to introduce Michael Sheaffer,Director of Investor Relations. Please go ahead.

Thanks, Doug. Good morning everyone, and welcome to Kulicke& Soffa's fourth quarter and fiscal year-end conference call. An audiorecording will be made of the entire conference call, including any questionsor comments that participants may contribute. The audio recording also be available on the Internet for alimited time and may be accessed from the Kulicke & Soffa website atwww.kns.com. Reconciliation of any non-GAAP financial numbers discussed duringthe call will also be available on the K&S website after the completion ofthis call. The content of this conference call is owned by Kulicke& Soffa Industries and is protected by U.S. copyright law and internationaltreaties. You may not make any recordings or other copies of this conferencecall. You may not reproduce, distribute, adapt, transmit, display, or performthe content of this conference call in whole or in part without the writtenpermission of K&S. Today's remarks are governed by the Safe Harbor provisionsof the 1995 Private Securities Litigation Reform Act. Actual results may turnout significantly better or worse than indicated by any forward-lookingstatements that we may make this morning. For a more complete discussion of the risks associated withthe operations of Kulicke & Soffa, please refer to our SEC filingsespecially the 10-K for the year ended September 30, 2006. And, our otherrecent SEC filings. And now it is my pleasure to introduce the host for today'scall, Scott Kulicke, CEO and Chairman of the Board. Scott?

Thanks, Mike. Good morning, and let me add my welcome tothis conference call, the purpose of which is to discuss K&S's financialresults for the fourth quarter and for the whole of fiscal year 2007. Those results were announced earlier today. For those of youwho may not have seen them, they are available on the company's website,www.kns.com, in the investor relations section. Maurice, why don't you take our audience through thefinancial details of the quarter?

Thank you, Scott. Good morning everyone. As always, I amgoing to be focusing on our current quarter compared to the prior quarter inthis case the September quarter versus the June quarter. I will also comment onthe current year compared to fiscal 2006. Let's start with revenue, which increased by $68 million to$237 million, up from $169 million last quarter. Our Equipment segmentaccounted for the vast majority of this increase. The 40% jump in revenue wasdriven by shipments to all of our large subcontractor customers as they addedcapacity to meet the overall increase in IC unit volumes and demand for complexpackaging capabilities. The subcontractors prefer the flexibility and the advancedtechnology of K&S wire bonders over our competitors' equipment for themajority of their production needs. Total company gross profit improved by $25million. And gross margin improved by 320 basis points to 28.6% for thequarter. The improved gross margin is consistent with our increasedrevenue and a larger proportion of our Equipment business in the overallproduct mix. Keep in mind, however, that the Packaging Materials segmentmargin, as a percentage of sales is heavily influenced by the gold metalcontent. This segment contributed $13.9 million to gross profit, anincrease of $1.4 million. The gold metal pass-through component this quarterremained relatively flat, moving from $74 million to $75 million. The recent run-up in gold price will be seen in our Decemberquarter financials. We are currently estimating about $90 million of goldpass-through in the December quarter. While this is a significant increase inthe price of gold, as I am sure everybody has seen in the recent pressannouncements, gold wire remains a small part of the overall package costs. We see opportunities in rising gold prices for Kulicke &Soffa, as the industry steps up its evaluation of copper wire and very finegold wire. We continue to believe that copper…

