Greetings, and welcome to the Kulicke and Soffa first fiscal quarter, 2013 results call. (Operator Instructions) It is now my pleasure to introduce your host, Joseph Elgindy, Director of Investor Relations and Strategic Planning for Kulicke and Soffa. Thank you, Mr. Elgindy. You may now begin.

Thank you, Jessie. Good morning everyone and welcome to Kulicke and Soffa's fiscal 2013 first quarter conference call. Joining us on the call today are Jonathan Chou, Senior Vice President and CFO and Chong Hang Wong, Vice President of Strategic Marketing and Business Development. Jonathan will provide prepared comments and both will be available for Q&A. Bruno Guilmart, President and CEO is unavailable to join the call today. He is undergoing a minor hernia procedure. For those of you who have not received a copy of today's results, the release is available in the investor relations section of our website at K&S.com. In addition to historical statements, today's remarks will contain statements relating to future events and our future results. These statements are forward-looking statements within the meaning to the Private Securities Litigation Reform Act of 1995. Our actual results and financial condition may differ materially from what is indicated in those forward-looking statements. For a complete discussion of the risks associated with Kulicke and Soffa that could affect our future results and financial conditions, please refer to our SEC filings, particularly the 10-K for the year ended September 29th, 2012 and our other recent SEC filings. I would now like to turn the call over to Mr. Jonathan Chou. Please go ahead, Jonathan.

Thank you, Joe. Thank you all for joining our call today. Net revenue in our first fiscal quarter of 2013 was $114 million, which was at the high end of our guided revenue range of $95 to $115 million. The pullback from the September quarter reflects a high degree of seasonality in our business, with the December quarter traditionally the weakest of the year. We have anticipated this decline and took appropriate actions at the beginning of the quarter to accelerate our cost-containment programs already underway. Specifically, we reduced our operating expense by 10.1% or $5.3 million in the December quarter from the September quarter. With continued focus on operational deficiencies and bond without stable, gross margins helped us to achieve an operating profit of $4.2 million. And currently, we continue to support the development projects as having the highest potential impact on our business over the long term. K&S has been and solely tends to remain the technology innovator [inaudible] on others in the industry allows us to fully support our customers and their future [inaudible]. I will go into more details on our financial [inaudible]. I would like to note here that even on a lower December quarter revenue level, our strict operating discipline enables us to generate $51.5 million of gross profit with gross margins of 45.2%. A balance of cash and cash equivalents increased by $53.9 million or 12.2% from the fiscal first quarter compared to the prior quarter. As I said on prior calls, our management board had had rigorous discussions to the effect on cash from a long-term view to benefit both shareholders value and the company's competitive position. We continue, for the time being, to pursue both internal and external opportunity to [inaudible] to pursue a share repurchase [inaudible] program. Our effort to…

(Operator instructions). Thank you. Our first question comes from the line of Lee Simpson of Jefferies. Please proceed with your question. Lee Simpson – Jefferies & Company: Hi, good morning, everyone. Sorry, I missed the start of the call, so I may be asking something that you’ve already quantified, but I’m just interested about what you think the greatest range would be for OpEx going into the March quarter? We saw that you did some – you know, you had some operational gains there in the OpEx base. Can we expect that to further continue as the sales track down or is there something else in the dynamic we should be aware of?

Actually, you know, as I said in the prepared remarks, Lee, basically we’re hoping our OpEx [inaudible] and plus we are also able to provide additional flexibility in terms of the cost and based on cost-containment initiatives. So if you look at our fixed cost structure, [inaudible] about $36 million plus about 4 to 5% tried to the [inaudible]. So to give you a little bit more insight into the current quarter, we basically [inaudible] $40 to $43 million for the quarter for OpEx respectively. Lee Simpson – Jefferies & Company: $40 to 43 million?

$40 to 43 million, right. Lee Simpson – Jefferies & Company: Maybe as a follow-up questions, I just wanted to ask about the nature of the recover that you anticipate in Wedge. It sounds as though it’s a slow recovery into the tail end of the year. Is this driven by an industrial uplift or is there some other sort of end market dynamic that’s helping to lift Wedge Bonder interest?

