庫力索法 (KLIC) 2021 Q1 法說會逐字稿

Greetings, and welcome to the Kulicke and Soffa 2021 First Fiscal Quarter Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Joe Elgindy. Please go ahead.

Thank you. Welcome, everyone, to Kulicke and Soffa's Fiscal First Quarter 2021 Conference Call. Joining us on the call today are 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 the supplemental earnings presentation are both available in the Investor Relations section of our website at investor.kns.com.

Beginning this period, we have changed our non-GAAP disclosures and adjusted the end market categorization of capital equipment sales. These changes better align non-GAAP reporting with our peer group and provide better insight to the underlying demand drivers expected to affect our business.

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 are pleased to report strong financial performance, progress in our advanced display business and the improvement to our outlook on today's call. First, we have recently acquired U.S.-based Uniqarta, Inc. in an all cash transaction, which enhances our competency and the ultimate potential in the fast-growing advanced display market.

Even prior to this acquisition, we worked closely with Uniqarta to accelerate the adoption of advanced mini LED backlighting. By combining Uniqarta's domain knowledge and the unique intellectual property with our operational and development competency, we have improved our position in this exciting advanced display marketplace. We expect our next-generation advanced display system will accelerate broader adoption of advanced display that utilize locally controllable backlighting and also direct-emissive micro LED approaches.

By the close of fiscal year 2021, we expect to introduce and initiate qualifications for our next-generation advanced display system. We anticipate strong demand for this solution throughout fiscal year 2022 as the broader LCD market begins to adopt new forms of backlighting.

Next, the ongoing strength of the general semiconductor and the LED end market and ongoing recovery in automotive demand has improved our fiscal year outlook. Broad trends, such as 5G and advanced display as well as the fundamental transition in the automotive market have only recently become meaningful to our business. We expect this new secular trend to provide significant growth and the market expansion opportunities over the coming years.

The current demand for our product and solution is stems from several areas. First, the underinvestment in the back end capacity spending over the past 2 years was historically unique and is now behind us, and the return to more typical semiconductor unit growth, which benefits our capital equipment market, has just begun. Over the coming years, we expect semiconductor unit growth to exceed the historical average of 6% to 6.5%.

Next, we also see strong demand in our new advanced display business and expect multiple design wins with our APAMA and Katalyst system, which will generate more significant revenue starting in fiscal 2022. We will provide more updates over the coming few quarters.

Finally, we are also seeing increased capital intensity due to more complex back end assembly approaches. Increasing complexity is a more secure driver expected to accelerate further into the futures. I will explain in more detail shortly. Given our cost alignment to this trend and ongoing interest from customers, our outlook has improved significantly since our prior earnings call held on November 20. Currently, due to improved visibility into our second half, we are now anticipating revenue for the year to be approximately $1.1 billion, representing a significant improvement, over 75%, from fiscal year 2020.

We have aggressively ramped our production capacity and are operationally prepared to support this higher level of demand. The ability to scale production quickly and efficiently is an inherent and long-established operational competency at K&S. With that said, we are closely monitoring broader supply chain and logistical constraints. At this moment, we are comfortable we can achieve this steep year-on-year growth target.

Turning to our December quarter's results. We generated $267.9 million of revenue, representing a 51% increase from the September quarter. The APS segment increased by 5% sequentially, driven by higher production level. We continue to make progress to expand our shares within the APS market. Capital equipment represents 83% of overall revenue and increased by 65% sequentially largely due to improvement within the general semiconductor, LED and auto/industrial end markets.

During the December quarter, we disaggregated our dedicated advanced packaging end market categories. What we previously deemed advanced packaging revenue is now primarily allocated to the general semiconductor end market. As we mentioned last quarter and I discussed earlier, advanced package and more complex assembly technique have become a material component within our other end markets. This increase in complexity is largely related to the growth of multi-die package, which provide a cost-effective solution to extend form factor benefits. This approach helped to overcome the well-known node-shrink challenge by increasing transistor density at the packaging level. We anticipate demand and the capacity needed for multi-die package will continue accelerating and will continue to improve capital intensity of our served market.

