Greetings, and welcome to the Culligan Software Third Quarter Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Joel Guindy, Senior Director of Investment Relations for Kula Consulta. Thank you, Mr.
Alghini. You may begin.
Thank you. Welcome everyone to Culligan's Office 4th quarter fiscal 2020 Conference Call. Joining us on the call today are Fuzen 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. Atinvestor.
Kns.com. This new supplemental earnings presentation provides additional details regarding end market trends and our outlook. 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 Kewell Gansofa that could affect our future results and financial condition, please refer to our recent SEC filings, specifically the 10 K for the year ended September 28, 2019, the 10 Q for the period ending March 28, 2020, the 10 Q for the period ending June 27, 2020, and the 8 K filed yesterday. With that said, I would now like to turn the call over to Fuzen Chen for the business overview. Please go ahead, Fuzen.
Thank you, Joe. We are pleased to report that despite global COVID-nineteen related challenges. Our operations, pest of development and the supply chain remain healthy as they work through the June quarter end. Our focus on employee welfare, collaboration and acceptee has allowed our global workforce to operate efficiently through this unique period. We are proud of the resilience, flexibility and the dedication of our employees.
We are also pleased with our pace of development, new product traction and the improving state of our core business. Our global development team continued to make significant and meaningful progress on several fronts, increasing our long term alignment with a significant technology transitions. Impacting the semiconductor assembly market, the automotive market and the display market. Within our core semiconductor assembly space, namely logic and image sensor applications are adopting more complex heterogeneous integration, which is increasing interest and adoption of higher density packaging options. Such as high accuracy free chip and a similar compression.
Fundamental challenge with a 2 dimensional noise ring are well reported, and a new packaging approach provides an alternative path to deliver both cost saving and performance. This fundamental change is essentially extending the value of back end assembly, which benefit our core high volume businesses. As well as our dedicated advanced packaging solution. Customers are seeking solution and the technology partner, for emerging 2d and 3d multi chip assembly techniques. Here we see heterogeneous integrations for complex logic system, namely mobile application processor and the imaging sensor, driving a need for our catalysts and APAMA dedicated advanced packaging system.
In parallel, we are seeing general system in packaged applications For high volume, cost sensitive devices, which continue to benefit our core wire binder business. We are actively engaged and are well positioned to support this ongoing transition and anticipate adoption to accelerate over the coming years. Next major trend, such as autonomous, plug in hybrid and fully electric vehicle, are increasing semiconductor demand for the broad automotive market. Our multiple products and the broad base of automotive customers provide insight to this progression of transition. We anticipate demand for our high reliability and the Performance Focus Automotive System to grow along with the demand for plug in hybrid and fully electric vehicles.
Our initial success in automotive power storage and the distribution solution has been beneficial even with electric vehicle representing only a tiny fraction of today's global production. We have recently experienced increased demand for power semiconductor applications supporting electrical vehicle as well as charging station infrastructures. Although traditional automotive demand has been below our long term average. We expect a gradual recovery to continue and remain well positioned to support this broader technology transition. Finally, within this sprint, we continue to learn production of our piece lock system which is a critical solution to enable new forms of stabilizing.
This transition is a logical evolution that can deliver performance and the power efficiency for the higher volume display market. Advanced LED unit growth forecasts are significant. Mini and the micro LED, annual unit production is expected to approach 500,000,000,000 unit, roughly half of current annual semiconductor production by calendar year 2022. And will continue growing aggressively for several years. This represents a significant capital equipment opportunity for sorting, mixing, and final placement.
We are pleased with the performance acceptance and the rapid development of Pixelabs and are committed to developing additional technology solution that support this broad advanced LED transition. As we execute toward this long term trend, supporting advanced packaging Automotive and the display. We also anticipate a more fundamental recovery in our core businesses, driven by an improving semiconductor unit growth rate. As a reminder, semiconductor unit production declined typically in early fiscal year 2019, which dramatically reduced the industry's need for incremental equipment capacity. This extended decline in production is historically uncommon and the ships to be behind us.