Thanks, Maurice. As Maurice said, our fourth quarter was agreat quarter, marked by a more than doubling of bonder shipments from thethird quarter. This is an example of the competitive advantage we derive fromour flexible manufacturing model. We believe we were able to ramp bonder shipments up muchmore quickly than our competition, and we think it allowed us to grab marketshare. This same flexibility also allows us to rapidly ship products duringmodel transitions, something we expect to do in 2008. Demand behind this ramp in bonder shipments came mostly fromthe usual suspects, the big subcontractors and selected IDMs. Subcontractorstook about 80% of the bonders shipped during the quarter. Our bonder group didn't just focus on our core customersthough, and are also continuing to expand our customer list, capturing firstorders from a couple of LED and discrete manufacturers and a smallersubcontractor. Based on all this, we believe we continue to expand our marketshare in wire bonding. But it wasn't just bonders that had a great quarter. Ourcapillary business also significant quarter-over-quarter growth, reflectinghigher IC unit outputs. Our wire business had a different experience during thequarter as we continued to execute our previously discussed plan to selectivelyaccept new orders based on ROIC. As a result, wire unit volumes were roughlyflat; but the ROIC of the wire business unit improved quarter-over-quarter. As for our die bonder business, we continued selling ourexisting die bonders into their established markets. But our primary focusremains on developing Discovery, our next-generation die bonder platform. WhenDiscovery launches in 2009, it will significantly increase our SAM. We expectdie bonders to be a major part of our growth story. More immediately, our customers indicate that they areexpecting ongoing increases in their unit output, but at a more modest ratethan the past quarter. Accordingly, our guidance for the December quarter isfor revenue of about $220 million, of which $90 million will be goldpass-through. We will be happy to take a few questions now.

Thank you. Ladies and gentlemen at this time we’ll beconducting a question-and-answer session (Operator Instructions). Our firstquestion comes from the line of Dave Duley with Merriman Curhan Ford. Pleaseproceed with your question.

Hey, congratulations on a nice quarter.

Thanks, David.

And spectacular ROIC metrics.

Yes, we are focused on it. Everybody really bears down onthat. We think that is about the best single measure of goodness in how we runthe business.

I agree, a couple just housekeeping things from me. First ofall, what should be the share count that we use next quarter, given the buybackand the debt repurchase?

Maurice, can you help Dave with that?

Around 63 million, fully diluted.

63 million? Okay. Final housekeeping for me. Was there any10% customer in the quarter?

I'm not sure off the top of my head. There’s different, butbonders only. Yes, but we don't have them in front of us, but there were 10%customers in the quarter.

One or two?

Yes.

Okay.

One for sure. Maybe two.

Okay, Scott, could you talk a little bit about the trendsgoing on in the bonder business? It would seem, despite unit volumes beingfairly strong, that your guidance for December is quite robust. I don'tremember a couple quarters in a row at over $220 million before. So maybe talk about what you see out there. I guess a couplethings that we have been hearing chatter about is stack die requiring morebonders, and then the sub-cons facilitizing Chinese facilities.

Yeah, I think you have actually captured most of the bigissues. Unit volume is clearly very strong. It continued to rise in the currentDecember quarter; we were surprised at how well it is going. We have raised ourguidance, not our guidance, but we have raised our internal plan more thanonce. People keep wanting a lot of bonders because they arebuilding a lot of units. A lot of those units are stack die units, whichconsume a lot of bonding capacity. The part has to pass through the bonder overand over again, once for each die in the stack. And in that particular application, we believe we have areal competitive edge. In general, we sell our bonders in part on UPH, but inpart on process control. The unique low loops required to build stack diesrequires extra process control in the bonders, and we are doing great there. You talked about China. The industry continues to move toChina. We have got two big subcontractors, for instance, who have facilitatedmajor expansions into China or are continuing to populate those facilities withbonders. There's are a lot of not common names, smallersubcontractors, in China; a lot of discrete and LED manufacturers in China. Sothere is an awful lot going on there. We are doing, I think we are getting morethan our share there. As much as anything, you're seeing a general robustness ofwire bonding technology, and its ability to continue to evolve and to enablepackaging advances that you wouldn't have even imagined a year or two ago. Wire bonding has great flexibility, great ease-of-use in thefactory for relatively low capital required to add capacity. It is just a greattechnology. While it doesn't solve every problem, it continues to solve thevast majority of semiconductor packaging applications. We think that it has gota great growth trend ahead of it.

Do you have a lot of exposure to the flash market?

Yes. Both flash and DRAM increasingly are going into stacks.We do a lot of flash, we do a lot of DRAM, but those same bonders can also turnaround and do lodging either in single die or flash. I know I sound like abroken record here, but it goes back to the fundamental flexibility of thebonder. A guy can do a seven-die flash stack in the morning and canturn around and be doing a low-pin count QFN in the afternoon, and he only hadthe bonder down for five or 10 minutes to convert it over. It is one of thereasons why the subcontractors love it so much.

