Kulicke and Soffa Industries, Inc. (KLIC) Q3 2021 Earnings Report, Transcript and Summary

Greetings and welcome to the Kulicke and Soffa 2021 Third Fiscal Quarter Results Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joseph Elgindy, Senior Director, Investor Relations for Kulicke and Soffa. Joseph, you may begin.

Welcome everyone, to Kulicke and Soffa’s fiscal third quarter 2021 conference call. Joining us on today’s call is Fusen Chen, President and Chief Executive Officer; and Lester Wong, Chief Financial Officer. For those of you who have not received a copy of today’s results, the release, as well as our supplemental earnings presentation, are both available in the Investor Relations section of our website at investor.kns.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 of 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 condition, please refer to our recent SEC filings, specifically the 10-K for the year ended October 3, 2020, and the 8-K filed yesterday. With that said, I would now like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen.

Thank you, Joe. We continue to be amid a period of dramatic capacity expansion throughout the semiconductor industry which is supported by durable and structurally sustainable end market trends. While supply chain challenges are broad and expected to continue, our global operational and engineering teams have done an outstanding job to mitigate challenges within our control while supporting our customers’ aggressive growth plans. Ongoing demand for our capital equipment and APS solutions remains very strong and is supported with multiple long-term drivers, which further enhance our visibility and outlook. Structurally, we are aligned with three prominent and fundamental technology transitions. These include the increasing capital intensity occurring throughout the semiconductor assembly space, the very significant and the long-term transition within the automotive market, and our direct involvement in accelerating industry adoption of new display technologies. In addition to these fundamental and structural growth drivers, we are also extending market reach through aggressive R&D investments. These opportunities, supported with ongoing development investments and new product introductions, target new opportunities within the Automotive, Electronics Assembly and the Display markets. We will provide further updates to these specific opportunities over the coming quarters. Finally, we are in a very dynamic, expansionary phase of semiconductor consumption and production. These expansionary periods have occurred in roughly 10-year increments as new uses for semiconductors were adopted. In the 90’s the driver was the global adoption of PCs; in the 2000’s global internet access increased demand, then over the last 10 years, mobility drove a new layer of semiconductor demand. Today, we have several new and meaningful end-applications that are dramatically accelerating semiconductor production capacity. The end-applications driving significant capacity needs today include the worldwide adoption of connected devices, the growth of 5G infrastructure and the next generation of computing power, driven by big data and artificial intelligence. The combination of these structural, technology transitions and broad-industry trends are significantly enhancing the demand for our products, our adjacent market opportunities and our ability to generate value for investors and the communities we serve. During the June quarter we have begun our annual long-term planning process, which provides a more granular view into how these drivers are expected to favorably benefit our business. At a very high-level, over the coming years we anticipate annual semiconductor unit growth to continue running significantly above the long-term, historic 6.5% growth rate. Additionally, we are very confident in our ability to support new higher-growth technology transitions that further extend our market reach and provide new vectors of growth. We currently expect to reach $1.5 billion of revenue this fiscal year and are confident underlying business conditions will extend through fiscal 2022, supporting a multi-year industry expansion. Beyond 2022, our ongoing execution with specific new opportunities supporting advanced display, advanced packaging, APS and new adjacent opportunities, will continue to grow and support a new sustainable level of revenue and profitability. Considering, these broad macro, industry and execution expectations, demand will remain strong supporting average annual revenue of $1.5 billion over the coming years. As a reminder, this new level of revenue is significantly higher, and also more sustainable, than what we shared during our 2018 Analyst Day. Lester will provide some additional details on how this long-term outlook translates to a new level of sustainable shareholder value shortly. We will also provide many more details regarding our business prospects and traction during our upcoming Analyst Day, scheduled for September 23. For today’s discussion, I would now like to provide some commentary to the June quarter’s performance and end market review. During our June quarter, we exceeded the high-end of our revenue expectations and delivered $424.3 million of revenue, 46.1% gross margins and non-GAAP EPS of $1.87, which was up 48% sequentially. This significant sequential improvement highlights our operational leverage and was driven by strong and ongoing demand across all end markets. Within the General Semiconductor space, there are many new sustainable trends supporting this multi-year expansion. A comprehensive underlying trend is related to broadening adoption of 5G. This significant transition is increasing chip content at the smartphone level and also increasing demand for new connected devices. Additionally, this transition is also demanding new high-bandwidth assembly solutions for next generation optical, networking and logic applications. Our development programs, customer engagements and recent market wins have increased