Based on our September results, near term outlook and the recent customer feedback, we continue to anticipate an ongoing unit driven recovery throughout fiscal 2021 and expect unit growth, excluding advanced LED to return to a more normal growth rate over the coming years. Upper and extended period of low capacity addition. Unit gross recovery is being driven by 5G, wolf from home, consumer products, and smartphone recovery. This end market dynamic and all advanced LED ramping are anticipated to ship our seasonal demand patterns through fiscal year 2021. Historically, demand for our product is stronger even in the 2nd fiscal half, although we are anticipating demand to be 1st half weighted in fiscal 2021.
Why demand is currently strong, the broad nickel environment remains dynamic. Considering the uncertain environment and our limited visibility, we are anticipating revenue within fiscal year 2021 to increase approximately 20 percent to 25 percent over fiscal year 2020. This estimate assumes annual semiconductor unit growth excluding Advanced LOD will return to a historic average of 6% to 7% during the fiscal year 2021. Turning back to the September quarter's performance. Capital equipment increased by 21% and the APS increased by 9% sequentially.
Capital equipment It represents 76% of overall revenue and the sequential growth was largely due to a steep recovery within the general semiconductor market. General semiconductor is our largest end market, and the most offset dashed customer fall into this category. In Pyakos, we have consistently discussed how the installed base of wirebonders has been long in near full utilization rate. At this point, incremental semiconductor output is triggering the need for broader capacity addition in the general semiconductor space, which is strength in 5G, smartphone, gaming, IoT and an increasing demand for multi tie wirebonding packages. While our general semiconductor end market shows the steepest sequential change, we also experienced sequential improvement within the Advanced LOD market.
LED overall was sequentially down due to a sizable set of general lighting order in the June quarter. Below our advanced LED sales for the display market increased sequentially. We expect healthy demand for both general lighting and advanced LED application over the coming quarters. The auto and the industrial end market as well as our memory end market improved sequentially, although we remain well below their long term average. Within auto and industrial, we are seeing a gradual recovery in a traditional automotive market.
In the memory, we are beginning to see a few customer aiding overall capacity, and we expect this market to recover. As general semiconductor also recovers. The advanced packaging end market also grew sequentially and represent our 30 credited advanced packaging system that support high efficiency free chip, star bumping, mass free for system in package. And the thermal compression and include our catalysts, Apartment and AT premium systems, wireless dedicated advanced packaging end market. We present just 9% of capital equipment sales.
It is important to note that multi die advanced packages and advanced LED memory are becoming material components of our higher general semiconductor memory and the non LED end markets. Collectively, we estimate that over 30 percent of our capital equipment sales during the September quarters support advanced packages. Looking into December quarter, we anticipate general semiconductor and the LED to be the primary driver of the near term demand. We anticipate strong demand through the December quarters which again, such as fiscal 2021, we will not follow a historical seasonal pattern. Operationally, we are focused on ramping production level to satisfy the strong demand level anticipated for December.
Over the past few years, the broader industry and the macro environment was challenging. A lot of strength of our balance sheet and the market positions allow us to execute our market expansion strategy be a new long term growth vector and the return capital to investors. I'm confident in the company's direction and expect new opportunities in automotive, display and advanced packaging combined with a broader general semiconductor recovery to fundamentally enhance our business model. Over the coming years. I would now like to turn the call over to Lester Wang, who will cover this quarter's financial overview in greater detail.
Mr.
Thank you, Fusen. My remarks today will refer to GAAP results unless noted. While fiscal 2020 clearly came with challenges, we were able to generate full year Income from operations during fiscal 2020 came in at $58,500,000 and represented a 171% sequential increase, highlighting our business model's operating leverage and potential as we execute on our strategic goals. For the September quarter, net revenue was $177,700,000, up 18.1% sequentially. Gross margins came in at 50 percent and generated net income of $15,800,000 and $0.25 of EPS.