Within general semiconductor, we estimate over 40% of December sales support multi-die, which require more assembly capacity than a typical single-die package. Within memory, over 60% of our exposure supports stacked NAND, one of the highest-volume and the most transistor-dense package available. Finally, within the LED market, about 50% is associated with advanced display.

For the December quarter, we estimate 38% of capital equipment sales are supporting more complex advanced packaging applications, increasing the capital intensity of general semiconductor, LED and the memory market.

Turning to composition of capital equipment sales in the December quarter. General semiconductor, which supports a broad set of application, such as smartphone and the consumer electronics, continued to be very strong and has increased by nearly 70% sequentially. As discussed, increasing complexity adds an additional layer of demand to this critical end market.

The automotive and industrial end market experienced a dramatic improvement, over 100%, sequentially. At this point, there are shortage of semiconductors throughout the automotive supply chain, and we have experienced a strong sequential increase in the utilization rate of our automotive installed base over the December period. Due to this near-term dynamic, combined with a broader long-term transition to fully electric and fully autonomous vehicle, we are optimistic on our outlook, and we look forward to further support our broad base of automotive customers over the long term.

As expected, LED demand has improved due to the ongoing adoption of our advanced display system and also sequential improvement for general lighting LED capacity. Looking ahead, we are confident in our position, technology road map and customer engagement with both high-volume general lighting and also high-growth advanced display applications.

As a reminder, despite clear challenge last year due to COVID-19, we were still able to achieve our fiscal year 2020 advanced display revenue target and expect a production ramp to continue through fiscal year 2022. Our acquisition of Uniqarta further enhances our position within this exciting advanced display market, and we anticipate a meaningful improvement to our outlook. We will provide additional feedback on our development progress and the longer-term advanced display expectations over the coming quarters.

After a delayed period of meaningful market expansion, we are very optimistic in the near-term outlook and in our ability to participate meaningfully in long-term and more secular opportunities. We continue to focus on served market expansion through our participation within the advanced LED market, the fundamental transition in automotive and the ongoing adoption of more complex semiconductor assembly.

After 2 years of softer demand, industry momentum is currently very high. Our solutions are increasingly aligned with this major trend, and we anticipate a transition into a multiple-year expansion period. Over this period, we expect our served market growth will accelerate and provide additional opportunities to create lasting shareholder value.

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 mentioned, demand for our products and services remained strong in the December quarter, revenue at $267.9 million, up 51% sequentially. We were, again, able to quickly flex operational capacity to support this dramatic sequential improvement.

Gross margins in December came in at 45.4%, and we generated net income of $48.4 million and non-GAAP EPS of $0.86. At this level of business, our operating leverage becomes significant. During the December quarter, we generated operating margins of 20%, an increase of over 700 basis points from the September quarter. Considering the operating leverage and our outlook, we expect to generate strong free cash flows over the coming years.

We continue to be very focused on cost control despite the more favorable business conditions, which has helped drive December quarter operating expenses to be slightly better than expected. We also expect operating expenses to follow our historical model of approximately $53 million of fixed quarterly expense plus 5% to 7% of variable expense tied to revenue. We do not anticipate a material increase to our operating expense model as a result of the Uniqarta acquisition.

Tax expense for the quarter came in at $6.3 million, and we continue to target an 18% long-term effective tax rate, although anticipate the effective tax rate coming in closer to 15% in fiscal 2021.

Turning to the balance sheet. We ended the December quarter with a total net cash and investment position of $576.7 million, up $46.5 million sequentially, which represents $9.19 per diluted share. The Uniqarta acquisition closed in the March quarter and the cash impact will be reflected in our March quarter results.

Considering the strong current demand, we improved working capital efficiency during the December quarter. Days of accounts receivable was down from 101 day to 76 days. Days of inventory improved from 113 to 77 days, and days of accounts payable decreased slightly from 58 to 55 days.