The Wedge Bonder, obviously, it is [inaudible] the bulk of our recovery, but we believe probably in terms of the longer term it will actually come back nicely. Perhaps I can actually ask Chong to provide a little bit more insight in terms of the – some of the data he’s looking at that would actually provide more additional color.

The Wedge Bonder growth is actually in a [inaudible] of semiconductor IC unit growth in the power semi markers and not as much in the industrial segment. Lee Simpson – Jefferies & Company: So within that power semi’s market, is the transition, is it from, you know, older HBTs to IGBT modules? Is that the sort of thing, in which case, it’s automotive driven?

Probably it’s automotive driven. Lee Simpson – Jefferies & Company: Okay. And maybe just, again, I missed the start of the call. I just wanted to get a housekeeping questions. Can you maybe give me a sense for how big the OSAT's were in the mix?

[Inaudible] 69% [inaudible]. Lee Simpson – Jefferies & Company: 69%, thank you very much. Thanks, guys.

Thanks.

Thank you. The next question comes from the line of Tom Duley of D.A. Davidson and Company. Please proceed with your question. Mr. Duley, your line is live, you may proceed with your question. Tom Diffley – D.A. Davidson: Oh, thank you. A quick question on the seasonality. Typically your business toughs in the physical first quarter, it has a little bit of recovery in the fiscal second quarter and that last three, four years. This year it looks a little different, you know, down sequentially in the physical second quarter. Are there trends that are different than what you typically see from a seasonality point of view?

I think it could be compared to the previous – it’s probably not any lower than the five-year, but we still see some, basically, in terms of the [inaudible] actually improving. To give you an example, in terms of the copper ball bonder, so copper capable bonders, it was 72% in the year-earlier quarter and 75% this quarter. So I think we’ll still continue to see that kind of trend, but I would say [inaudible]. Tom Diffley – D.A. Davidson: Okay. Does that have to deal with the – when Chinese New Year’s hits? And then, you know, you’re [inaudible]?

Well, this is it, the current quarter, that’s probably [inaudible]. It is a shorter period of time basically between Chinese New Year and the remainder of the quarter. So this year the Chinese New Year is coming out a little later than previous years. Tom Diffley – D.A. Davidson: Okay. And then what are you seeing then as far as the adoption of copper form the IDMs? It sounds like the other sectors still are competing forward. Do we need to see an acceleration of IDM adoption or what has that done over the last couple of quarters?

I would say form an IDM perspective, you know, most of the [inaudible] basically [inaudible] so mostly the [inaudible]. If you look at it from the quarter, the percentage would be higher, from a volume perspective it’s about the same. Tom Diffley – D.A. Davidson: All right. Obviously, when you look at the cash, cash continues to pick up here, 6.50 a share, so well over half your market capital it looks like right now. When you look at the cash, is there a certain level that you think is sufficient to obtain the external growth that you’re targeting or is it, you know, are we ever going to get to a point when you think you have sufficient cash and look at some other options?

Sorry, [inaudible]. The use of cash question, [inaudible]? Tom Diffley – D.A. Davidson: Yeah, I’m just kind of curious what it’s going to take to do something like share repurchasing or you know, other use of the cash besides just holding onto it for external acquisitions?

Right, I mean, [inaudible] look at the composition that actually comes up very frequently with our team at a board level. We just feel that in this point in time it is actually better for us, for our [inaudible] to basically [inaudible] for external opportunities. Really, find opportunities that [inaudible] and the confidence that we have within the company. I would say that with the compositional progress will shift as we go through the buying process. But at [inaudible], basically our organic growth [inaudible]. Tom Diffley – D.A. Davidson: Okay. And in the past you talked about how the goal really was for advanced packaging technologies, you know, the multi-shifts, that kind of thing. Is that still the plan? Is that still the main target as opposed to just existing or older technologies for revenue growth sakes?