On a non GAAP basis, we generated net income of $18,000,000 or $0.29 per diluted share. Gross margin came in much better than related to our warranty accrual. Without this favorable adjustment, gross margins would have been approximately 47%. However, we're anticipating gross margins to be around 45% over the coming quarters. Operating expenses for the quarter came in on the higher end of our long term target range due to end of year incentive compensation accruals associated with the stronger September financial performance.
As Fusen mentioned, our global development and operational teams continue to aggressively work towards several long term initiatives, while we also ramp near term production capacity. We also have several SG and A related products that have been delayed to the softer demand environment over the past years. We anticipate our GAAP operating expense model to remain consistent at $53,000,000 of fixed expenses plus 5 7% of variable expenses tied to revenue. However, we're anticipating the variable component to approach the higher side over the coming quarters. Tax expense for the quarter came in at $8,000,000 due to increased profitability and jurisdictional adjustment.
Our total effective tax rate for the We ended the September quarter with a total net cash and investment position of $530,100,000, which was up sequentially by $14,300,000. Represented $8.49 per diluted share. On a book value per share basis, we closed the September quarter with $12.30. Representing a slight sequential improvement. We generated income and strong working capital performance.
From a day standpoint, we improved working capital efficiently during the September quarter. Days of accounts receivable was down from 117 to 101 days. Days of inventory improved from 127 to 113 and days of accounts payable increased from 55 to 58 days. For the December quarter, we are guiding revenues to be approximately 2 $40,000,000 plus or minus $10,000,000. We're guiding gross margins to be approximately 45 percent plus or minus fifty basis points due largely to product mix and higher freight charges.
This margin forecast also support a near term market share strategy for recently introduced product in our wedge bonding business. GAAP operating expenses is expected to be approximately 70,000,000 plus or minus 2 percent and non GAAP EPS to be $0.53 plus or minus 10 percent. This guidance suggests operating income to increase by over 60% sequentially and highlights the business model's leverage. This also highlights our potential create meaningful long term shareholder value as we support the significant transitions within the semiconductor, automotive and display market. This concludes our prepared comments.
Session.
Our first question today is coming from Craig Ellis from B. Riley. Your line is now live.
Thanks for taking the question and congratulations on the strong recovery in the business guys. The first question I wanted to follow on with some of the elements related to guidance. I believe that one of the things you mentioned Lester was that that OpEx will be on the high side of the typical model. So can you just help us understand how long that will play out and give us some their insight into the specific expenses that are keeping OpEx towards the high end of the models range?
Sure, Craig. I mean, as we've indicated before over the last couple of quarters, we've had a lower level of spending over the past six quarters due to a lower travel, initially, cost reduction reasons during the semi downturn in 'nineteen. And obviously, because of COVID now, You also have lower variable expenses. And also, as I said, during 2019, we had a very focused corporate wide reduction on less critical and discretionary related expenses. Basically, we pushed out certain projects that was not critical at the time.
Some of these projects are now being more critical and we're also actually increasing our technology engagement with new customers So I think for the rest of FY21, again, I don't guide you on the quarter, but I would say that it would probably on the high side of the the 7%, 5% to 7% variable.
That's helpful. And then, questions, if I could. First, Bufin, can you just give us a better sense of what you're seeing for Pixelox PAMA and Catalyst as we go through fiscal 'twenty one. It sounds like end market demand is coming back fairly broadly. And it seems like you've got good traction with those products.
But any color and an update on PixelX's fiscal 'twenty one prospects specifically would be helpful.
Sure. For the piece of that, we previously in our call, we have a target to achieve our $40,000,000 revenue for FY20. So I'm very happy to report that we achieved a goal. For the FY 2021, actually, our first quarter of FY 2021, we see a sequential growth compared to Q4 of FY20. And we are guiding maybe a long way for next couple of quarters FY 2021 from Q1 to Q4.