For the March quarter, we continue to expect further demand improvement for our products and services. We expect revenues to be approximately $300 million, plus or minus $20 million. Gross margins are expected to be approximately 45.5%, plus or minus 50 basis points, due largely to product mix. GAAP operating expense is expected to be approximately $76 million, plus or minus 2%, and non-GAAP EPS to be $0.88, plus or minus 10%.

This concludes our prepared comments. Operator, please open the call for questions.

(Operator Instructions) Our first question today is coming from Tom Diffely from D.A. Davidson.

So I just wanted to confirm the new outlook for 2021, fiscal '21 is $1.1 billion, up 75% year-over-year?

That is correct.

Wow. So when you look at the, obviously, the very strong growth this year, is there any way you can split it between -- how much of it is driven by just unit growth in the industry versus share gains maybe versus increased intensity for your tools?

So Tom, I think due to few reasons, number one, of course, in the past 2 years, '19 and '20, because of semi downturn and underinvestment from customer and right now go another way, right? So we expect this year will be slightly higher than 6% to 6.5%. So number one is really the unit growth coming back.

The number two, I think, is very significant. I think we are seeing a different phenomenon. For example, the transition from 4G to 5G, we are seeing the demand for the multi-die package, big example is RF module. So this module actually typically have a 4 die to 40 dies. Actually, demand increased significantly due to transition to 5G. And not only [that among --] or the multi-die package increase, the die is much more complicated. So the time to process this package also increased dramatically. So therefore, capital intensity increased, right?

So originally, I think we gave a guidance in normal year, our base should be around $750 million right? We take our 3-year's average, I think 2017 is normal year, '18 very strong year and '19 is a very bad year. So if you take the average, it's about $750 million . So this should be a representable number of our base in a normal good year. And we estimate this complex additional multi-die package actually increase our capital intensity, we estimate, another $100 million to base line, right?

So I don't know if I answered your question or not. And of course, auto is also coming back, and everything adds up. I think our base line is much closer to $1 billion land before. That's why I think we feel optimism. Almost every of our products have a strong momentum. And therefore, we feel comfortable that this year, we should be able to touch $1 billion.

Okay. No, that's great. That's good color. So I guess, I want to switch gears here and look at the acquisition of Uniqarta. So I guess, a couple of things. First, is that a competitor to Rohinni? Do they have any revenue associated with them? And is there any -- would you give us a rough idea of what the cost was?

Okay. So I will have Lester answer the cost. So I think Rohinni is our first partner, and the product is called PIXALUX. This is our first-generation of mini and micro LED system. And in 2020, last year, we guide The Street and also we accomplished revenue around $40 million. And last earnings call, I think we guide the revenue for '21 will be $60 million to $80 million. I think we are more close to a high end. And all the system we are going to ship is PIXALUX. So this is our first-generation of the product.

And in my script, I also mentioned by the close of fiscal '21, we expect to announce our next generation of advanced display system. And this will use 100% of our K&S IP after acquisition of Uniqarta. And the second-generation system is expected to contribute to our fiscal 2022 revenue, right?

So your question is the difference of these 2 systems, how do we position it? I think around mid-2022, we are -- we will have an overlap of these 2 systems. And -- but we believe our second-generation -- our system, which we utilize 100% of our own IP, will have a much higher productivity and should take off, I think, [at later time] probably around mid of 2022. So I hope I answered your question, Tom?

Yes. No, that's great.

Acquisition price was around $26 million.

Okay. And was there any revenue associated with that? Or was this purely IP technology?

It's a purely technology acquisition.

Your next question today is coming from Krish Sankar from Cowen and Company.

I had a couple of them. Fusen, you mentioned about how there has been underinvestment in back end spend, especially wire bonding. And ASE this morning also spoke about wire bonding demand being tight through all of 2021. So I'm just kind of curious, what is your visibility today on wire bonders given what your big customers are saying? And should we assume that if wire bonding is going to remain tight through all of 2021, are we going to add excess capacity this year? Or do you think it's going to be more smoother for the next couple of years? And then I had a couple of follow-ups.