Yes, yes it is. Let me just [inaudible] and then I’ll actually maybe ask Chong to provide a little color about the event packaging piece and also some of the other [inaudible]. If you look at – if you look at our 8-K that was actually – early, the board [inaudible] focused on basically event packaging as far as the [inaudible] or revenue source of the product. So that’s something that we are very much focused on from the company perspective. So event packaging is [inaudible] other areas, but this is actually part of – if not a little bit more, areas that we are actively looking into. So Chong, would you like to talk about the event packaging?

Yes. We continue to look at the packaging and this is really to give the bonding solution for the merging [inaudible] markets. You know, this [inaudible] market is primarily driven by the multiple devices such as, you know, platform and tablets and [inaudible] of [inaudible] like single package and it improves performance while reduces power issues founded by the mobile devices. That is one of the – what do you call it, the low-hanging solution that we are looking at. In fact, this is a long-term dividend program, as you know, this 3D IC market is an emerging market and it takes some time for it to materialize and realize that it takes some time for it to realize and mature. Tom Diffley – D.A. Davidson: Okay. Thank you.

Thank you. The next question comes from the line of Chris Cantar of Bank of American/Merrill Lynch. Please proceed with your question. Krish Sankar – Bank of America/Merrill Lynch: Yeah, hi. Thanks for taking my question. I have a few of them. Jonathan gave guidance for the March quarter and we assumed that the wedge bond sales settlized and the weakness is primarily driven by the IC bonders?

Yes, I think so. It’s mainly due to volume from, you know, on the ball bonder side. Krish Sankar – Bank of America/Merrill Lynch: Got it, okay. And then I just have a big picture question. If I look at your revenue profile, and I understand that, you know, you see the seasonality in December and March. If I look over the last three years called financial crisis. You’re seasonally trough quarter, whether it’s December or March, you know the lows have been getting lower as you go over the last three years. So, I’m just kind of wondering, is there some trend going on in that, or am I just reading too much into it?

Yes, if you look at our, you know, I guess no quarter is [inaudible] in our industry, and the volume actually could shift 60% quarter-on-quarter. So if you look at year-on-year it’s down 1.8%, so I think this is kind of a noise in terms of our industry. So, we’re still seeing - well there’s actually year-on-year slight decline, but I think it’s still – it’s not [inaudible] downward kind of a trend that we should be concerned about. What I like about it, is that our conversion is still going to continue in terms of the copper conversion. We are still actually improving the conversion, let’s just say the mix, the difference between gold and copper are the capable bonder. You know, so that is going to continue. Krish Sankar – Bank of America/Merrill Lynch: All right. Then in terms of your break-even level, I know you obviously lowered the OpEx. I remember last time you guys said it was 95 million is the break-even. What is the break-even today?

Well, you know, this is something I think the team has actually pulled together, are able to do quite well. Adding additional flexibility in terms of how we may direct these cost cycle quarters. If you look at our guidance of 90 to 100 million, you know, I’m [inaudible] and are comfortable that we will be profitable, assuming that there’s no [inaudible] items and [inaudible] events or issues. But we are able to actually lower that [inaudible] 95 to a level that we could stay profitable, or breakeven [inaudible] range. Krish Sankar – Bank of America/Merrill Lynch: Assuming that the [inaudible] guidance would be profitable.

The reason we’re comfortable compliment, I will – that can happen. Obviously the only guidance on is the top line, and we’re able to actually [inaudible] additional cushion on the 95 million breaking [inaudible] Krish Sankar – Bank of America/Merrill Lynch: Fair enough. All right. And then this final question from my hand. So, you know, I understand that given that you would at least see any activity from your [inaudible] customers after Chinese New Year, so does this [inaudible] is this going to be an improvement in demand in March quarter, you would not have [inaudible] until like sometime in late February or early March realistically?