Okay, final question for me is we have seen your bonder unitshipments double, I think, sequentially. In a way, you kind of went from atrough to a peak in one or two quarters. Usually that takes you five or sixquarters, and there's a couple of quarters in between of 800 or 900 units beingshipped. With that in mind and with some of the sub-cons talkingabout purchasing significant volumes in the March time frame, does it look toyou like next year will be a growth year in the bonder business?

Dave, it was a really good try, but you know that ourcustomers do not try and give guidance out for very far because this is such avolatile business.

Maybe you could comment on the…

I am only going to comment. The December quarter will be avery strong quarter, although not quite as strong as the September quarter, andhopefully, we will have you back on a conference call in the end of January.And we will talk about March then.

Okay.

But it was a good try. I almost took the bait. Nextquestion?

Our next question comes from the line of Dave Egan from withLehman Brothers.

Hi, guys. Thanks for taking my call.

Hi, Dave.

The first question I guess I have is in terms of the wirebonder shipment. How does it and I guess revenues. How does that compare yourprior peak?

In terms of unit shipments, it was a little higher. In termsof dollars shipments, I'm guessing it was probably about flat. But not asignificant difference in dollar shipments.

Okay, so then the difference, the delta here this timebetween in last time, in your prior peak, is really the die bonder business?

The delta in total revenue is partly die bonders but alsogold.

Ignoring gold, just the product revenue?

Yeah.

Or even the Equipment segment.

Also, capillary shipments are probably up a little bit. Itis probably noise.

I will just tell you my numbers. I had you guys at Equipmentin December '05 at $120 million, and your materials ex-gold something like $30million. So it looks like the difference is really the die bonders, which have…

Yes, die bonders are certainly the big issue there.

Okay, perfect. In terms of gross margin, compared to thatquarter, the December '05, which was your prior peak, the gross margin in yourEquipment is actually down. So it's down a couple percentage points. Is thatbecause you guys needed to expedite some orders and materials to get, to meetthe delivery times of your customers?

No. This is Maurice. No, it is expediting always comes inthe peak quarters. It is related to the die assess business.

The die assess, the die bonders?

The die bonders, yes.

Yes. Current die bonder products have a lower gross marginthan wire bonder products.

Okay, so the wire bonder gross margin this quarter waspretty similar to as it has been for the last eight quarters or so? Just lookhistorically and it is kind of similar?

Dave, it is not really a pretty similar, because there is alot of volatility in that number depending on customer mix and product mix.Given that, yes, it was pretty similar. But there is a big standard deviationin that just naturally.

It is a noisy number.

Yes.

Okay, then the die bonders, just to refresh my memory thatyou expect to see that gross margin improve, because you are going to move someof the manufacturing to China and then when you introduce the new product outthere in '09, that should carry a higher gross margin. Is that?

That is exactly correct.

Okay. Then, OpEx, this was definitely lower than we hadexpected. Could you run through, Maurice, how you were including, how you arecalculating the incentive compensation, and how we should think about thatgoing forward?

Well, that is a complicated question. We did have incentivecomp, significant incentive compensation in the quarter. But we stayed flatbecause of adjustments. Not adjustments, because of work that we had done inother parts of the business. So the incentive calculation is a complicatedpiece.

Is it in our proxy?

I think the best bet, rather than take it to everybody onthe call here, is to go refer back to the proxy. But I will say, engineeringexpenses as we have talked about for three quarters, are trending up or arehigher than they were due to investment in two new platforms. The new wire bonder platform and the new die assessplatform. And that won't eased up or go backwards for three or four quarters.

Okay, so maybe you can help us out in a different way. Wheredo you think that the SG&A and R&D are likely to be next quartercompared to this quarter?

We don't guide to those numbers, Dave.

That's okay. Can you give us directionally how you think weshould think about them?