Krish, I don't know if I understand fully your questions. You -- can you repeat again quickly?

Sure. So you spoke about underinvestment in wire bonding by the OSATs for last couple of years. So now that they're doing a catch-up investment, how long do you think it's going to last?

Okay. So Krish, let me put it this way: I think the estimate from the market this year is about a trillion die -- semiconductor die will be produced, roughly 1 trillion die. And the estimate of market shares of the ball bonder, I think about 65% of these die are processed by ball bonder, between 65% to 70%. So ball bonder is here to stay. And ball bonder also went through a lot of technology improvement, although we did not provide very detailed information. Actually, ball bonder, a lot of technology associated with that, right? For example, currently, all the segment, majority, actually is a user of the ball bonder and many, many days orders taking. And also, multi-die package I mentioned, including SiP and also including multi-die module, actually is a very complicated ball bonder process, right?

So to answer your question, I think this year, the revenue for ball bonder is very strong. Maybe it's a little bit strong than needed because of 2 year underinvestment. But we are quite optimistic. The ball bonder is here to stay. And the level actually the industry needed to support the overall industry growth, I think ball bonder will continue to grow.

Got it. That makes sense. And then two other quick questions. One is, on PIXALUX, did you guys update your FY'21 revenue target for PIXALUX? Or is it still $60 million to $80 million?

Yes, that's correct. That's what we guided last quarter. But right now, I think we are running maybe -- like this quarter, it's about $22 million, right? So hopefully, we will reach the higher end or over a little bit this year for FY'21.

Got it. And then a final question, Fusen, on the Uniqarta acquisition. Is it fair to assume that your PIXALUX, the pick-and-place technology that works well for many might not scale up for micro LED? That's why you need a laser transfer approach for micro LED. Is that the way to think about the acquisition? Or are you going to still work in parallel to improve PIXALUX placement speed?

Okay. I think the -- we do believe -- I know you see the script, our PR, press release. This is a laser-based technology. We believe the potential productivity is much, much faster. So I'll give you an example. The large TV, very, very large TV, if you need a mini or micro LED, you probably need to place about 25 million die. So again we are just at the infant stage of this industry's growth, right? We are talking about maybe less than 100 hertz at this moment. That means every second process less than 100 die. I think in the future, the speed need to be much, much faster to support this industry's growth. That's why I think Uniqarta, we choose it to be next generation of technology.

And I mentioned, we have PIXALUX and we have next generation. We believe maybe around middle of 2022 will be a crossover, and the industry will decide which one will be a faster technology. And we feel like we will have faster productivity probably for the Uniqarta based on this technology.

Our next question is coming from Craig Ellis from B. Riley.

And congrats as well on the strong execution in the quarter and meeting the tremendous upside demand. Fusen, I wanted to just start by going back to some of your comments on the market for fiscal '21. The question is as we look at the new fiscal '21 demand outlook for revenues of $1.1 billion, can you help us understand, as you look into the back half of the fiscal year, where do you have relatively higher or lower demand visibility across your different end market opportunities?

Okay. So, Craig, the first quarter, I think, we delivered to $267.9 million, right, Lester? So the second quarter, I think we guided $300 million. so if you add this together, it's a little bit more than $550 million, I think $567 million, right? So we are looking at -- if you have a mirror image -- so Q2 -- the second half can be the mirror image over the first half. That means we expect Q4 probably will have a seasonality, as usual, but it's not going to be very significant, right? So if we model, Q1 is comparable to Q4 and Q2 and Q3 comparable, actually, we get about $1.1 billion. So does that help?

It does. But my question was actually a little bit different, and it was really related to the visibility that you have into the demand that makes up that profile. So underneath that profile, is your visibility similar across auto, things -- other end markets that you mentioned, like 5G smartphones and gaming cards and consoles that are in consumer? I noticed, at least from the investor deck, that memory revenues are very low in the quarter. Do you see memory coming back? And if so, to what extent through the back half of the year?