Think, roughly, it's going to be between $15,000,000 to $20,000,000. So we actually will expect, you know, a conservatively will achieve a $60,000,000 to $18,000,000 for Pixelox, for FY 2021. I think at 22, we have a goal to the $100,000,000 business. And somewhere around 2122, we intend to introduce a new product to the market. And beyond 22, we believe we this business should grow faster.
And, 20 should be above $100,000,000 and will grow, possibly. So our goal is around 24, 25. Hopefully, I think a 20% of our K and S revenue product revenue, probably will be a display related. Right? So let's, in advanced packaging, particularly TCD.
I think our head to head for genealogy integration is very important in my script. And we believe we make a very good traction and we believe, we were in test level field design win, in 21, And for the other one's packaging, we expect to be much bigger I think in 22. So any other questions?
That was helpful. Yes. One more question then I'll hop back in the queue. So, I appreciate the color on fiscal 'twenty one's revenue potential. So it looks like if I'm doing the math right, that the company expects around $760,000,000 in revenue And that assumes 6% to 7% semi unit growth.
I think in the past, you've noted that it's possible that semi growth would be as high as 10% in, 21% 22% following 2 years of, below seasonal growth. So if we see, semi unit growth more in the double digit range versus 6% to 7% how would we think about the models potential for upside versus the 20% to 25% or $760,000,000 ish in revenue?
So maybe, I can answer this. We feel good about the current business recovery and we feel this is sustainable. So at this moment, what we plan is for the 20% to 25% And you mentioned this close to maybe 760 region to maybe 790 translate So at this moment, that's our plan, you know, and, we plan to roll a revenue more when did it in the first half, but I think we will have a better outlook about the strength of second half. So that's what we're planning. But looks like there is a recovery, is sustainable and we'll give you a more update in next quarters.
That's great. Thanks so much guys. And I'll hop back in the queue.
Thank you. Our next question today is coming from Tom Diffely from D. A. Davidson. Your line is now live.
Yes, thank you. Maybe just a follow-up on the last line of questioning. So what is driving the unusual seasonality or the lack of seasonality this year versus previous years, is it truly just a recovery in the general semiconductor ahead of expectations?
Okay. So, Tom, let me give you a little bit color, the area of a strength we are seeing. Right? So currently, we are seeing a strength in the 5G consumer products, IoT, smartphone, and the increase in SiP also multiply wirebonding package, right? And we also see ongoing strengths in both traditional LED and advanced LED for display, the product we just introduced.
So I can summarize, I think there are few reasons behind the strength So number 1, in 2019, 2020, I mentioned a few times, all customer under invest, right? So when you can reach in the over a certain number, are triggering another watch to actually increase our business. So it's because of our other investment in our core product from customers. And number 2, I think this recovery, it also related to consumer patent change, such as the work from home and also stay home. That drive more need in PC gaming and the other home application, right?
So a number 3 reason, I think this is significant for us. Actually, we see 5G investment, 5G actually is a key end market. That's why a lot of inquision demand for SIP and very complex market, multi die in a wirebonding module and the packages. So, the increase in complexity in these devices actually draw in incremental capacity. Capacity will comment for our advanced wire button.
So that's what, we are seeing in simple language. I think, wirebanger actually also important part of the 5G investment. So the last reason I think I mentioned already, in this upcycle, we also see ongoing strength for both the traditional LED and the advanced LED new product user interviews. So this a figure reason behind the current strength we are seeing.
Okay. No, I appreciate the color that's pretty impressive. Okay. And then just to follow-up on the PixelX 2, when we look at growth from $40,000,000 this year to $80,000,000 or so next year, Does that require an expansion to multiple customers, or does it require a new tool from you? What are the the individual growth drivers, or is it just the market itself as it'll give you a little stronger?
