KLA-Tencor Earnings Call INSIGHTS: Order Mix By Segment, Customer Behavior

On Thursday, KLA-Tencor Corporation (NASDAQ:KLAC) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Order Mix By Segment

Satya Kumar – Credit Suisse: I was wondering if you could give a sense of what the order mix by segment would look like in the September quarter and at this time if you have any thoughts on how the orders would shape out for December with the view on trying to get a sense of either you will track up low single-digits for revenue this year?

Rick Wallace – President and CEO: Memory forecast not that different percentage wise. We think probably about 17% of orders is what we’re currently looking at. Logic down a little 15% off of the 20% for the quarter we just finished and looks like foundry would be about 68%, so that’s how we’re currently modeling it, not a big change. As far as the rest of the year and it’s very hard we don’t guide out for the December quarter, but we do see the overall picture softening as we said in our guide for the September quarter and then we’d expect some resumed investment coming back in the December quarter as we talked at SEMICON West.

Customer Behavior

Terence Whalen – Citi: This question is a little bit of a qualitative commentary on how you see your customer’s behavior changing. It certainly feels a lot like last year in terms of the 3Q order pause and if I think about last year, that order paused in some ways got us into the 20-nanometer shortage that we experienced in the first half of this year. I wanted to understand do you observe your customers responding any differently to macro uncertainty this year around versus last year around, especially considering some of the foundry shortages that we experienced set by this year?

Rick Wallace – President and CEO: I think it is perhaps for different causes, but has similar sense of headwinds that are causing I think the pause that we are seeing from our customer base. Whether that will result in any shortages is very hard to tell. I can say that as our customers work on 28, they haven’t made progress, they haven’t made it as fast as they had hoped and there are plenty more challenges and the early look at 20 makes it look even more challenging than what they experienced in 28. So, I know if it will create shortages or not, but I do see some conservative behavior in our customer base in the short-term.