Chris, [inaudible] the complete question, but I think they mentioned it because it’s – the thing, the time of Chinese New Year versus the number [inaudible] left for the quarter we’ll have to basically ship the cards out. Is that what you were saying? Krish Sankar – Bank of America/Merrill Lynch: I’m just trying to get a sense of when do you think – if there’s anything [inaudible] Would you [inaudible] you’re old [inaudible] . Do have to wait till post Chinese New Year or?

Yes, okay, got it. Basically we get much better visibility after Chinese New Year. Before Chinese New Year, obviously there’s, you know people are preparing to basically go on major holiday from some major key markets Asia. So, yes, [inaudible] more decisions and more visibility after the Chinese New Year, that’s correct. Krish Sankar – Bank of America/Merrill Lynch: Thank you guys.

Thank you. The next question is from the line of Steven Pelayo of HSBC. Please proceed with your question. Steven Pelayo – HSBC: Great. Apologies, the audio quality is quite bad on the webcast, and [inaudible] fine here. Sorry, if I’m repeating a couple of these questions. First from a very high level prospective: [inaudible] he was talking about tripling of 28 nanometer revenues this year. I’m curious, is anything 28 nanometer done in a wire bonded package, or what percentage, or what percentage is done? Because when you play around with the math, you also think the (boundary) market on the gross is about 7% this year, and I think 28 nanometer is actually bigger than that 7% growth. So, that would imply the rest of the market doesn’t really grow. So, if you could just help me understand what, you know, what’s going on 28 nanometer with the [inaudible] market in the 28 nanometer node?

Sorry, [inaudible] on the call. Let me defer that to my colleague, Chong, for that question on the 28 nanometer [inaudible)

All right. If you get a little closer to the microphone and see – it might help the audio quality.

Okay, 28 nanometer is still kind of new in the market, and the customer still qualifying why bonding is 28 nanometer. Basically if you look at 28 nanometer on the front end, it takes, you know about a hundred days, you know, from [inaudible] so you take a while to come to the old [inaudible]. And we have not seen much of 28 nanometer yet. But you should be seeing them (dead air).

Steven, just so you know, [inaudible] running over 20% of revenue at 20 nanometer. They had like $2 billion in revenue last year, and they expect it to triple this year. So, we’ve already got a good run of 28 nanometer definitely through the (wafer) side. Steven Pelayo – HSBC: But now it makes me wonder, you know, a little bit more on the backend. If that is going to be more of an advanced (flip chip pumping), what does it mean for kind of the wire monitor market next year. In fact I think A&C is reporting tomorrow or Thursday, and I think they’re already talking of, you know, down 25-30% for their CapEx this year. So, I guess I’m trying to understand, when you put all those data points together, what’s your [inaudible] for the assembly market, and therefore [inaudible] since you dominate there, for the whole year, for the calendar year?

Let me try to explain this. At 28 nanometer, if you look at what is loading as 28 nanometer first, really the product like, you know the BG&As the [inaudible] and traditionally this group of products are not wire bonded. They’re [inaudible]. So the wire bonded product [inaudible] qualify, and that’s the reason why we have not seen the [inaudible] yet. Steven Pelayo – HSBC: Okay, so you do believe there’s still a large number of 28 nanometer products that will be wire bonded?

Yes, right. Steven Pelayo – HSBC: Okay.

There’s still - bonding is still the most cost effective way of bonding I think. Steven Pelayo – HSBC: Okay, great. I guess I wanted to ask, if you guys have seen any indications of customers that were, you know, primarily a big copper users that are making more aggressive transitions to flip chip. Because, you know customers like MediaTech were one of those big initial drivers, and of course they’ve got a couple of – two or three important chips coming out that are going to be done in flip chip. Are you starting to see some of that potential impact in your utilization rate, or your copper bonders? Or are they able to back fill those pretty well? Any thoughts on large customers transitioning more to flip chip and potentially actually seeing it in your utilization rates?