Okay. I think that is it's, actually, it's a boss, but actually more probably is all your intention in the next 2 years also or 1 year also, we intend to introduce multiple products to broaden our advanced LED portfolio. And we do expect ongoing development activities, the effort we put in will sustain our competitive advantage as we are broadened our advanced OED portfolio. So I mentioned, 20, 40,000,000, 21, about 80,000,000. And beyond that, I think that we will need, you know, multiple products to drive this business, and we are preparing for that.
Great. Okay. And then finally, maybe just a quick, overview of what your expectations are for the Apartment Catalyst in 'twenty one as well. Thank you.
Okay. So, 2021, you know, I think we're still working on field design win a lot, we already had a few, but we actually, we'll try to complete all our targets and we feel confident, 21, to win a few more design wins. I think the 22 will be a more significant one, right? So, in 22, I mentioned our Pixel Luxe, and the display business, is around $100,000,000. That's our goal.
We also expect maybe a lifetime, our dedicated advanced packaging We talked about the free chip TCB and also 80 premium all is together can also reach about $100,000,000, but it is really all credentials. Great.
Okay. Thank you.
Thank you. Our next question is coming from Krish Sankar from and Company. Your line is now live.
Thanks for taking my question. And, congrats on the very impressive guidance. Had a couple of them. First one, Susan, if I try to take your comments on FY 21 revenues growing 20 to 25% and more first half fiscal year weighted, it looks like the December quarter, midpoint of $240,000,000 is probably going to be the highest revenue quarter in FY21. I just wanna double check on that math is if that's true.
And secondly, is that mainly because the pixel that's really front loaded, with the new products for, like, mini LED coming out in Q1 of next year, calendar Q1. And therefore it will explode on after that.
So, Chris, let me answer that. I don't think we said the December quarter will be the highest quarter for 1st fiscal 2021, we did say that seasonality has switched to the front end, sorry, the front part of the year. And as Susan said, for now, that's this is what we see. We see 20% to 25%. But in response to an earlier question, I mean, as we go ahead further into our fiscal year, we will get debt visibility in the second half.
And at that time, we will revise guidance if we believe that's necessary. And again, to your second question is, the ramp is not because Xlux is front loaded. I think the ramp is, as we've already indicated, is across the board, both in advanced display as well as traditional LED as well as general semi driven by, again, 5G, as IoT, and we're seeing a little bit of recovery in automotive, and memory as well.
Got it. If you remember
our truck actually is Q1 over 'nineteen, right? So it's almost 2 years. And since our residual truck, every quarter, from that point, either we got up, we got, we got trapped. So until this moment, we even changed the seasonality to dry up in the next quarter, Q1, twenty twenty one, right? So we didn't see we didn't say going to be the highest one.
But at the certain point, right, is or, is or will not be every quarter for many, many years, right? So that's what we are planning, you know, because of, the business coming back is so strong, we just cannot plan, you know, our area code clean up. That's why we have a column business is a 20% to 25% growth. That situation can be stronger than that. And we already are mentioning, next quarter, we will take a look, we will have a better outlook for second half of the twenty one, and we probably will provide update at a time.
Got it. Got it. That's very helpful. And I do remember you guys definitely called the bottom, building up last year. Couple of other questions.
One second one is Lester, it does look like the December quarter, there's gonna be more mini, pixel x shipments relative to the September quarter. But I understand you gave some reasons why the margins might still be, you know, like around gross margin around 45%. I'm just trying to figure out the drop through happening? Because my understanding was the Pixel Hyper High margin for you, and there should be pretty nice drop through all the way to the bottom line.
Yeah. There's drop through, Krishna. As you know, I mean, the, the drop through is at $175,000,000. We get very good operation flow through. And if you look at what we're guiding in terms of, non GAAP EPS, I mean, it's growing by 60%.
While revenues only go up by 35%. So that does show that the operating leverage is happening. And as far as why the go margin went down. I think as I indicated, as for us, it's product mix. So there's more, traditional LED ball bonders, as well as the ball bonders in general.