No, we are not going to go there. I will maybe deal with itdifferently and talk about it in terms of how we think about them. And we thinkthat we need to do continuing work to improve our operating expenseefficiencies. So there is a lot of effort throughout the company, figuringout how we can get more out of the operating expense dollar. We have made someprogress, which is one of the reasons we were able to hold it flat lastquarter.

Okay. One last question, in terms of the convertibles youhave, the net shares settled convertibles, is there, have you guys made anydecision about how you are going to treat the accounting?

No, I don't think the final pronouncements are out yet. Wereviewed it. Let's be honest, though and I think Mike probably talked aboutthis when you were doing your calculation. It is a pure accounting change.There is no cash impact. There is no real impact to this accountingpronouncement. So, we will calculate it when we get the final guidance andwe’ll give you guys that as soon as the guidance is final and we will take alook at what we do in response to that when the guidance is up. One side note here, as it is written now, it is completelyretrospective. So no changes that you make to the structure of the bond changesthe accounting. Now, we will see if that holds.

Okay, thank you very much.

Next question, please.

Our next question comes from the of Tom Diffely with MerrillLynch. Please proceed with your question.

Yes, good morning.

Hi, Tom.

Tom Diffely

Yeah.

An new person out there.

Earlier you talked, you gave a nice little description ofthe wire bonder market. I was wondering if you could do the same thing for thedie bonder market and how you expect that to mature over the next couplequarters?

Well, first, the die bonder market is in some ways differentin that it is more fragmented than the wire bonder market. There are a lot ofniches that require significantly different hardware to effectively penetratethem. But there is a sweet spot that occupies the center ofgravity of the die bonder business, which is focused on stack die and high-endBGA. And this is a market that wants a fast machine, but also wants really goodprocess control. That is the area that we are targeting the Discovery projecton. We feel comfortable that we will move the state of the artwhen we launch that product in 2009. In the meantime, of course, we are sellingour older die bonders, which have limited served markets and have a COGSproblem we talked about earlier, about the die bonder gross margins. So, we will continue with the existing products, do somesustaining engineering, do some cost reduction associated with the move to China.That is all well in hand. But the big push comes and the real payout for theinvestment comes in 2009 and beyond, when we launch Discovery right into thesweet spot of the market.

That sweet spot, what percentage of that $600 million marketis that?

I don't know, maybe half-ish.

Okay. You also talked about how you had some pretty goodband exposure. What about DRAM, is there any way to quantify that?

DRAM, we sold some machines that probably went to DRAM. Butin a lot of cases, a customer builds DRAM and flash in the same factory, so wedon't always know what that stack looks like. Yeah, we are really happy with our DRAM story. I know youguys think about it as going up and going down; but for us it is almost allmarket share gain over the last 18 months. We have historically underserved theDRAM business, so we are hurting our competition. We view it as incrementalgrowth. And we are pleased as punch with it.

Okay. Great. Thank you.

Our next question comes from the line of Robert Chapman withChapman Capital. Please proceed with your question.

Guys, by the way, nice quarter obviously; better than theStreet expected. What I wanted to check with you on is the buyback. The Companyis cash flowing extraordinarily now. Although the market and obviously the customer base musthave recognized the cyclicality in the business, as seen by the peak in thenumbers and the trough in the stock, the company's return on invested capitalis quite high. Yet the repurchase of stock was relatively small at 700,000shares in the quarter. Can you walk me through your mentality on repurchases andwhy you are not being far more aggressive, given the returns that you're seeingon your invested capital?

Sure. This is certainly territory we have all covered beforeand we recognize that different people come to different conclusions on this.Our Board of Directors' conclusion is very clear, they want us to continue todelever the company, and first call on cash is for debt reduction. We’ve gotconverts that sure in mature in when is it?

November of '08.

November of '08, less than a year. So a big pile of thatcash in our minds is earmarked to retire that debt. We would be buying thatdebt back now for the time value of them and nobody wants to offer them to us.So we will just wait till they mature and write the check. But from our point of view, that money is alreadysequestered for debt reduction. Then beyond that, we continue to discuss withthe Board how much of the debt we start to put aside for the next round ofconverts that are due in 2010.