Okay. So I think general semi is strong from Q1 to Q4 continuously. I think auto will start to be stronger this quarter. I think conventional auto is also coming back. EV is helpful. So we do believe from Q1, we start to see auto will be quite strong, and that really help our wedge bonder a lot.

And for the memory, at this moment, we don't see full recovery yet. But actually, we see -- actually start to see recovery coming. So we do believe our next few quarter, memory will start to pick up. So memory probably is the last segment.

Other than memory, EV is a segment, I think, we see very strong demand. But we already see initial investment of memory coming in. Also from the past 3 years, actually, the industry utilization rates started going up. And also the big growth per year, I think, compound annual growth rate, CAGR, is consistently close to 30% every year. So we do believe memory is on the way to come back.

Yes. That's very helpful. My next question goes back to some of the comments in prepared remarks from you and Lester, and it relates to supply. So clearly, phenomenal operations quarter in the December quarter, meeting demand and then implied in the outlook for March with the $300 million in revenue. The question is this: if demand this year were to be meaningfully above the current $1.1 billion forecast, would the company have the ability to flex up supply further to meet that demand? Or at the current forecast, do you see either constraints or other bottlenecks that would preclude revenues from being higher than that, if any of the end markets that you just discussed prove to be stronger than we can now see?

Okay. So I think the demand is really strong right now. But as you also know, the industry have a minor -- maybe a little bit more than minor problem for the supply chain constraint, right? We know there are component shortage, also semiconductor die shortage, and also some of logistical constraints, for example in a flat, also have a difficulty. So we are comfortable with $1.1 billion goal, although we still have upside. But the upside maybe will be constrained at this moment with global supply chain constraint. But we are not going to give up. Whatever we can do, we will try our best.

So to answer your question, I think this demand is also very dynamic, right? So if you ask us, we can give you, at this moment, it looks like there's still upside, but there are also significant headwind for the supply chain shortage. And $1.1 billion is the number we feel comfortable. And there are upside, but there's also risk. That's why I think we need to monitor and put our effort if we want to realize additional upside.

That's very helpful. And my last question is a longer-term question, and it goes back to the target model that the company set a few years ago. And the question is it's clear that there appears to be, across virtually all end markets, demand strength that has underlying drivers that are multiyear in nature. When the company set its target model, the midpoint -- the low end was $1.15 billion, so you're almost getting to that low end this year with current guidance.

The question is this: given the multiyear nature of demand, what are the gives and takes to potentially seeing the midterm model revenues in fiscal '22? I believe that one underlying assumption there was a significant increase in services revenues. Can those revenues ramp quickly enough really to get us towards that $1.187 billion? Or might there be other areas of strength that are just greater, for example, the degree of advanced packaging uptake, that could more than offset that if that didn't come to deliver us towards that target financial model midpoint in fiscal '22?

Okay. So I think this a significant ramp. Of course, it's a little bit difficult to predict next year, but I think I mentioned today in the Q&A., originally, our guidance for the normal year base line is about $750 million. Right now with capital intensity, I think we are seeing $850 million, right, because of the capital intensity increase. So these are very close to $1 billion, much closer than before.

And on top of that, I think we have upside on flip chip and TCB. These are new products for us, right? So for long term, I think they are very important. Our flip chip is very, very good accuracy and very high productivity. And TCB, I think we actually are quite comfortable with a few design wins. Hopefully, it will ramp up also for the next couple of years. So we have flip chip, TCB. Display market, I think, can also be upside for us, and also APS, right?

APS, I think I'll give you an example. 2017, our revenue may be $140 million, and then mid-2020 is about $170 million. We do believe in 3 years -- 3 to 4 years, we have another upside for another $40 million, $50 million. So all you're adding together.

So hopefully, I think what I'll answer is this: I think the industry next couple of years should be very, very healthy. So as long as the industry is healthy, I think our core business is very, very healthy for us. And we also have upside in a few areas I mentioned, dedicated advanced packaging, flop chip and TCB and also display and APS. I think we are quite optimistic for K&S and the whole industry for '21 and beyond.