And also capital equipment is a larger piece of, the quarter rather than APS and our APS business has high margins plus I did call some unique items like the freight charges because of the great demand by customers. We're doing more things by air freight than defray and that increases our costs as well as we are introducing a new product at our Wedgebonder business unit and far as the market penetration strategy, the margins are down a little bit.
Yes. So this is a one time, you know, will not be, you know, forever.
Got it. Got it. That's very helpful. And the final question, for Fusen, you know, once there are more mini LED products in the marketplace, should we assume PixelX will have your typical consumer seasonality embedded in it or do you think because it's still in a growth mode, we should not think a whole lot about seasonality on a quarterly basis?
So actually, Krishna, we did not say, the piece of that was just an idea. I think what I just mentioned to you question. It's a $40,000,000 actually for last year. We are very happy to report. And for the 21, I actually see quite even, you know, a shipment.
That's our business plan. Every quarter, is between 15 to 20. But we'd like to stay, you know, hopefully, it will be in the high side. So even on the high side, it will be $18,000,000 business. So we didn't see seasonality for, this or last, but at the same point, I think This is the initial, products and the customer base is not many.
So it's a a certain, you know, point. EOC is a spotty, right? You know, a business quarter by quarter. And hopefully, by introducing more product, maybe a year from now on. And after penetration, we will see more repeatable and more flexible business in our offerings.
Got it. Thank you very much, Susan. Thanks, Lester. Thanks,
guys.
Thank you. Our next question today coming from David Duley from Steelhead Securities. Your line is now live.
Yes, thanks for taking my question. I guess the first question I have is about your core wire bonder business. The large OSAT in Taiwan was talking about a huge difference between supply and demand, somewhere between 30% 40%. Of not needing more capacity. And also talked about how the wire bonders now are, I guess, I want to say are slowing down a bit because they're having to do more stacking and having to connect more wires per device.
I'm just wondering what sort of intensity increases you're seeing as you move into calendar. 2021 on the wire bonder front. Are these stacked packages and more wires like 15% or 20% more wire bonder intensive than previous packages? Or could you comment on that and then also just comment on what the utilization rates are for your equipment?
Okay. So I will answer the first part and then let's start with the expert over intelligent. So you will answer the second part. So, Dave, I'd like to say this, you know, many people comment about the bow longer is a sunset business and also technology. And I think we already proved it wrong and we'll continue to be wrong.
We believe the ball binder is a very important part of existing solutions. And so far, I think yearly production over semiconductor devices before packaging is about 1,000,000,000,000 device is looking forward to the interconnectivity. 70% of that actually is an awful number. And when we come through, the 5 gs a lot, and we are seeing a more dedicated, you know, more complex requirement available under. Because the 5G is not only smartphone only and not only a station.
And actually is a whole infrastructure and bring actually a lot of devices. And they really need to have a very complex in a wire binder process to put a multi bag together in SIP and also multi bag module. And because of this requirement, because of this increasing capacity, all this is a complexity tie, and that will try, you know, all the one that continue to grow. Time. So I don't know if I answered your question or not, but let me give you a color.
So, we believe part of the bank's ball under is a very, very spatial technology. You can do a 3d packaging, for example, like a sticky name. So actually, if I could, every company has a different definition of advanced packaging, So I think Kayla's advanced packaging should be defined as following, right? We mentioned our dedicated advanced packaging, feature catalysts, TCV, Apartment, star bumping is 80 premium. So, this part actually represents in our September quarter, 9% of total capital equipment sales.
Right? I think it is, you know, advanced packaging because of a special requirement, because of very, very competition looping capability, you can connect a 2 d and 3 d die to die and within a die. I think this capability, we know that this multi, I think packaging will not be possible. Right? So we have a 2 d and a 3 d multi die packaging.
I think by using advanced binder, that should be categorized as advanced packaging. So for the 2 d SiP margin die package is about 8%. 3d stack by memory is about 5% of our September capital equipment sales for September, right? And right now, I think our AP should also include advanced LED assembly, right? And we love our system.