June 2010.

June 2010. Or whether we go and take some of that money anduse it to buy back shares. But first things first, and the first thing isgetting the November '08 bonds retired. Did we lose you or …?

No, I just, my math …

Once again, we recognize that not every …

What’s going through my head would not be appropriate for apublic conference call. I will call you off-line.

Okay, we recognize that not everybody agrees with thisapproach and this set of priorities.

You can't on one hand brag about your return as the investedcapital and then have a Board of Directors that thinks that paying downrelatively low-cost debts makes sense. It defies logic. But we will talk afterthe call.

Okay. Next question.

Our next question comes from the line of Andy Schopick withNutmeg Securities.

Hi, Andy.

Good morning. You know, what is so frustrating here, Scott,is that if we look back two years ago at this time, Dow Jones at 10,700approximately, it is now up about 22% or 23%. Your stock in November of '06 '07, '05 or I should say,November '05 and '06, $7.50, $8.00. We have basically treaded water. You have done so much heavy lifting in the company; it isjust very frustrating not to see the performance of the company being reflectedin terms of its underlying share price. I have just got to make that comment. Ithink it kind of echoes what preceded me. A question I want to ask you about die bonders, will thedrag on margins from the die bonder business persist through the full calendarfor fiscal year ahead? Will it get any worse prior to Discovery beingintroduced?

Certainly, it will continue through all of '08. Will it getworse? No, I don't think so.

Okay. The other thing I want to ask Maurice for just asecond here is on the tax rate, the expectation going forward, and the impact,if any, from moving to a defined benefit plan. Is there a specific tax effect associated with that? Can youjust generally give us some indication of what type of change in the overalleffective rate you expect in '08?

We don't expect any real change in the effective rate. I thinkwe came in for the year a little under 11%; and we think it is going to stayaround that for the next year. The changes in the defined benefits plan will have verylittle tax effect. The pretax number I gave you of $9 million is $10 millionafter-tax, I mean opposite. So very little effect from that. This step is just the final step of paying out the cash andturning the responsibility over to somebody else, which we did the cash portionlast quarter. So you will see very little effect, except for a big accountingcharge during 2008 on the defined benefits plan.

Okay. Scott, I want to come back to you on more of anindustry question now. I have kind of had some discussion with Mike over thepast day about some comments that were made by Amkor's COO during apresentation at the UBS technology conference in New York the other day. And he said existing wire bonder technology will all run outof steam. He was extolling the virtues of flip chip, that obviates the need forgold wire, etc., and just making general comments about the direction of thetechnology and that flip chip is going to be the way to go as it moves downfrom 65-nanometer to 32-nanometer technology. I know we have had these discussions in the past, but Istill think this is a real issue that is on investors' minds as they look atthe Company and look at some of these longer-term technology trends. Would justlike to have you address that comment.

I'm going to, I have been addressing this particulartechnology comment literally my entire working career, Andy. So I don't mean totake a tone, but I remember my father coming home from work in the '60s; andIBM just invented this new thing; and my God, our wire bonder business is goingto go to hell in a handbasket. What are we going to do? Flip chip is a great technology for some problems. Itsupports high-speed. It supports high I/O density. It is not factory-friendly.It is not high-ROIC friendly. It is not cost of goods sold friendly. It is aninherently more expensive approach to the problem. Now some applications can support that higher expense. Butif you look at the vast number of ICs built every day, most of them are nothigh-performance. Most of them are not in the easily-understood categories thatWall Street likes to focus on, which are processors, DRAMs, flash, andcellphones. Those bunches, while it accounts for a lot of dollars, froma units point of view is a small percentage of the total units. There is allthis other stuff built every day that consumes vast fleets, when I say vast, Iam talking about 60,000, 70,000 wire bonders; millions of capillaries a week ora month; miles and miles of gold wire. They go into these no-name applications,but they are what drive our business. I think that the best data out there about potential flipchip penetration comes from VLSI. If you look at the VLSI numbers, they put aflip chip CAGR at roughly the same as the wire bond CAGR. They see flip shophaving penetration in about 10% range over the next five years, 10% of allunits. That certainly fits with our historic data and what we seewith customers. You know, you have got an Amkor out there pitching flip chip,and Amkor is a great customer. By the way, took a lot of wire bonders lastquarter. Love doing business with them. I mean, they are pitching flip chip partly to break out of astrategic bind they are in. They are pitching flip chip to try and do somethingto their margin structure. But the bulk of their revenue is going to come fromwire bonding the over the next five years.