So Craig, to add on what Fusen said, right? On top of the revenue he built for you, we -- given our tremendous operating leverage, we believe that at above $1 billion, which, again, Fusen just indicated that there's a clear path to it on a sustainable basis, that the operating leverage would allow us to have an EPS of between close to $3 on a sustainable basis.

Our next question is coming from David Duley from Steelhead Securities.

Congratulations on great results. I guess my question is when I look at your backlog, it certainly suggests that your order rates were substantially above the revenue that you just reported, probably like $140 million above. Has -- have your overall -- I guess that -- I'm assuming that your overall visibility hasn't extended. Could you just help us kind of understand how much more visibility you have now? And then maybe help us understand, have your lead times extended? What are your current lead times for wire bonders?

So Dave, our visibility has extended. As you put in the backlog, customers are putting in PO at a tremendous rate, not just for the next quarter but for the remaining rest of the fiscal year, given the very tight demand for our product as well as for all products as well as lead time. Lead time now has gone up significantly. I would say it's almost up to about 40 weeks or so -- 30, 40 weeks. So I think we do have much better visibility, which is why I think we were comfortable in terms of giving guidance of $1.1 billion for the year.

Okay. Great. As far as contribution, I think on the last conference call, roughly, your guidance for the year was like $780 million, and now you've bumped it up to $1.1 billion. Could you just talk about the difference between the -- what the delta is in your segments of business between the $780 million and $1.1 billion, roughly? Where -- you've kind of gone through this, but this is asking the question in a different way. Where did the upside come from in your annual model from the $780 million to the $1.1 billion?

So Dave, I think it's across all sectors, to be honest. I mean I think general semi is still -- it's really driving the business. I mean general semi was close to about 74% of our revenues for this quarter. And general semi basically went up by about -- I guess, it went up about 70%, right? Automotive more than doubled, went up about 100% from the December quarter. And LED went up about 80%, right? So we see strength across all the segments. I think automotive is definitely coming back, and you can see that in terms of the headlines every day in terms of the automotive companies having lined down. So there's a real push right now.

So again, I think the difference is it's just an incredible recovery across the board.

Excellent. And with this $1.1 billion kind of target revenue for the year, as far as the operating margin performance going forward, I mean, I think you just achieved a number we haven't seen for some time. Should we expect this 19% or 20% run rate, whatever -- I guess, it was 20%. Is that kind of the expectation throughout this calendar year for an operating margin goal?

Well, Dave, I don't guide below -- for the year below revenue. But I mean I think if you do the math in terms of -- we believe the gross margin will be consistent around the level we have this quarter between 45% to 46%. We believe that our -- we always set expense -- OpEx is about $53 million to 5% to 7% variable. And then there is -- I just guided to an effective tax rate of 15%. So if you back it, I think you get very close to the number you just said.

Yes, I think it does generate, by the way, a little bit more than $3 in earnings. So congratulations. I look forward to the business continuing to improve throughout the year.

(Operator Instructions) Our next question is coming from Christian Schwab from Craig-Hallum Capital Group.

Congratulations, guys, on just a fabulous quarter and outlook and the ability to ramp that. Fusen, as we listen to this and we look at some of your other peers on the back end, I'm curious of your thoughts on this, but it seems to me that we're seeing a tremendous industry shift in value that is actually just starting in the back end of the semiconductor equipment process where capital intensity is beginning to meaningfully increase. Something we saw when the NAND industry had to switch to 3D and when foundry logic had to shrink sub 28, right?

So we're seeing general semiconductors -- you're seeing increased volume in complex chips. Chips that used to be 1 package that are now 4 or 6 or 8. And on top of that, we're seeing drivers like 5G and automotive and medical, Wi-Fi upgrade cause disproportionate volume even greater than the general industry is doing. And with that, multi-die packaging is creating increased complexity, which is causing, where we started, increased capital intensity. And it doesn't seem like there's other technologies that could disrupt this trend. It just seems where the industry is going post Moore's Law world, if you will, that we're just going to see more and more multiple chip packages for an extended period of time, and we've underinvested for years.