access to specific high-growth end-applications, including mobile sensing, mobile application processors, silicon photonics and next generation display drivers for virtual and augmented reality. Looking into next year alone, we anticipate an incremental $40 million of revenue stemming from these end markets. We continue to be very early into global 5G adoption and anticipate this transition will continue providing a tailwind and new equipment needs over the coming years. In addition to our alignment with these very positive and long-term market trends, we are also supporting and benefitting from the growing need for more complex packaging. As mentioned over the past few calls, there is a strong market demand for advanced K&S solutions that support greater transistor density at the package level. Rising front-end design costs and yield challenges have slowed the cadence of node shrink and are directly contributing to the higher level of assembly complexity, which is in turn increasing the capital intensity across our broad-served markets. This underlying market need creates an additional long-term technology-driven demand for our high-volume businesses such as ball and wedge bonding. This transition is also accelerating adoption of higher-growth, more specialized packaging techniques that further extend our significant market presence across semiconductor applications. Approximately 40% of our capital equipment revenue stemmed from advanced packages, including system-in-package, multi-chip module, high-accuracy flip-chip and thermocompression based devices. This mix has changed materially over the past year, and we anticipate it will continue growing long-term, along with our value proposition. Finally, within General Semiconductor, we are focusing R&D investments to expand market reach and also to expand profitability levels across our large and established served markets. We have several exciting product announcements to share over the coming quarters. Equipment sales into the LED market softened slightly in June although remained very strong and are expected to increase further in September. We continued to support ongoing demand for general lighting applications while we are actively supporting the long-term mini and micro-LED transition. Our PIXALUX system continues to be in high demand, and we anticipate strong demand through fiscal 2022 and beyond. We also intend to further capitalize on this new high-growth market by expanding our portfolio of advanced-display solutions. There is a strong market demand for more efficient and the more capable assembly solutions, which provide an opportunity to significantly broaden our customer base. Existing and the new customer interest has been very strong for our next-generation system. We expect to ramp qualifications with multiple customers over the coming two to three quarters. Additionally, this next-generation system also allows us to address multiple process steps required in mini and micro LED. While, the current Pixalux tool is very competitive within the critical final-placement step, there are several additional touch-points necessary for mini-LED backlight assembly including, mixing, sorting and PAM or Pitch-Adjusted-Module assembly. These additional process steps will all be supported by our new mini and the micro LED system, increasing our potential within this fast-growing new market. Progress on the next-generation LED system remains on track and I look forward to providing additional updates on this exciting product release over the coming quarters. The Automotive and Industrial market also remained strong through the June quarter, with revenue near the elevated March quarter’s. Underlying demand is being driven by the growing need for semiconductors in both traditional and emerging automotive applications such as electric vehicles and autonomous driving features. We continue to extend the market reach of our automotive solutions which support high-growth power storage, power distribution and sensing applications necessary to support the autonomous and electric vehicle transitions. We are well positioned to support these long-term transitions across our broad customer base. Finally, demand within memory has improved sharply with June quarter sales above our long-term average. Like our other served end-markets, memory utilization levels have sequentially improved driving the need for additional capacity. We anticipate memory strength to continue into the September quarter. Over the past several weeks our business outlook has improved. We have continued to mitigate a broad-range of dynamic supply-chain challenges as we have significantly ramped our production capacity. Our internal operational and engineering efforts, combined with the key market trends I covered earlier, have enabled us to increase our September quarter outlook dramatically. After market close yesterday, we provided a revenue outlook for September of $465 million, which would mark our third sequential quarter of record revenue and profitability. I would like to also note, that we continue to operate in a very dynamic global supply chain environment, and I am very pleased with our organization’s collective response which allow us to mitigate challenges, continue aggressive development efforts and enhance supply chain flexibility during this period of rapid industry expansion. In summary, the past several years of our R&D investments and market expansion efforts have extended our competencies and solutions to better support several significant, long-term and structural market opportunities. These opportunities are accelerating demand within our broad portfolio of solutions and provide access to new high-growth opportunities in the Semiconductor, Automotive and the Display markets. As we execute on this long-term strategy we are enhancing our ability to create long-term value for customers, and ultimately for shareholders. I would now like to turn the call over to Lester Wong who will cover this quarter’s financial overview in greater detail, Lester?