Let me address that, Chong. Basically utilization rate is still basically [inaudible] on previous quarter, based on what we’re seeing from here. Although we are seeing some gradual turns to chip but nothing that will be of concern [inaudible] Steven Pelayo – HSBC: Okay, just two final quick questions here. I didn’t hear what you said on LED. I thought you said 6% working figure for LED market. Can you just reiterate what exactly you said there? And then really your outlook for that market this year. And then my last question, I’ll just go ahead and ask now, then I’ll shut up, is on the competitive environment. Given that, you know, there is so little business that’s kind of going on right now, I always like to know, if – just any increased efforts are in [inaudible] negotiations around end of the year, or anybody being more aggressive on pricing? So, LED’s and competitive landscape, thank you.

LED and [inaudible] gained about 6% or our revenue. If you look at the historical quarters, generally with the [inaudible] it’s actually lower than 5%. So, this quarter is actually 6%, and we remain very excited about the LED market. I even mentioned that [inaudible] We don’t guide past the current quarter [inaudible] so it’s hard for us to kind of give you the kind of view that would go past this current quarter. Steven Pelayo – HSBC: Okay. And on the competitive landscape, any thoughts there on any shits going on, or you’re primary competitor [inaudible] is very much not as - you know, within the OSATs, or are they just going to you, or other [inaudible] applications going on where they relatively outperform you now? Or just thoughts on are they being more [Inaudible] on pricing? Any thoughts on the competitive landscape?

Well I think the LED market – our equipment is [inaudible] basically something that will require a lot more staff in position, you know, [inaudible] directly. But they are actually [inaudible] in total solutions on LED. So, from that perspective, you know, we’re [inaudible] niche level [inaudible]. You know, based on that explanation. [inaudible] my colleague Chong may be give a little bit of collar on what you’ve been looking at there.

Okay. Basically if you look at, you know, the wire bonder market segment, basically you will see that the we are better off in the high performance, you know, wire bonder where, you know, you come on [inaudible]. So, that is an area that we’re very strong at, and our competitor kind of weaker in those areas. However, if you look at the lower end (affrication) where, you know, our competitor kind of stronger there, you do see, you know, some competitiveness there.

Thank you. The next question comes from the line of David Duley of Steelhead Securities. Please proceed with your question. David Duley – Steelhead Securities: Thanks. Can you just talk a little bit about, I think you mentioned unit bonds and copper were down about 1.8% year over year in the December quarter. Given your guidance from March, what do you think, are they going to be down year over year in March?

Sorry. [Inaudible] in the March quarter. David Duley – Steelhead Securities: I can’t really hear what you’re saying.

David, can you repeat the question again? Are you saying the March prior-year quarter? David Duley– Steelhead Securities: Yes, according to your guidance to last March and what is the copper unit margins down, can you just give us that number on the December basis year over year? It was down 1.8%, I’m just trying to compare what the growth rate is going to be in March. It sounds like it’s going to be down more in March, so I’m trying to dig around that.

Okay. The March quarter, the March quarter is basically – you’re talking about the copper cable I’m assuming, so basically the – well, we didn’t actually report [inaudible] in terms of the mix of the copper versus the [inaudible]. Yeah, so if you look at the prior year March quarter, [inaudible] million, so obviously it is down from the prior year based on the current value. David Duley – Steelhead Securities: So has the – where are we in the copper conversion cycle? Do you think copper is slowing? Essentially, the question comes down to why is your revenue down year over year in both the December and the March quarters? That would indicate that your revenue on an annual basis will be down. Can you talk a little bit about why that is?

If you look at the copper cycle and you look at the 130,000 bonders have been currently in the field and installed bonders, we believe it’s around 40% in terms of copper – copper [inaudible] out there. David Duley – Steelhead Securities: [Inaudible]?

It’s about – it’s – if you look at, obviously, our – what we shared before, about [inaudible], but it’s probably a little further than that at this point and time. And roughly, out of all the integrated wire bonded IP, there’s actually a 70% conversion eventually [inaudible]. And so we believe there’s still – there’s still quite a way to go from those installed [inaudible] to get to about 70% copper capable. The 1/3 of the 130,000 bonders out there include about 10,000 [inaudible] that [inaudible]. David Duley – Steelhead Securities: Could you maybe give us what the utilization rates are of your copper bonders now?