I think will not be able to achieve a very, very high final placement. So advanced LED assembly is about 10% of our, September quarter sales. So all these agents together, we believe our products 32% of our product is supporting advanced packaging. So I don't know if I answered your question.
I guess my question was more about just wire bonder intensity. It seems one of your large customers in Taiwan was talking about on their conference call that the wire bonders are literally slowing down because they're having to connect more leads per device and having to do more loops So you need more wire bonders per device or
so
the intensity of the wire bonding is increasing. So I'm just wondering if you're if you have some sort of metric, is it increasing by 25%, 20% to 10%?
Well, I can only tell you, we only seen the beginning of a huge demand at this moment. And, but we believe because we're 5G bringing in very, very complex, you know, multi value packaging that we call a go binder. And right now, we have a really have a capacity constraint. And we'll give you a more precise number and maybe on next couple. So, we will give you the demand percentage increase for the broadband.
So, Dave, let me ask answer the utilization question, right? So, for the September quarter, utilization was above 80%, Taiwan and China significantly above 80%. China is almost at full capacity, over 90%. Southeast Asia also improved significantly and they're now around 75% or so. Obviously, Europe and North America have improved, but they're lagging the other market.
And, the bow binder, we also did part of that. So along with a new product, introduction, we talk about the, in the future will be a new product portfolio in display. And advanced packaging, as we mentioned it, And, the Vodonger, I think, is also participating in a big, you know, rev as in for this current of the cycle.
Our next question is coming from Christian Schwab from Craig Hallum Capital Group. Your line is now live.
Great. Thank you. Congrats on, the nice recovery steering here. So can you, a follow-up to the to to the 3 his question, you stated slightly different. Susan, when you look at your general general stuff, I can electric business and we see, you know, 4 silicon content in in in the next generation 5 g applications, and we saw it 4 g.
As as well as the continued, you know, movement to electrical vehicles and continued electrification of, the automobile system and contents going forward. In addition, potential increased capital needs due to the complexity of some of these chips. Can you give us an idea if if the total satellite conductor unit growth is just to keep the math easy, say, 10% per a year for the next few years. What you expect to outgrow growth. And if you do, over time, what what percentage would you expect?
Well, Christian, I'm sorry. I think your voice did not come very you to us. But I hear your question ask about the unit growth rate. Right? So at this moment, I think the industry actually have a different forecast.
And, now it's a little bit more positive. So for our vision frame. I think we print 2122 is going to be around 6 to 8%. And, if the market, I think, dynamic change, we are going to update you, you know, maybe in 1 or 2 quarters. At this moment, I think that's what we are planning.
We don't see we don't want to work out very, very long. Right? Next 2 years, I said we have seen about 6 to 8%. That's about our full plan, but it's gonna be faster. But we are gonna do, the United States should change.
Okay. Great. No other questions. Thank you.
Thank you. Our next question today is coming from Craig Ellis from B. Riley.
Yes, thanks for taking the follow-up questions. I'll just start with one that goes back to, the utilization color that you provided Lester. Thanks for the granularity there. Would it be fair to say that the strength in the business that you're seeing in the fiscal first quarter is really led by China and Southeast Asia And if that's so, given the utilization levels in Europe and North America, would it be fair to think that as we look ahead to fiscal 2Q, the more of the incremental strength would be coming from those geographies or is, in fact, the order dynamic different than what we see if we just did a 1 to 1 correlation with utilization levels.
I would say, Craig, that, for Q1 actually is China and Taiwan, more than Southeast Asia. Southeast Asia utilization is, as improving, but not the levels where, Taiwan and China is. I think going forward, I think the continued growth will also come from China, Taiwan, Taiwan lagings a little bit behind, the, the China engine utilization, but they're already very, very high. So we can see continued strength from Taiwan and Southeast Asia over the next two quarters or so. And then as North American Europe, they will catch up hopefully, you know, assuming they solved the COVID issues.