Thank you, Fusen. My remarks today will refer to GAAP results, unless noted. As Fusen indicated, we continue to be in a period of dramatic industry expansion which is supported by our alignment with several structural transitions, this combination of industry expansion and market alignment are providing the opportunity to maintain a similar revenue run-rate and a new sustainable level of operational cash generation over the coming years. During the June quarter, we delivered revenue of $424.3 million, up nearly 25% sequentially. We have worked very closely with our supply chain partners, operational teams and engineering groups to better enable customers’ capacity needs while also exceeding the high-side of our revenue guidance. Gross margins during the June quarter also came in better than expected at 46.1%. Product mix, expediting fees and surcharges have all weighed on our gross margins during the June quarter. We accept these temporary effects as they help us support our customers during this period of industry expansion. Looking ahead we anticipate near-term gross margin improvements as incremental supply-chain costs ease and ultimately long-term gross-margin expansion as we execute on our development programs and new product introductions. Overall, non-GAAP net income came in at $118.8 million or $1.87 of non-GAAP EPS during the June quarter, which highlights the leverage in our model. Considering this operating leverage, new product traction and outlook, we expect to continue generating strong operating cash-flows over the coming years. Operating expenses in the June quarter came in line with our expectations, despite our better-than-expected revenue performance. On a non-GAAP basis, we are maintaining our quarterly operating expense model which represents roughly $48 million of fixed expense plus 5% to 7% of variable expense tied to revenue. Tax expense for the quarter came in at $7.2 million which was better than previous expectations. This favorable benefit was driven by a partial release of a valuation allowance, previously recorded against a net deferred tax asset. This favorable benefit is directly related to the strong market success of the Pixalux solution. Considering the one-time nature of this benefit, we continue to target an 18% long-term effective tax rate. Through fiscal 2021, we continue to anticipate the effective tax rate will come in at around 15%. Turning to the balance sheet, working capital efficiency has improved overall. Days of accounts receivable decreased from 81 days to 78 days, days of inventory decreased from 66 to 60 days and days of accounts payable decreased slightly from 58 to 57 days. This ongoing efficiency combined with the underlying market drivers we are associated with, allowed us to end the June quarter with a total net cash and investment position of $635 million, up 12.5%, or $70.7 million sequentially, representing $10 per diluted share. This sequential increase to cash and investments highlights the long-term cash-generation potential of our new multi-year outlook. As touched on earlier, we are operating at a new level of heightened demand, which is flowing through very positively to operating margin. Non-GAAP operating margins for the June quarter came in at 29.7%, representing over an 1,800 basis point improvement from the same period last year. As Fusen mentioned, over the coming years, we now anticipate annual revenue to average $1.5 billion. This outlook provides many more opportunities to demonstrate our leverage and cash-generation potential. For the September quarter, we expect revenues to be approximately $465 million plus or minus $20 million, a nearly 10% increase over our most recent record revenue, in the June quarter. Gross margins are expected to improve to approximately 47% in the September quarter plus or minus 50 basis points, due largely to product mix, pricing improvements and easing of incremental supply chain costs. Non-GAAP operating expense is expected to be approximately $73 million plus or minus 2%, and non-GAAP EPS to be $2, plus or minus 10%. Over the long-term, we remain very aligned with several high-growth prospects in the semiconductor, display and automotive markets, which are generating opportunities for above average growth. Additionally, we continue to be extremely focused on multiple paths that extend reach into our existing served markets and also provide access to meaningful new market opportunities. We see tremendous potential to build from our current baseline revenue in FY 2021 as we continue to execute on our multi-faceted growth strategy. We look forward to sharing additional information regarding these new opportunities over the coming quarters. This concludes our prepared comments. Operator, please open the call for questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Your first question comes from the line of Craig Ellis with B. Riley. Please proceed with your question.

