Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| The macro environment for industry is incrementally better than last quarter, with global PMI stable or improving slightly |
| Growth in our wireless business, LitePoint, will be strongly linked to handset growth, a recovery in the PC market and the start of the rollout of Wi-Fi 7 |
| The highlight of the quarter is -- was a well-executed volume ramp of our UR20 collaborative robot |
| And there's also a significant growth in analog and power for automotive and industrial in China, and we serve that segment very well with our Eagle Test platform |
| Our cash position and strength in our balance sheet enables us to continue to invest in strategic organic initiatives and has the firepower to support a wide range of M&A options for inorganic growth in the future |
| Summing up, our second half is playing out as expected with the highlight being strong execution by our UR team, as they ramp UR20 to meet high customer demand |
| In Q3, demand strengthened, with revenue nearly at 2022 levels and up 20% from Q2 |
| For the full-year 2024, we expect gross margins to be better than ‘23 on higher volume and lower resiliency spending |
| As noted earlier, we continue to see strength in SOC concentrated in auto end-market and image sensor parts of our business in the quarter |
| But long-term, there is significant upside potential |
| The fundamentals in the memory market are getting better |
| The thing that I can tell you is that our share in memory is highest in final test and we also tend to be a first mover that we have the capability to test next-generation standards and protocols, and that allows us to sort of capture more share in that part of the market |
| That coupled with market conditions that favor low-cost, short-ROI automation investments and our team's growing execution skill, I expect renewed growth in Robotics in 2024 as well |
| We are confident about the long-term growth outlook of semi -- of the semiconductor market, as the substantial fab equipment investments made in the recent past have not yet seen matching test investments |
| The distribution channel transformation that we described in the -- in past calls is also making steady progress |
| Complementing our existing distribution channels with direct coverage at large accounts and adding OEM partners is a long-term project and we're beginning to see positive benefits |
| And we've seen direct OEM orders grow nearly 20%, driven by the high demand from the pelletizing market |
| At MiR, our account strategy continues to deliver with our top 10 customers, expanding their collective installed base by over 15% year-to-date, a rank that's more than 50% greater than the overall install base growth |
| As we previously discussed, we expect the SOC market and our revenue to grow from 2023 on broader 3-nanometer adoption in the mobility space, driving market growth and continued to strength in the compute market |
| In Robotics, we're finishing 2023 on a positive note in a tough market, with Q4 revenues up about 10% year-on year on the strength of the new UR20 product introduction |
| That performance reinforces our optimism in Robotics |
| As we finish the year, I'm encouraged by indications that our largest market, semi test, appears to have troughed in 2023 at a level that delivers an operating profit of 20% for the total company |
| Overall, we expect the total ATE TAM to be up modestly from this year and the key factor is the strength in -- of recovery in mobile |
| We've transformed our supply chain to reduce geographic risk and strengthened our operations capacity |
| We expect to close out the year with strong Robotics shipments, amplified by new product shipments at UR and seasonally softer test shipments |
| The technology buys that have supported the memory TAM in 2023 should continue into next year and we expect the memory market to grow as HBM, DDR5 and LPDDR5 penetration expands to support AI and computing growth |
| The demand for high-speed DRAM test remains high, as we close out 2023, which will help us tick-up a few points of memory share for the full year |
| The UR20 extends UR’s ease-of-use and quick ROI to higher payload and longer reach applications, expanding the market in many segments |
| Third quarter sales and earnings were at the high end of our guidance range, as Robotics sales came in above plan and we cleared some supply constraints and tests |
| As a result of supply and demand coming into balance, our lead times continue to improve |
| Statement |
|---|
| In wireless, demand remained muted in the quarter, given the weak smartphone market and lack of new wireless standards this year |
| For reference, we estimate subcon tester utilization is still low, up only marginally from our July estimate and well below the typical Q2 to Q3 increase |
| In wireless test, revenue was $37 million in Q3, with low demand from both PC and smartphone end-markets |
| The supply-demand imbalance in HDD is likely to persist through 2024 and we expect HDD test to remain weak |
| System Test Group revenue was $83 million, with $38 million in storage test, as SLT in HDD production demand remains muted |
| In semiconductor test, the mobility correction cycle persists and shipments remain well below historic levels while our automotive test shipments remained high in Q3 |
| The biggest headwind that we have in China is we are unable to sell test equipment into Huawei |
| In system test, defense and aerospace, and storage test groups were unplanned while production board tests softened in the quarter |
| And right now, we're seeing that there is significant weakness in orders for our peers in industrial automation compared to where they were a year ago |
| That part is significantly weak and continues to be |
| To be clear, our customers are still cautious about their near-term demand and we're reflecting that caution in our initial outlook for next year |
| In the first half of 2023, demand was quite low, down 21% versus the first half of 2022 |
| The other segments of the business were negatively impacted by over-supply in the HDD market and mobility weakness |
| The weakest segment of SOC is mobility, down about 40% from 2022 on slower complexity growth in smartphone semiconductors and year-on decline in units |
| Starting the year with Q1 2024 revenues, similar to Q1 2023 levels, Q1 is expected to have unfavorable product mix yielding lower gross margins than Q4 2023 |
| How correlated is that demand to what you see and what your UR business sees? Because you're noticing strength in UR, but when we look at folks such as TI or Analog Devices, they were talking about weakness on the industrial side |
| Obviously, in the short term, the visibility is very muted and very cautious |
| The thing that we said in the prior call about this was we didn't see -- like, we didn't have demand confirmed in that April, May timeframe, but there was still some uncertainty about what their peak loading might be and whether they need additional capacity |
| So unit growth was actually down this year, and it's coming back slightly, but it will still be below the units back in 2022 by our best guess |
| It appears that channel inventories in automotive are stabilizing and we have some -- seen some spot weakness in the market |
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