I don’t have that information in front of me. But we do actually have [inaudible] that we actually [inaudible]. David Duley – Steelhead Securities: Okay. What’s the current utilization rate?

The current – the current utilization rate for the total – based on the installed base that we is 77%. David Duley – Steelhead Securities: Did you say 75%?

77%. David Duley – Steelhead Securities: 77%. Okay. And do you think you’re still [inaudible] in copper [inaudible] for the medium-to-high end profit?

Yes, we are. David Duley – Steelhead Securities: Okay, that’s it for me. Thanks.

Thank you. The next question is from the line of David Wu of Indaba Global Research. Please proceed with your question. David Wu – Indaba Global Research: Yes, thanks for letting me in. Two quick things. One, on the acquisition, if you do an acquisition, is there criteria that it has to be accretive in the first 12 months post acquisition or do other criteria that you use for financial criteria’s be useful in an M&A deal? And as a follow-up, actually, on these smartphones that are growing strong double digits, do they use full chips or do they use wire bonded? I just want to clarify that.

Okay, let me address the first part of your question and then I’ll turn it over to Chong to address the technical part of your question on the smartphone [inaudible]. But since Bruno and myself actually joined the company about two years ago, we [inaudible] profit in play, that’s what we’re actually planning for when we did the division for [inaudible]. And as far as the [inaudible] process, we have actually done a fairly thorough [inaudible] as far as acquisition, that that came up in the past [inaudible] as well. We’ve also actually incorporated [inaudible] to other companies where, you know, that we [inaudible] some others. So I believe we have a fairly robust process to swing out opportunity as well as actually related to integration plan that actually [inaudible] to capture this energy [inaudible]. We do have some high-level financials that [inaudible] to look at that are accretive, but you know, we don’t – we basically want to make sure that we’re not looking at this kind of short-term financial but also the longer term. So we do everything that typically you are seeing, the company does that from a financial screening perspective. I hope that answer your question. If not, [inaudible]. Let me turn this to Chong about the smartphones in terms of the kind of technology they use.

On the smartphones, there are lot of chips that go into the smartphones, you know, things like them [inaudible] that goes into the – the smartphone is wire bonded mostly. If you look at the connectivity, you know the [inaudible], the Wi-Fi, those chips are still wire bonded. If you look at the power management chip, those are all wire bonded. But even the [inaudible] chips, you know, the application [inaudible], those, you can have both, you know, [inaudible] chip and wire bonded. And a lot of the big chips that you can [inaudible]. The memory on top of it, or other chips are still wired bonded. So there's a high [inaudible] of chips that goes into the smartphones are still wire bonded. David Wu – Indaba Global Research: Yeah, I was wondering, if we go to [inaudible] infused with LTE modem integrated application processor. If you see more integrated chips in the future, would the percentage of the chips getting wire bonded go up or down?

I think it stays fairly the same. David Wu – Indaba Global Research: I see. So there’s no difference between [inaudible] and integrated [inaudible]?

Correct. David Wu – Indaba Global Research: Okay. Thank you.

Thank you. (Operator Instructions). There are no further questions at this time. I would like to turn the floor back over to Joseph Elgindy for any closing comments.

Thank you all for the time today. Before we end, I’d like to take this opportunity to remind investors that management will be presenting at sever investor events over the March quarter. On February 5th and 6th we will be presenting in the Stifel Nicolaus Technology Conference in San Francisco. On March 13 and 14, the company will also be presenting at the Bank of American, Taiwan, Technology and Beyond Conference in Taipei, Taiwan. And finally, on March 19th, we’ll be hosting an analyst investor day at [inaudible] location in New York City. For those who can’t attend these events in person, a live webcast and recording will be assessable from the Investor section of our website. For those of you on today’s call interested in attending our March 19th analyst and investor day, please email me after today’s call. We will provide additional details as we get closer to the actual event. Again, thank you all for the time today. Operator, this concludes our call.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.