Scott, thanks for responding to it. I only asked it becauseit is such a historically important customer.

Yes, they are; and they are a great customer. And they tooka lot of wire bonders. We love doing business with them.

Thanks.

Our next question comes from the line of James Bosch withDialetic. Please proceed with your question.

Hey, guys, great to see all the progress that you have madecoming together in this quarter. Wanted to ask you, I guess, about a couplethings. One is, I missed a portion of the call, so I apologize if you discussedat all what your margin thoughts are for next quarter. Then I have a follow-upquestion after that.

We generally don't guide to margin, so we didn't discuss itand won't.

Okay. Then can you talk about the linearity of the quarter?Certainly, people I think were starting to get worried about back-endsemiconductor companies, with the thought that we are going to start to see aunit slowdown as major OEMs start to see a slowdown in their business becauseof the economy.

As we said in our opening comments, we see no signs of aunit slowdown. We think the rate of unit growth will slow down, but it’sclearly next quarter or the current quarter that, the December quarter, looksto be a very strong quarter, with the industry taking not quite record numbersof incremental bonders, but still historically a really strong quarter in termsof the amount of capacity our customers are adding. Absolutely no sign of aunit slowdown.

Okay, but at some point, maybe it is two quarters down theroad, the rate of that unit growth might slow down. But overall if we arecoming from extremely healthy levels back down to healthy levels, maybe that isnot such a bad thing.

Well look, it is a cyclical business.

Right.

And units will slow down and then units will pick up again,and slow down and pick up again; and that is life. It has a lot to do with howwe structured the business, our flexible manufacturing model, all of which wethink delivers competitive advantage.

Okay. Thanks, guys.

Okay. Next question.

Our next question comes from the line of Chris Sipple withBlue Lion Capital. Please proceed with your question.

Hi guys. Can you frame the amount or the mix of die bondersto wire bonders in the equipment revenue this quarter?

Less than 7%, 6% to 7%, is that right?

That is on total revenue or …

Equipment revenue.

It is under 10% were die bonders.

Okay. On the SG&A, how much of the $24 million had to dowith that kind of accelerator incentive thing when you guys sell a lot ofequipment?

You mean our incentive pay?

Correct.

I think it is in the press release as the $3 million, $3.5million of incentive pay for this quarter.

Okay, and then how does the Board or how do you guys thinkabout …?

I'm sorry, you dropped out there. Hello?

He did drop out, sir.

Okay, do we have another question, while we will see if hewants to go back in the queue?

Yes we do. We do have a follow up question from the line ofDave Duley. Please proceed with your question.

Hi David.

Scott, I was wondering if you might update us on what youthink your current market share is. Even if it is just kind a historical lookwhat it was?

We think, we are into the middle high 50s, but that is anoisy number. Again, it is an internal estimate. We know that there's always acouple orders that we can't track, a couple of our competitors' orders we can'ttrack. But certainly, it is up by a broad up to our internalbaseline. Also make a point, our market share always goes up in an upturn anddown in a downturn, because it is composition of customers. From our point ofview, rather than try and measure it 57%, 59%, 52%, we tend to look atcustomers and new accounts that we are capturing that we didn't used to dobusiness with. As you know, we have historically over focused on bigsubcontracts and subcontractors and big IDMs and let our competitors have somesafe zones in the memory area and the discrete area, the LED area. And for thelast couple years, we have been attacking those niches, and we have beengaining customers. So we measure it more in terms of that approach to it. Who are we doing business with we didn't used to do businesswith before? And, did we protect our share at the big guys simultaneously? So,using that approach to it, while we can't exactly quantify our share, we knowwe are gaining share.