Yes, thanks for taking the question and guys congratulations on the very strong results and the robust outlook. Fusen, I wanted to start at a high level and just look at some of the parameters that that you're providing as we look ahead. So very helpful to get the company's view that spending can reset to $1.5 billion level. So the question is this from current levels of spending at the current quarter's guide $465 million is $1.86 billion annualized from that level to what would be the $1.5 billion or $375 million a quarter. How long do you see current spending intensity sustaining? And when does the business really modulate down to about $1.5 billion? Would that be in the first half of next year or more so in the second half of next year?

Craig, you hit the Q3 we just announced at this moment and the Q4 guidance. Actually, I think, all the number this year we will finish – FY we were already finished at $1.5 billion. So maybe I just quickly walk through the baseline assumption how we will reach out this $1.5 billion. So current semiconductor revenue growth in the industry for 2021 and 2022, our forecast to be very strong and are at 20 and above, 10% respectively for 2021 and 2022. So at the fourth quarter altogether including the one which is the guide, we couldn't expect to reach $1.5 billion revenue this fiscal year, FY 2021. And for the FY 2022, based on our current market data and our customer feedback and we also see a very high level of utilization rate in the industry and also very strong demand from end market. And we actually not expect FY 2022 revenue to be similar to FY 2021, revenue of about $1.5 billion. And we also say that if our current industry chip shortage situation continue well into FY 2022, we might see additional upside in the second half of FY 2022, right? So FY 2022, now we expect similar revenue level as FY 2021. And Lester also mentioned this will be a multi-year growth. And we believe $1.5 billion can be sustainable. And because we believe our current semiconductor market expansion will continue for multi-year well into 2023 and 2024. So for the 2023 and 2024, between 2023 and 2024, from all organic growth project we are working on, we do expect to hit about $200 million to $300 million over new revenue in 2023 to 2024. This is from advanced display and advanced packaging, also electronic assembly SMT and also APS. So we actually not only very positive about the new revenue we are bringing in, the project we are working on, advanced packaging, advanced display SMT and APS. Actually they are huge at this moment, huge semiconductor capacity underpinning and will bring to production in the next couple of years from all of our customers. And now we expect roughly next three years production bringing into roughly half overlap will be from China. And the majority of our – this new capacity from China will be 28-nanometer and above. And lot will really benefit our core business greatly. So in summary, I think this year, 2021, we will finish at 1.5, we see similar level for the 2022 from all the study we have and the customer feedback. And for 2023 and beyond, we actually do expect our new revenue level we're coming along $200 million to $300 million. That will continue to fund competency growth and for the new products and also for the core business, again a lot of new capacity, particularly in China, huge capacity is going to coming online for next couple of years. And they really will benefit upgrade ready for our core business. So, in terms of our spending, Lester, do you have anything to add?

No, I think that’s customer spending.

So, Craig, do I answer your questions?

Yes, I think that helps. I can follow-up on some of the segues from the current annualized run rate with the September guide, which is 465 to the 375. But Lester, let me follow up with you on just gross margin. So great to see the 47% gross margin in the outlook, the question is this, do you think that's a sustainable number or are there some product mix dynamics or customer other dynamics that are providing some kind of one-time help and it would mean that gross margins, as we look beyond that into fiscal 2022 would move back closer to a 45 to 46 range, is 47 sustainable?

We think 47 is sustainable. I mean, as you know, product mix and customer mix are very key to our gross margins, but I think there's also other things that come into play, which is nowadays are – so on the product mix side, we are selling more higher ASP, higher margin products, and that's partially due to the capital intensity that Fusen has talked about before, which we believe will continue into 2022 and beyond. I think also as the new products that Fusen mentioned, talked about particularly maybe advanced display, as well as advanced packaging. Those products also have high margins. And then for our core products, we have a very robust program in terms of cost reduction both on the supply chain side, as well as for engineering. So we believe we can also bring cost reduction to our core business, which again will help with the gross margin.

Very helpful. Thanks guys.

Your next question comes from the line of Tom Diffely with D.A. Davidson. Please proceed with your question.

Yes, good morning and good evening. And boy, fantastic results here. So I guess, the first big picture question for Fusen, when you look at the big demand level today, and you did a very good job of outline all the drivers and all the different markets. But are you a little surprised that you're seeing it today versus maybe a year from now when all the front-end semi-cap equipment that's being ordered today, it's up and running to those units coming off of the new lines. It seems like this, all this demand that you've gotten is come into a situation where we already kind of tight on ships. And it just – it seems like business would get even better down the road. Once all this recent capital spending is turned into actual production.