So I would say it was probably in that sequence, but we see continued strength in the next two, three quarters coming from the Taiwan and Southeast Asia. Great.
And then the next one is really just a housekeeping question on the color you've provided around fiscal 12, 1Q gross margin. So clearly there's increased shipping costs because of order intensity with customers. And then you talked about the new wedge product impacting gross margin can you quantify what the combined impact of those 2 are for?
I would say probably around maybe 150 basis points or so.
Great. That's very helpful. Yes. And then, tax rate for the quarter and year, should that be 18%?
Yes. I think we're still forecasting 18%. Okay.
And then lastly, long term question, Houston. So So it's clear that you're gaining some visibility into new product ramps on a multiyear basis. Very encouraging to see that. And we clearly have a rebound in the general semi business that as you've articulated multiple times is led by numerous secular dynamics, plus some cyclical things like a SAR recovery and a smartphone recovery. The question is this, as you look at how the business is unfolding on a multiyear basis, are you starting to gain visibility into the low end of target model, which was $1,150,000,000 $4 in earnings per share or do you not yet have visibility to revenue of that level as you look out to 'twenty two and 'twenty three.
Okay. So, Craig, let's look at this. In my script I mentioned, you know, the negative, negative unit growth actually is very uncommon, right? Especially happened in this industry, 1920, this is a really, really uncommon plan. So in the conservative way, let me answer the question.
Let me if we add 3 years, 2018 is a very strong year, right? Total revenue is close to $900,000,000. And then, we have, we have 19, like, 5 40, and we have, this year, just finished our 20 is about 6 facility also, right? So if you add the resources together, we have 1 very strong year and 2 very uncommon year, right? So divided by 3 roughly is about $700,000,000.
So this I believe can represent the very, very solid our average long way of our core business, right? Because one strong year and very, very 2 low years, And I mentioned already, this is very uncommon. How can we, in this war, high-tech war, we have a negative unit growth. So what I said is, I we feel like a $700,000,000 run rate should be sustainable as a base for the core business. So, but in 2 years, we don't talk about 1 year in 2 years.
2022, we mentioned already, I think, our display, we already guide 21, maybe we will reach 60, 80, right? So on a higher end, 80 is already very close to, you know, 100. So we believe our 2020, 2022 display we just said it's $100,000,000 goal. I think we can fit it. We can touch it.
I think if we are good about the goal. But the budget packaging, actually, we can add on our $100,000,000, right? We intend to have a few significant design wins, in 2021, and the 22, I think, hopefully, our advanced packaging dedicated, you know, dedicated were dedicated advanced packaging will be $100,000,000. I think APS, we can also draw another $50,000,000 to $80,000,000 So you're adding all this together, I think $1,000,000,000 looks like that is, attributable from from our view at this moment, right? So, but if we are very lucky with the current business, you know, really poor water, you know, right now, we almost reached a $250,000,000 run rate.
I think if a decent score crazy. I think we probably will be also higher than $700,000,000 or even higher than $800,000,000 or can be a little bit even higher, right? But we really don't want to we really don't want to see, you know, our core business overall. But we believe this should be sustainable above our $700,000,000. So overall, we feel Good.
The general semi, I think, is recovering. And we also believe our product roadmap is sound and that we are making objections. And hopefully, you know, by 2022 and, not 2021, 2021 is going to be locked, but 2022 and hopefully, we have a good possibility to achieve our dividend goals.
That's very helpful. Thanks everybody and good luck.
Thank you. We reached end of our question and answer session. Like to turn the floor back over to management for any further or closing comments.
Thanks, Kevin. Thank you all for the time today. Will be presenting at Needham Sidoti, D. A. Davidson Conferences and also the CEO summit over the coming months.
As always, please feel free to follow-up directly with any additional questions. Have a great day, everyone. Gavin, this concludes our call.
You. That does conclude today's teleconferencing webinar. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.