So unless there's some type of economic dislocation that is caused globally again, probably more than likely if we can't get COVID under control, I mean, this could be very similar to the shift that we saw in the front end. This could be a 3- to 5-year trend that just keeps on going and then stays extremely capitally intense, especially if we're going to go from 200 million 5G smartphones to 3 billion, plus or minus, over the next 4 to 5 years. Am I thinking about that right? Is that what you guys are trying to say?

Yes. I think -- yes, actually, we agree. We are quite optimistic overall industry. And Christian, on top of what you say, I think we also try to get into very exciting new business like [display]. And I think this will also provide additional engine for us. And we do believe, at this moment, we have the best tool for industry. And we are going to keep our differentiation against any potential competitor.

So with the strength in the industry and also more than Moore's Law industrial trend and plus a new opportunity we are getting in, I think we are quite optimistic at this moment.

Right. And then I guess my last question has to do with cash. What are your thoughts? We are -- over the course of the next few years with these type of trends and revenues and the way your bottle flexes, we're going to have substantial amount of cash on the balance sheet in a couple of years. Can you give us -- and you already have a substantial amount. So can you give us an idea? If you think about -- you've been historically a very shareholder-friendly repurchaser of your shares in the open market, but can you kind of tell us kind of what you're thinking as far as cash?

Sure. I will add something, and then I will let Lester also contribute a few sentences. So at this moment, could I give you an example of PIXALUX? From the first day of development we generated revenue. I think we take a little bit just more than 2 years, and we are seeing a sizable revenue. So we also believe we have a few other products maybe in the same way. And we will continue also in the new display industry.

So mega story short, short term, I think we have many growth engine, right? And Uniqarta is additional one. We believe additional technology can help us grow. This is one path, I think, we probably like a lot. And we're doing dividend. We're doing stock buyback. We are not going to give up. This will continue.

So if -- M&A, I think, will be last choice. I think we will be very, very careful. I think in the short term, there's RAND we need to deal with. And there's a lot of new technology that can add for our future growth, and they are in a start-up stage. And we are also looking at many of this, right?

So mega story short, I think organic growth, we are quite confident we can do very, very good, just internal growth by ourselves by acquire some special technology, right? That's one way. And for the shareholder return, dividend and also buyback, we will continue. And if M&A right options come up, we will not give up. But so far, I think that we not paying huge of attention in bigger M&A at this moment.

Lester, you want to say anything?

Yes. So Christian, I think we have always consistently deployed the cash quickly if it was available, like in the different geographies because, obviously, as we've mentioned before, we do have some restrictions on bringing some cash onshore. And I think, as Fusen said, we have deployed a significant portion of our free cash flow in terms of both the share repurchase as well as the dividend. I mean on the share repurchase, we've returned close to 80% of free cash flow to our shareholders since 2015. And if you look back last year, that's fiscal 2020, we returned close to 110%. Year before, over 250% -- close to 250%. So I think that's significant.

I think the other uses of cash, as Fusen allocated, is that we do believe that there will continue to be interesting technology bolt-on that will help accelerate our development, like Uniqarta has for our advanced display, as well as for some adjacency technologies that will help us build. And then also, again, we do look at prudent acquisition. A reminder is the acquisition of Assembléon is what allowed us basically to have PIXALUX and the next generation because that's based on the Assembléon platform.

So I think between all those, we'll continue to kind of closely monitor the cash situation. And we talk about capital allocation every quarter, both -- Fusen does with the Board. So we'll do what's most prudent in -- both in terms of organic initiatives, like PIXALUX, like our advanced packaging; plus technology buys in terms of like Uniqarta; and then, obviously, return to the dividend and, opportunistically, share repurchases.

We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Joe for any further or closing comments.

Thanks, Kevin, and thank you to our participants for joining today's call. We will be presenting at several upcoming conferences over the coming months. As always, please feel free to follow up directly with any additional questions.

Have a great day, everyone. This concludes our call. Thanks.

Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.