So, Tom, we always need to have business forecast ongoing. And there are constraints in terms of our priority and the resource. So, yes, we are – we feel very positive into our futures. For example, they are – since, for example, we probably cannot do right away. Like when we see the industry under invest in 2019 and 2020, and we see actually order coming repeatedly and we just actually was not well prepared to it and plus supply chain shortage. So sometimes we are not able to handle this response right away. When we see since clearly, we put all the effort so for the next few years we do feel positive.

Okay. And it seems to me that, a lot of the strength you’re seeing today has been enhanced by just the increased capital intensity of wire bonding and ball bonding. Is there some way you can quantify what you think the impact of increasing capital intensity has been over the last few years?

Well, actually, yes, I think last time we discussed this, probably we feel good about it, probably capital intensity. If I remember the number we love to calculate…

No, I think – sorry, Tom. I think roughly and it's very hard to kind of triangulate specifically, but we think it adds maybe at least another $100 million plus to our baseline.

Okay. Well, that's helpful. Thank you. And then, Lester, finally you mentioned the tax rate of 18%, but then you mentioned it might be 15% this year. The 18% on a kind of go-forward basis on a quarterly basis, is that what you're saying?

No, I'm saying for this year, we're probably coming close to 15%, but for long-term, if you're modeling for 2022 and 2023 and beyond based on a lot of things happening in the tax laws, the effective tax rate should be 18%.

Great. Thank you, and congratulations on a great quarter and outlook.

Thanks, Tom.

Your next question comes from line of Krish Sankar with Cowen and Company. Please proceed with your question.

Thanks for taking my question and congrats on the really strong results and guidance. The first question I had is, Fusen, it’s really impressive to see there's $1.5 billion run rate for next year. I'm just trying to reconcile what you're seeing with what some of your customers have said. ASC publicly has said the current quarter might be the peak wire bonding purchasing quarter. I'm trying to reconcile that with the number that you're seeing because you said that some of the new products will drive upside to revenues in FY 2023 and beyond. So I'm just kind of curious to see what is really driving the strength in FY 2022.

So FY2022 basically, at this moment the industry really still have a shortage of uptake and capacity and still need a lot of equipment from us. So actually we do stellar strengths. We are into couldn't also quote us. So as time goes on, we do believe the FY2022 can be as good as a 2021, right. And actually the end market is quite strong, it was a lot of driver and we can see a 5G, you know, I'll try a lot of a multi data chip and IoT, and there's a lot of driver and we also have a tremendous display. So actually less than what we have seen, I think and chip shortage actually is continuing. So with all this we feel like a 2022 not only for us, I think for industry was still be a good year.

Got it. Got it. And then just as a follow-up, I'm kind of curious what your lead times are to your visibility is, I remember last time it was almost nine months. It seems like that it stretched to nine months to 12 months now. If that is the case do you think the December and March quarter, we will not see any typical seasonality in other words, revenues should be strong, or do you think you'll still see seasonality in December and March?

So Krish, I just going to lay off you a driver balance each other. Number one, I think we still have a shortage, right issue. And also I think our customer even diminished, they have prefer delivery schedule. So currently, we target the next mark capacity is a 450 per quarters, our candidate is quite efficient. We can always stretch additional 10% by adding some variable. So I mentioned already, the industry still have a strong shortage for the equipment we provide in. So next few quarters, we do see -- they will be few quarter revenue will be above $450 million a lot will not be every quarter again. And this is to relive the shortage of our equipment in the industry and also depend on a customer’s need.

Got it. Thank you. Thanks a lot, Fusen. Appreciate it and congrats.

Your next question comes from the line of David Duley with Steelhead Securities. Please proceed with your question.

Thanks for taking my question and congratulations on excellent results, especially on the gross margin and operating margin improvements. Along those lines, you mentioned on gross margins that you have longer term plans to improve the gross margins in the core business. I was just wondering if you could elaborate on that a little bit more, if there’s some expectation of, how much you can improve gross margins there. And then just remind us how big do you think the wire bonder market is in this current calendar year?