Okay. Final question is the cash flow generation nextquarter. It looks like given the revenue projections that it will be quitestrong again. Would we expect you guys, I guess the pace of buying backthe debt, will you just kind of buy it back at the levels of the cash flow thatyou are generating on a quarterly basis?

No, our approach to the debt is that we will buy back asmuch of the '08 bonds as people are willing to offer to us at their time value.At our time value, excuse me. If they don't want to sell them back to us at the timevalue, we will wait till they mature. That’s really up to the debt holders,it’s not up to us. I think everybody who owns that debt knows what our termsare.

One observation would be is like, it’s good to have theargument about what to do with the cash flow.

Yes. It is absolutely a nice position to be in.

So congratulations on that part.

Thanks, David. Okay, do we have any other questions?

Yes we do sir. Our next question comes from the line of GaryHsueh with CIBC World Markets. Please proceed with your question.

Hey, Scott.

Hi Gary.

Thanks for taking my question. If I look at Street consensusfor you guys, we're basically modeling a five-year in calendar year '08. Thisis a cyclical business, and if you look at the Asian supply chain, thefoundries are talking their CapEx down. Applied Materials reported last night they see a pretty kindof weak tone from their foundry customers. But some of the sub-cons, primarilyASE is talking their CapEx up. How do you reconcile that? And what is your viewon wire bonders, sitting here in calendar '08?

Okay. Now you get into the leading indicator, trailingindicator. This all seems perfectly consistent to us. The last capital thatpeople add is assembly capital. So the investments that are being made by theASEs and the Amkor’s and the SPILs now is to balance off fab investments thatwere made in early '07 and in '06. This is and if you tie it back ultimately to the featuresize nodes, this is the assembly capacity needed as the 65-nanometer featuresize node matures and becomes day-to-day production. How far it goes, how longit persists, is a function of unit demand. How good are the, how much increased functionality ordecreased cost is delivered to the ultimate consumer by the 65-nanometer node?It is certainly a lot, because we are having a great period of unit growth. I think the SIA just put out some forecasts there. They seeeverything as rosy for the next three years. From their lips to God's ears. TheApplied announcement, the slowdown in foundry spending, also seems perfectlynormal to us in that people are limiting their fab investments in 65-nanometer.The next boom in fab will come at the next feature size node. As those investments start to mature, then it will fallback, back to us, at the back end because we are the tail end of this train. Weare the caboose. Then we will get our round of that, and that will be, I don'tknow, 2009, 2010.

Okay, so that, thanks for the answer. So you don't see thisas a contradiction? It is more or less a reflection of the difference in termsof the timing in your lead-time relatively?

Absolutely.

Okay, perfect.

So we think this all makes perfect sense to us.

Okay, thank you.

Any more questions?

Yes we do we have a follow up question from the line of AndySchopick. Please proceed with your question.

Yes, could you just remind me what the outstanding November'08 convertible bonds are right now?

$75 million.

$75 million?

Face value, something like that 74, yes.

Okay, thanks. So Scott, if you could just figure out a wayto get into the solar energy business, maybe. Thanks.

Okay, thanks, Andy. I think that wraps it up. Mike, do youhave any housekeeping announcements?

Yes, thanks, Scott. I would like to remind everyone thatwe’ll be participating at the Lehman Brothers Global Technology Conference inSan Francisco. Our presentation will be December 5 at 10.30 in the morning,Pacific Time, and it will be webcast. This concludes today's Kulicke & Soffa conference call.As we announced at the start of the call, an audio recording has been made ofthe entire conference call including any questions or comments thatparticipants may have contributed. The audio recording and any non-GAAP reconciliation’s willbe available on the Internet for a limited time and may be accessed on theK&S website at www.kns.com. Thanks, everybody and have a great day.

Ladies and gentlemen, this does conclude today'steleconference. Thank you for your participation. You may disconnect your linesat this time.