So Dave, on the gross margin, I mean, we obviously have internal targets and we’re not going to flow with that. But we believe that based on some of the things I was talking about in terms of cost reduction, alternate sources, reengineering, we could continue to keep the gross margin at the high-40s instead of dressing back towards the mid-40s.

Okay. And then the size of the wire bonder market.

So, actually I think this year, easily more than double of previous years. So I think AV quarter right now at the peak, we ship several systems.

Okay. And then you talked about an opportunity in the automotive space and transition that’s happening there. I’m guessing that might be an opportunity for your surface mount technology equipment. I guess, I was just wondering if you could kind of give us an update on some of the other assembly equipment that’s kind of percolating the SMT stuff, the catalyst to APAMA. Just kind of help us understand what the progress points are on all those new products. Thank you.

Sure. So as you know, this year is a very strong for our core business as I just mentioned. And for APAMA and the high accuracy flip chip, let’s talk about AP as a SIP and also multi-die free chip TCB. So particularly free chip and the TCB we call a dedicated advanced packaging. So next year alone, these two products, actually, we are going to see – next year will be the first growing year for our dedicated advanced packaging. I mentioned in the AR and VR pod in our next generation logics optical, all these advanced program with our customers. Next year alone, our dedicated advanced packaging was about $40 million. So next year will be very fast growing year for our advanced packaging dedicated throughout. So let's follow 2022, we do believe 2023 our company to grow. So our dedicated advance packaging, we expect probably we'll reach about $80 million to $100 million by 2023 as well LED. For other spread, we have PIXALUX and has it been a very successful product launch. We wish received a very good feedback. We target year-to-date revenue this year is a $60 million to $80 million. We easily – we will need the commitment. So we even have a PO into next year. So next year, PIXALUX alone will spear of target, $60 million to $80 million. But I also mentioned in my script, we have a next generation of mini and micro LED tool actually we call Luminex. Next two, three quarters, we are going to ship a couple of them to our customer for qualification, upon successful qualification which enhance all expectation. We expect the revenue in the coming in second half over 2023. So next year, I think PIXALUX with target $60 million to $80 million. And hopefully we will see in addition new tool have about $10 million to $20 million revenue. So next year, as you know, we are targeting probably $70 million to $100 million just for our capacity spread. And in my script I also mentioned in current PIXALUX in mini and micro LED fabrication only saw one step is a final placement, but a new tool actually was multiple step including sorting, mixing, also repeating this is a much, much bigger market, much, much multiple purpose and many more customers. So, we do believe upon successful qualification of Luminex in 2024, we can reach about $150 million, and we’ll go even faster beyond 2024. So to – okay for SMT system, actually we are quite excited, we actually have a very innovative idea to improve accuracy and to put actually mortification over old system to become a new system. And it’s under development. And for all the comparison, we are very update about this opportunity, and this is a huge market several billion dollar in our attempt. So, we believe SMT electronics assembly will also bring us very good growth for next couple of years.

Thank you.

[Operator Instructions] Your next question comes from line of Charles Shi from Needham & Company. Please proceed with your question.

Thank you for taking my question. Congratulations Fusen and Lester on a nice results. I wanted to start with a little bit of clarification on the gross margin, forgive me if you have given the answers earlier. When I look at your gross margin for the quarter 46% that when I looked at your historical gross margin for APS and Capital Equipment, APS in the mid-to-high 50s, Capital Equipment low to 40s, there seems to be no way for me to really get to 46.2%, unless I assume APS has huge uptake here unless there is a some favorable product mix or custom mix going on the equipment side. I wonder, if you can give us a little bit more color, what is the really the moving parts in your gross margin performance for the last quarter? Thank you.

The main drivers for that better gross margin is product mix within the capital equipment, both ball bonder and wedge bonder in the quarter actually had much higher gross margins than the previous quarter, mainly due to product mix as well as customer mix. So that's the main driver. APS effect on the gross margin obviously is much less this quarter as they only accounted for less than 13% of our overall revenue.

Got it, got it. Thank you. So maybe my second question is around mini-LED. Fusan, thank you so much you actually gave a little bit longer term outlook for the Advanced Display going into next year and that year after. I understand that that PIXALUX versus Luminex and all the dynamics that you're talking about, I just want to ask how many PIXALUX have you shipped so far? Last quarter, you said it was about more than 130 systems. That's the first part of my question. I'll follow up quickly after this.

So you are asking, how many system PIXALUX ships over, actually…

Yes.

If you – I think 134 roughly, in high volume we shipped for about full quarter, roughly is a full quarter. So actually I think, we got $60 million to $80 million. So roughly every quarter is about $50 million. So every quarter, ballpark probably is about maybe 30, 40, so roughly that’s average.

Got it. Got it. Got it. So my last question, I think this probably is one of the most important question I believe. So a quarter ago, you did gave a number for FY 2022, $1.1 billion, $1.2 billion next year. And I heard, you did say it's not really a forecast it's of a scenario. You think that could happen, that you didn't rule out other possibilities. So I just wonder we – I mean, over the last quarter, now you are possibly seeing average run rate over the next few years as $1.5 billion, and you believe maybe next year it could be flat, could be up. I wonder what has changed to your view over the last quarter. I understand you did say – you did a little bit of a longer-term planning over the last quarter, and maybe your customer also did a little bit longer term planning for 2022. I understand that the visibility may be improving, but I really would appreciate, give us some color what we're really changed to a view here?

Right, So Charlie, I think we lead; it was a serious problem about support and challenge. So part of the reason I think we tend to a little bit conservative because of surprising pandemic, we work on almost every day, right? So – but the difference compare this quarter to our last quarter, if you remember, what I mentioned the difference is about a 10%, right? So if we mentioned like 100 – 1.4 billion or 1.3 billion, 10% is roughly about $115 million, right? So that's a ballpark. We believe very, very high growth year possibility to pull back is possible. And last time, I think we talk about maybe $1.35 billion, I remember. So from last quarter to now, I think the intention really did not change it landmarks. 10% really is not very, very much, right. We just put like a rich sector over there in case I think the industry in are really – really – it really not able to achieve continued strong growth for two years, but right now, as we see the chip shortage convenience, right? And we still have some system, customer have urgent need to get it. And from a loss of one or two quarters continue to carry back. So let's actually give us the confidence. I think our next year can be as good as this year, right. But at that time I think we say, 22 will be lower actually is like a 10% lower and lot of our intention to guide. So this 10% actually, compared to, the current industry up to, I think we will be able to manage that. That's all of you.

Thank you, Fusen. That's all my questions. Thank you so much. Congrats again.

Thanks, Charles.

Sure. I think we are going to have, our Analyst Day. There will be a lot of more detail, if you have a more question as we'll be happy to provide you a more detail.

Thank you so much.

The next question comes from line of Eric Gregg with FTIA. Please proceed with your question

Fuse and Lester, this is a tremendous quarter and great outlook. Really appreciate it. Maybe I missed this, but between $10 per share that you have in cash on the balance sheet evaluation, it’s less than 50% of your peers on a price of sales basis. You may rate or discount on a PE basis and a really great outlook that you just outlined. Why isn't the company buying back a lot more stock at these levels? Thank you.

Well, we constantly look at our capital allocation program and I think with the new outlook we will again look at it again. I mean, we did increase share repurchase in the last quarter, quite significantly more than Q2. And I think with the new outlook, as well as confidence in the sustainable $1.5 billion and over 25% operating margin, I think we will look at the best use of the capital and to return value to shareholders. We also obviously have the dividend which pays about $8 million a quarter. So we will continue to discuss this with the board and figure out the best way to use the – our resources. We generally look at it in terms of the dividend and the share repurchase, that's one bucket. The second bucket is our organic growth, which obviously now has fueled us into the future with advanced display as well as packaging. So this is a continued conversation we have with our board and we look at this very closely.

Thank you very much.

Ladies and gentlemen, there are no further questions at this time. I would like to turn the floor back over to Joseph Elgindy for closing comments.

Thank you, Hector, and thank you all for joining today's call. We will be presenting at several upcoming conferences over the coming months, including those with Oppenheimer, Jefferies, and Credit Suisse. Additionally, we will be sharing many more details regarding our long-term opportunity, strategy and financial expectations during our Analyst and Investor Day scheduled for 8:30 AM Eastern on September 23. As always, please feel free to follow-up directly with any questions. Have a great day, everyone. Hector, this concludes our call. Thanks.

This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.